A Copyright Office for the digital age

The Internet is a major driver of growth in the U.S. economy, enabling $8 trillion in electronic commerce annually, and a vital enabler of access to information, ideas and entertainment for people around the globe.  It has also been a boon to creativity, providing new platforms for the distribution of video, film and music. Digital sales now account for 68% of total sales revenue generated by the recording industry, and that number will surely grow. These new mechanisms for content delivery online are also convenient and revenue-generating alternatives to piracy – something that benefits creators, content providers, and consumers.  For example, the U.S. filmed entertainment industry will grow to over $36 billion by 2017, with the majority of growth coming from streaming services like Netflix, Hulu, and Amazon. Keenly aware of that the nation’s copyright framework can sometimes stifle rather than promote creativity in the digital age, Congress is actively considering reforms to the copyright system.  

The ability of the Internet to continue to fuel economic growth depends on a well-functioning and balanced copyright system.  Congress’ efforts should be guided by a need to strike the right balance between ensuring fair compensation for copyright holders and ensuring that innovation in new technologies and services can continue to thrive.  Meaningful copyright reform should entail taking a hard look at the structure and operations of the Copyright Office, which is charged with promoting creativity by maintaining an efficient national system for the registering of copyrights and maintaining a current copyright database so that information on ownership of copyrighted works is readily available to the public.  Housed in the Library of Congress as part of the legislative branch, the Copyright Office also advises Congress on copyright policy issues, prepares technical studies and provides guidance on best practices.  

{mosads}Yet, there is growing concern in the creative community that the Copyright Office, which has suffered from budgetary and staffing constraints and antiquated systems, has fallen behind technologically and is failing to meet basic user needs.  Its IT systems and its databases are woefully outdated, and its recordation system still requires things to be recorded and examined manually.  Although not permitted under current law, incentives should also be considered to motivate rights holders to update their records, perhaps as a condition of preserving their rights.  The phenomenon of “orphan” works and the daily challenges new services face when attempting to identify rights owners to license content is a prime example of the ways in which the copyright system has fallen short in its mission.

All of this has fueled an ongoing dialogue within industry and government about the future role of the Copyright Office.  Some have questioned whether it serves the public interest for the Copyright Office to continue as a separate entity within the Library of Congress.  Indeed, many of the Copyright Office’s structural and budgetary deficiencies are a function of its being tethered to the Library of Congress. The administration of all other IP functions are under the purview of the executive branch, which makes sense because the executive branch needs to be able to shape IP policy and negotiate and enforce IP commitments internationally. One proposal under consideration is to merge the Copyright Office with the US Patent and Trademark Office, effectively creating a new United States Intellectual Property Office with a Commissioner for Copyright position created on par with the existing Commissioners for Patents and Trademarks.

There appears to be much to commend this approach.  Under the law, the Under Secretary of Commerce for Intellectual Property, who also serves as the director of the Patent Office, is designated to be the president’s principal advisor on all intellectual property policy matters, including copyright.  Placing the Copyright Office within a new US Intellectual Property Office (USIPO) or US Patent Trademark and Copyright Office (US PTCO) would eliminate redundancy in the policymaking role and streamline these functions in a single executive agency.

In addition, the Patent Office is uniquely situated to fix the Copyright Office’s IT and database problems.  Having recently undergone a massive and successful IT overhaul, the Patent Office has the expertise and resources needed to fix this pressing problem.  This systems upgrade, like the administration of copyright generally, could and should be funded by copyright user fees, which, if insufficient, could be raised, like patent fees after the 2011 America Invents Act, to keep pace with the cost of the services provided and ensure that user needs are met.  Any proposal to combine the Copyright Office with the USPTO would need to entail iron-clad assurances that patent or trademark fees – which are kept scrupulously separate within the USPTO – are in no way diverted to subsidize copyright operations.  

Finally, incorporating the Copyright Office into a single USIPO would bring the U.S. in line with rest of the world, where a single unified IP office is the norm.  And for good reason.  A unified IP office streamlines functions and reduces costs and inefficiencies while providing consistency and coherence to IP and innovation policy across patents, trademark and copyright.  Creating a single USIPO in the executive branch – within the Department of Commerce — would also have the benefit of providing greater accountability on critical copyright policy matters, ensuring that the interest of copyright holders are balanced with those of their audiences and the public in general.  And it would maintain a strong role for Congress, which would continue to maintain oversight responsibilities for a USIPO, just as it does today for the Patent and Trademark Office.  But all IP functions would be integrated in a single entity, headed by a person appointed by the President and confirmed by Congress, who would be best situated to fulfill the existing statutory mandate that the Under Secretary of Commerce and Director of the USPTO be the president’s principal advisor on all IP policy matters.  As Congress continues to search for ways to improve the copyright system, it should seriously consider incorporating the Copyright Office into the existing USPTO, and creating a unitary executive branch agency, either within or outside the Department of Commerce, to administer all three major forms of IP rights and to formulate IP policy across all three realms of IP.

Pappas is the former chief of staff of the US Patent and Trademark Office, where he served from 2009 to 2013. He is currently president of Innovation Strategies LLC.