Category Archives: Issues

Update: Antitrust and the Proposed Penguin Random House and Simon & Schuster Merger

Posted July 29, 2022

In November 2021, Authors Alliance published a blog post about antitrust and the publishing industry, focusing on a recent antitrust investigation intended to block the merger of two of the largest publishers in the country: Penguin Random House (“PRH”) and Simon & Schuster. The case is currently the subject of antitrust proceedings, with the Department of Justice (“DOJ”) on one side, and PRH, who is the party that would be purchasing Simon & Schuster, on the other. On August 1st, 2022, this case is scheduled for oral argument in the District Court for the D.C. circuit before Judge Florence Pan. In today’s post, we will provide an update on the case and share some thoughts about what it might mean for authors.

Witness Lists

Last week, the lists of witnesses for each side were announced. Both PRH and the DOJ included many prominent authors and publishing industry professionals on their witness lists. Literary agents and publishers will testify for both sides. Perhaps surprisingly, each party’s witness list also includes well-known authors. Bestselling author Stephen King will testify on behalf of the government, for example, whereas Andrew Solomon will testify on behalf of Penguin Random House. Penguin Random House also plans to call an economist to testify, likely as to potential economic effects of the merger.

Parties’ Final Briefs

Then, earlier this week, both PRH and the DOJ submitted their final briefs in the case before it proceeds to oral argument. In its brief, the DOJ argues that a merger between PRH and S&S would violate antitrust laws based on the huge market share of bestsellers that the new firm would have, which it estimates will be nearly 50%. The DOJ also postulates that this would result in lower advances for authors, as there would be fewer publishers to “bid” on anticipated bestsellers, and ultimately, that the merger would lessen creative output and mean fewer authors could make a living from their writing.

The DOJ’s brief also contextualized the merger within the longstanding pattern of publishing houses merging and consolidating, arguing that the industry as a whole is an “oligopoly” dominated by five major publishers, which cumulatively control 90% of the market for anticipated bestsellers (aside from Simon & Schuster and Penguin Random House, Hachette Book Group, Macmillan, and HarperCollins make up the rest of the so-called “Big Five”). Smaller publishers, which lack the resources of these major players, are generally unable to compete with the Big Five when it comes to anticipated bestsellers, as they often cannot offer the large advances bestselling authors come to expect. The DOJ concludes that because the planned merger would substantially lessen competition in the anticipated bestsellers market, it is presumptively illegal, a presumption which it states cannot be overcome by PRH’s arguments. The DOJ’s argument is also notable because it focuses on the harm to authors, not consumers. By including diminished creative output in the negative effects that might result from the merger, the DOJ’s brief signals that incentivizing authorship and supporting authors are important interests to be weighed when considering reorganization within the publishing ecosystem.

PRH, for its part, argues that the relevant “market” in the case should not be the market for anticipated bestselling books, but market for books published overall. It further alleges that the “anticipated bestsellers” market (which the DOJ defines as books with advanances over $250,000) the DOJ discusses in its filings has no basis in industry classifications, and would only include approximately 85 books out of the more than 55,000 books published each year. PRH also challenges the government’s “presumption” of illegality, arguing that its prediction model is not adequate to show a likelihood of competitive harm. PRH argues that the merger would actually enhance competition by enabling the new firm to offer more attractive offers and incentivizing other large publishers to do the same in order to compete. It also states that the DOJ government misunderstands the publishing industry and book auctions, and that the DOJ’s predictions about competition within the publishing industry rest on false assumptions. For example, the brief explains that there is substantial uncertainty about how well a book will perform once it is published, making book auctions highly subjective and meaning that no “market price” can be set for book advances. Additionally, because authors have other priorities aside from maximizing financial gain, such as establishing strong relationships with their editors and ensuring that the publisher is a good fit for their work, it is not unheard of for authors to accept a bid that is not the highest offered due to these other factors.

Overall, the parties’ final briefs in this case show that the book publishing industry is one beset by unusual characteristics and conditions: the offer and auction processes are not straightforward, sales predictions are unreliable, and the role of literary agents in book sales can obfuscate things further. And while publishing houses have steadily consolidated over time, antitrust efforts to make the industry less of an “oligopoly” have so far not been successful.

As a general matter, Author Alliance believes that more competition among publishers, and less consolidation of market power, will benefit authors. The trend that the DOJ observes about consolidation is true across the industry, including tradebook publishers but also academic publishers, textbook publishers and others, and substantially and negatively impacts all types of authors. It’s also true that more competition across the publishing ecosystem is needed, as shown by the pending ebook pricing fixing lawsuit against the Big Five publishers and Amazon.

What’s Next?

Multiple sealed documents have been filed in the case, which makes it difficult to say with certainty what next steps are already in the works. Reports are that after initial oral arguments, trial will begin and is expected to last three weeks. The court has set a post-trial briefing schedule, suggesting that the upcoming hearing will not be the end of the story in this case. Authors Alliance will keep our readers informed about any updates as this antitrust case moves forward.

Hachette Book Group v. Internet Archive: Updates and Other Amicus Briefs

Posted July 20, 2022

Last week, Authors Alliance submitted an amicus brief in Hachette Book Group v. Internet Archive. You can learn more about the arguments we made in our brief in last week’s blog post. Authors Alliance was not the only amicus in this case—five other briefs were submitted by organizations and individuals that, like Authors Alliance, believe controlled digital lending (“CDL”) to be a fair use worthy of defending in court. In today’s post, we will provide an update on the case and an overview of other amici’s arguments.

