    [House Hearing, 118 Congress]
    [From the U.S. Government Publishing Office]

                     OVERSIGHT OF THE U.S. COPYRIGHT OFFICE

    =======================================================================

                                    HEARING

                                   BEFORE THE

                        SUBCOMMITTEE ON COURTS, INTELLECTUAL
                              PROPERTY, AND THE INTERNET

                                     OF THE

                           COMMITTEE ON THE JUDICIARY

                         U.S. HOUSE OF REPRESENTATIVES

                        ONE HUNDRED EIGHTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                         WEDNESDAY, SEPTEMBER 27, 2023

                                   __________

                               Serial No. 118-47

                                   __________

             Printed for the use of the Committee on the Judiciary

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                   Available via: http://judiciary.house.gov

                                   __________

                        U.S. GOVERNMENT PUBLISHING OFFICE
    53-722                        WASHINGTON : 2023

    -----------------------------------------------------------------------------------

                           COMMITTEE ON THE JUDICIARY

                            JIM JORDAN, Ohio, Chair

    DARRELL ISSA, California             JERROLD NADLER, New York, Ranking
    KEN BUCK, Colorado                       Member
    MATT GAETZ, Florida                  ZOE LOFGREN, California
    MIKE JOHNSON, Louisiana              SHEILA JACKSON LEE, Texas
    ANDY BIGGS, Arizona                  STEVE COHEN, Tennessee
    TOM McCLINTOCK, California           HENRY C. ``HANK'' JOHNSON, Jr.,
    TOM TIFFANY, Wisconsin                   Georgia
    THOMAS MASSIE, Kentucky              ADAM SCHIFF, California
    CHIP ROY, Texas                      ERIC SWALWELL, California
    DAN BISHOP, North Carolina           TED LIEU, California
    VICTORIA SPARTZ, Indiana             PRAMILA JAYAPAL, Washington
    SCOTT FITZGERALD, Wisconsin          J. LUIS CORREA, California
    CLIFF BENTZ, Oregon                  MARY GAY SCANLON, Pennsylvania
    BEN CLINE, Virginia                  JOE NEGUSE, Colorado
    LANCE GOODEN, Texas                  LUCY McBATH, Georgia
    JEFF VAN DREW, New Jersey            MADELEINE DEAN, Pennsylvania
    TROY NEHLS, Texas                    VERONICA ESCOBAR, Texas
    BARRY MOORE, Alabama                 DEBORAH ROSS, North Carolina
    KEVIN KILEY, California              CORI BUSH, Missouri
    HARRIET HAGEMAN, Wyoming             GLENN IVEY, Maryland
    NATHANIEL MORAN, Texas               BECCA BALINT, Vermont
    LAUREL LEE, Florida
    WESLEY HUNT, Texas
    RUSSELL FRY, South Carolina

                                     ------

               SUBCOMMITTEE ON COURTS, INTELLECTUAL PROPERTY, AND
                                  THE INTERNET

                        DARRELL ISSA, California, Chair

    THOMAS MASSIE, Kentucky              HENRY C. ``HANK'' JOHNSON, Jr.,
    SCOTT FITZGERALD, Wisconsin              Georgia, Ranking Member
    CLIFF BENTZ, Oregon                  TED LIEU, California
    BEN CLINE, Virginia                  JOE NEGUSE, Colorado
    LANCE GOODEN, Texas                  DEBORAH ROSS, North Carolina
    KEVIN KILEY, California              ADAM SCHIFF, California
    NATHANIEL MORAN, Texas               ZOE LOFGREN, California
    LAUREL LEE, Florida                  MADELEINE DEAN, Pennsylvania
    RUSSELL FRY, South Carolina          GLENN IVEY, Maryland

                   CHRISTOPHER HIXON, Majority Staff Director
              AMY RUTKIN, Minority Staff Director & Chief of Staff

                                C O N T E N T S

                                  ----------

                         Wednesday, September 27, 2023

                                                                       Page

                               OPENING STATEMENTS

    The Honorable Darrell Issa, Chair of the Subcommittee on Courts,
      Intellectual Property, and the Internet from the State of
      California.....................................................     1
    The Honorable Henry C. ``Hank'' Johnson, Ranking Member of the
      Subcommittee on Courts, Intellectual Property, and the Internet
      from the State of Georgia......................................     2
    The Honorable Jerrold Nadler, Ranking Member of the Committee on
      the Judiciary from the State of New York.......................     3

                                    WITNESS

    The Hon. Shira Perlmutter, Register of Copyrights & Director,
      U.S. Copyright Office, Library of Congress
      Oral Testimony.................................................     5
      Prepared Testimony.............................................     8

              LETTERS, STATEMENTS, ETC. SUBMITTED FOR THE HEARING

    All materials submitted by the Subcommittee on Courts,
      Intellectual Property, and the Internet, for the record are
      listed below...................................................    42

