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U.S. Senate Finance Committee Keeps Up Pressure on Chinese

As requested by the U.S. Senate Finance Committee, the U.S. International Trade Commission on Monday released the first of two comprehensive reports detailing the impact of China’s “indigenous innovation” policies and its local intellectual property enforcement regime on the U.S. economy.

Broadband Breakfast Staff

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Senate Finance Committee Chairman Max Baucus, D-Mont. (left) and Ranking Member Chuck Grassley, R-Iowa.

As requested by the U.S. Senate Finance Committee, the U.S. International Trade Commission on Monday released the first of two comprehensive reports detailing the impact on the U.S. economy of China’s “indigenous innovation” policies and its local intellectual property enforcement regime.

The report’s release, timed to co-incide with the U.S.’s 21st annual trade summit with the Chinese this week, re-iterates several years’ worth of American companies’ complaints about the insufficient level of intellectual property enforcement in China, as well as the country’s perceived protectionist policies in the form of a “web” of indigenous innovation policies.

But it also provides a comprehensive examination of China’s developing system of intellectual property, and it offers various frameworks with which to measure the scope of the policies’ economic impact on the United States.

The second report is due in May.

Both Democratic and Republican leaders of the Senate Finance Committee used the opportunity as a bully pulpit to publicize their efforts to press the Chinese government about intellectual property issues.

“It is time for China to get serious about protecting American innovation,” said Sen. Max Baucus, D-Mont., the committee’s chairman in a statement. “China continually fails to protect and enforce American intellectual property rights and discriminates against American businesses.  Small steps and empty promises won’t cut it when American jobs are on the line.  This week’s U.S. – China trade talks are the perfect opportunity for China to make serious commitments to address these issues.  It is time for action.”

“Despite China’s serious problem with intellectual property infringement, the U.S. government hasn’t done a comprehensive economic analysis of the impact on the U.S. economy until now.  This two-part report will fill that gap,” added Sen. Chuck Grassley, R-Iowa, the committee’s top Republican.

As defined by the ITC report, China’s “indigenous innovation” policies manifest themselves through government procurement policies, technical standards, anti-monopoly laws and tax regulation — all designed to block U.S. companies from accessing the Chinese market.

Among the findings of the almost 200-page report:

  • Shenzhen and Guangzhou are production and distribution hubs for copyright-infringing products. These two states are also where most infringing video games are produced. The games are officially banned in China.
  • Piracy of Western music and movies flourishes in China because they’re officially banned. When they’re not banned, there’s a delay in the release of the works because content companies have to find a local Chinese partner to distribute the product online.
  • The Chinese government’s focus on indigenous innovation has spurred a boom in patenting by Chinese inventors, who are then suing foreign companies for trying to market similar technologies in China.
  • The Chinese State Intellectual Property Office (SIPO) received 976,686 applications in 2009, with invention patent applications growing by 18 percent, utility model patents by 38 percent, and design patents by 14 percent compared to 2008.
  • Most SIPO applications were filed by domestic inventors: in 2009, Chinese applicants filed 73 percent of invention patent applications, 99 percent of utility model patent applications, and 97 percent of design patent applications.

Broadband Breakfast is a decade-old news organization based in Washington that is building a community of interest around broadband policy and internet technology, with a particular focus on better broadband infrastructure, the politics of privacy and the regulation of social media. Learn more about Broadband Breakfast.

Copyright

Public Knowledge Celebrates 20 Years of Helping Congress Get a Clue on Digital Rights

Derek Shumway

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Screenshot of Gigi Sohn from Public Knowledge's 20th anniversary event

February 27, 2021 – The non-profit advocacy group Public Knowledge celebrated its twentieth anniversary year in a Monday event revolving around the issues that the group has made its hallmark: Copyright, open standards and other digital rights issues.

Group Founder Gigi Sohn, now a Benton Institute for Broadband and Society senior fellow and public advocate, said that through her professional relationship with Laurie Racine, now president of Racine Strategy, that she became “appointed and anointed” to help start the interest group.

Together with David Bollier, who also had worked on public interest projects in broadcast media with Sohn, and is now director of Reinventing the Commons program at the Schumacher Center for a New Economics, the two cofounded a small and scrappy Public Knowledge that has become a non-profit powerhouse.

The secret sauce? Timing, which couldn’t have been better, said Sohn. Being given free office space at DuPont Circle at the New America Foundation by Steve Clemmons and the late Ted Halstead, then head of the foundation, was instrumental in Public Knowledge’s launch.

The cofounders met with major challenges, Sohn and others said. The nationwide tragedy of September 11, 2001, occurred weeks after its official founding. The group continued their advocacy of what was then more commonly known as “open source,” a related grandparent to the new “net neutrality” of today, she said.

In the aftermath of September 11, a bill by the late Sen. Ernest “Fritz” Hollings, D-S.C., demonstrated a bid by large copyright interest to force technology companies to effectively be the copyright police. Additional copyright maximalist measures we launched almost every month, she said.

Public Knowledge grew into something larger than was probably imagined by the three co-founders. Still, they shared setbacks and losses that accompanied their successes and wins.

“We would form alliances with anybody, which meant that sometimes we sided with internet service providers [on issues like copyright] and sometimes we were against them [on issues like telecom],” said Sohn. An ingredient in the interest group’s success was its desire to work with everyone.