The Case

In June 2020, four of the largest publishers filed a lawsuit against the Internet Archive in the Southern District of New York, challenging, among other things, the legality of CDL. The case is currently before district court Judge John Koeltl. The case stretched on for over two years until both parties filed their motions for summary judgment in early July. A request for “summary judgment” is one where a party asks the court to rule on the case before a full trial, and is proper when no facts are in dispute. Summary judgment motions are fairly typical at this stage in a civil trial.

On July 14th, six amicus briefs were filed by the following parties:

Authors Alliance;
Library Futures Institute, together with EveryLibrary Institute and ReadersFirst;
A group of copyright scholars led by law professor Jason Schultz;
A group of intellectual property law professors led by law professor Rebecca Tushnet;
Michelle Wu, former director of the Georgetown Law Library and someone deeply involved in the history of CDL;
Kenneth Crews and Kevin Smith, both lawyers and librarians who have written and taught extensively on library copyright issues.

The next day, Judge Koeltl granted Authors Alliance’s motion to submit an amicus brief, as well as the other five amici’s motions to do the same. Later that day, the publishers filed an opposition to several of the amicus briefs, including ours, but this came after the judge had already granted the motions.

We are pleased that Judge Koetl promptly agreed to allow us to submit an amicus brief in this case. Amicus briefs are useful when they can provide information or perspectives not offered by the parties in the case. We believe our brief will accomplish just that: we provided the court with information on the views and motivations of authors to show it that many authors do support CDL, contrary to the publishers’ argument that authors as a group are against CDL. While amicus briefs are not very common at the district court level (but more common in higher courts), the six separate briefs in this case show how many parties are deeply invested in CDL, and highlights the importance of this case for readers and authors going forward.

Other Amicus Briefs

Library Futures Institute

The Library Futures Institute, along with groups the EveryLibrary Institute and ReadersFirst, submitted an amicus brief in the case representing the perspective of libraries. In its brief, Library Futures explained that CDL is an established practice employed by numerous public libraries across the country—it is far from unique to the Internet Archive. Library Futures further contextualized library lending historically: this is not the first time that publishers have been up in arms about changes in library practices, yet book publishing as an industry continues to thrive. CDL is also cost-effective for libraries and the taxpayers that support them, allowing libraries to make their collection more accessible and broadly available while making the most of the limited resources and physical storage libraries have. Library Futures also drew key distinctions between licensed ebooks and CDL scans: the two have different features and purposes, undermining the publishers’ argument that a CDL loan is a highly effective substitute for licensing an ebook. Instead, Library Futures argues that CDL bridges the gap between print and digital resources for researchers and readers, ensuring that libraries can serve their mission and readers can access books.

Copyright Scholars

A group of 17 copyright scholars, led by NYU Law Professor Jason Schultz, submitted a brief to the court discussing the first sale doctrine, digital exhaustion, and library lending. In their brief, the copyright scholars explained that libraries have had a special place in our copyright scheme since time immemorial, and copyright permits libraries to lend books out in whatever manner they see fit. This fact, the copyright scholars argue, means that libraries should be able to loan out copies via CDL without publishers’ interference. This brief also argues that CDL is a fair use because of its nonprofit, socially productive purpose and the fact that it does not cause “market harms” for the purposes of fair use analysis. Because CDL enables libraries to do what they have always done—make their collections available to patrons and adapt to changes in technology—the copyright scholars argue it is consistent with fair use and with legal principles covering libraries’ operations.

Intellectual Property Law Professors

A group of intellectual law professors, led by Harvard Law professor Rebecca Tushnet, also submitted a brief in this case to make the argument that the noncommercial and nonprofit status of CDL make it consistent with fair use. Tushnet explained how and why CDL is a noncommercial use and explained that fair use analysis favors such uses. Furthermore, this brief discusses how nonprofit library lending has historically received special treatment in the law because of libraries’ crucial role in supporting access to knowledge, freedom of speech, and a core purpose of copyright: to incentivize creation for the benefit of the public. Libraries help democratize information by ensuring broad audiences can access information, and CDL is simply a new way for libraries to fulfill this mission.

Michelle Wu

Michelle Wu, a former law professor and former director of the law library at Georgetown, also submitted a brief in this case defending CDL. In her brief, Wu explains that CDL was designed to strike a balance between two competing interests: granting authors exclusive rights and encouraging socially beneficial onward creation. She also discusses the broad range of ways in which CDL benefits libraries, and explains that the publishers’ proposed solution—that libraries must digitally license works—is inadequate to meet the needs of libraries and their patrons. Wu also explains that, regardless of the outcome of this particular case, the court should be extremely cautious about disrupting CDL as a general practice, because its contours, applications, and features vary across the different implementations of CDL. While the publishers behave as if CDL is a monolithic practice, it can vary substantially between institutions that implement it.

Kenneth Crews and Kevin Smith

Library and information scholars and historians Kenneth Crews and Kevin Smith also submitted an amicus brief in this case, arguing that CDL is a natural extension of traditional library activities in supporting communities, broadening access to information, and facilitating civic engagement. In their brief, Crews and Smith contextualize the history of libraries in the U.S., and emphasize libraries’ role in ensuring public access to information and working towards a more egalitarian society. The brief also explains how and why CDL is the “logical and reasonable next step” for libraries as they adapt to meet the changing needs of their patrons. The digital age has brought on heightened inequality in access to information, making CDL lending by libraries more important than ever.