                     QUESTIONS AND RESPONSES FOR THE RECORD

    Questions to Register Shira Perlmutter, Register of Copyrights &
      Director, U.S. Copyright Office, Library of Congress, submitted
      by the Honorable Darrell Issa, Chair of the Subcommittee on
      Courts, Intellectual Property, and the Internet from the State
      of California, for the record
      Response from Register Shira Perlmutter, Register of Copyrights
          & Director, U.S. Copyright Office, Library of Congress

                     OVERSIGHT OF THE U.S. COPYRIGHT OFFICE

                                  ----------

                         Wednesday, September 27, 2023

                            House of Representatives

               Subcommittee on Courts, Intellectual Property, and

                                  the Internet

                           Committee on the Judiciary

                                 Washington, DC

        The Committee met, pursuant to notice, at 10:04 a.m., in
    Room 2141, Rayburn House Office Building, the Hon. Darrell Issa
    [Chair of the Subcommittee] presiding.
        Members present: Representatives Issa, Jordan, Fitzgerald,
    Cline, Kiley, Moran, Lee, Fry, Johnson of Georgia, Lieu, Ross,
    Schiff, Lofgren, Dean, and Ivey.
        Mr. Issa. [Presiding.] Good morning. The Subcommittee will
    come to order.
        Without objection, the Chair is authorized to declare a
    recess at any time.
        We want to welcome everyone here today, and particularly
    note that there are conferences going on, and that a number of
    members have been delayed, but will attend. So, please, it is
    not you; it is the busyness of this week that causes a little
    bit of a delay for some people being here.
        I will now recognize myself for the joy of an opening
    statement, which I will abbreviate.
        As we all know, the Copyright Office plays a critical role
    in our economy. Strong copyright protection, the incentives
    that our creators, our Constitutional creators, bestowed, if
    you will, not for the benefit of the creators, producers, or
    innovators, but for the benefit of our society. The
    Constitution itself confers a responsibility on Congress to
    promote the progress of science and useful arts by securing for
    limited times for authors and inventors the exclusive right to
    their respective writings and discoveries.
        We take that role seriously, and for more than 200 years,
    have continued to debate what promotes. Most laws and most
    things conferred in the Constitution are fairly static. They go
    back their original intent. When the intent is, in fact, a
    mandate to promote, we must from time to time review whether or
    not that promotion is fair and appropriate. Too much, in fact,
    we deny the public the opportunity to also share in those
    creations. Too little, and those creations do not happen.
        As the Copyright Office carries out a wide range of
    responsibilities, it, too, must change with the time. When the
    Copyright Office made the decision that, in fact, full AI-
    produced had no right to a copyright, they did us all an
    appropriate favor, because, in fact, we know that pushing a
    button and letting that run for days, weeks, months, or years
    is not, in fact, continuous innovation.
        In fact, today, one of our discussions will be on the
    intersection of artificial intelligence and copyrights, because
    we do not want to limit AI from participating in the further
    promotion of intellectual property that is useful in not only
    copyright, but also in patent. We must make sure that this is,
    in fact, an incentive, and not simply a reward for the first to
    turn on a machine.
        We recently held hearings on music modernization,
    mechanical licensing, with the Copyright Office, and we look
    forward to the potential renewal in 2025.
        We also examined issues of the right to repair, including
    examining the Copyright Office's Section 1201--hotly debated,
    but necessary.
        At each turn, we have been reminded that the importance of
    the Copyright Office in all these areas cannot be overstated,
    which is why I am pleased that the Register of Copyrights
    accepted our invitation to appear at this hearing, so that we
    can go straight to the source and explore the issues she faces,
    in fact, whether there are appropriate intersections for us to
    join in legislative changes.
        I want to thank the Register, and I want to appreciate her
    time.
        So, with that, we will have an opening statement from Mr.
    Johnson, and then, go right to our witness.
        With that, I recognize the Ranking Member, Mr. Johnson of
    Georgia.
        Mr. Johnson of Georgia. Thank you, Mr. Chair, for hosting
    and holding this hearing.
        Thank you, Register Perlmutter, for your appearance today.
        What does it mean for human beings to create? In a very
    real way, this question is the subject of our hearing today.
    This is not just a philosophical or academic query; it has
    real-world implications for countless American families and
    American businesses, and as such, our answer to this question
    must be reflected in our laws.
        For well over 100 years, our Copyright Office has protected
    Americans' intellectual property, and by doing so, has
    protected American creativity and innovation. That is no easy
    task.
        As technology evolves, intellectual property evolves with
    it. Artists, entertainers, writers, musicians, coders, and
    creators adapt to a changing world, and unfortunately, so do
    those who seek to profit by stealing intellectual property or
    by undermining copyright protections that are a cornerstone of
    our free enterprise system and a driver of both art and
    commerce.
        This Committee has deep experience in examining new
    technologies and determining how our laws must change to
    acknowledge the role new methods of innovation play in the
    world. Internet connectivity changed the way writing and art is
    created and shared. So, in 1998, Congress passed the Digital
    Millennium Copyright Act to change the way we protect creators.
        When music streaming began, it disrupted our thriving music
    community of artists, songwriters, publishers, and record
    labels. Instead of letting it flounder, the Music Modernization
    Act created new ways to ensure that songwriters are paid for
    their work.
        For creators, for the Copyright Office, and for this
    Committee, the rise of artificial intelligence, or AI, might
    pose the greatest challenge yet. AI models, trained on
    copyrighted data, pose serious intellectual property questions
    regarding licensing and credit for final products.
        I'm glad the Copyright Office addressed the question of
    whether AI--or excuse me. I'm glad that the Copyright Office
    addressed the question of whether AI in their creations can
    claim copyright protections and found that artists can only
    seek copyright for their human contribution.
        We all, however, know that this is just the beginning. The
    European Union is considering finalizing legislation to
    regulate the use of AI, and it includes regulations governing
    so-called trustworthy or ethical AI. Other individual Nations
    have also begun to take steps to say how they want AI to impact
    their citizens' work, play--or how their citizens work, play,
    and create.
        The United States, the leader in AI development, stands
    alone in its silence thus far. We cannot afford to ignore the
    very real challenges AI presents, even as we enjoy its very
    real benefits. Missing the moment would set our Nation back and
    it would harm the artists who call America home.
        I'm proud to represent the State of Georgia, also known as
    the ``Hollywood of the South,'' where actors, screenwriters,
    directors, and others live their dream. Georgia is also home to
    a thriving music industry, where artists, songwriters, and
    record labels live, work, and play.
        Their work and the work of the ecosystem of creation that
    encircles television and filmmaking, as well as music, from the
    crew to the studios boosts the GDP in Georgia and keeps our
    State strong.
        I was glad to see the writers and the studios come to the
    table and find common ground on many issues, including AI. It
    is time for Congress to do the same.
        Just before his death, Robert Kennedy told a crowd that,

