President Obama's IP Advisor Talks Reform Efforts and a New Administration

USPTO director Michelle Lee - Publicity - H 2016
Courtesy of United States Patent and Trademark Office

It's easier than ever to distribute creative works and ensure art is seen — but it's also easier than ever for those works to be shared illegally — and the Copyright Act that protects authorship was written in a time when the technology that people now use to access content didn't exist.

As we continue in the digital revolution, copyright reform remains a key focus for Hollywood and others who own intellectual property rights to things that are shared on the internet. 

The Hollywood Reporter had an in-depth conversation with Michelle Lee, the Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office, about the current reform efforts, her biggest areas of concern and how things will move forward under a new administration.

How could the change in the administration affect the ongoing copyright reform efforts announced by House Judiciary Committee Chairman Bob Goodlatte?

Copyright has never been a partisan issue, and there is no reason to believe that the results of the recent election will signal a change of course in copyright policy. Of course, legislation is in the first instance a matter for Congress, and the leadership in Congress will not be changing. I expect that Chairman Goodlatte will continue to lead the Judiciary Committee in a bipartisan effort to update our copyright laws. Since the founding of our nation, the United States has recognized the importance of copyright in encouraging creative expression by incentivizing people to produce and share the works that contribute to America’s leading role as a cultural and economic powerhouse. I am confident that USPTO will remain engaged in copyright policy to ensure that our copyright system continues to adapt and thrive, furthering the Constitutional goal of “promoting the Progress of Science and useful Arts."

What’s your sense of the scale of the changes we’re going to be seeing and what the priorities are?

Our copyright system is really designed to play a critical role to promote and incentivize the creators of artistic works, while also promoting their dissemination and use. The internet has significantly transformed how copyright policy and copyright works are being distributed nowadays. Computers can make an identical copy instantly. There is a tension between promoting and incentivizing that innovation and permitting free dissemination and fair dissemination. The two have to work in tandem in order for us to have a system that works.

The Copyright Act hadn’t been changed for a really long time. No one had studied it since the Clinton administration. This was the first comprehensive look at copyright issues related to the digital economy. The USPTO took the lead, and the National Telecommunications and Information Administration both worked on it, and we came up with a white paper. It’s on remixes, first sale doctrine and statutory damages. We looked at everything and got a lot of stakeholder input. We then produced the white paper that focused on those three topics.

Let me first focus on the issue of damages, because that’s one area where we did make a recommendation for legislative change. Right now damages are available to a successful plaintiff and they’re set within a certain range and we were concerned that this structure could lead to excessive and inconsistent rewards, particularly involving individual file sharing and also mass online services. So we proposed that Congress amend the Copyright Act in three ways. One is to establish certain criteria for the courts to consider when determining the award of statutory damages. Second is to remove the existing bar to invoking what we call the innocent infringer defense. Third is to give the court discretion to depart from the strict per work [standard] on the statutory damages, to give a little more flexibility.

We also noted the benefits of a new forum to adjudicate small copyright infringement claims below a certain dollar amount not as encumbered by district court litigation with all the costs and all the discovery to provide an alternative avenue to adjudicated small amount copyright infringement cases. So those were concrete legislative recommendations that we made to Congress.

On the other two topics, remixes and first sale doctrine, we didn’t make any statutory recommendations. On the remix side, we heard a lot of consensus that the fair use doctrine is an appropriate standard for determining the legality of remixes and the use of remixes. So the existing law is probably adequate and should not be amended, but we did say that there could be clarification on how the fair use doctrine is applied. The last one is the first sale doctrine and, again, we didn’t make a legislative recommendation there. When you sell a book, you can subsequently resell it without a problem. In the online version, if you’ve got an electronic copy can you subsequently transfer it? The bottom line conclusion was that there would be implications to the original rightsholder if there were identical copies being promulgated. Our sense is we’ll keep an eye on it and monitor it as to whether the law should change. That’s, in a nutshell, that thick document.

It’s just the beginning because, as with any piece of legislation, there’s still lots of work to be done and a lot of stakeholder discussions to be had in terms of best practices and so forth. Of course, in the background, Chairman Goodlatte and others in the House are looking at pretty comprehensive reviews of copyright issues and they’ve been having hearings.

What are your biggest concerns?

It’s always about maintaining balance. The technology is incredibly powerful and pervasive, not just domestically but internationally. [We have to make] sure that intellectual property systems across the globe afford the same level of protection that we afford in this country. I’m not saying it’s perfect here in the United States. We can certainly do better and that’s the purpose of the white paper, to fine tune and improve in light of the changing environment in which content gets disseminated. But, to the extent that American creators of copyrighted works have the ability to disseminate their works across the globe and have the protection and the security of knowing that they will be fairly compensated for their creative efforts, that’s pretty important. It varies a lot from country to country. What are we doing in countries where there’s not a strong protection? What’re the laws on the books? The remedies for infringement? The court systems and procedures? We need those protections if we want to open up those marketplaces for our filmmakers, our musicians, our authors.

What can be done with those issues of international infringement, with piracy, with the Disney World knock-off theme parks?

[Disney is] obviously a creator of wonderful creative works and their market is literally global. USPTO does a lot in terms of providing input on other countries’ laws in the area of patents, trademarks, copyrights and trade secrets. So when a country, for example China, is considering legislation, we will actually comment on their legislation and they’re usually pretty open to it.

