Copyright Office asked to investigate software copyright issues by Senate Judiciary

Marie Pallante, U.S. Registrar of Copyrights.

On Friday, October 23, 2015, the Copyright Office released a public draft of the Copyright Office’s Strategic Plan, setting forth the Office’s performance objectives for the next five years.

Maria Pallante has been the United States Register of Copyrights since assuming her duties on June 1, 2011. As Register of Copyrights Pallante directs the legal, policy, and business activities of the United States Copyright Office. As Register she is also the principle advisors to the Congress on matters of domestic and international copyright policy.

Perhaps fortuitously, Pallante was the scheduled luncheon speaker later in the day at the annual meeting of the American Intellectual Property Law Association (AIPLA).

“We should have annual appropriated dollars,” said Pallante. “We want people to participate and to have as robust a system for accurate data as possible because the return on the economy and for culture and commerce is tremendous, so for me it is something like roads and bridges. It is an infrastructure question for a system that is important to the U.S. government, so some appropriations is necessary, certainly more than we get now.”

Funding the Copyright Office was a theme throughout Pallante’s speech at AIPLA, and also in the Strategic Plan. “There is no question that investments are necessary to meet the strategic goals,” the Strategic Plan reads. “Funding should reflect a strong commitment to both human capital and capital projects, and ensure that the Office is interoperable with, and supportive of, the data, technologies, and businesses of its customer base.”

According to the Strategic Plan, funding for the Copyright Office should come from two distinct sources: (1) “Fees paid by authors, corporate entities, and other customers” and (2) “appropriated dollars that reflect the value of Copyright Office services to entrepreneurs, the public, and the economy.”

Presently, very little funding for the Copyright Office comes from annual appropriations, which is a problem given the desire to revamp and update the Copyright Office systems. Much of Pallante’s speech at AIPLA was directed toward explaining Copyright Office funding and calling for greater appropriations support from Congress.

From the Copyright Office Strategic Plan, showing just how small a portion of the Library of Congress budget is devoted to the Copyright Office.

“We need policies for Copyright Office investment systems and acquisition processes that are dedicated to the Copyright Office and not other parts of the Library [of Congress],” Pallante explained to the AIPLA audience. “We need to be able to submit appropriations requests and operating plans directly to Congress not through the Library, we need to adopt flexible fee schedules that allow for the recovery of aggregate costs and certain capital costs… and we need the ability to spend fee receipts across annual appropriations without regard to a spending cap.”

Those familiar with how the budget operates for the United States Patent and Trademark Office will likely feel great empathy for the Copyright Office, which usually doesn’t have enough money to do all the work statutorily required.

Despite being a repository for works of cultural significance, the Copyright Office gets little taxpayer support.

“We are asked to estimate the amount of fees we think we will get in a given year,” Pallante explained. “If we hit that cap early we can wind up with work to do… and no ability to use the money sitting in our account. And then we get into an issue whether and how we will be able to keep the money sitting in our account through the next appropriated year. That is no way to treat fees that people are paying into the Copyright system… we should be able to put those fees right back into the system.”

At the end of her speech Pallante mentioned that she had just received a letter from the Senate Judiciary Committee, specifically sent by Senator Chuck Grassley (R-IA), who Chairs the Committee, and Ranking Member Senator Patrick Leahy (D-VT). The letter from Grassley and Leahy asked the Copyright Office to undertake a study and to report back on a number of software copyright issues.

Pallante read a portion of the letter received from the Senate Judiciary Committee, which said: “As software plays an ever increasing role in defining consumer interactions with devices and products, many questions are being asked about how consumers can lawfully use products that rely on software to function.” She then remarked that this inquiry goes away from copyrights merely protecting expressive content, and further pointed out that the Senate is asking about works that are protected by copyright but still functional.

Ultimately, there will be a Federal Register Notice to announce the software copyright investigation. Pallante previewed the questions that the Copyright Office will be putting to the public, which likely won’t appear in the Federal Register until sometime in December 2015. Some of the questions will be:

1. Please address the provisions of the Copyright law that are implicated by the ubiquity of copyrighted software in everyday products.
2. Whether and to what extent the design, distribution and legitimate use of products are being enable and/or frustrated by the application of existing copyright law to software in everyday products.
3. Whether and to what extent innovative services are being enabled and/or frustrated by the application of copyright law to software in everyday products.
4. Whether and to what extent legitimate interests or business models for copyright owners and users could be undermined or improved by changes to copyright laws in this area.
5. Identify key issues in how the copyright law intersects with other areas of law and establishing how products that rely on software to function can be used.

Pallante explained that this is not an exhaustive list of questions, and that the Copyright Office will need to delivered the report to the Senate Judiciary Committee no later than the end of 2016.