What’s Next?

Following their motions for summary judgment, both the publishers and the Internet Archive filed letters asking the court to agree to grant oral argument, where the parties appear and make their case before the judge. No oral argument has been scheduled as of the date of this writing, though we will keep our readers apprised as this case moves forward. After briefing and arguments, the court has a few options. It could grant either side’s motions in whole or in part. The court could also conclude that important facts actually are in dispute, in which case a full trial may be scheduled. Once there has been a decision in a case, there is always the possibility that either party could appeal the ruling by asking the Second Circuit (the relevant court of appeals) to reconsider Judge Koeltl’s decision.

Authors Alliance Submits Amicus Brief in Hachette Book Group v. Internet Archive

Posted July 15, 2022

Authors Alliance is thrilled to announce that we have submitted an amicus brief in Hachette Book Group v. Internet Archive, a case currently pending in the Southern District of New York. In the case, four large publishers—Hachette, HarperCollins, Penguin Random House, and Wiley—brought a lawsuit against the Internet Archive, challenging, among other things, the legality of Controlled Digital Lending (“CDL”).

Our brief asks the court to uphold CDL as a fair use and explains that, contrary to the claims of the publishers, CDL does not harm authors, and in fact many authors support it strongly. In anticipation of our brief, we launched a survey to elicit feedback from our members and other authors on how they viewed CDL and whether and how they had used it. A majority of respondents voiced strong support for CDL, showing that the publishers’ representations about author interests do not apply to all authors. Our voice is an important one in this case because the publishers purport to represent the interests of authors in general, when a vast majority of working authors do not publish with these publishers or necessarily share their interests. Authors are not a monolith, and while not all authors support CDL, many see it as a valuable way to achieve their dissemination goals.

In our brief, we argue that CDL should be upheld for four reasons. First, CDL does not disrupt incentives for authors to create: authors have different motivations for creating new works, and these can include seeing their works have a greater impact when made available through CDL. Second, CDL helps authors reach readers, ensuring works are broadly accessible rather than languishing on library shelves. Library readers can encounter difficulties getting access to works when they are only available as print copies, whether due to print or mobility disabilities or simply living too far from the library in question. Third, CDL ensures that works are preserved, keeping them from disappearing into obscurity once they are no longer available commercially, but remain protected under copyright. The disappearance of 20th century books from public consciousness is a serious problem, and CDL’s preservation function is one solution. Finally, CDL can be a powerful research tool for authors to access others’ works during their writing process. CDL enables efficient access to a wide variety of research sources, and several Authors Alliance members have attested to the effectiveness of CDL as a research tool.

We will keep our readers and members informed as this important case moves forward. We thank all of our survey participants for helping us understand the views and motivations of Authors Alliance members and other authors. You can read our full brief below:

Click to access Authors-Alliance-Amicus-Brief_HBG-v.-IA_Filed.pdf

Authors Alliance Supports Model Ebook Legislation

Posted July 7, 2022

Authors Alliance is pleased to add its support to an effort that would restore balance to the ebook market. Last week, Library Futures released a policy statement and model legislation that would help state legislatures resolve a host of challenges that make it difficult for libraries to lend ebooks and ensure their long-term availability.

Why we care: For authors who want to have an enduring impact on the world, having their writings fall into obscurity is a major concern. For print books, libraries have historically played an important role in making sure books did not drop out of circulation. No matter the current state of the market or what is going to make the biggest splash on a publisher’s bottom line (or even whether a book has long gone out of print), libraries make authors’ books available to readers in both the short and long term. Copyright law plays an important role in balancing the level of control that publishers have over copies they sell and the rights that libraries and their readers have to access and use those copies. Current law gives libraries fundamental rights, including the ability to buy copies on the open market, lend copies to users one at a time, and preserve books for the long-term.

For ebooks, publishers have been able to write their own rules for how libraries can use those books. That’s because every ebook that you buy–or that a library acquires –is not actually owned by the purchaser, but licensed by the publisher or ebook distributor. The terms of these licenses are largely dictated by publishers. In recent history, libraries have contended with contracts that severely limit how they can fulfill their mission – contracts that charge libraries multiple times more than what consumers pay, place strict limits on how many times a ebook may be lent out before the library has to pay for it again, place limits on how long the library can have access, limits on how long a user can check out a book, and limits on how researchers can use that book (e.g., limiting text and data mining), among many other limitations that don’t apply in the print world.

These kinds of contractual restrictions make an end run around the traditional market balance that existed in the print world. The end result is that for ebooks, authors are less likely to reach the readers they hope to, especially cutting out readers who rely on libraries for access and don’t have the financial means to purchase ebooks themselves. Restrictions on library preservation activities can also jeopardize long-term availability. While libraries are committed to continuing to pay for the care needed to maintain books long into the future, commercial publishers have no such incentive beyond the window in which a work is commercially viable. That window for commercial viability is short – on average, only 5 years. While some publishers (mostly academic publishers) have been willing to agree to license terms with libraries that provide for long-term availability for ebooks, most others have not, and instead actively frustrate library efforts to ensure long-term access. All of this means that as time goes on, these types of restrictions could make authors’ books harder—if not impossible—to find online.

What the proposed ebooks law does: We wrote last year about a Maryland law passed in 2021 that aimed to force publishers that sold ebooks in the state to also license to libraries on “reasonable terms,” addressing many of licensing problems we note above.

