During last year’s presidential campaign, the Obama HOPE poster designed by prominent street artist Shepard Fairey achieved iconic status. Soon after Fairey’s poster appeared in early 2008, it went viral: on t-shirts, buttons, Internet sites, coffee mugs, even on bicycle spoke cards. Now, the Associated Press (AP) has approached Fairey with a demand for credit and compensation for use of the original AP photograph, alleging that Fairey’s use infringes AP’s copyright.

Fairey has acknowledged he used AP’s shot as the basis for his poster, but claims that his use of the photo was a fair use under copyright law. In fact, in response to AP’s actions, he’s actually filed suit for a declaratory judgment that would confirm his fair use claim and effectively protect him against AP’s claims of infringement.

Given the ubiquity of the Obama HOPE image and given Fairey’s notoriety, this affair has generated immense play. For all the noise, this case will probably settle before it goes to trial.

Neither the copyright claim that AP makes, nor the fair use issue that Fairey argues, is particularly clear cut. On the copyright side, it’s not clear whether there’s sufficient creativity to merit much copyright protection. Copyright protects creative expression. The resolute expression in the AP photo at issue here—the framing, the angle, the choice of just the right moment to shoot, and that now famous tilt of Barack Obama’s head—are all very interesting, but this was one shot of many taken by a pool photographer snapping away at a public event, not a picture taken in a posed setting. So it’s hard to argue that there is much creativity in the original photo. There is also a question of whether AP even owns the copyright, since photographer Mannie Garcia was temping for AP, without contract, when he took the photograph in 2006. Garcia is working with AP to resolve this matter.

Can Fairey establish a good fair use defense in this case? Maybe. Fair use is intended to allow limited uses of copyrighted works, mainly for socially beneficial purposes like scholarly research, social commentary and criticism, as well as for certain highly “transformative” uses, without the permission of the copyright owner. Clearly, Fairey added creative elements to the original photo—use of different media, color and background, for example—and has argued that his work is transformative. He has also added social and political messaging (”Hope”, “Progress”, etc.). On the other hand, Fairey’s poster is undoubtedly a derivative work, and if there are creative elements in the photo that are protected by copyright, Fairey has arguably employed all of them. Interestingly, Fairey may not have received direct payment for the rampant commercial use of the Obama HOPE image, but the artist has definitely received a great deal of valuable publicity.

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Washington, DC — The rate that digital retailers like Apple’s iTunes must pay songwriters and music publishers will stay the same under a new decision handed down by the Copyright Royalty Board (CRB), which rejected the publishers’ petition for a 66% rate hike. The decision to freeze royalty rates at $0.09 a song came after revelations this week that Apple had threatened to shutter its iTunes store last year if rates rose and the business became unprofitable. The CRB also established for the first time a rate of $0.24 cents for each ringtone, and gave publishers the right to seek a 1.5% late fee, calculated monthly. “These events will bring clarity and order to an environment that for the past decade has been hampered by litigation and uncertainty on all sides,” said David Israelite, president and CEO of the National Music Publishers’ Association (NMPA). “During this challenging time for the music industry and digital stores and services, we are pleased with the CRB’s decision to keep royalty rates stable for the next five years,” said Jonathan Potter, executive director of the Digital Media Association (DiMA), which represents digital music retailers like Apple, Amazon and Best Buy.

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P2P file-sharing, long the scourge of the music and movie industries, increasingly is making waves in the publishing world. Most notably, textbook file sharing is on the rise.

The RIAA and MPAA have implemented aggressive campaigns to stop illegal file-sharing, but publishers have generally taken a more subdued approach, opting for take-down notices over litigation. And while the RIAA and MPAA lawsuits against content users have generated tremendous attention to the P2P issue, file-sharing is still alive and well.

If more and more students eschew bookstores in favor of downloading free textbooks from P2P sites, publishers will be faced with a familiar conundrum: move even more quickly to adjust business and distribution models—or take up the battle in the courts. Either way, change seems to be in the air.

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Like others before it, Canada is finding that updating its copyright legislation from the analog to the digital environment is drawing interest—and opposition—from many quarters. If passed, a bill up for consideration before Parliament would amend the nation’s existing copyright law to address a host of issues posed by new technologies and types of use.