            You cannot measure a Nation just by its wealth. The Gross
            National Product, measures neither our wit nor our courage;
            neither our wisdom . . . nor our devotion to our country; it
            measures everything, in short, except that which makes life
            worthwhile.

        The Copyright Office protects many intangibles that make
    life worthwhile, and I sincerely hope that Congress has the
    courage to protect creators as new technologies disrupt their
    fields.
        I would like to thank Chair Issa for calling this hearing
    once again.
        Once again, I would like to thank Director or Register
    Perlmutter for being here. I look forward to hearing from you
    about your agency's work.
        Thank you.
        Mr. Issa. I thank the gentleman.
        I am now pleased to recognize the Ranking Member of the
    Full Committee, Mr. Nadler, for his opening statement.
        Mr. Nadler. Thank you, Mr. Chair.
        Mr. Chair, I would like to begin by thanking Ms.
    Perlmutter, the Register of Copyrights, for being here today.
        The Copyright Office bears responsibility for registering
    copyrights, examining copyright claims, and administering
    statutory licenses--not to mention advising Congress on new and
    emerging issues of copyright policy, among other
    responsibilities.
        As the Committee with jurisdiction over the matters related
    to the American judicial system, including intellectual
    property law, we have the responsibility to provide oversight
    of this critical office.
        Professional and amateur artists, authors, and coders rely
    on copyright protection to put their creations out into the
    world. These ownership rights promise that, with hard work and
    a lot of luck, it is possible to make a living from one's
    artistic and intellectual abilities.
        Our intellectual property laws foster creativity in the
    arts, as well as productivity and innovation. As such, the
    Copyright Office serves a dual role in American culture; it is
    protective of both the future and the past.
        While giving our hits the space to age gracefully into
    classics and for our visual artists the time to gain
    appreciation, the Copyright Office must also wrestle with
    integrating the newest artistic mediums and addressing
    philosophical questions about the use of technology in human
    creations.
        What we determine holds value, and how we choose to protect
    it, demonstrates to the world what we believe is important in
    this country. It is often the men and women in the Copyright
    Office who make those important determinations.
        Today, much of our conversation will focus on the future.
    Artificial intelligence, or AI, has changed and will continue
    to change the way Americans create. We cannot escape the novel
    difficult questions posed by the integration of AI models into
    our work.
        How should American creators interact with generative AI
    tools? What regulations will guide our innovations as a Nation?
    I was glad to see the Copyright Office address these questions
    this year in its March guidance and August Notice of Inquiry on
    the impact of generative AI. I look forward to hearing more
    about the results of the Copyright Office's examination of how
    AI will impact artists and intellectual property holders.
        The Music Modernization Act, which this Committee led
    efforts to enact in 2018, is an example of what can happen when
    an entire industry agrees to work together to protect creators.
    When streaming services arrived on the scene roughly a decade
    earlier, they disrupted the music industry's normal way of
    doing business. America's teenagers stopped waiting outside
    stores for the latest star's album to drop. Instead, the
    listening public moved online, where unlimited songs were
    available at their fingertips, and unfortunately, where there
    was no structure to ensure that songwriters could get paid.
        By creating the Music Licensing Corporation, or MLC, to
    ensure that songwriters receive the royalties they are due, we
    in Congress made clear that, no matter how the music industry
    evolves--and evolve it will--the people who write the songs
    deserve to be paid for their work.
        I'm looking forward to hearing from the Copyright Office,
    as the entity responsible for the administration of the MLC, on
    how it believes the MLC is accomplishing its goals.
        Some protections simply never existed in the first place.
    The United States is the only democratic Nation in the world
    that does not pay its performing artists when their songs are
    played on terrestrial radio. There is no reason not to pay our
    creators for their work.
        That is why I am proud to join Chair Issa in leading the
    American Music Fairness Act, which would require broadcasters
    to pay artists when their songs are played on the radio. Our
    actions should match our values, and paying artists when their
    songs are broadcast on AM and FM radio would take a vital step
    toward that ideal.
        The Copyright Office's jurisdiction is broad. Today will be
    an opportunity to expand beyond AI and music. I am also looking
    forward to hearing from Ms. Perlmutter about the status of the
    implementation of the CASE Act; how the Copyright Office is
    modernizing its outdated IT systems to better serve artists,
    and what changes, if any, need to be made to Section 1201 of
    the DMCA.
        Thank you, Mr. Chair, for holding this hearing, and I yield
    back the remainder of my time.
        Mr. Issa. I thank the gentleman.
        I now recognize--oh, sorry. Without objection, all other
    opening statements will be included in the record.
        It is now my honor to introduce our sole and important
    witness. Ms. Perlmutter is the Register of Copyrights and
    Director of the Copyright Office. She was appointed in October
    2020. Prior to her appointment, she served as the Chief Policy
    Officer and Director of International Affairs for the United
    States Patent and Trademark Office.
        We welcome our witness today and thank her for appearing.
        I would ask that you please rise to take the oath.
        Do you solemnly swear or affirm, under penalty of perjury,
    that the testimony you are about to give will be the truth and
    correct to the best of your knowledge, information, and
    beliefs, so help you God?
        Ms. Perlmutter. I do.
        Mr. Issa. Thank you. Please be seated.
        Let the record indicate the witness answered in the
    affirmative.
        Since you are the sole witness and the reason we are here
    today, we won't hold you strictly to the five-minutes, but the
    sooner we get to questions, the happier people here on this
    other part of this very cold room will be.
        I'm noting that because we asked to have it warmed up and
    we will do our best.
        Thank you, and you are recognized for your statement.
        We will turn the mic on. I know it is a little cold this
    morning, too.