While the bill passed the legislature and became law,it ran into trouble almost immediately. The Association of American Publishers brought a lawsuit to enjoin its enforcement, arguing that because copyright law is the domain of federal law, state legislation governing ebooks is preempted by federal law and therefore unenforceable. Earlier this year, the Federal District Court of Maryland agreed, holding that because the Maryland law required that publishers “shall offer” a license to libraries whenever they offer an ebook to the public, it effectively forced publishers to grant these licenses, conflicting with the copyright holder’s federally granted exclusive right to control public distribution. The court explained, “[f]orcing publishers to forgo offering their copyrighted works to the public in order to avoid the ambit of the Act interferes with their ability to exercise their exclusive right to distribute. Alternatively, forcing publishers to offer to license their works to public libraries also interferes with their exclusive right to distribute.” The decision tracks closely with an opinion that Shira Perlmutter, Register of Copyrights and Director of the U.S. Copyright Office, released in 2021. The Copyright Office drew a sharp distinction between those state laws that purport to regulate the terms of a contract (which she concluded are unlikely to be preempted since they do not interfere with the right to distribute) with state laws that require publishers to grant a license (likely to be preempted). Perlmutter explained that “[b]oth the Third Circuit and the District of Utah have explicitly excluded from permissible state regulations those that “appropriate[] a product protected by the copyright law for commercial exploitation against the copyright owner’s wishes.”

Since Maryland passed its legislation, numerous other states have taken up the same issue, with slight variations on their approach. Given the failure of the Maryland law, how states craft such legislation is clearly important.

Authors Alliance supports the Library Futures policy paper and model legislation because it offers a reasonable, productive, and viable alternative pathway for states to address inequities and unequal bargaining power in the ebook marketplace. Specifically, it proposes an approach that does not demand that publishers license to libraries on certain terms, but instead focuses on the state’s traditional and well accepted role in regulating how its own state contract law will apply, particularly in cases of unequal bargaining power. We encourage states to utilize the framework set out by Library Futures rather than repeating the same framework as the Maryland law.

Authors Alliance Joins Amicus Brief in Vans v. MSCHF, Supporting the First Amendment Rights of Creators

Posted June 27, 2022

On Friday, Authors Alliance was pleased to join on an amicus brief in an important and fast-moving trademark case before the Second Circuit Court of Appeals in Vans, Inc. v. MSCHF Product Studio, Inc. Vans, creator of a variety of well-known skater shoes, alleged that MSCHF (an art collective, based in Brooklyn, pronounced “mischief”) had infringed its rights by “blatantly and unmistakably incorporat[ing] Vans’ iconic trademarks and trade dress” in MSCHF’s own shoe, which MSCHF called the “Wavy Baby.” For its part, MSCHF and the associated artist who designed the shoe (the artist’s stage name is “Tyga”) defended its creation by arguing that its shoes are a parody and an artistic expression of Van’s trademarks, thus protected by the First Amendment. MSCHF, for this project and many others, primarily uses “existing, potent, pieces of culture as [their] building blocks and working medium to create new works.”

Earlier this year, the Eastern District of New York granted a temporary restraining order and preliminary injunction against MSCHF, preventing distribution of the Wavy Baby shoes. The court reasoned that the Wavy Baby shoe was likely to cause consumer confusion and that MSCHF’s First Amendment defense was unlikely to succeed. MSCHF appealed, and the case is currently before the Second Circuit Court of Appeals.

In the past, Authors Alliance hasn’t weighed in on trademark lawsuits like this. But one of the major issues we care about is making sure that authors can freely communicate their ideas and reach broad audiences. We know that our members “write to be read” and hope to see their knowledge and products of their imagination widely disseminated. Often, restrictive interpretations of copyright law can impose a barrier for authors. That’s why we’ve focused on things such as fair use, which gives authors the right to comment, criticize, and create parodies freely, without infringing copyright, even when using or referencing material from other creators, and even when those materials include popular brands and culturally significant materials.

Other laws, such as trademark law, can impose significant barriers for authors as well, and other rights such as the First Amendment can protect authors. Our brief doesn’t take a position on who should win the lawsuit. What we do take a position on is that First Amendment protections in trademark suits be taken seriously; authors and artists rely heavily upon those protections to comment on modern consumer culture. Thus, the brief argues that the Second Circuit should reinforce a clear framework for courts to dispose of unconstitutionally oppressive trademark suits early in the litigation process, as a matter of law. As our amicus brief argues, “[t]rademark law does not give brand owners the right to control depictions of, or comments on, their brands. Nor can it. The First Amendment guarantees artists’ right to depict the world as they see it and to respond in the marketplace of ideas to the inescapable corporate brand messages by which we are bombarded every day, virtually everywhere we look.” Without a clear framework for quick disposition of these suits, our amicus brief argues, “deep-pocketed brand owners can chill artists’ exercise of their First Amendment rights simply by threatening or filing lawsuits that are unlikely to prevail on the merits but that will entail long, costly discovery battles.”

Thanks to the attorneys at Lex Lumina PLLC for drafting this brief, and the visual artists, Mason Rothschild and Alfred Steiner, who joined us as amici curiae.

Authors Alliance Submits Amicus Brief to the Supreme Court in Warhol Foundation v. Goldsmith

Authors Alliance is thrilled to announce that we have submitted an amicus brief to the U.S. Supreme Court in Warhol Foundation v. Goldsmith, a case that the Court will hear this coming October. Our brief was filed in support of the petitioner, the Warhol Foundation, which is asking the Court to reexamine the Second Circuit’s constrained interpretation of what it means for a use to be transformative, a consideration in fair use cases that, when met, weighs heavily in favor of fair use. Authors Alliance has covered this case extensively over the past year, and we think and hope that our voice will be a useful one as the Court considers the scope of fair use in the art world and beyond.

