The PRO-IP Act: Pulling Section 104

As I mentioned yesterday, the Congressional subcommittee reviewing the PRO-IP Act has pulled section 104 from the bill in an effort to make the bill more palatable to legislators at large. In a legal and logical sense, it seems that if we give the subcommittee members - and Rep. Berman in particular - the benefit of the doubt regarding their good intentions, this amendment would have come about for one important reason. Creating a statutory damages statute that allows for damages for each component part of a compilation simply injects too much uncertainty into the legal landscape when using pre-existing copyrighted materials.

The idea of fair use is essential to the continuing creation of new copyrightable subject matter in all media. Whether it is to spur the later creator to wholly new insights or as the basis for development of derivative works, fair use allows a person to use portions of someone else's copyrighted material for things such as criticism, education and parody.

In determining whether incorporation of copyrighted material in a work is "fair use," the courts undertake to analyze the following four factors:

1.the purpose and character of the use, including whether such use is of commercial nature or is for nonprofit educational purposes;

2.the nature of the copyrighted work;

3.amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

4. the effect of the use upon the potential market for or value of the copyrighted work.

Because this 4-factor analysis is interpretive, the later author or creator must make his own judgment at the outset of creation as to whether his use will be fair. If the original copyright holder disagrees and a court finds infringement, the later creator will be liable for damages. Changing the statutory damages provision as originally proposed by the PRO-IP Act, simply makes the risk too great for those intending to use materials under the fair use doctrine, and therefore stifles artistic innovation.

While the legislators on the subcommittee assure us that reform of statutory damages is still on the table, it seems that for now logic has prevailed.