                 STATEMENT OF THE HON. SHIRA PERLMUTTER

        Ms. Perlmutter. There we go.
        Mr. Issa. OK, and then, get it a little closer, and we will
    all be happy. Thank you.
        Ms. Perlmutter. Good morning, Chair Issa, Ranking Member
    Johnson, and Members of the Subcommittee.
        Thank you for the opportunity to update you today on the
    recent accomplishments and current projects of the Copyright
    Office.
        The past year has been very productive on multiple fronts.
    We have substantially improved processing times, while making
    significant progress on IT modernization.
        We've launched work on artificial intelligence; marked a
    full year of operations of our new small claims tribunal;
    produced a number of policy studies; developed an economic
    research agenda, and engaged in rulemakings under the Music
    Modernization Act, as well as commencing the next Section 1201
    rulemaking.
        The Office's law and policy activities have been wide-
    ranging. Most notably, we have moved quickly to address the
    copyright implications of artificial intelligence. Early this
    year, we announced a broad AI initiative, and in March, issued
    guidance on how to apply to register works that incorporate AI-
    generated content.
        That guidance reaffirmed our longstanding position that
    human authorship is required for copyright protection--a
    position that was recently upheld by the District Court for the
    District of Columbia.
        Over the past six months, we've held a series of public
    listening sessions and webinars and have met with a diverse
    range of interested parties.
        We, then, published a Notice of Inquiry at the end of
    August seeking public comment on a full range of copyright-
    related issues, including the legal treatment of the ingestion
    of copyrighted works for machine learning; the copyright-
    ability of the output, and the imitation of the likeness and
    style of human creators.
        As of the first anniversary of the small claims tribunal,
    the Copyright Claims Board that was established by the CASE
    Act, nearly 500 claims have been filed--with about 10 percent
    of them so far in active proceedings. We've seen a steady
    influx involving a wide range of types of works with strong
    participation by individuals appearing pro se.
        Over the past year, the Office has responded to
    congressional inquiries on a number of issues, including
    studies on deferred examination of registration applications;
    on electronic deposits and the best edition requirement; and on
    standard technical measures, as defined in the Digital
    Millennium Copyright Act.
        We are currently completing a study on non-fungible tokens
    and intellectual property jointly with the Patent and Trademark
    Office.
        In our role administering the Copyright Act, the Office
    registered over 484,000 claims to copyright for millions of
    works in fiscal 2022.
        Processing times are at a historic low. The average for all
    copyright claims now stands 2.1 months. For fully electronic
    claims that don't require correspondence, the average is just
    over 1 month.
        We also recorded more than 14,000 documents containing
    titles of over a million works. A major milestone was reached
    last year with the opening of our online recordation pilot to
    the public. Almost 80 percent of all basic recordation
    documents are now submitted online, and processing times are
    measured in weeks rather than months.
        We've completed the consolidation of deposit materials from
    several facilities into a single modern warehouse to enable
    faster location services that are tracking and improved
    security.
        We're also implementing a new multichannel contact center
    to enhance communications with the public.
        Modernization remains a top priority. The planned
    Enterprise Copyright System, or ECS, will update and connect
    all our services, making them more efficient and easier to use.
    The first public releases were the online recordation system
    and a pilot of our new Copyright Public Records System.
        Development of a new and improved registration system is
    now well underway, and we've made considerable progress in
    digitizing pre-1978 records and making them available online.
        As the ECS becomes fully operational, we will focus on
    continuous development with regular maintenance and updating to
    avoid repeated overhauls of legacy systems.
        Finally, we've expanded our outreach through a greater
    range of educational materials and events offered to more
    audiences to further our goal of copyright for all.
        So, let me close by thanking the Subcommittee for your
    support of the Office's work to foster creativity and promote a
    thriving copyright system.
        [The prepared statement of the Hon. Perlmutter follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Issa. Thank you.
        I'm going to forego my questions initially and go to Mr.
    Fitzgerald.
        Mr. Fitzgerald. Thank you, Mr. Chair.
        Thank you for being here today.
        September 5th, the Copyright Office recently published an
    interpretative rule in the Federal Register relating to when
    late fees apply under the Music Modernization Act, instead of a
    proposed rule that would have been subject to public notice and
    comment. Given the potential commercial impact and the
    disruption of settled industry practices by this rule, can you
    speak to why the Associate Register of Copyrights, Suzy Wilson,
    is listed as the signatory on the rulemaking rather than
