US copyright reports are missing the bigger picture
Among other important functions, the US Trade Representative (USTR) regularly publishes reports detailing foreign and digital threats to American IP industries. The “ 2020 Special 301 Report” and the “ 2019 Notorious Markets Report”, released in April this year, are cited and relied upon for their list of websites and countries that most widely participate in copyright infringement and counterfeiting.
In their most recent editions, the reports focus on the counterfeiting and piracy practices of countries ranging from Peru to China and on peer-to-peer download and streaming websites that allow users to view copyrighted material for free.
The report names dozens of websites and dozens of countries, and outlines in admirable detail how these digital and physical destinations are hurting rights owners the world over. When it comes to the counterfeiting of physical goods, from designer bags to bootleg DVDs, and digital piracy from peer-to-peer and dedicated streaming websites, the USTR Special 301 and notorious markets reports have their bases covered. However, a large, and still growing, part of the copyright infringement problem has been overlooked.
These reports fail to mention a growing problem for the music, film, and television industries that is most apparent on well-known social media networks. Facebook, YouTube, and Instagram have undeniably brought about the democratisation of content creation and, with it, a “golden age” of widespread creativity.
This push forward has also, inadvertently, facilitated widespread copyright infringement. The copyright-infringing content present on these platforms unfortunately dwarfs the amount of content trafficked in countries and websites listed in both these reports. As a point of reference, for every two million pieces of content clients provided to Pex, we were able to identify 480 million copies of those assets across user-generated content platforms.
New EU copyright rules
Platforms and rights owners will soon have to adjust their business practices to conform to a major new law. Mid-2021, the EU will enforce its Directive on Copyright in the Digital Single Market, passed in 2019 and now in the process of implementation by European states.
Article 17 overturns the EU’s prior Electronic Commerce Directive 2000, which established platforms such as YouTube or Facebook as “mere conduits” of information. Under the new framework, platforms will have to make “best efforts to obtain an authorisation” for the content that is shared on their networks before it is published. In order for the user experience to remain intact, this will have to be done within seconds.
Additionally, while the EU is leading the way in implementing laws that affect how content is shared on major platforms, it is not the only major market thinking about the future of copyright online. The US Congress is currently holding hearings to examine the Digital Millennium Copyright Act (DMCA)—in order to determine its efficacy two decades after it was passed. In May, the US Copyright Office published a report concluding that section 512 of the DMCA needs to be rethought. Should the US Congress devise changes to the DMCA based on this report, it may look to the EU’s copyright directive for inspiration.
Of course, this presents a hurdle for companies such as YouTube, to which 500 hours of content is uploaded every minute. Its current copyright protection system, Content ID, is a landmark piece of technology, but under the EU’s new laws, it will fall short of the mark.
YouTube spent more than $100 million building this system, but Pex has found that it fails to identify two out of every three instances of copyright infringement. Based on our findings, this results in an estimated $2 billion of misallocated revenue each year.
Flick the switch
Other platforms, such as Facebook, TikTok, Vimeo, Reddit, etc, face the same task.
Some may believe that these requirements will prove too difficult, but they would be wrong—they can be met with technology that already exists, including that provided by Pex.
Platforms, as required by the new law, will need to review content before it is published on their networks. Identifying the millions of pieces of content that reach user-generated content platforms every minute seems like a daunting task, but the technology already exists and it is used on a daily basis. It just needs to be used everywhere content is exchanged, and before there’s a problem rather than after the event.
Just as Visa facilitates the purchases we make every day between cardholders, merchants and banks, this technology can seamlessly facilitate content exchanges between creators, rights owners and platforms. We just need to flip the switch.
Cesar Fishman is head of business and government affairs at Pex, which offers online rights management services to creators, rightsowners and marketers. He can be contacted at: cesar@pex.com
