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Golan v. Holder: The Long Road to Restoration

By Joan McGivern and Christine Pepe

In 1994, Congress amended our copyright laws to allow for the restoration of foreign copyrights, which had lapsed into the public domain, thereby, placing the U.S. in compliance with our foreign treaty obligations under the "Uruguay Round Agreement". (Section 514 of the Uruguay Round Agreements Act (URAA), Pub. L. No. 103-465, 108 Stat. 4809, 4976-80 (1994), codified as 17 U.S.C. §104A, 109. As stated in Golan v. Holder, the Uruguay Round General Agreement on Tariffs and Trade included the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPs). The TRIPs agreement required, in part, that its signatories, which included the U.S., comply with Article 18 of the Berne Convention, and thus, extend copyright protection to all works of foreign origin whose term of protection had not expired. See Golan v. Holder, 2010 WL 2473217 at *1-3 (10th Cir. 2010), citing Berne Convention for the Protection of Literary and Artistic Works, Art. 18, Sept. 9, 1886, revised at Paris July 24, 1971.) Foreign copyright owners rejoiced; many had lost valuable rights due to their inability or lack of knowledge of the arcane formality requirements imposed under the U.S.'s pre-1976 Copyright Act. U.S. copyright owners also stood to benefit because their copyrights, due to the U.S.'s failure to comply, were not being similarly protected through restoration abroad.

However, people in the U.S., who had built livelihoods in reliance on these works being in the public domain, were not happy. They alleged that once a work was in the public domain, the work had become part of the common culture and could never be "restored." Some alleged that their First Amendment rights were encroached and that no action by Congress, even to comply with an international treaty obligation, can justify the "unconstitutional" action of trammeling their First Amendment rights. Congress had also enacted detailed provisions to address and balance the concerns of such users of public domain works with the rights of foreign copyright holders of restored works. Nonetheless, the users of these public domain works were not satisfied.

And with these allegations, so began a long challenge, which seemingly came to an end this past summer, with the Tenth Circuit, on its second review of Golan v. Holder, upholding Congress' authority to restore foreign copyrights. (See generally Golan v. Holder, Docket Nos. 09-1234, 09-1261, 2010 WL 2473217 (10th Cir. 2010)).

Nearly a decade of litigation . . .

The statute at issue is Section 514 of the Uruguay Round Agreements Act (URAA) (now codified in the Copyright Act at 17 U.S.C. §§104A, 109), an important copyright provision that restores copyright status to certain foreign works that had fallen into the public domain due to failure to comply with statutory formalities.( Section 514 of the Uruguay Round Agreements Act (URAA), Pub. L. No. 103-465, 108 Stat. 4809, 4976-80 (1994), codified as 17 U.S.C. §104A, 109). Section 514 places the United States in compliance with Article 18 of the Berne Convention, which requires each signatory to provide the same copyright protections to authors in other member countries that it provides to its own members. (Berne Convention for the Protection of Literary and Artistic Works, Art. 18, Sept. 9, 1886, revised at Paris July 24, 1971). The statute contains certain provisions to protect "reliance parties"--that is, people that had been using the formerly public domain work. For instance, in order to enforce the restored copyright, an owner must file a notice with the Copyright Office or otherwise place the reliance party on notice. (17 U.S.C. §104A(d)(2)). Further, a reliance party has a twelve month grace period in which they may continue to sell or exploit the restored work (although they cannot make additional copies of the work). (Id. at §104A(d)(2)(A)(ii), §104A(d)(2)(B)(ii)). And, only after that period had elapsed, would a license fee be due to the copyright holder, or the reliance party had to cease its use of the work.

In 2001, the plaintiffs, consisting of educators, performers, publishers, film archivists, and motion picture distributors, each claiming to rely on the use of public domain works to support themselves, brought suit in the United States District Court for the District of Colorado against the government seeking to enjoin on constitutional grounds the enforcement of Section 514 and the Copyright Term Extension Act (CTEA). (Golan v. Ashcroft, 310 F.Supp.2d 1215 (D. Col. 2004)). Plaintiffs included violinist and conductor Lawrence Golan and the Symphony of the Canyons, who had publicly performed restored works such as Prokofiev's Classical Symphony and Peter and the Wolf and Stravinsky's Petroushka. Plaintiffs also included film distributors, who had invested significant resources identifying and restoring public domain films such as Hitchcock's 1932 film, Number Seventeen, and the 1940 British film, Night Train to Munich. (Golan v. Gonzales, 501 F.3d 1179, 1182 (10th Cir. 2007)). These "reliance parties" claimed that Section 514 not only harmed their free speech, but also their economic interests, having spent time and money restoring or preparing the works on the expectation that the works would remain in the public domain.

The case was stayed briefly because the Supreme Court had agreed to hear the Eldred v. Ashcroft case, discussed below, which similarly involved First Amendment challenges to the Copyright Act. (Eldred v. Ashcroft, 537 U.S. 186 (2003)). Upon the lift of the stay, the district court dismissed plaintiffs' claims, concluding that Congress had the authority under the Copyright Clause of the Constitution to remove works from the public domain and there was a rational basis for enactment of Section 514, i.e., the protection of American authors' copyrights abroad. (Golan v. Gonzales, 2005 U.S. District Lexis 6800 at *42, 43-47 (D. Col. 2005)). The district court did not fully analyze the Plaintiff's First Amendment claims.