    yourself?
        Ms. Perlmutter. Suzy Wilson, as you said, ``Associate
    Register and also General Counsel.'' It is not unusual for the
    General Counsel to sign regulations that we issue in the
    Federal Register. It had no other substantive significance
    beyond that.
        Mr. Fitzgerald. OK. Very good.
        Do you or your office intend to issue further
    interpretative rules that circumvent public comment periods?
        Ms. Perlmutter. With that rule, in particular, we had
    originally asked for comment because we had heard different
    views expressed on the issue of the late fees. Once we looked
    at the comments and evaluated the statute further, we concluded
    that the statute was clear on the late fee issue and that it
    would be up to the CRB to determine any different treatment of
    late fees.
        Mr. Fitzgerald. Very good.
        Music fans, generally, want to listen to their favorite
    artists and songs regardless of which record label or artist it
    belongs to, or which PRO has particular rights to any given
    song. We had a wonderful field hearing in Nashville in which
    that point was brought up many times by many different
    individuals.
        They made the point; an individual song may have multiple
    writers who belong to different PROs. So, radio stations and
    music service providers generally need to license from all
    PROs, rather than just one or two. This arrangement, as you
    know, leads to a consistent upward trajectory of royalty rates
    because, if a PRO, like a GMR, it gets a high rate through
    contracting with in-demand songwriters, this rate will serve as
    a benchmark for negotiations with other services for a new,
    higher rate which can be used by the next PRO to negotiate a
    new rate, and so on.
        Can you talk about what your office is doing to keep the
    music affordable to customers?
        Ms. Perlmutter. The Copyright Office is not involved in
    rate-setting, either through the PROs or in terms of the work
    of the CRB in setting rates for music. So, we have a defined
    scope of authority in this area, and there are certain things
    we are regulating, but the actual amounts of the license fees
    we do not handle.
        Mr. Fitzgerald. So, would it be accurate to say, then, no
    matter what happens with those rates, that you would not
    intervene, and you certainly would not get involved in that
    discussion?
        Ms. Perlmutter. We would not intervene, although, to the
    extent that Congress is looking at any legislative changes, we
    would be happy to offer any kind of technical advice and
    assistance.
        Mr. Fitzgerald. OK. All 10 publishers represented by voting
    members of the MLC's Board are also represented on the Board of
    the National Music Publishers' Association. Are you at all
    concerned that this overlap raises questions about the MLC's
    independence and the ability to function as a neutral
    administrator?
        Ms. Perlmutter. We're aware that some have raised those
    concerns, and we do think it would be valuable to address those
    concerns and avoid any perceptions of a lack of balance. So, we
    would certainly be happy to discuss further any potential
    solutions. Any change in the board composition, however, would
    require statutory change.
        Mr. Fitzgerald. Just one final question. The other thing we
    heard on the field hearing was that there were many artists
    that the MLC was having a difficult time even locating. Have
    you been involved in that process at all, or do you oversee
    that in any way?
        Ms. Perlmutter. Yes, and we did do a study and issue a
    report about two years ago now with recommendations for the MLC
    and how to improve matching, to be able to pay out to the
    appropriate copyright owners.
        Mr. Fitzgerald. Do you think that has improved or are you
    tracking that at all?
        Ms. Perlmutter. I think it's improving. In terms of the MLC
    paying out under the new, blanket statutory license, I
    understand they've reported about a 90 percent match rate at
    this point. Then, in terms of matching the historical unmatched
    royalties, we believe that's improving.
        We recommended that the MLC not pay out for at least five
    years, so that there was more time than the statute, the
    statutory minimum to make, to do as much matching as possible
    and identify as many copyright owners as possible. It is our
    understanding that at this point in time the MLC is not
    planning to pay out the money anytime in the near future.
        Mr. Fitzgerald. Very good.
        I yield back.
        Mr. Issa. I thank the gentleman.
        We now recognize the Ranking Member of the Subcommittee,
    Mr. Johnson of Georgia.
        Mr. Johnson of Georgia. Thank you, Mr. Chair.
        Register Perlmutter, in its guidance, the Copyright Office
    argued that both the Constitution and the Copyright Act define
    an author as ``a human entity,'' excluding nonhuman creations,
    and noted that this stance is reinforced by various court
    rulings, and concluded that those using AI in their creations
    can claim copyright protection only for their human
    contributions.
        How did the Copyright Office make that determination, and
    how will that bright line help artists and creators survive in
    fields that will increasingly be filled with AI-generated
    works?
        Ms. Perlmutter. Well, I would divide my answer into two
    parts. So, the first part is the issue of the protectability of
    the output, the protectability of individual works that are
    generated using AI. To the extent that humans use AI as a tool,