Congress didn’t have a clue on digital rights

What drove the trio together was a shared view that “Congress had no vision for the future of the internet,” explained Sohn.

Much of our early work was spend explaining how digitation works to Congress, she said. The 2000s were a time of great activity and massive growth in the digital industry and lawmakers at the Hill were not acquainted well with screens, computers, and the internet. They took on the role of explaining to members of Congress what the interests of their constituents were when it came to digitization.

Public Knowledge helped popularize digital issues and by “walking [digital information] across the street to [Capitol Hill] at the time created an operational reality with digitization,” said Bollier.

Racine remarked about the influence Linux software maker Red Hat had during its 2002 initial public offering. She said the founders of Red Hat pushed open source beyond a business model and into a philosophy in ways that hadn’t been done before.

During the early days of Public Knowledge, all sorts of legacy tech was being rolled out. Apple’s iTunes, Windows XP, and the first Xbox launched. Nokia and Sony were the leaders in cellphones at the time, augmenting the rise of technology in the coming digital age.

Racine said consumers needed someone in Washington who could represent their interests amid the new software and hardware and embrace the idea of open source technologies for the future.

Also speaking at the event was Public Knowledge CEO Chris Lewis, who said Public Knowledge was at the forefront of new technology issues as it was already holding 3D printing symposiums before Congress, something totally unfamiliar at the time.

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In Google v. Oracle, Supreme Court Hears Landmark Fair Use Case on Software Copyright

Jericho Casper

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Photo of Tom Goldstein from the Peabody Award used with permission

October 12, 2020 – The Supreme Court on Wednesday publicly struggled with the copyrightability of software in a uniquely contested case between Google and Oracle, the outcome of which could play a significant role in the future of software development in the United States.

The oral arguments were the culmination of a battle that started 10 years ago, when tech company Oracle accused Google of illegally copying its code. Oracle owns the copyright to the Java application programming interface that Google utilized to establish a new mobile operating system.

The company has sued Google for more than $9 billion in damages.

Yet Google claimed a “fair use” defense to its copying. Google copied less than 1 percent of the Java code. Even though the law generally treats computer programs as copyrightable, Google’s attorney before the Supreme Court, Thomas Goldstein, said that by adapting Oracle’s code to serve a different purpose, Google’s use was “transformational,” and entitled to fair use protections.

Goldstein said that this form of unlicensed copying is completely standard in software, and saves developers time and lowers barriers to innovation.

He referenced a famous Supreme Court precedent about public domain works, Baker v. Selden, which in 1880 declared that once information is published to the public, the public has a right to use it.

“Google had the right to do this,” said Goldstein.

Still, Oracle attorney Joshua Rosenkranz asserted that the Java code is an expressive work eligible for copyright protections. Rosenkranz further argued that Google’s use of the code was not transformational.

Justice Sonia Sotomayor appeared to suggest that jurors in the lower court case properly found Google’s use to be transformational because it took the APIs from a desktop environment to smartphones.

“Interfaces have been reused for decades,” said Goldstein. Google had to reuse Oracle’s code to respond to interoperability demands.

“It has always been the understanding that this purely functional, non-creative code that is essentially the glue that keeps computer programs together could be reused, and it would upend that world to rule the other way,” he said.

Supreme Court observers said that the high court appeared leaning toward upholding the 2016 jury verdict vindicating Google’s fair use defense.

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Fair Use is Essential But its Enforcement is Broken, Says Senate Intellectual Property Subcommittee

Elijah Labby

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Screenshot of Grammy-winning recording artist Yolanda Adams from the hearing

July 28, 2020 — “Fair use” is an essential doctrine of copyright law that is unevenly applied, said participants in a Senate Intellectual Property Subcommittee hearing Tuesday.

The hearing, “How Does the DMCA Contemplate Limitations and Exceptions Like Fair Use,” saw participants discuss whether the Digital Millennium Copyright Act still permits fair uses of copyrighted content that would be otherwise infringing.

The DMCA, passed in 1998, criminalizes the manufacture, sale or other distribution of technologies designed to decrypt encoded copyrighted material. This ban on anti-circumvention tools does not appear to account for fair use.

The fair use exception to copyright law allows the republication or redistribution of copyrighted works for commentary, criticism or educational purposes without having to obtain permission from the copyright holder.

However, Joseph Gratz, partner at Durie Tangri, said that fair use often clearly applies but is not enforced, leaving users of the legally obtained content to deal with automated content censors.

“Fair use depends on context, and machines can’t consider context,” he said. “A video, for example, that incidentally captures a song playing in the background at a political rally or a protest is clearly fair use but may be detected by an automated filter.”

When an automated filter detects a song on a platform like YouTube, it redirects advertising revenue from the creator of the video to the creator of the song, often erroneously.

Rick Beato, who owns a music education YouTube channel with over one-and-a-half million subscribers, said that he does not receive ad revenue from hundreds of his videos.

“One of my recent videos called ‘The Mixolydian Mode’ was manually claimed by Sony ATV because I played ten seconds of a Beatles song on my acoustic guitar to demonstrate how the melody is derived from the scale,” he said. “This is an obvious example of fair use, I would argue.”

Grammy-winning recording artist Yolanda Adams testified that she sees the problems of fair use employment as about more than simply receiving money.

“As a gospel artist, I’m not just an entertainer,” she said. “I see my mission as using my gift to spread the gospel — so for me, fair use is not just about money. It’s about access.”

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