IP for Creative Upstarts papers available for conference on Nov. 9-10, 2012

Presented by Michigan State University College of Law

Intellectual Property, Information & Communications Law Program

Co-sponsored by

       NKU Chase College of Law, Law + Informatics Institute

Copyright Alliance

This conference considers how law and policy can nurture diverse creative industries—”Creative Upstarts”—in the U.S. and abroad. “Creative Upstarts” encompass a range of commercial enterprises from independent artists and producers in developed countries to emerging content industries such as Nigeria’s “Nollywood,” Jamaican dancehall, Brazilian tecnobrega music, and Chinese digital publishing. Their interests have been overlooked in recent debates on intellectual property and information policy. This conference seeks to remedy that gap. Read More


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Professor Sean Pager


Second Circuit affirms that Internet streaming is not cable broadcasting

In 2010, ivi launched a television streaming service that provided subscribers access to television stations. The streaming service provided a national footprint for television access and harkened a potentially new chapter for TV distribution. As the court noted, “within five months of its launch,
ivi had offered more than 4,000 of plaintiffs’ copyrighted television programs to its subscribers.”

In WPIX v. ivi, the Second Circuit held that the new chapter must be written by Congress.

ivi had claimed the right to stream the television content pursuant to section 111 of the Copyright Act that allows cable companies to rebroadcast television signals in their local area upon payment of a compulsory or statutory fee. ivi took the position that it met the definition of cable system so that it could opt into the compulsory payment system.

Based on the statute and congressional hearings, the regulations provide the following definition for a cable system:

A cable system is a facility, located in any State, Territory, Trust Territory, or Possession, that in whole or in part receives signals transmitted or programs broadcast by one or more television broadcast stations licensed by the Federal Communications Commission, and makes secondary transmissions of such signals or programs by wires, cables, microwave, or other communications channels to subscribing members of the public who pay for such service. A system that meets this definition is considered a “cable system” for copyright purposes, even if the FCC excludes it from being considered a “cable system” because of the number or nature of its subscribers or the nature of its secondary transmissions.

The Second Circuit agreed that the language was ambiguous, so it applied the Chevron test to determine whether Congress was clear, and if not, was the agency regulation correct.

If the intent of Congress is clear, that is the end of the matter; courts must give effect to the unambiguously expressed intent of Congress.  If we determine that Congress has not directly addressed the precise question at issue, we proceed to Chevron step two, which instructs us to defer to an agency’s interpretation of the statute, so long as it is reasonable. [WPIX v. ivi, quoting Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467, 842-43 U.S. 837 (1984) (other quotations omitted).]

The court had a difficult time believing ivi had a facility located in a particular state as required or that the Internet was a “facility” as required under the statute, but more importantly it found that the language was not meant to be broadly construed. Despite case law holding that satellite transmissions were within the ambit of section 111, Congress disagreed and instead added section 119 to specifically address satellite retransmissions. Congress also added the work “microwave” by amendment rather than relying on a more general reading of the statute and regulation.

Against this backdrop, the legislative history strongly suggested that Internet broadcasting was not an included subcategory under the “other communications channels.” Had Congress intended Internet broadcasting it had many opportunities to add the language.  Under the second part of the Chevron test, the Copyright Office uniformly stated in both regulation and congressional testimony that Internet broadcasting was not subject to the statutory provisions.

Although the case remains at the preliminary injunction stage, the unequivocal position of the Second Circuit would make future success for ivi very unlikely.

Undoubtedly the technology is rapidly shifting and the time is coming for Apple, Google, Microsoft and other Internet/Mobile companies to rewrite the social contract between audiences and broadcasters, but that revision will not be based on existing statutory licensing schemes. Instead it will require either new, directly negotiated distribution agreements – or more likely triggered by creation of high quality content that originates on the Internet/Mobile platforms. If the “broadcasters” are “streamcasters” then the new model will evolve quickly. Until then cable will still have the upper hand.

So What is Law & Informatics and Why Study it in Law School?

On November 4th the NKU Chase Law & Informatics Institute held our opening reception at the beautiful, new LEED certified Griffin Hall, host to the NKU College of Informatics. Well over one hundred attorneys, business leaders, faculty and students attended, including representatives of NKU and many other Tri-State universities.

Among the presentations made by NKU President, Dr. James Votruba, deans Dennis Honabach (Law) and Kevin Kirby (Informatics) was a short video directed by Informatics undergraduate student Kyle Breitenstein.

You can see the video here:

We are very grateful for the time and effort from everyone who worked on the event and attended the event.

As you watch the short video, I hope you find the answers to the questions of this post. Please let me know.

What is Law & Informatics? Visit YouTube to learn more: http://www.youtube.com/watch?v=Muk5n1aDX0k

Lessons on Innovation – Schooling TV by Google

This week is the MediaGuardian Edinburgh International TV Festival 2011. As Informed Edinburgh explained, “The festival attracts a who’s who of the television industry, with over 2000 attendees, ranging from controllers, directors, and producers, to new media companies and distributors.” A major event for UK media, it has a sliver of U.S. interest generated from its keynote speaker – Google’s Eric Schmidt.

Interloper Schmidt did not disappoint, though his reception and impact were viewed quite differently by The Guardian – which found he did not understand UK’s media issues – and DigitalMediaWire – which found him prescient.

The speech and Q&A sessions reflected the gulf that separates U.S. from U.K. and the regulated television industry from the largely open Internet content business. As Schmidt commented, “Regulation has always favoured the regulated and at some level always shuts off new opportunities.” He rejected the notion that regulation to keep a multitude of voices serves a valuable social purpose. Instead he sees the competition being fierce and victory essential. “History shows that in the face of new technology, those who adapt their business models don’t just survive, they prosper. Technology advances, and no laws can preserve markets that have been passed by.”

The debate started at the festival is an important one. Schmidt is probably correct regarding the impact on disruptive innovation and the failure of lagging regulation to stop change. But the social value of media diversity is independent of efficiency. It begs a question whether society would be better with three or four search engines rather than only Google; meaningful networks to provide settings missing from Facebook; or television content that did not come from only four studios. The U.S. values efficiency so oligopolies and monopolies inevitably develop. The U.K. values media diversity so the industry is less efficient and faces challenges competing with the U.S.

Schmidt did his job well. This is a very important discussion for industry and government. The values – as well as the consequences – need to be better understood. And we can watch it live on the Internet.