In a speech before the participants of the World Copyright Summit June 9^th, U.S. Senator Orrin Hatch called copyright piracy “the very antithesis of creativity—crippling growth and stifling innovation in its wake.”

A senior member of the Senate Judiciary Committee and co-chair of the Congressional International Anti-Piracy Caucus, Hatch is actively involved in legislative efforts to protect intellectual property. In his recent speech, Hatch emphasized the need for legislation to address performance rights and orphan works issues, and called a Swedish court’s conviction of the operators of the peer-to-peer file-sharing site Pirate Bay a “moral victory.”

Hatch also encouraged Internet Service Providers and copyright holders to work together to prevent Internet users from distributing unlicensed copyrighted content.

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Copyright Clearance Center CEO Tracey Armstrong and Outsell Inc. Lead Analyst Ned May kicked off the recent “Big Ideas” Conference for BookExpo America 2009 in New York with a focus on the future of content licensing.

Armstrong described digital content licensing as a “hot space to be in right now.” She and May discussed some of the challenges facing content providers, and covered such topics as: the similarities between CCC’s licensing model and the planned Book Rights Registry, which is part of the proposed Google Book Search settlement; challenges created by new technology, including Amazon’s Kindle and eBooks; and, licensing options for today’s copyright holders. See video of this event.

In addition to Book Expo, Armstrong was featured in a recent article about CCC in Publisher’s Weekly.

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After six months (to the day) of relative inaction, yesterday turned out to be a very interesting day for those closely following the proposed class action settlement between Google, the Authors Guild and the Association of American Publishers. The proposed settlement agreement, announced last October 28, would settle the claims brought by authors and publishers against Google for its unauthorized digitization of in-copyright books as part of the Google Library Project and authorize Google to continue to scan and to sell online access to scanned books in exchange for certain payments to the books’ rightsholders.

Opt Out Deadline and Fairness Hearing Delayed

First, U.S. District Court judge Denny Chin granted the request of a group of authors to extend by four months the May 5, 2009 deadline for authors and publishers to opt out or object to the settlement. The authors, led by representatives of the estate of John Steinbeck, filed the motion seeking the extension last Friday, the 24th of April, arguing that the two-month notice period was insufficient to allow authors time properly to digest the complex terms of the proposed agreement and to assess their implications. Representatives of the settlement classes and Google responded by filing a motion of their own which rejected the arguments presented by the Steinbeck group, but independently requested a sixty day extension in order to allow the settlement class “more time to consider its rights and options” under the Settlement.

In granting the authors’ request, the judge set September 4, 2009 as the new opt-out date. He also delayed the fairness hearing originally scheduled for June 11, 2009 until October 7, 2009. All other deadlines and key dates will remain unchanged.

The extension should come as little surprise in light of the unprecedented scope of the proposed settlement, which would encompass potentially millions of in-copyright books, including those of foreign authors and publishers, and the sheer density of the settlement documents (which run well over 300 pages in length). Indeed, public scrutiny of the settlement, particularly (but not only) from foreign quarters, had appeared to increase in recent weeks as the original May 5 opt-out deadline approached. The delay will provide authors, publishers and others with more time to assess the settlement terms and make a determination whether to participate, opt-out or take other action.

Antitrust Inquiry Commenced by US Department of Justice

Later in the day, with the Blogosphere still abuzz with news of the extension, it was widely reported by several major news outlets that the U.S. Department of Justice had opened an antitrust inquiry into certain aspects of the settlement. The reports suggested that to date the inquiry appears to be focused on the treatment of “orphan works” – those in-copyright works whose owners cannot be readily located or identified – under the settlement. An oft-repeated criticism of the proposed settlement agreement has been that it would provide Google with an effective monopoly over the use of orphan works by immunizing it, and it alone, from any infringement claims with respect to the use of such works. Advocacy groups and others have called on the Justice Department to intervene to address this and other antitrust concerns. While the DOJ’s inquiry does not mean that it necessarily will intervene, its interest in the settlement, along with Judge Chinn’s grant of the authors’ motion for an extension, does suggest that the road to approval may not be as smooth as the last six months may have led us all to believe.

Copyright Clearance Center recently presented a free online seminar about the proposed settlement featuring publishing and copyright attorney Lois Wasoff. A recording of the event, entitled “The Authors Guild, AAP, Google Settlement: What Authors & Publishers Need to Know as May 5th Approaches” is available here.

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The copyright infringement convictions of operators of the popular Pirate Bay peer-to-peer file-sharing website in Sweden April 17^th will likely have implications well beyond that country’s borders.

Gottfrid Svartholm, Peter Sunde Kolmisoppi, Fredrik Neij and Carl Lundstrom were each sentenced in the Stockholm district court to one year in prison and they were collectively fined more than $3 million for violating Sweden’s copyright law. Their site, The Pirate Bay, was one of the largest and most “in-your-face” file-sharing sites on the Web, allowing millions of users to swap all sorts of copyrighted content, from movies to video games.

Pirate Bay administrators were known for posting on their site the cease-and-desist notices they received from rightsholders, along with their defiant responses to those notices. Rightsholder groups, like the International Federation of the Phonographic Industry (IFPI), are celebrating the verdict, citing it as a huge step toward protecting the rights of content creators around the world.

The decision will be appealed, but the outcome in the Swedish court could have a very real effect on the future of illegal file-sharing sites in many countries around the world. Of course, it will not eliminate these activities altogether. But the combination of strong criminal penalties with the efforts in some quarters to hold internet service providers more accountable for preventing online infringement, may make a significant dent.

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The International Intellectual Property Alliance (IIPA) has again submitted its annual review of intellectual property-related issues to the Office of the U.S. Trade Representative (USTR). As we have come to expect from the Special 301 report, there are dozens of countries on its Watch Lists – both the usual piracy suspects, like Russia, as well as surprise entrants such as Canada, which the IIPA has identified as “the lone OECD nation that has not modernized its copyright laws to reflect the rise of the Internet.” As we have also come to expect, the Special 301 report decries the job and revenue losses caused by piracy of all types of copyright materials — software, games, videos, and CD’s.

What is new this year is an increased focus on Internet file-sharing. This signals that the IIPA recognizes that the most important issue is no longer one of back-alley photocopying, or even “merely” one of commercial-scale physical piracy. With the explosion of online methods for file sharing through P2P networks, high-intensity reproduction of copyrighted works has become more mainstream and more widespread, and has started to reach the type and level of activity that everyone can easily see as piracy. And P2P file sharing is no longer just for music and movies. As we noted in a recent post, P2P has also moved into publishing, as evidenced by the troubling rise in textbook file “sharing”.

Alarmingly, the ubiquity and ease of “sharing” copyright materials seems to be conferring legitimacy on the practice – at least in some eyes. As file sharing technology becomes even more convenient and is paired with wider and wider Internet bandwidth, the impact on copyright industries is likely to become even harder to address, as infringement and even piracy start to come more from individuals than from traditional mass-production operations.

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