    that should not affect the protectability of the work. The
    human author would still be the creator and the work would be
    protected by copyright. Using AI as a tool is not something
    entirely new. It has been used, in particular, in the music
    field, for example, for decades in various ways.
        The issue that we address because it was squarely put
    before us, in particular, in the Thaler case, was a situation
    where the claim was that a work was generated solely by a
    computer and in that situation, looking at the word author and
    both the Constitution and the statute, as you have noted, Mr.
    Johnson, we believe that this term implies human authorship and
    not that of a machine. That position was borne out by a number
    of court cases over decades, if not centuries. So, we were
    pleased to see the District Court and the District of Columbia,
    as I mentioned, agree with us on that. What we are trying to do
    is to guide people as to how they can register works that
    include generative AI outputs. In that context, we said they
    should just disclaim the portion of the work that was generated
    by AI and we will issue a registration for the work as a whole
    where there is some human authorship.
        The second part of the question I think really relates to
    what effect it will have on the ability of human creators to
    make a living when their works are input into the computer for
    purpose of machine learning and then the output might compete
    in the marketplace with their work. That is an issue that we
    are going to be studying that we have asked for comments on our
    Notice of Inquiry. We agree, it is a critically important issue
    for the future. We need to make sure that we do not inhibit the
    development of very exciting new technology, while at the same
    time ensuring that human creativity continues to thrive.
        Mr. Johnson of Georgia. Thank you. Many AI models are
    trained on copyrighted data, but not all the training data is
    licensed. Why is it important that copyrighted information used
    to train AI be licensed?
        Ms. Perlmutter. One of the issues that is presented both
    before us and that we have asked questions about in the Notice
    of Inquiry and also in some of the court cases that are pending
    is the extent to which any use of copyrighted works in training
    the AI may qualify as fair use. To the extent it qualifies as
    fair use, it would not need to be licensed. To the extent there
    are certain uses that do not qualify as fair use, there would
    be a need to obtain licenses. Then we have asked the further
    question of how would that be done as a practical matter? Can
    it be handled through direct licensing? Should it be handled
    through collective licensing? Or should Congress consider some
    sort of new compulsory license system?
        So, a lot of open questions still and we will be exploring
    all those as we review the responses to our Notice of Inquiry.
        Mr. Johnson of Georgia. Would licensing be sufficient?
        Ms. Perlmutter. It would certainly deal with the need to
    have authorization if a use falls within the rights under the
    Copyright Act and doesn't qualify as fair use. So, it would
    deal with the authorization element. Presumably, it will also
    deal with the compensation element and depending on the terms
    of license, at the license, it could also require credit being
    given to the creators.
        Mr. Johnson of Georgia. Thank you. My time is about to
    expire, so I will yield it back.
        Mr. Issa. I thank you for the six-seconds. We now go to the
    gentleman from Virginia, Mr. Cline.
        Mr. Cline. Thank you, Mr. Chair. Register Perlmutter, thank
    you for being here. You do a great job, and your 444 employees
    are well served.
        I want to go back to the subject of a hearing we had back
    in July with the MCA and Section 1201 and right to repair. The
    DMCA was introduced back in 1998 to address the evolving
    relationship between copyright, the internet, and merging
    technologies. Section 1201, as you know, prohibits the
    circumvention of technological protection measures designed to
    safeguard copyrighted works. Your office oversees a triennial
    rulemaking process pursuant to the DMCA to grant specific
    exemptions to 1201, balancing copyright protection with
    technological advancement. Some have called for reform of this
    process, particularly those who rely on exemptions to enable
    third-party repair of devices with TPMs.
        With respect to those issues, do you believe that Section
    1201 should be modified statutorily, or do you think the
    Copyright Office will make an authority sufficient to address
    the needs of copyright holders and consenters?
        Ms. Perlmutter. My answer would really be both. We are able
    through rulemaking to address the right to repair issue and we
    have done it in I think in the last three successive
    rulemakings. On the other hand, that is not the most efficient
    way to do it. It requires a lot of work from stakeholders and
    from the Copyright Office every three years. For that reason,
    in our report on Section 1201 a few years ago, we did recommend
    a statutory permanent exemptions for the right to repair in
    appropriate circumstances and we still believe that would be
    advisable.
        Mr. Cline. Can you talk about what are the most important
    reasons that led to your office's decision to expand those
    exemptions in that space?
        Ms. Perlmutter. We did hear that there were many situations