So that’s the first level, looking at what are the laws on the books. Secondly, it’s making sure they have court systems that are fair to all litigants, whether you’re domestic or foreign — because it should be a level playing field for everybody. Thirdly, it’s making sure there are adequate remedies if there is an infringement. It’s got to be more than a de minimus amount of damages. It has to be enough to disincentivize the piracy or the infringement.

Then, a lot of it is making sure that customs officials have appropriate know-how to respond, to confiscate, to really crack down on the piracy and the infringement. It’s a lot of education and outreach. We have what we call IP attaches in 12 countries across the globe, including three in China and a number in India. It is precisely to help influence the legislation so that it is conducive to American businesses. It’s also to educate and create an environment that is more conducive to the export of American products, services and creative goods.

What issues in the realm of copyright, trademark, patent law should people in the entertainment industry be paying closest attention to?

On the copyright side, they should be paying attention to two international treaties. One treaty is called the Beijing Treaty, which is on audiovisual performances. The second one is the Marrakesh Treaty to facilitate access to published works for persons who are blind or visually impaired or otherwise disabled.

The Beijing Treaty will fill a gap in the copyright system by extending to audiovisual performers the types of protections that performers and producers of sound recordings already enjoy. It’s strengthening the protections for audiovisual performers. It’s an example of ensuring that proper balance to ensure that we’re generating the type of creative works that we want them to generate. On the other side, the Marrakesh Treaty is a perfect example of an exception to copyright protection. Affording rights to others to use the copyrighted works for these limited bases to allow people with visual imparities to have greater access to it. The USPTO had a leading role in preparing the ratification and implementation of those two treaties on behalf of the administration and we sent that to Congress in February.

What do you think are the most interesting questions being raised as we’re in this new frontier of copyright?

I think on the issue of fair use, how much is okay? How much is not? It’s absolutely right that it should be considered on a case-by-case basis because it’s so fact-specific. The thing about legislation is, it’s very powerful in that it’s a rule. It gets promulgated. It’s uniform. People know what it is. But if your difference in outcome varies upon the facts of the case, it’s hard for any piece of legislation to fully anticipate all the various cases. That’s why we have this wonderful system where we have statutes and they’re interpreted by judges, but there’s going to be a lot of case law development in that area.

Are there any cases that you have found particularly important in terms of the case law that they’ve developed? 

The advent of new technology [is] actually one of the reasons I entered the practice of law. I’m an engineer by training. I realized that with the constant evolution of technology, you’re going to push up against the boundaries of the law. The copyright law, which was created for printed publications, for books, for musical compositions, now has to evolve.

One of the first cases I worked on when I began the practice of law was the Apple v. Microsoft copyright infringement case. It had to do with to what extent the graphical user interface, the trash cans, the scroll bars, the icons, were protected by copyrights. There was no answer in the case law. So that’s just one example. That’s an example where, with the evolution of technology, people were trying to apply copyright law to an area that never before had been applied. The court’s held a pretty important role in all of this whether it be the application of the Fair Use Doctrine in remixes, whether it be the application of copyright law on graphical user interfaces for computers.

If I’m a creator, and I’m unhappy with how my creations are currently being protected what’s the best way to get involved in the conversation?

We’ve had these stakeholder meetings that led up to first the green paper that we wrote, and then the white paper. These are literally open to everybody. We publish public notices of these. We got a huge cross-section of the copyright community, all different sides, providing alternate viewpoints. That’s really the way in which the system works best.

Our regional office in Silicon Valley, which is the closest office to your stakeholders in the LA-area, will be trying to get out more information about those opportunities to provide input. Because we really do need everybody’s input in order to create the best policies. You can’t always make everybody happy, but you make the best decision by getting a cross-section of viewpoints.

It’s like voting. It’s both a right and a duty, really. If you want policies to work for your industry, provide input. Many of your stakeholders already do. They’re very sophisticated. They keep track of these issues. But it should be not just the big, well-funded, sophisticated players but also the small creators of artistic works that should be providing input. Is the system working for them? Because it needs to work for everybody.

So keep your eye out for these things. Or just submit your comments in writing. We read every one of the comments that’s submitted — every one of them — as we make recommendations to Congress and so forth.

What happens next? Are we just waiting to see if Congress takes up your recommendations?

We’re working on getting the Beijing and Marrakesh treaties passed. So we know what we want there and we’re working to facilitate that. On the statutory damages, legislation needs to be passed. We need to provide input. We’ll continue to provide technical assistance. On the other two areas, on remixes and the first sale doctrine, we’ll continue to convene and encourage multiple stakeholders to convene on best practices and so forth. There’s still lots of work to be done. You know how contentious some of these issues can be.

Looking ahead to 2017, are there any key dates or actions that people should be looking out for?

The USPTO has charged forward the last eight years, and it is positioned to face future challenges. We are financially more secure thanks to the America Invents Act, which gave us, among other things, fee setting authority. This fee setting authority is set to expire on September 16, 2018, which will be a key date for the new administration to work toward retaining this authority. In addition, we are more customer-service oriented and more responsive to stakeholders than ever before.

Lee, an MIT-trained engineer and former deputy general counsel at Google, is the first female director of the USPTO. She also serves as the principal advisor to the President on domestic and global copyright issues, and will continue in her role until Jan. 20.