Plaintiffs appealed on the basis that the Supreme Court's Eldred v. Ashcroft decision required further First Amendment scrutiny of Section 514. The Tenth Circuit agreed and reversed, holding that although Congress has the authority under the Copyright Clause to enact Section 514 and restore protection to foreign works in compliance with the Berne Convention, the legislation "must still comport with other express limitations in the Constitution," notably the First Amendment. (Golan v. Gonzales, 501 F.3d 1179, 1187 (10th Cir. 2007), citing Eldred v. Ashcroft, 537 U.S. 186 (2003)). The Circuit Court found that copyright works historically followed the same sequence: creation, copyright, then public domain. Because Section 514 presented a departure from this sequence (by restoring copyright to public domain works), the court, relying on Justice Ginsberg's language in Eldred, held that Section 514 "altered the traditional contours of copyright protection" and on this basis, remanded the case to the district court for further First Amendment analysis.( Id).

The district court, finding that Section 514 was content-neutral, applied an intermediate level of scrutiny, as opposed to a heightened scrutiny standard. (Golan v. Holder, 611 F. Supp.2d 1165, 1170 (D. Col. 2009)). Nonetheless and even though the district court recognized that Section 514 advances a significant governmental interest, it concluded that the Berne Convention did not require full restoration of copyrights because the reliance parties could have been completely exempted.( Id. at 1174). In finding a First Amendment violation, the court concluded that Section 514 was substantially broader than necessary to achieve the government's interests.( Id). The government appealed to the Tenth Circuit.

Nine years after the initiation of the lawsuit and three U.S. attorney generals later, on June 21, 2010, the Tenth Circuit reversed the district court, holding that Section 514 did not violate the First Amendment. (Golan v. Holder, 2010 WL 2473217 (10th Cir. June 21, 2010)). In Golan v. Holder, the Court found that the statute satisfied intermediate scrutiny because it (1) advanced important governmental interests unrelated to the suppression of free speech and (2) did not burden substantially more speech than necessary to further those interests (or was "narrowly tailored").( Id. at *4).

As to the first prong, the Circuit Court found important governmental interests on the basis that securing foreign copyrights for American works preserves the authors' economic and expressive interests.( Id. at *5). In assessing the government's asserted harm, the Circuit Court held that substantial deference, particularly in matters of foreign affairs, should be given to Congress in its judgments of potential harm: "Our sole obligation is to assure that, in formulating its judgments, Congress has drawn reasonable inferences based on substantial evidence."( Id). The Court pointed to testimony before Congress at the time of Section 514's passing that the United States' historically lax position on copyright restoration had been harming our citizens' copyright interests abroad. (Id. at *7). The theory adopted by the Court was that if the U.S. was to pass restorative legislation for foreign works, other nations would be more likely to pass similar legislation.( Id).

As to the second prong, the plaintiffs argued that there was a less restrictive way of implementing copyright restoration, specifically urging the adoption of the United Kingdom model where the reliance party is allowed to continue making those uses of the work it had made, or incurred commitments to make, before the copyright is restored, but the reliance party can be bought out by the owner of the restored copyright.( Id. at *12-13). In rejecting this argument, the court held that even if there were other options available to Congress, the less restrictive analysis is never a part of the inquiry into the validity of a content-neutral statute, so long as the means chosen are not substantially broader than necessary to achieve the government's interest.( Id. at *13). Moreover, the court noted that there was no real different between Section 514's protections for the reliance parties and the U.K.'s protections, stating that the difference between the "buy out" and "notice" is only that one is economic protection and the other expressive protection. (Id. at *14).

The Importance of International Treaty Compliance

The Tenth Circuit's decision in Golan represents significant progress in the United States' compliance with international treaties relating to the protection of intellectual property. In upholding Section 514, the Court considered the evidence presented to Congress in support of Section 514's passing, such as evidence that foreign countries were willing to provide, at most, reciprocal copyright protections to American works. (Id. at *7 citing General Agreement on Tariffs and Trade (GATT): Intellectual Property Provisions: Joint Hearing on H.R. 4894 and S. 2368 Before the Subcomm. on Intellectual Property and Judicial Administration of the H. Comm. on the Judiciary and the Subcomm. on Patents, Copyrights, and Trademarks of the S. Comm. on the Judiciary, 103d Cong., 2d Sess. 249 (1994) (hereafter "Joint Hearings") at n.2, statement of Eric Smith, Executive Director and General Counsel of the International Intellectual Property Alliance). Otherwise stated, foreign countries would restore American copyrights only if the U.S. restored copyrights of their citizens. The Court also noted evidence in the legislative history that the U.S. often served as an example to other countries--U.S. restoration to foreign works in our public domain would induce other countries with whom the U.S. recently established copyright relations to follow suit. (Id., citing Joint Hearings at 225, statement of Irwin Karp, Counsel, Committee for Literary Studies).