The lawsuit concerns a series of Andy Warhol screen prints and sketches of the late musician Prince, inspired by a photograph taken by photographer Lynn Goldsmith. The images in the case were created after a first image was commissioned by Vanity Fair based on the photograph by Goldsmith, authorized pursuant to separate agreements between Vanity Fair and Goldsmith and Vanity Fair and Warhol. The authorized Warhol image appeared in the magazine in 1984 and included credit for both Goldsmith and Warhol. However, Warhol went on to create fifteen additional works of the image in the same style, which are the subject of the litigation.

After learning of the additional images after Prince’s death, Goldsmith sued the Warhol Foundation for copyright infringement, alleging that the Prince Series infringed her right to prepare derivative works, one of the exclusive rights granted under copyright—in the photograph of Prince. In its decision, the district court found for the Warhol Foundation on fair use grounds, focusing on the transformative nature of Warhol’s prints, which the court stated “transformed Prince from a vulnerable, uncomfortable person” as seen in Goldsmith’s photograph “to an iconic larger-than-life-figure” as depicted in Warhol’s series. Under the traditional “new expression, meaning, or message” test articulated by the Supreme Court in Campbell v. Acuff-Rose and applied across the country for almost three decades, the district court found that the screen prints were transformative. Yet the Second Circuit went on to reverse the district court’s decision, applying a novel standard for transformativeness rather than the Campbell test. The Second Circuit held that since comparing the Goldsmith photograph and the Prince series side by side, they appeared visually similar, Warhol’s use was not transformative.

In our brief, Authors Alliance first argues that the Second Circuit misunderstood the interaction between the fair use doctrine and the derivative work right. One of an author’s rights under copyright is to prepare derivative works, such as translations and movie adaptations. But even when a second creator creates a derivative work, that use might still be allowed under fair use. For example, a literary parody is a classic example of fair use. An author might make a film version of a work that is also a parody. Even though movie adaptations are part of the derivative work right, the parodic character of the film parody could still make the use a fair one.

Second, we argue that the Second Circuit ignored guidance from the Supreme Court about how to tell the difference between an infringing derivative and a derivative that is also a fair use. In addition to failing to apply Campbell’s established “new expression, meaning, or message” test, the Second Circuit treated the “transformativeness” standard as an all-or-nothing inquiry, when numerous court cases show that transformativeness is a matter of degree—a use might be highly transformative or only modestly transformative. The Second Circuit also considered the Prince series as if each image were the same work, rather than assessing the nature of the different images on a work-by-work basis as it has done in other fair use cases involving visual art. We also pointed out that this constrained interpretation of fair use does not serve the objectives of the Copyright Act or the interests of creators.

Finally, Authors Alliance argues in our brief that the Second Circuit’s narrow interpretation of fair use in fact hurts the very creators that copyright is designed to protect. Focusing on nonfiction authors, we explained that the Second Circuit’s decision made it difficult to even discern what test for transformativeness it was applying. We explained how Authors Alliance exists to support authors, and one of the main ways we do this is by creating informative guides to help authors understand the legal aspects of publishing. By presenting a new and vague measure of what it means for a use to be transformative, the Goldsmith decision could make it much harder for us to provide this guidance. It also makes it harder for authors to determine whether their uses are fair, which could lead authors to take a conservative stance on fair use, potentially detracting from their authorship. Because this does not serve the interest of our author members, we are supporting the Warhol Foundation in asking the Court to overturn this decision before it is applied in other contexts, doing serious damage to the fair use doctrine and the authors who rely on it to create new works of authorship.

Authors Alliance will keep our members apprised of any developments in this case. Read our full brief below:

Click to access AuthorsAlliance_WarholFoundationv.Goldsmith_Amicus.pdf

Top Gun and Termination of Transfer

Posted June 10, 2022

Termination of transfer has been in the news lately with a dispute over the release of a sequel to the movie Top Gun, entitled Top Gun Maverick, which as of the date of this blog post is one of the highest grossing movies in the U.S.. A little discussed and somewhat arcane provision of copyright law, termination of transfer is a mechanism that allows authors to formally reclaim rights that were previously handed over to a publisher or another party. Termination of transfer can be a powerful tool for authors who want to reclaim rights, but the termination of transfer statute is complicated, requiring that authors wait at least 35 years to exercise this right and serve notice between two and ten years in advance.

In the Top Gun Maverick dispute, the estate of the author who wrote a magazine article on which the original Top Gun movie was based is suing Paramount Pictures in an effort to stop the film’s release. Paramount had obtained a license for the magazine article, a nonfiction piece entitled “Top Guns,” for the original movie, but did not obtain a license to use the materials for the sequel. “Top Guns” was published in 1983 and is “a character-driven tale of two ambitious Navy fighter pilots” which inspired the original film.

In its complaint, the estate claims that it terminated the transfer of rights in “Top Guns” via the statutory provision, meaning that Paramount would no longer hold rights in the article as of the date of termination. The estate provided notice about the termination in 2018, and alleges that the termination went into effect in 2020. For its part, Paramount claims that Top Gun Maverick was “sufficiently completed” before 2020 when the termination went into effect, as it had originally been planned for release in 2019. On the other hand, the estate has expressed its view that the film was not completed until 2021 based on re-shoots.

