Top Court Ruling Spurs Concerns Over Copyright

WASHINGTON, D.C.-The June 23 U.S. Supreme Court ruling that gives states immunity from private lawsuits seeking damages for patent and trademark violations does not yet affect copyrighted material, but recording industry observers are concerned that the ruling will soon be applied to that area.
As a potential copyright test case percolates in the 5th U.S. Circuit Court of Appeals in New Orleans, some industry observers speculate that the ruling could be applied should state-run universities come under fire for copying music, books, and movies from the Internet or more traditional sources.
The test case, Chavez vs. Arte Publico Press, challenges the constitutionality of the 1990 Copyright Remedy Clarification Act (CRCA), which sought to remedy federal court decisions that immunized states from copyright damage awards.
The appeals court must rule this year in the Chavez case, which was brought by an author against a publisher run by the state of Texas. It is likely that if the 5th Circuit Court finds in favor of the state-run Arte Publico Press, the case will be appealed to the Supreme Court for review. It is unclear whether the Supreme Court will elect to review it.
A number of music industry organizations have filed amicus (friend of the court) briefs in the Chavez case, including ASCAP, BMI, and the Recording Industry Assn. of America (RIAA), in addition to publisher, software, and movie interests.
The Chavez amicus brief states: "All that is required of states is that they respect the property rights of copyright owners by complying with federal copyright law-just as private persons are obliged to do."
Industry observers say that a Supreme Court decision against author Denise Chavez could reverse gains achieved in copyright protection over the last two decades and could cost copyright holders tens of millions of dollars in lost revenue.
In addition, legal experts say that if the Supreme Court were to rule against the federal government intrusion in copyright damages cases, it would bring about a "fragmentation" that would result in a kaleidoscope of varying and contradictory legal decisions obliterating uniform federal protection.
Frances Preston, president/CEO of BMI, says she is concerned about the potential effects of the Supreme Court's recent trademark and patent decisions, adding that if the court were to ultimately rule in favor of states in the Chavez copyright test case, BMI members would be "in great danger of having their work taken without compensation by states and state-owned institutions."
"It's a very serious issue," adds Ed Murphy, president of the National Music Publishers' Assn. (NMPA).
Cary Sherman, senior VP and general counsel of the RIAA, says that the patents and trademark rulings "are damaging and bad in principle." But he adds that he doesn't believe if the Supreme Court sides with the states on copyright lawsuits it will have much impact on record companies.
"We are less vulnerable," he says. "It's a question of scale. Compared to what our members are facing with Internet piracy and MP3, [copyright infringement involving state entities] doesn't make a dent."
What if music education professors decided to copy recordings and produce their own "Great Classical Composers" custom-CD packages for classes? Says Sherman, "I don't believe, in the real world, that universities are going to get into the business of bootlegging CDs. Whereas, if you're a textbook manufacturer, your marketplace won't have to respect your rights."
However, Michael J. Remington, a law professor and veteran copyright-issues expert, notes that "in the case where there are a lot of uses of copyrighted materials by state institutions, particularly state universities, I would be less worried about hacker kids on the Net than I would about college textbooks and software, or indeed, the licensing of music, where universities are users and they're creating wealth, so to speak, through the unauthorized use of entertainment product.
"If the university doesn't have to pay for students' textbooks or for music-band concerts, football games-you're talking about a fairly significant redistribution of wealth," Remington says.
EASY ACCESS
The emergence of the Internet and computer-wired state facilities means that the copying of protected material-whether it is from books, articles, databases, written or recorded music, or videos-is much more prevalent and is far easier today.
Copying is often accomplished in the name of the "fair use" provision of the copyright law by funds-hungry state groups. It would be far cheaper, for example, for university administrators to buy one "English 101" textbook and copy it than to spend the funds to purchase thousands of copies for an entire freshman class.
Lawmakers say the CRCA fulfills the Supreme Court's requirements to determine whether Congress "may abrogate a state's 11th Amendment immunity" and allow that "the copyright law should remain fully enforceable against all infringers, including states."
It also constructs a tit-for-tat legal setting: A state waiver of sovereign immunity in copyright-infringement suits in federal court would be required in order for states to be able to call on the full benefits of federal copyright laws if they were infringed.
DISSENTING OPINIONS
Some observers are concerned, though, that the majority of the Supreme Court justices appear to be staunch supporters of states' sovereignty and might find the CRCA a flawed document.
NMPA's Murphy is cautiously optimistic. "There were enough dissenting opinions [in the Supreme Court's June 23 ruling] that it does give us some ray of hope with the Chavez case" should it be heard by the Supreme Court.
Several lawyers pointed specifically to the remarks by Justice John Paul Stevens in his dissenting opinion in one of the trademark rulings. "To the extent that a majority of this court finds this factor dispositive," wrote Stevens, "there is hope that the Copyright Remedy Clarification Act of 1990 may be considered "appropriate' legislation. The legislative history of that Act includes many examples of copyright infringement in the States-especially state universities."
Richard Reimer, ASCAP VP of legal services, believes that the CRCA stands as a "very strong record made before Congress of the need for this kind of protection on the part of copyright owners as applied to the states. That in and of itself may be a point of departure from the rulings last week involving patents and trademarks."
However, observers say, there is no way of knowing whether Stevens' contention that the CRCA will pass muster as constitutionally appropriate would sway the other justices that a ruling on copyright matters should be substantially different from those accorded the trademark and patent cases.
"Most people believe there's going to have to be some sort of congressional fix here," says Reimer.
On Capitol Hill, several Senate and House lawmakers have already voiced concerns about the impact of the rulings, although no hearings have yet been scheduled.
"This is a dramatic development with major ramifications in intellectual property law," says Remington, who adds that despite widespread speculation about Congress' role, the court may have the final say. "The Congress will have to tread lightly when it comes to constitutional questions," he says.