Content users and rightsholder groups have been lobbying legislators over this bill for more than a year. Last December, more than 35,000 opponents succeeded in delaying the bill by banding together through Fair Copyright for Canada, a Facebook group launched by University of Ottawa Professor Michael Geist.

Legislators have touted the bill as a means to bring Canada’s copyright law in line with international IP standards. But many opponents of the bill refer to it as the Canadian DMCA (Digital Millennium Copyright Act), claiming it’s the result of pressure from powerful U.S. media companies to restrict content users’ rights to access and use digital content. Proponents, such as the Canadian Publishers’ Council, say the bill is long overdue.

The Canadian bill does bear some similarity to the U.S. DMCA in that it restricts people from circumventing technology that locks down content. But it also offers an interesting twist that sets it apart. Under the DMCA, internet service providers must take down content when a rightsholder claims infringement. According to the Canadian amendment, ISPs would not be held responsible for the actions of their subscribers. No takedown required.

Those following the Google Book Search case may find the new Canadian bill particularly interesting as it tackles one of the questions at the heart of that controversy. As drafted, search engines that copy content in an effort to provide a way for people to locate information would not be held liable for damages, unless they ignore rightsholder requests to remove infringing material.  This would appear to accommodate Google’s “opt-out” policy for digitizing books still in copyright.

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Is orphan works legislation doomed to fail again? Reaction to the new bills introduced in the House and Senate last month has been mixed, and lines are starting to be drawn in support and opposition. The proposed legislation is meant to tackle problems that arise when someone interested in using copyrighted material in a book, a song, a museum exhibit, etc., either can’t identify or can’t locate the rightsholder.

Legislators in both houses offered substantial concessions to photographers, the textile industry and other visual-works rightsholders who’ve opposed orphan works legislation in the past. The bills call for the U.S. Copyright Office to certify private searchable databases that would allow users to actually see a sample of each work, but also protect against unauthorized screen scraping. Under the proposed House bill, users would have to notify the Copyright Office each time they intend to use an orphan work and to provide substantial information about their efforts to find the missing rightsholders.

Rightsholder and user groups both are split. Among rightsholders, publishers (significant content users in their own right) favor the less restrictive Senate bill, while photographers are lined up behind the House version. Illustrators appear to remain firmly opposed to any substantive change to current law. User groups, including colleges, libraries and documentary producers, are finding that requirements of the bills are testing their longstanding support for a solution to the orphan works dilemma, though some seem prepared to accept a less-than-hoped-for outcome. But at least one prominent university advocate has concluded that no legislation is preferable to that being offered.

If the legislation stands a chance in this Congress, it will need to be pushed through both houses quickly. In this election year, little substantive work will take place after the start of summer. At this point, it’s a toss up whether key groups and both houses can resolve their differences by then.

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The literary blogosphere erupted last week after HarperCollins announced that it is creating a new publishing start-up venture with a strategy to minimize some of the business risks trade publishers now face. Specifically, the plan envisions a new publishing model in which authors would receive little or no advances and booksellers would no longer be able to return unsold books as has long been the practice. In place of advances, authors would receive 50 percent of the royalties earned.

Not surprisingly, some authors viewed the plan as heretical. Others, however, noted that in view of the challenges facing the trade publishing industry, fresh thinking is long overdue.

By nearly eliminating author advances, HarperCollins’ new publishing unit aims to attract authors who might otherwise be considered too risky. Those include new authors who are yet unproven and successful authors interested in writing different kinds of a books than what they’re known for. The publisher plans to release about 25 books a year in multiple formats.

It is unclear how retailers ultimately will react to the prospect of getting stuck with unsold books. These aren’t good times for most booksellers, as was evidenced by reports that the second largest book retailer, Borders, is strapped for cash and may sell the business. Conceivably booksellers might demand a larger cut of the sale if they can no longer send returns back to the publisher.

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After three years of hearings, studies and deliberation, the Section 108 Study Group has posted its final report on how to bring the special provision of the U.S. Copyright Act regarding libraries and archives into the digital age. The results reflect the difficulty of balancing the interests of copyright holders, libraries and archives.