The questions in the Top Gun Maverick dispute may be largely technical: what does it mean for a film to be sufficiently completed, and how does this relate to statutory termination of transfer? Paramount has expressed that it has no interest in settling, reflecting its likely belief that it did not need a license from the author of “Top Guns” in order to produce Top Gun Maverick, whether due to the timing of the termination of transfer or for other reasons. Regardless, it is notable to see a major news story and high-profile lawsuit involving termination of transfer. Many have lamented that statutory termination of transfer is rarely used due to its obscurity, context dependence, and how complicated the provision and its requirement are. Authors Alliance is optimistic that this renewed attention to termination of transfer could lead authors and other creators to explore whether termination of transfer might help them reach their dissemination goals, and we encourage our members to consider termination of transfer where appropriate. Once a termination of transfer has been affected, the author who terminated the transfer regains the rights she had previously handed over to her publisher or another party. In the case of the “Top Guns” author’s estate, the estate is now free to license the article to other parties (whatever the result of the current dispute might be).

Authors Alliance has a dedicated resource page on termination of transfer as well as a tool for authors to help them determine when they might be able to effectuate a termination of transfer and a template and guidance on effecting a termination of transfer. We have also published guest blog posts from authors on their experiences with termination of transfer. If you have experience with termination of transfer, please reach out to us at info@authorsalliance.org to share your story and help us bring more attention to this important but underused provision within copyright law.

Fair Use and Literary Parodies

Posted June 3, 2022

“Parody Is Not Infringement” by Joe Gratz is licensed under CC BY-NC 2.0.

Fair use is one of the more dynamic topics in copyright law lately—the Supreme Court has issued decisions or agreed to hear cases in two separate fair use cases that could affect how authors can rely on fair use just within the past year and a half. Fair use is also a topic Authors Alliance discusses a lot on this blog and elsewhere—we care about fair use so much that we wrote a book on it! While our guide focuses on fair use for nonfiction writers, fiction authors can and do rely on fair use to create new creative works of authorship. One of the clearest examples of fair use in the realm of fiction is parody (a topic we previously discussed in our 2020 series on fair use for fiction authors). At the most basic level, a parody is defined as “a literary or musical work in which the style of an author or work is closely imitated for comic effect or in ridicule.” In today’s post, we will contextualize parodies within copyright and offer some thoughts on how law and practice surrounding parody might affect authors of parodies and authors more generally.

Parody at the Supreme Court

The landmark Supreme Court decision that proposed a framework for a use’s “transformativeness” which is still relied upon today, Campbell v. Acuff-Rose Music, was itself a case about parody. In the case, the rap group 2 Live Crew recorded and released a song entitled “Pretty Woman.” The song drew from “Oh, Pretty Woman,” a rock ballad by Roy Orbinson and William Dees which was featured in the film Pretty Woman. After reusing a familiar line from the song, the 2 Live Crew song “degenerates into a play on words, substituting predictable lyrics with shocking ones.” The song “juxtaposes the romantic musings of a man whose fantasy comes true, with degrading taunts, a bawdy demand for sex, and a sigh of relief from paternal responsibility.” The Court interpreted this change “as a comment on the naiveté of the original of an earlier day, as a rejection of its sentiment that ignores the ugliness of street life and the debasement that it signifies.” While many remember Campbell for the concept of transformativeness that it established as part of the test for fair use, it also shows the strong legal protection for parodies.

Parodies and Artistic Judgments

One issue that sometimes arises when an author defends their use of another’s work as a fair use parody is the question of whether it is a parody at all. Courts require more than claims from the author that their work is a parody in order to consider it as such. The question of whether the apparent parody uses the first work for a different purpose, or in a way that is transformative, or merely reuses existing material to unfairly benefit from that creative output, involves some artistic judgment by a court. While courts have, in different ways, resisted being slotted into the role of art critic, some judgment as to a work’s “parodic character” is inevitable.

The recent fair use case, TCA v. McCollum, is an illustrative example of this problem. The case concerned the use of a portion of the comedic routine “Who’s on First,” written by Bud Abbott and Lou Costello, in an original play entitled Hand to God, described as an “irreverent puppet comedy” about “a possessed Christian-ministry [sock] puppet.” While the play was not described as a parody, it did arguably use the comedic routine for comedic effect or ridicule, making it at the very least “parody-like.” In Hand to God, “Who’s on First” takes place as a conversation between the protagonist and Tyrone, a sock puppet worn on the character’s hand. The actor performs both roles, using different voices for the character and the sock puppet. In 2015, a district court found the use of the routine in the play to be “highly transformative,” because “[w]hereas the original Routine involved two actors whose performance falls in the vaudeville genre, Hand to God has only one actor performing the Routine in order to illustrate a larger point.” It explained that “[t]he contrast between [the character’s] seemingly soft-spoken personality and the actual outrageousness of his inner nature, which he expresses through the sock puppet, is, among other things, a darkly comedic critique of the social norms governing a small town in the Bible Belt.”

But the next year, the Second Circuit reversed the district court’s decision, finding that the use of “Who’s on First?” in Hand to God was not transformative or a fair use. The court argued that neither the playwright or the district court had explained how the use of “Who’s on First?” specifically served the “darkly comedic” aim of the play. The court added that its conclusion was bolstered by the fact that the playwright presented a portion of the routine “almost verbatim,” apparently ignoring the fact that verbatim copying can be fair use in some instances. In the view of the Second Circuit, the use of the routine did not “add something new” to “Who’s on First?” with “new expression, meaning, or message.” It is difficult to square this with the astute observations of the district court regarding the creative use of “Who’s on First” in Hand to God, and begs the question of how much artistic judgments are involved when judges decide whether a work is transformative or parodic in character.