While at first this appears to be a copyright protection quid pro quo, the facts presented to Congress indicated that the United States would continue to lose billions of dollars each year because foreign countries were not providing copyright protections to American works. (Id. at *6, citing Joint Hearings at 225, statement of Eric Smith). Projections from RIAA Chairman and CEO Jason S. Berman supported this, stating "[t]here are vastly more US works currently unprotected in foreign markets than foreign ones here, and the economic consequences of [granting retroactive copyright protection] are dramatically in favor of U.S. industries." (Id. at *6, citing Joint Hearings at 262, statement of Jason S. Berman, Chairman and CEO of the Recording Industry Association of America). The U.S. has a strong economic incentive to comply with international treaties, particularly given the increasing importance of export revenue from U.S. intellectual property.

While much of the Golan analysis focused on the reliance parties, it is important to remember that a significant number of foreign copyright owners routinely lost their rights because of a failure to comply with U.S. formalities that were in place prior to the 1976 Copyright Act. Under the 1909 Copyright Act, in order to create a valid copyright under U.S. law -even if the work was already in published form--a creator or owner was required to post a notice of copyright on the work, i.e., "©", and register the work with the United States Copyright Office. (Copyright Act of 1909, Pub. L. No. 60-349, 35 Stat. 1075 (March 4, 1909)). The 1909 Act also required a renewal to be filed after the expiration of the first 28-year term of copyright (to extend protection for another 28-year term). (Id).

The 1976 Act abandoned these formalities as a pre-requisite to a valid copyright, and instead, provided that copyright is created when expression is fixed in a tangible form. (Copyright Act of 1976, Pub. L. No. 94-553, 90 Stat. 2541 (October 19, 1976), codified as Title 17 of the United States Code). Now, notice of copyright and registration are only required in order to bring a lawsuit for infringement and obtain statutory damages and attorneys' fees. (17 U.S.C. §§411, 412). Somewhat ironically in view of Golan, a primary goal of the 1976 Act (and its abandonment of formalities) was to harmonize U.S. copyright law with international treaties and practice, where formalities were not a requirement for copyright protection.

Authority over matters relating to international treaty obligations and the consequences of non-compliance lies exclusively with the Executive Branch. And as the Tenth Circuit ultimately acknowledged in its recent decision, when it comes to matters of foreign policy and international affairs, Congress should be afforded significant deference.

Heightened First Amendment Scrutiny of Copyright Legislation

In Eldred v. Ashcroft, the Supreme Court upheld the constitutionality of the Sonny Bono Copyright Term Extension Act and in doing so, refused to apply anything beyond the rational basis review. (Eldred v. Ashcroft, 537 U.S. 186, 205 (2003)). The Court noted that the Copyright Act's "built-in free speech safeguards" are generally adequate to address First Amendment concerns. (Id). Only if Congress altered the "traditional contours of copyright protection," the court stated, would further First Amendment scrutiny be necessary. (Id. at 221). The "traditional contours of copyright protection" referred to by the Eldred Court comprise copyright law's "built-in free speech safeguards" of fair use and the idea/expression dichotomy (i.e., that ideas are not copyrightable).

Given that the Tenth Circuit in Golan ultimately applied intermediate scrutiny (as opposed to rational basis review), it would follow that Section 514 was found to be outside the "traditional contours of copyright protection." In Tenth Circuit's first Golan decision, the court interpreted Eldred quite broadly, finding that the "history of American copyright law" should inform its inquiry. The Circuit Court then performed a detailed analysis of the history of the Copyright Act and its treatment of the public domain (including the Framers' intent) and concluded that there simply was no history or tradition of removing works from the public domain. As such, the Court found that the statute presented a departure from the traditional creation, copyright, and public domain sequence. The Court did not specifically analyze the impact of the statute on fair use or the idea/expression dichotomy--if it did, it would see that those protections remained in tact regardless of whether a work was restored from the public domain.

If such a broad interpretation of Eldred was to persist, Congress' discretion would be hindered. It is important for the Copyright Act to continue to evolve--particularly in view of new media and technology developments as well as the growing international landscape for intellectual property. For instance, the Digital Millennium Copyright Act was a game-changing addition to copyright laws, and certainly in many ways, had no precedent. (Digital Millennium Copyright Act of 1998, Pub. L. No. 105-304, 112 Stat. 2860, 2887, enacted October 28, 1998, codified as Title 17 of the United States Code).

In closing, although Section 514 appears to have survived First Amendment scrutiny, it wouldn't be surprising if further attacks are brought against the Copyright Act on the basis that certain amendments exceed the Act's "traditional contours." Lawrence Lessig (in connection with the Stanford Law School Center for Internet and Society) represented the plaintiffs in both the Eldred and Golan cases, and given the Center's zeal in challenging the Copyright Act, it was somewhat predictable that on October 20, 2010, a petition for writ of certiorari was filed with the Supreme Court seeking review of the Tenth Circuit's Golan decision. It will be interesting to see if the Supreme Court is willing to accept certiorari to clarify what the Court meant in Eldred with regard to the "traditional contours of copyright protection."


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This page contains a single entry from the blog posted on December 20, 2010 10:46 PM.

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