The Study Group recommended a number of legislative changes to Section 108 to facilitate preservation and archiving of published and unpublished material, unrestricted online content and television news programs. The report also reviewed many issues on which the members—often divided between the interests of rights holders and librarians—could not reach full agreement.

There were no major bombshells in the report. Interestingly, the Study Group identified, but refrained from proposing recommendations on, a number of significant copyright issues worthy of further study and consideration. These included the use of movies and other non-text-based materials in the library context, technology circumvention and e-reserves.

Nineteen copyright experts served on the Section 108 Study Group, which was co-chaired by UNC School of Law Associate Dean for Academic Affairs Laura Gasaway and Richard Rudick, retired Senior Vice President and General Counsel of John Wiley and Sons (and Vice Chairman of Copyright Clearance Center’s Board of Directors). The Study Group’s report may be used by the Copyright Office to draft legislative recommendations to Congress.

The group’s years of effort and the resulting report illustrate just how challenging it is to find consensus on copyright issues and, ultimately, how daunting the task of writing copyright legislation can be. Yet the pace of technological and social change around the topic has led to calls in some quarters to consider a revising of the 1976 Act for a new generation (just as the 1976 Act replaced the 1909 Act). Whether it will come to that in the near term is doubtful, but the pressures being created in the digital environment are equally hard to ignore.

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The issue of orphan works has made its way back to Washington’s attention. The House Subcommittee on Courts, the Internet and Intellectual Property held a hearing March 13^th to gather some follow-up testimony from a small group of rightsholder and content user representatives before reintroducing legislation to address the problem of using orphan works without authorization. Orphan works are those copyrighted works for which no rightsholder can be identified or located.

Subcommittee chairman Howard Berman made it quite clear that he intends to introduce new orphan works legislation shortly and would like to receive the cooperation of interested parties such as those who gave testimony on March 13. It is likely the new bill will look very similar to The Orphan Works Act of 2006, which was proposed and received substantial bipartisan support, but was never enacted, in the last Congress.

Given concerns previously expressed by some visual artist groups, the IP Subcommittee will probably make a few revisions to the language. Photographers, textile designers and graphic designers have argued that, unlike written content, their materials usually do not contain rightsholder information through no fault of the applicable rightsholders, and therefore orphan works legislation must address their unique infringement challenges.

Since this is an election year, and re-election campaigns will be in full swing by late summer, new orphan works legislation will probably be fast-tracked to reach the floor of the House by mid-May.

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A U.S. district court judge in New York has denied Viacom’s motion to seek punitive damages in its $1 billion lawsuit against YouTube and parent company Google. Judge Louis Stanton issued his ruling on March 7^th, stating that U.S. copyright law does not accommodate punitive damages in a copyright infringement case.

Under copyright law, Viacom will still be able to seek statutory damages. The programming giant filed an infringement suit against YouTube and Google in March 2007, claiming about 160,000 video clips from Viacom programs were posted on YouTube without permission and compensation. Google claims that its actions are covered by the Digital Millennium Copyright Act (DMCA).

Last month, a federal judge granted Google’s request for more time to hand over documents in the case. The deadline was extended to May.

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The International Intellectual Property Alliance (IIPA) has released its annual assessment of the state of large-scale copyright violations worldwide and their effects on U.S. copyright industries. The IIPA’s Special 301 review to the U.S. Trade Representative estimates that piracy in 51 countries cost U.S. copyright industries more than $18 billion in 2007.

The review shows a hike in estimated losses for three out of the five industries represented by the IIPA—music, business and entertainment software. IIPA member, the Association of American Publishers showed a $30 million drop in piracy losses compared to the prior year. The AAP reported some progress in its work with government officials in a number of Asian countries to tackle unauthorized commercial-scale copying and printing of textbooks and journals.

Interestingly, the IIPA review did not include loss estimates for the motion picture industry. Last month, the Motional Picture Association of America announced that their 2005 commissioned study on piracy significantly overshot estimated losses from peer-to-peer file sharing by college students.

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