Parody in Practice

While the fair use doctrine provides strong legal protection for parodies, in practice, authors might still be cautious about whether and how they create parodies of literary works. The possibility of facing a lawsuit related to a new book is daunting, even when those lawsuits are entirely unsuccessful. The cost of defending a copyright infringement suit can be very high, and authors are already strapped for time and resources they need to create new works of authorship. This threat of copyright liability can lead some authors and other creators to be cautious about creating parodies. For example, there has recently been news of an upcoming horror film parody of Winnie-the-Pooh involving live action actors, entitled Winnie the Pooh: Blood and Honey. This work arguably fits squarely within the definition of parody, turning Pooh and Piglet from lovable, naive animated characters into gruesome killers portrayed by actors. Yet the filmmaker waited until Winnie-the-Pooh by A.A. Milne entered the public domain before creating the film. Moreover, the filmmaker took additional precautions to avoid antagonizing the Milne estate or Disney, who owns copyrights in the character as presented in Disney’s Winnie-the-Pooh films and movies. The filmmaker made sure to pattern the character designs off the drawings in Milne’s book rather than the Disney TV show or films, and even omitted characters like Tigger who did not appear until Milne’s later The House at Pooh Corner, which has not yet entered the public domain.

Parodies and the law around them are an important topic for authors who care about fair use. Fiction authors may be inspired to create new parodies, and nonfiction authors too can take lessons from the laws around parody as to transformativeness and practical caution, even when the law is on one’s side.

Copyright Term, Disney, and “Steamboat Willie”

Posted May 25, 2022

Authors Alliance thanks our research assistant, Derek Chipman, for researching and authoring this blog post.

Copyright and Disney are in the news again with the recently proposed Copyright Clause Restoration Act, legislation which would reduce the length of copyright protection as 2024, when the iconic character Mickey Mouse will enter the public domain, approaches. The bill, proposed by Senator Josh Hawley, would reduce the term of new copyrights to 56 years from its current duration—the life of the work’s author plus an additional 70 years for most works—and would apply this change retroactively to entertainment companies with over $150 billion in market capitalization (currently around 70 companies). Senator Hawley has specifically targeted Disney with his bill as according to his website and statements to the press. This blog post will provide a brief history of Disney’s relation to copyright term extensions and the public domain to contextualize the latest copyright term debate.

The first short cartoon featuring Mickey Mouse, “Steamboat Willie,” was released on November 18, 1928, becoming a hit and launching Walt Disney Studio on its path to becoming an industry juggernaut. While not the first cartoon to use sound, “Steamboat Willie” was exceptionally creative with its music and sound effects, premiering only a year after Al Jolson’s The Jazz Singer. “Steamboat Willie” took three months to complete with an estimated budget of $4,986 and was an immediate hit with audiences following its premiere in New York.

At the time of Mickey’s debut, copyright law protected a work for up to 56 years under the Copyright Act of 1908. Under this law, copyright protection was for an initial term of 28 years, with an option to renew for another 28 years, meaning that the cartoon short would have entered the public domain no later than 1984. However, in 1976, Congress passed a new Copyright Act which extended the term of copyright for a period of 50 years after the death of the author with a maximum of 75 years for pre-existing works, pushing Steamboat Willie’s entry into the public domain until 2003. Then, in 1998, the Sonny Bono Copyright Term Extension Act was passed, extending the copyright term once again and keeping “Steam Boat Willie” from entering the public domain until January 1, 2024, almost 96 years after its debut. Disney lobbied heavily for the 1976 extension and the 1998 extension. In fact, the 1998 extension became derisively known as the “Mickey Mouse Protection Act” due to Disney’s heavy lobbying. With a public more interested in copyright law, it seems unlikely that Disney will successfully push for another extension.

Why did Disney push for these extensions? Copyright allows Disney to control access to these original cartoons and designs. Once it has entered the public domain, “Steam Boat Willie” will be free for the public to use in new works and distribute as they see fit. However, it is important to note that later designs of the characters would still be copyrighted until their terms end. It is also important to note that while the copyright protections for the characters would end, trademark protections on the character still exist (for a rundown on the differences between trademark and copyright, check out 2020 our blog post on the topic).

“Steamboat Willie” entering the public domain will enrich and benefit the public at large as authors and creators create derivative works and new imaginings of the work. Disney itself makes various use of public domain works in some of its most popular films: Frozen and The Little Mermaid are based on Hans Christian Andersen stories from the late 19^th century, The Lion King is a reimagining of Shakespeare’s Hamlet, and numerous others are based on folktales and myths. Incredibly, “Steamboat Willie” itself made use of the public domain: one of the film’s songs was set to the tune of “Turkey in the Straw,” which was already in the public domain at the time. Disney’s reliance on the public domain and simultaneous efforts to expand the scope of copyright protection are remarkable, demonstrating how the public domain can be a potent tool for creators while the long scope of copyright protection can be a strong limitation on add-on creation.