    where because copyrighted software is incorporated into devices
    of various kinds, and because it is protected by encryption or
    other technological measures, that the MCA's prohibition on
    circumventing technological measures made it impossible for
    people to get access for purposes of repair. So, for that
    reason, in particular contexts which were medical devices,
    consumer devices, and vehicles, we did put in place, we
    recommended to the Librarian of Congress, and she put in place,
    I should say, exemptions allowing circumvention in those
    situations to make repairs.
        We continue to believe that is a valuable tool for people
    to have and therefore we would support addressing it in a
    permanent way rather than through a triennial rulemaking.
        Mr. Cline. So, in your view, this expansion could lead to a
    proliferation of third-party repair shops and emergence of a
    more competitive and robust repair industry?
        Ms. Perlmutter. It may, yes.
        Mr. Cline. Now, that you have recently initiated your ninth
    triennial rulemaking process, we know that petitions for
    renewing existing exemptions and new exemptions were due August
    25th, can you offer any insight into new exemptions that are
    being requested and how they compared with requests over the
    past several rulemakings?
        Ms. Perlmutter. We have had a few new requests, not a
    deluge of them. We never know until we get them. We will be
    issuing a Notice of Proposed Rulemaking in October which will
    set out our recommendations on all the requests, but I don't
    think anything will be a tremendous surprise. There are a
    number of requests to renew existing exemptions or expand them
    and just a few new ones, not a lot.
        Mr. Cline. Talking about TPMs, rights holders argue that
    aside from protecting IP TPMs, ensure device safety, security,
    and reliability, what has your office found in terms of whether
    the increased granting of exemptions weaken IP rights for
    owners and present security issues for consumers?
        Ms. Perlmutter. We have not been made aware of any serious
    problems arising from any of the exemptions that the Librarian
    has granted. So far, what we have recommended, and the
    Librarian has adopted, have been very carefully delineated
    exceptions that are drafted in such a way that we believe
    avoids negative impacts.
        Mr. Cline. Thank you. I yield back.
        Mr. Issa. I thank the gentleman. We now go to the Ranking
    Member of the Full Committee, Mr. Nadler, for five minutes.
        Mr. Nadler. Thank you, Mr. Chair, and thank you for
    appearing before the Subcommittee. Unlike most other regulatory
    agencies, the Copyright Office has taken concrete steps toward
    studying and guiding the adoption of artificial intelligence
    with its guidance and Notice of Inquiry. How do you see the
    Copyright Office's role in AI regulation?
        Ms. Perlmutter. We have two separate roles. One is our role
    as the administrator of the Copyright Act and registering
    applications or registration, accepting applications for
    registration. There, we are having to make day-to-day decisions
    looking at specific examples of works created using AI
    technology and the extent to which there is a human
    contribution that can be protected by copyright. So, in a way,
    we are a bit of a natural laboratory for looking at what the
    dividing line is between human and computer creation.
        The second role that we play is as an advisor to this body
    and also to the courts and to other Executive Branch agencies
    on copyright law and policy. In our Notice of Inquiry, we are
    looking at all these issues. We are looking at whether we need
    to refine in any way the guidance that we issued in March on
    registration and we are looking at what the policy implications
    are and whether we would recommend any changes to legislation
    or regulation.
        Mr. Nadler. Well, you may have answered part of my next
    question. How should intellectual property be considered when
    Congress or the Executive Branch as a whole decides to regulate
    AI?
        Ms. Perlmutter. I am sorry. Can you repeat the question?
        Mr. Nadler. How should intellectual property be considered
    when Congress or the Executive Branch as a whole decides to
    regulate AI?
        Ms. Perlmutter. I think as a result of the input that we
    will get in response to the Notice of Inquiry we will have a
    better sense of the extent to which any changes to the
    copyright law are necessary. I know that this overlaps a bit
    with some of the questions more broadly affecting society from
    the development, in particular, generative AI dealing with
    security issues, and dealing with privacy issues. So, I think
    it is important to keep an eye on potential overlaps and
    potential relationships. At the moment, it appears that the
    copyright issues could be dealt with separately, that we don't
    yet see any necessary overlap between other initiatives
    relating to AI, but that may change as we continue to examine
    and follow what is happening in the space.
        Mr. Nadler. Thank you. What are the potential pitfalls of
    AI adoption in artistic fields like music, visual arts, and
    writing?
        Ms. Perlmutter. There have been great concerns expressed by
    creators and performers about the impact of a proliferation of
    AI-generated content on their ability to make a living. There
    are still a lot of unknowns about what the economic effect will
    be, and we are looking at those issues as well as the legal
    issues.
