Last month the USCO completed its latest rulemaking on exemptions to the law prohibiting circumvention of technical protection measures — e.g., hacks to DRMs — under Section 1201 of the DMCA. The DMCA 1201 rulemaking process, which has taken place every three years since 2000, entails the USCO evaluating submissions of proposals for exemptions as well as oppositions to those proposals.
Section 1201 has become less well-known these days than the other major part of the DMCA, the “notice and takedown” law that sets limitations on copyright liability for online service providers. But somewhat ironically, the rulemaking process has metastasized over the years, as the law has been applied beyond media DRMs to garage door openers, laser printer toner cartridges, mobile phones, and various types of Internet-connected devices. The Copyright Office now has to evaluate about a hundred times the number of exemption proposals as it did during the first rulemaking in 2000.
Last year, the USCO concluded a study that recommended several changes in the rulemaking process. These changes streamlined the process in a few ways, not least by relaxing the requirement that every exemption be re-proposed each time with a completely new set of supporting evidence. Another important change is that the USCO staffers who run the rulemaking are no longer prohibited from using the wealth of information that they already know about technical protection measures and their applications in making decisions; they can “take administrative notice” of that information instead of having to rely solely on the evidence submitted in exemption proposals and oppositions to the proposals.
At our upcoming conference, Regan Smith, the USCO General Counsel who ran the latest rulemaking, will talk about the new exemptions and the new process.
The other major area of copyright and technology that the USCO is focusing on is the Music Modernization Act (MMA). Now that the MMA has become law, the USCO has a responsibility to take proposals from entities that want to become the mechanical licensing agency that the law calls for and select the winner. This agency will administer royalty payments under the new blanket license on mechanical (reproduction and distribution) rights to musical compositions that interactive streaming music services such as Spotify and Apple Music will take. Currently, each of these music services handles the onerous task of mechanical licensing on its own (usually by hiring third party service providers such as the Harry Fox Agency or Music Reports); the MMA gets them out of that business.
And it’s an enormous job: interactive music streaming currently generates hundreds of billions of transactions per year, a number that is rising rapidly. The selected agency has to be an independent nonprofit, but it will be able to subcontract parts of the job out to entities that aren’t necessarily independent or nonprofit, such as those aforementioned service providers. The USCO has until next July to select the agency.
Steve Ruwe recently returned to the USCO after a sojourn at the U.S. Patent and Trademark Office; one of his responsibilities as USCO Assistant General Counsel will be the mechanical licensing agency selection process. He’ll be giving an update on that process at our conference in January.
After Ruwe’s update, we’ll have a panel of experts to discuss the implications of the MMA on the future of mechanical licensing. The panel will include Bill Colitre of Music Reports, Todd Larson of Weil Gotshal (who has been representing two of the major music service providers in the MMA process), and representatives from the Open Music Initiative and the independent music publishing community.
Join us – register today!