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Scholarship Abstract Google v Oracle is a blockbuster copyright case. This decade-long lawsuit arose from Google’s unauthorized copying of 11,500 lines of code in the Java . . .
Google v Oracle is a blockbuster copyright case. This decade-long lawsuit arose from Google’s unauthorized copying of 11,500 lines of code in the Java computer program in launching its Android smartphone to vast commercial success. When Oracle sued Google for copyright infringement, Google argued that the Java computer program was uncopyrightable or that its copying was fair use. On the first issue of copyrightability, the Supreme Court punted. Instead, Justice Stephen Breyer’s majority opinion sets forth a novel and sweeping fair use defense for Google’s unauthorized commercial copying of computer programs like Java (known as APIs).
This article first explains that the Computer Software Copyright Act of 1980 is clear that APIs are copyrightable, and that the Court should have explicitly addressed this issue. This copyrightability analysis is important, because it elucidates the peculiar nature of Justice Breyer’s fair use analysis in the substance of his opinion. At a minimum, it confirms the Court’s ultimate decision: a de facto denial of copyright protection in all APIs. In sum, the Google Court did not skip deciding that APIs are not copyrightable. Rather, Justice Breyer reached this same result through a novel and creative application of fair use doctrine.
Google’s significance cannot be understated: the Court held for the first time that an unauthorized copying of a copyrighted work for a commercial purpose to sell a competing product qualifies as a fair use. The Court ostensibly limited its analysis to only APIs, but academics and accused infringers are now arguing that Google applies to other creative works. Time will tell if Google has created a (fair use) exception that swallows the (copyright) rule.
Amicus Brief An ICLE amicus brief filed in U.S. District Court in California supporting a motion to dismiss a suit in which holding Visa collaterally liable would generate massive social cost.
The attached was submitted Jan. 17, 2022, by the International Center for Law & Economics (ICLE) to the U.S. District Court for the Central District of California, Southern Division, as a proposed amicus brief in case of Fleites v. MindGeek in support of co-defendant Visa Inc.’s motion to dismiss.
Visa sits outside the boundaries of liability contemplated by statutes like RICO and TVPRA. At the very outer boundaries, liability for indirect actors under these statutes is analogous to the sorts of collateral liability sometimes found in other statutes and in common law tort. But the nature of the relationship between Visa and the alleged direct actors in this case, dictated by the mechanics of payment networks, does not support the traditional economic and policy rationales for assigning collateral liability. This amicus brief elucidates the law and economics of collateral liability and applies it to the circumstances of Visa’s alleged participation in the alleged enterprises at issue. As discussed further below, the general principles of collateral liability counsel strongly against holding Visa liable for the harms suffered by Plaintiffs. To hold otherwise would be sure to generate a massive amount of social cost that would outweigh the potential deterrent or compensatory gains sought.
Read the full brief here.
 This amicus brief uses the term “collateral liability” to encompass a range of theories of civil liability aimed at secondary actors not directly responsible for causing harm. Thus, the term contemplates causes of action like premises liability for third-party injury, distributor liability for defamation, civil aiding and abetting liability for fraud, contributory and inducement liability for copyright infringement, and various theories of vicarious liability under the doctrine of respondeat superior. See generally Reiner Kraakman, Third-Party Liability, in 3 THE NEW PALGRAVE DICTIONARY OF ECONOMICS AND THE LAW 583 (Peter Newman ed., 1998).
Popular Media Capping months of anticipation, President Joe Biden on July 9 unveiled his Executive Order on Promoting Competition in the American Economy, which he argues will “lower . . .
Capping months of anticipation, President Joe Biden on July 9 unveiled his Executive Order on Promoting Competition in the American Economy, which he argues will “lower prices for families, increase wages for workers, and promote innovation and even faster economic growth.” To achieve these lofty goals, the order prescribes regulatory interventions that interfere with property and contract rights in industry after industry.
Read the full piece here.
Scholarship Many people hope that data interoperability can increase competition, by making it easier for customers to switch and multi-home across different products. The UK’s Open . . .
Many people hope that data interoperability can increase competition, by making it easier for customers to switch and multi-home across different products. The UK’s Open Banking is the most important example of such a remedy imposed by a competition authority, but the experience demonstrates that such remedies are unlikely to be straightforward. The experience of Open Banking suggests that such remedies should be applied with focus and patience, may require ongoing regulatory oversight to work, and may be best suited to particular kinds of market where, like retail banking, the products are relatively homogeneous. But even then, they may not deliver the outcomes that many hopes for.
Data portability and interoperability tools allow customers to easily move their data between competing services, either on a one-off or an ongoing basis. Some see these tools as offering the potential to strengthen competition in digital markets; customers who feel locked in to services that they have provided data to might be more likely to switch to competitors if they could move that data more easily. This would be particularly true, advocates hope, where network effects grant existing services value that new rivals cannot emulate or where one of the barriers to switching services is the cost of re-entering personal data.
The UK’s Open Banking system is one of the most mature and important examples of this kind of policy in practice. As such, the UK’s experience to date may offer useful clues as to the potential for similar policies in other markets, for which the UK’s Furman Report has cited Open Banking as a model. But fans of interoperability sometimes gloss over the difficulties and limitations that Open Banking has faced, which are just as important as the potential benefits.
In this article, I argue that Open Banking provides lessons that should both give hope to optimists about data portability and interoperability, as well as temper some of the enthusiasm for applying it too broadly and readily.
I draw on my experiences as part of the team that produced the industry review “Open Banking: Preparing For Lift Off” in 2019. That report concluded that Open Banking, though promising, needed several additional reforms to succeed, a few of which I discuss in this piece. I was also the co-author of a white paper that argued for an Open Banking-like remedy in the UK’s retail electricity market, which I discuss briefly below. All views expressed here are my own.
I argue that there are three main lessons to draw from Open Banking for considerations of similar remedies in other markets:
I conclude that Open Banking has not yet led to noticeably stronger competition in the UK banking sector. Implementation challenges suggest that taking an equivalent approach to other markets would require more time, investment and effort than many advocates of interoperability requirements usually concede and may not deliver the anticipated benefits. To the extent that Open Banking is to be a model, it would be best applied as a focused approach in markets that bear particular characteristics and where the costs are outweighed by the benefits, rather than a blanket measure that can be applied to every market where customer data matters.
Read the full white paper here.
Popular Media Warner Bros. Entertainment Inc.’s announcement in early December that it would send 17 films from its 2021 slate directly to its HBO Max streaming service . . .
Warner Bros. Entertainment Inc.’s announcement in early December that it would send 17 films from its 2021 slate directly to its HBO Max streaming service the same day they debut in theaters shocked the entertainment world. Affected films include anticipated franchise tentpoles like “The Matrix 4,” “Dune” and “Space Jam: A New Legacy.”
Theaters traditionally have had a three-month exclusive “window” to run a film, after which it would be distributed to home video, premium channels, free channels, and then network television. Warner effectively shut the window between when a film is shown in theaters and when it is made available elsewhere.
Popular Media It would not be reasonable for service providers to be held culpable for every possible misuse of copyright material in the vast amount of user-generated content they . . .
It would not be reasonable for service providers to be held culpable for every possible misuse of copyright material in the vast amount of user-generated content they carry. That would create massive risk of lawsuits, with ill effects for internet users and even for copyright holders who benefit from the legal distribution of their content.
But proper safe harbors should encourage online companies to help prevent copyright content from being improperly disseminated in the first place. For example, such rules could encourage online companies to license content upfront, which they can do more easily than copyright holders can with each of the service providers’ many users.
TOTM The European Court of Justice issued its long-awaited ruling Dec. 9 in the Groupe Canal+ case. The case centered on licensing agreements in which Paramount Pictures granted . . .
The European Court of Justice issued its long-awaited ruling Dec. 9 in the Groupe Canal+ case. The case centered on licensing agreements in which Paramount Pictures granted absolute territorial exclusivity to several European broadcasters, including Canal+.
TOTM More than two decades after Congress sought to strike a balance between the interests of creators and service providers with the Digital Millennium Copyright Act (DMCA), it . . .
More than two decades after Congress sought to strike a balance between the interests of creators and service providers with the Digital Millennium Copyright Act (DMCA), it is clear that Section 512 of the Copyright Act has failed to create the right incentives to curb online copyright infringement. Indeed, as a May report from the U.S. Copyright Office concluded, the “original intended balance has been tilted askew.”
Written Testimonies & Filings We believe that Section 512 revisions should create greater incentives for online service providers to prevent unauthorized dissemination in the first place. Ideally, service providers should license the content so that copyright holders, Internet users, and OSPs themselves can all benefit from a healthier online ecosystem.
We thank Senator Tillis and his staff for undertaking this important examination of the operation of the Digital Millennium Copyright Act (DMCA). As we note in more detail below, copyright law is overdue for review in light of the evolution of the online ecosystem over the last two decades.
The Constitution recognizes that copyright provides incentive for the creation and wide dissemination of works to the public’s benefit by granting copyright holders the exclusive right to determine whether and how to make their works available. The ease with which content can be disseminated online without authorization, however, cuts at the core of the exclusive rights, and thus also at the engine that drives investment in content.
Section 512 was meant to secure for copyright holders better protection for their works online, while at the same time provide online service providers (“OSPs”) more certainty that they would not face unreasonable litigation risk when facilitating socially valuable dissemination of user-generated content, which might contain copyrighted material. The idea was to grant OSPs a safe harbor from liability in exchange for collaborating with copyright holders to curb unauthorized dissemination. The hope was that by sharing the burden to combat online piracy between copyright holders and OSPs, their mutual interests in creating a lawful market for online consumption of content would align.
Yet Section 512, as applied today, puts a greater burden on copyright holders than is optimal. As a result, the law enables excessive proliferation of illegal content. Under the current regime, the onus is on copyright holders to discover and flag unauthorized dissemination of their works; OSPs have little obligation to preempt sharing of unauthorized content and are generally obligated only to take down unauthorized content once notified by the copyright holder. The problem is that, at that point, dissemination has already occurred and much of the harm has already been done. Even one unauthorized digital copy of a copyrighted work that slips onto the Internet can quickly become thousands.
We believe that Section 512 revisions should create greater incentives for online service providers to prevent unauthorized dissemination in the first place. Ideally, service providers should license the content so that copyright holders, Internet users, and OSPs themselves can all benefit from a healthier online ecosystem.
Toward that end, we propose statutory changes that could improve the ability of rights holders to defend their property rights without undermining the ability of OSPs to operate efficiently. These ideas will undoubtedly require further elaboration as you continue your DMCA reform process in the new year, and we welcome the opportunity to participate in the ongoing discussion.
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