        In terms of the protectability of AI-generated content,
    there are a lot of questions about the extent to which it might
    replace human-generated content, what consumers are going to be
    interested in seeing, hearing, and listening to. So, all these
    issues are very much up in the air. We are looking to find out
    through the Notice of Inquiry all the concerns that people
    have, and we will take those into account in writing a report
    once we have had a chance to review the input.
        Mr. Nadler. Thank you. A professional portrait artist takes
    an average of 3-6 months to create a work of art. As they
    become more popular, their work will often change hands,
    becoming more valuable with each sale. If the artist will never
    see a painting of these later sales, does the Copyright Office
    continue to support the passage of Resale Royalty Scheme for
    visual artists?
        Ms. Perlmutter. Yes, we do, for exactly the reason that you
    mentioned. I think the copyright system for a long time has not
    served visual artists who create unique works of art as well as
    it has served other types of creators and having the ability to
    obtain a share in the money that is made when an original work
    is resold is one way to allow an artist to continue to benefit
    from an increased demand.
        Mr. Nadler. Thank you. My last question is under the
    current statutory framework, radio broadcasters do not need to
    compensate artists when their songs are played on AM/FM radio.
    What would be the benefits of legislation requiring royalty
    payments to the broadcast of artists' songs and what resources
    would the Copyright Office need to distribute those royalties?
        Ms. Perlmutter. This is an area where the Copyright Office
    for many years has recommended legislation. The United States
    is one of very, very few countries in the world that do not
    provide a full public performance right for sound recordings
    covering over-the-air broadcasts and we believe it is past time
    to do so. If we do so, that will mean more money coming into
    the United States from other countries that provide that right
    to performers, but only on a reciprocal basis, so they will not
    pay performers in the United States because the U.S. doesn't
    have an equivalent rate.
        Mr. Nadler. Thank you for supporting Chair Issa and my
    legislation and with that, I yield back.
        Mr. Issa. Thank you. We now go to the gentleman from Texas,
    Mr. Moran, for five minutes.
        Mr. Moran. Thank you, Mr. Chair. Director Perlmutter, thank
    you so much for your time today. I wanted to start out by
    talking a little bit about what kind of cooperation we have had
    across the globe with dealing with copyrightability of AI-
    generated works. Can you tell me what level of cooperation we
    are currently engaging with other countries across the world
    with respect to this issue?
        Ms. Perlmutter. Yes, that is a very important question.
    Thank you. Of course, we can't only look at the issues within
    U.S. borders because the technology involved in AI can be
    international in scale. The databases can include copyrighted
    works from around the world. The technology is developed by
    different groups around the world, so we need to think about
    the international implications.
        We are in touch with our counterparts in other countries. I
    have been to numerous meetings just over the last nine months
    with copyright policymakers in a plethora of different
    countries, so we are trying to make sure that we talk to each
    other, that we understand what is happening and why.
        We are also participating in conversations through the
    World Intellectual Property Organization with other countries
    as well. The goal really is to say having a certain level of
    consistency and how we treat this issue and how we address the
    issue is going to be desirable. We don't need to have identical
    laws, but we should have consistent laws.
        Mr. Moran. I like the way you put that because we certainly
    want to contain our sovereignty here and make our own
    determinations, but consistency certainly provides some
    benefits to our human artists.
        Who is leading on this issue as you have been talking
    across the globe? I met with some folks from the E.U.
    Parliament last week. They seemed to be doing a lot in this
    space to determine what kind of framework should exist in the
    copyright and AI space. Who would you say is somebody we need
    to look at for leadership in this world that we need to
    cooperate with?
        Ms. Perlmutter. It is interesting because the Copyright
    Office here has become the leader in looking at the
    copyrightability issue because of our system of examining works
    submitted for registration. So, a lot of countries are looking
    to us on that particular issue.
        On other issues, yes, the E.U. has moved forward with The
    AI Act, which I believe is expected to go into force later this
    year, and that deals with transparency issues and the question
    of providing information about what copyrighted works have been
    input into the machine. Then, we have seen a lot of activity
    also in other countries, such as, Japan, Korea, and Singapore,
    for example.
        Mr. Moran. Let me switch gears and talk about the Copyright
    Claims Board for a moment. At the one-year mark of its
    establishment, there were over 500 cases filed with the
    Copyright Claims Board. Does the Copyright Office have enough
    resources to ensure the smooth operation of that board? Could
    you talk about that?
        Ms. Perlmutter. