Trading places

Shifting tides in the safe habors lead to shifting tactics

The major movie and music companies and their lobbyists in Washington have a long history of laundering controversial or unpopular copyright policies that they can’t get through Congress through trade agreements or international treaties instead.

The game is to work assiduously with U.S. trade negotiators to get language effecting those policies inserted into international or bi-lateral agreements. Then, once the U.S. becomes a signatory to those agreements, the companies can make the case to lawmakers that U.S. law must be changed to reflect those policies in order to bring the U.S. into compliance with the agreement it just signed.

The classic example are the provisions requiring limitations on the circumvention of digital rights management included in the WIPO Copyright Treaties, which were signed in 1996. Those provisions were then incorporated into Title 1 of the Digital Millennium Copyright Act of 1998, which was titled the “WIPO Copyright and Performances and Phonograms Treaties Implementation Act.”

The law made it a crime to circumvent “technical protection measures” even if the purpose in doing so is to make lawful use of underlying copyrighted work.

Other examples abound. The U.S. inserted language into the proposed Anti-Counterfeiting Trade Agreement (ACTA) that would effectively have required ISPs to implement a “3-strikes” policy leading to termination of the account of any subscriber found to be downloading copyright infringing content a third time. Although ACTA was never ratified, the U.S. incorporated similar language into the proposed Trans-Pacific Partnership (TPP).

While the U.S. ultimately pulled out of TPP, U.S. rights owners have not given up trying to use U.S. leverage in trade deals and international agreements to force new provisions into U.S. law. U.S negotiators managed to insert language into the proposed WIPO broadcast treaty that would grant broadcasters a copyright-like “neighboring right” in their transmission signal, independent of the content being transmitted.

If adopted, it could force a fundamental change in U.S. telecommunications law, which currently recognizes no such right.

Rights owners also managed to get language inserted in the U.S.-Colombia bilateral trade agreement that would prohibit Congress from enacting any law that would permit the retransmission of a broadcast signal via the internet without the broadcaster’s permission.

In the case of the revised U.S.-Canada-Mexico free trade agreement (NAFTA 2.0) now awaiting congressional approval, however, the movie and music companies have suddenly reversed tactics and are trying to get copyright-related language removed from the agreement.

Like most U.S. free trade agreements, the IP chapter of NAFTA 2.0 includes DMCA-like safe harbors, providing shelter from infringement liability for online service providers so long as they follow prescribed notice-and-takedown procedures.

At the prodding of the music industry, however, a bi-partisan collection of members of the House Judiciary Committee last week sent a letter to US Trade Representative Robert E Lighthizer urging that the safe harbor provisions should not be included in the agreement.

“The effects of Section 512 and the appropriate role of a copyright safe harbor have become the subject of much attention in recent years,” the members wrote. “Some have called on Congress to update these very provisions, enacted in the days of a dial-up Internet.”

The lawmakers also emphasize that the U.S. Copyright Office may finally be on the verge of issuing a report based on its review of the safe harbors launched back in 2015, which many anticipate will recommend changes to the current law.

Mostly, though, as I discussed in a previous post, the movie and music industries, along with their allies in Congress, smell blood in the wake of the European Union’s recent adoption of its Directive on Copyright in the Digital Single Market.

That directive, for the first time, imposes an affirmative obligation on online service providers to monitor and police their platforms for infringing content, rather than waiting to be notified of its presence by the rights owners and taking it down. Such a rebalancing of the burden of policing platforms like YouTube and SoundCloud has long been sought by the movie and music companies in the U.S., but never achieved, despite years of litigation and lobbying.

As happened with the EU’s General Data Protection Regulation (GDPR), which quickly became a de facto global standard for how online publishers and services collect and manage the data they collect on their users, the movie and music companies are hoping the EU’s severe curtailment of the safe harbors, which after all were modeled on the DMCA safe harbors, can establish a new global baseline for how online service providers must address infringing content on their platforms.

With the legal and political tide regarding the safe harbors now turning in their favor, the movie and music companies are concerned that including provisions modeled on the current DMCA in a binding free trade agreement could effectively prevent Congress from passing legislation to modify the law to align it with the new EU standard.

They recognize the danger because they’ve run the scam so many times themselves.

Google calls a bluff

Whatever happens with NAFTA 2.0, the movie and music companies’ pirouette on trade agreements is one indication of how intense the next phase in the long-running battle between rights owners and online platforms is likely to get as a result of the EU Copyright Directive. But it’s not the only indication.

In addition to restructuring the safe harbor for online service providers, the EU directive creates a new “neighboring right” for news publishers. As a result, search engines, aggregators, and other news repackagers will be prohibited from displaying even the smallest snippet of a news story without first obtaining permission from the publisher.

The stated goal of the provision is to enable news publishers to establish a new revenue stream by licensing the right to display their content to search engines and aggregators.

In France this week, however, the first country to implement the provision, Google put publishers on notice that it intends to play hardball over the new rule.

Richard Gingras, Google’s VP of news, told European journalists in Paris that the search giant has no intention to pay them for their content.

Instead, he confronted them with a choice. Publishers can either grant Google the right to display their content in search results, for which the publishers will not be paid, or, they can decline to grant permission, in which case Google will display only the headline and a bare link to the content, likely resulting in a loss of visibility for the publisher.

Google has been down this road before, having fought similar efforts to impose a licensing requirement on search engines in Spain and Germany. In both cases it forced publishers into a stalemate, resulting in no new payments from Google and no new revenue stream for publishers.

In Spain and Germany, of course, publishers had only a single national government behind them. Now they have the full weight of the 28-member (ok maybe soon 27) European Union backing them up.

But Google has come out swinging. And this thing could get bloody.