While the latest Copyright Extension bill may in reality have more to do with topics outside of copyright, shortening the length of copyright protection could positively impact cultural exchange by allowing culturally iconic and historically important works and characters like Mickey Mouse to enter the public domain sooner than nearly a century after their debut. While the bill is unlikely to pass, having been criticized by some as inaccurate and potentially unconstitutional, its introduction is itself notable, and has the potential to bring attention to the need for carefully considering the limits of copyright protection.

Authors Alliance Signs onto Letter Opposing the Pro Codes Act

Authors Alliance is grateful to our Research Assistant, Derek Chipman, for researching the Pro Codes Act and authoring this blog post.

On April 21, Authors Alliannce joined 15 other organizations to express strong opposition to the Protecting and Enhancing Public Access to Codes Act, known as the Pro Codes Act. If passed, the Act would allow private organizations to assert a copyright interest in an “original work of authorship” that is “adopted or incorporated by reference, in full or in part, into any Federal, State or municipal law or regulation” so long as the work is provided “at no monetary cost for viewing by the public in electronic form on a publicly accessible website.” As this post will explain, Authors Alliance opposes this bill, as it limits access and dissemination of laws and regulations that are necessary and even vital for a functioning democracy and robust free speech protections.

Co-sponsored by Representatives Ted Deutch and Darrell Issa, the Pro Codes Act would codify copyright protection for voluntary standards or “codes” incorporated into law by reference. These voluntary standards are initially written by industry experts, government officials, and organizations known as standards development organizations (“SDOs”). According to the General Aviation Manufacturers Association (an SDO itself), SDOs “provide industries with a neutral forum to exchange expertise and set standards.” The National Fire Protection Association (“NFPA”), another SDO, states that SDOs provide “hundreds of technical, industry and scientific standards to the federal government each year[,]” and that “government use of these standards decreases the burden of regulation and the costs of enforcement by conforming regulatory requirements to voluntary, user accepted standards.” The NFPA also asserts that it holds a copyright in its standards and fund its activities through the sale of their standards publications.

These standards are often quite lengthy, such as the Society of Automotive Engineers’s Motor Vehicle Dimensions standards, which is over 78 pages in length but is incorporated by reference into 49 CFR § 571.3, saving the legislature the need to write the entire document into the legislation. Standards incorporated into federal law must be made available to the public, however the only requirement currently is that a hard copy must be deposited into the National Archives, with electronic copies from the Archives being made available at the discretion of the SDO. The Pro Codes Act would officially establish that these incorporated standards are copyrightable, but must be made available on a publicly accessible website. Representative Deutch characterizes the bill as protecting public access and a “win for transparency and public safety.” Representative Issa likewise stated that the bill would “promote transparency in standard setting, and ensure the public can access the rules they are being asked to follow.” SDOs have expressed strong support for the bill, while our co-signers on the letter opposing it largely consist of organizations dedicated to open access and government transparency.

While the sponsors of the bill promote it as a step forward for transparency and access, it could be problematic for both. As David Halperin, Counsel of PublicResurce.Org, explains, this act could allow SDOs as well as other private parties that publish text “later incorporated into a law could use copyright law to block people from reciting or distributing the text . . . so long as they offer that text on a website somewhere.” While it may seem that the bill improves access by requiring the SDOs to post their codes online, it could actually limit access by giving a copyright interest to the SDOs and allowing them control over access. EFF astutely characterizes the proposed bill as a “Wolf in Sheep’s clothing” that could allow SDOs to assert a monopoly over their standards and codes via paywalls and restrictive licensing, likening this outcome to allowing them to “put up tollbooths in front of huge swaths of U.S. Law.” EFF also points out that the mandate that the SDOs make the codes publicly accessible is unnecessary, as the non-profit PublicResource.Org is already making these codes and standards available without burdensome restrictions. PublicResource.Org is a non-profit that promotes access to government records and documents by making them freely available online, and was a co-signer in the letter opposing the Act. As noted earlier, the NFPA and other SDOs claim they have a copyright in their standards even if incorporated into public law. With this theory in mind, certain SDOs launched a lawsuit against PublicResource.Org under a Copyright infringement claim, but a recent district court decision ruled the majority of its sharing was fair use.

The proposed bill could increase litigation for non-profits, but some have postulated the bill may be unconstitutional, given the Supreme Court’s ruling in Georgia v. Public Resource. Authors Alliance has previously covered this case, but importantly, the court held that “no one can own the law” under the government edicts doctrine, regardless of whether the material itself carried the force of law. Importantly, the court stated if “every citizen is presumed to know the law[,]” then “all should have free access to its contents.” The codes and standards incorporated by reference are vital to understanding the laws citizens are subject to and are a critical piece of the laws themselves. Without being able to access and disseminate these codes like regular legal codes, free speech is stifled, and the public could be unable to discuss critical pieces of legislation. As stated in the letter, giving an authorship interest to private entities for public laws would give these private actors the ability to control access via paywalls, demands of personal information, and to control the very format they are presented in, raising accessibility issues. Promoting the free exchange of ideas and fostering public discourse is key to a heathy democracy and society, and allowing private actors to control how critical pieces of public law are viewed and disseminated works against this.

Laws and legislation belong in the public domain, and strong access allows codes and standards that affect everyday life to be dispersed more rapidly and widely. By removing barriers to access, these standards could be more easily understood and studied by the public and even improved upon through the free exchange of knowledge. Requiring only that the text of codes incorporated by reference into public are made available on a website does not promote transparency if what is given in exchange is a monopoly power that curtails the copying and dissemination of that information.

Authors Alliance will be monitoring the progress of the Pro Codes Act and will keep our readers appraised of any new developments.