The Big Story: Copyright Office concludes ancillary copyright protections are not warranted
In a recent report, the U.S. Copyright Office explained why it does not recommend expanding or adopting new copyright-like protections for press publishers. The Copyright Office’s study was rooted in concerns about supporting vitally important local news media, but it focused specifically on whether policymakers should extend copyright-like protections (also known as “ancillary copyright”) to sharing hyperlinks and quoting news headlines or snippets of articles. Last week’s report concluded that it is not clear any new copyright-like protections would solve problems facing press publishers, while those sorts of copyright expansions would have “critical policy and Constitutional dimensions.”
From the startup perspective, this is a welcome development, because legal changes allowing copyright to cover links or quotes would fundamentally alter the way all types of companies and users engage with, create, and share information online. As we wrote in comments to the Copyright Office earlier this year, adding copyright restrictions over links and quotes could make some of the exciting work of today’s startups impossible and snuff out future innovations. And that would include startups who are creating new business models for local media or supporting better, more diverse ways to engage with localized content. For example, there is a lot of innovation around improving the creation and sharing of locally-relevant, topical, and timely information—and those business models depend on current infrastructure and legal frameworks. Requiring those companies to pay to license links or news headlines would erect new barriers to entry, could open doors to abuse or bias, and restrict speech.
Adjusting copyright law to restrict sharing hyperlinks or briefly quoting news and headlines—which is something that the public, Internet users, startups, and multiple media outlets rely on—would be rife with unintended consequences for innovation and public discourse. And the Copyright Office’s report comes at a time when lawmakers are considering other proposals, like the Journalism Competition and Preservation Act (JCPA), which implicate issues of whether and how Internet companies and users can link to and quote news content online. It is essential that policymakers take a holistic view of local media markets and digital innovation ecosystems to avoid legal structures that do more harm than good—including for the nation’s startups.
Policy Roundup:
European Parliament adopts new digital regulations. The European Parliament adopted two landmark pieces of legislation by wide margins this week, designed to reshape competition and content moderation online. The Digital Markets Act (DMA) aims to improve competition online and regulates the conduct of large (mostly American) companies that are designated as “gatekeepers,” but it could lead to increased costs for startups. The Digital Services Act (DSA), meanwhile, addresses content moderation online, building on existing EU law and creating new obligations for companies—including startups—that will have the effect of heightening barriers for U.S. startups to serve EU users. Both the DMA and DSA remain to be ratified by the European Council later this year, and will likely be in force by 2024.
Engine files comments on idea of small claims patent court. This week, Engine and the Public Interest Patent Law Institute submitted comments to the Administrative Conference of the U.S. (ACUS) as it studies the potential creation of a small claims patent court. In our comments, we emphasized the complex questions involved and encouraged the government to pursue such a court only if it could be done in a fair, balanced way. We also highlighted the multiple ways startups might encounter the court—from claimants asserting infringement to (wrongfully) accused infringers—and detailed how a small claims court could also be a place where startups defend themselves against frivolous suits or settle disputes over patent ownership. As the government seeks to address legitimate concerns about the high costs of patent litigation, we encourage policymakers to look through different lenses to improve patent quality and balance enforcement, which could reduce costs and solve other problems and abuses in the patent system.
Competitiveness legislation outcome remains cloudy. As Congress quickly approaches the August recess, time is running out to reach an agreement on compromise legislation designed to support U.S. innovation and competitiveness. We noted in an April letter to conferees working to reconcile the separate House and Senate competitiveness bills that the legislation could provide a welcomed boost to the startup ecosystem. But it is unclear whether critical provisions to help startups, like a startup visa and other high-skilled immigration policies, will make it into a possible final package. It is likewise unclear whether lawmakers will remove harmful provisions like the SHOP SAFE Act, which would have an outsized, negative impact on e-commerce startups.
Irish data authority decision further threatens transatlantic data transfers. A recent decision from the Ireland Data Protection Commission could bar Meta from transferring user data from the EU to the U.S., and is likely to have wider implications for transatlantic data flows. In 2020, the Court of Justice of the European Union invalidated Privacy Shield, an agreement that had allowed U.S. companies to process and store European users’ data in the U.S. Since then, many companies have relied on Standard Contractual Clauses (SCCs) to transfer data across the Atlantic, but SCCs are more expensive and are out of reach or a significant investment for many startups. This Ireland decision now threatens the use of SCCs and underscores the dire need for U.S. and EU negotiators to finish an agreement to restore Privacy Shield as a legal transfer mechanism.
Appeals court hears DACA arguments. On Wednesday, a federal appeals court heard arguments on the future of the Deferred Action for Childhood Arrivals (DACA) program, which provided renewable status to certain immigrants brought to the U.S. as minors. The program, which was found “unlawful” last year by a Texas judge, is unable to accept new applicants due to the outcome of the Texas case. Though the Justice Department has appealed the decision, this proceeding underscores the uncertainty DACA recipients continue to face without a permanent, legislative solution. The three-judge appeals panel is expected to rule in the coming months. And recipients continue to await another DACA final rule from the administration in response to the Texas case. As we’ve long stated, many DACA recipients make valuable contributions to the startup ecosystem, boosting innovation as founders and critical STEM talent. We urge policymakers to pass a permanent solution for DACA, ending the uncertainty faced by thousands.
Indian government sued over content takedown orders amid updates to intermediary laws. Twitter filed suit on Tuesday against the Indian government, challenging orders to remove certain pieces of content and block accounts from the platform. The suit comes after the country instituted new intermediary rules last year and as the government considers amendments that are likely to create additional challenges for companies and increase reliance upon technology for content moderation. Stakeholders have widely noted the negative impact the rules have on doing business in India, while Engine has regularly pointed out the impacts on U.S. startups looking to tap into the country’s large base of Internet users.
Startup Roundup:
#StartupsEverywhere: Boston, Massachusetts. Startup Boston is a community-building organization that provides New England-based startups with programming, content, and initiatives to propel them toward success. Stephanie Roulic, Founder & Lead Organizer of Startup Boston, spoke with us about her organization, COVID-19’s effect on the startup ecosystem, and how policymakers can better support startup founders beyond the pandemic era.
