Engine Executive Director Evan Engstrom responds to the European Parliament’s vote to adopt the Directive on Copyright in the Digital Single Market.
As 2018 comes to a close, one key policy area that is sure to take center-stage in 2019 is the passage of the updated North American Free Trade Agreement (NAFTA), renamed the United States-Mexico-Canada Agreement (USMCA). While the USMCA is a big win for startups in several areas, Congress should continue to push the Administration in two areas to ensure that entrepreneurs will flourish under the new agreement. Overall, the USMCA sets a high standard for future free trade agreements and will positively impact the growth of American startups.
As a non-profit policy organization committed to making the world better for startups, Engine has a long history of engagement on copyright reform issues. Indeed, Engine began as an effort to harness the political power of the startup community that emerged from the tech world’s fight against the ill-fated SOPA/PIPA copyright bills. While the SOPA/PIPA battle remains a critical milestone in the emergence of tech as a political force, our work to return copyright law to a system that promotes rather than hinders innovation is only beginning. To help further this crucial mission, we are proud to join the Re:Create Coalition, a group of creators, innovators, and users working to ensure that copyright laws are balanced and foster innovation, creativity, and economic growth.
Historically, startups have had little occasion to pay attention to the proceedings of our nation’s highest court. While arcane questions of constitutional law have an enormous impact on broader society, the Supreme Court’s activities are often too far removed from the challenges entrepreneurs must handle every day to simply keep their businesses afloat. But, an upcoming case on the Supreme Court’s docket may warrant a shift from this traditional mindset, as the outcome of the dispute could have a resounding impact on startups and small businesses in all industries.
On New Year’s Eve 2015, while most people were out celebrating, the Copyright Office quietly issued an notice of inquiry seeking public input on an incredibly important topic: the effectiveness of Section 512 of the Digital Millennium Copyright Act (DMCA). For those who didn’t skip their New Year’s Eve party to brush up on copyright policy, here’s a refresher: the DMCA is a law from 1998 that, among other things, grants online service providers (OSPs)—basically, all your favorite websites—a legal “safe harbor” from facing lawsuits arising from user copyright infringements.
Copyright law has always had a complicated relationship with software. Supreme Court Justice Stephen Breyer presaged the difficulties in applying copyright law to software in a seminal law review article in 1970, and despite a few legislative revisions of copyright law since then, many of those same inherent difficulties persist. In the past year, these problems received public attention in a few high profile news stories, including John Deere’s claim that tractor purchasers don’t actually “own” the tractors they buy. Instead, purchasers merely receive an implied license to operate the vehicle and the software it contains. To just about any rational person, this seems like a Kafka-esque absurdity that only the most creative lawyer could dream up. But as more and more of our everyday products become computerized and connected, it’s likely that we’ll see many more examples of how copyright laws meant to encourage creative production can produce bizarre outcomes when applied to products containing embedded software.
Spurred in large part by the John Deere story, the Copyright Office opened a public inquiry seeking commentary on the legal and policy challenges related to copyright’s application to software embedded in everyday products. Last week, Engine filed comments with the Copyright Office identifying the many challenges to startup innovation that arise from this application. Written by a crack team of legal students at Stanford Law School’s Juelsgaard Intellectual Property and Innovation Clinic under the guidance of Phil Malone and Jef Pearlman, the comments examine difficult questions surrounding the appropriate scope of software copyrights, focusing on how granting copyright protection to essentially functional code can hurt startup competition by undermining interoperability between platforms and services, and how limiting a user’s right to modify software in devices they own poses a range of threats to innovation and security.
The innovation-stifling threat of overbroad copyright protection for software is perhaps best encapsulated in the ongoing litigation between Google and Oracle over the copyrightability of Application Programming Interfaces (APIs) that facilitate communication between computer programs. As the comments explain, “APIs have been and are indispensable to interoperability in standalone software platforms and products and will be equally indispensable to software-enabled consumer devices,” such that allowing companies to assert copyrights over APIs to will create “incentives for incumbents in almost any industry to misuse copyright law to try to exclude new entrants and emerging competition.” Particularly in the emerging Internet of Things, where startups will be well-positioned to build apps and services that interact with the innumerable connected devices that will soon be a part of everyday life, protecting interoperability is paramount to encouraging innovation and competition. This competition will foster both enormous economic growth and consumer value, so it’s critical that we rein in rules that give incumbents the power to use ill-fitting copyright laws to exclude competitors.
The comments make a compelling case for sensible copyright rules in the age of embedded software, and we at Engine are incredibly grateful for the fantastic work of the Stanford team. Read the full submission here.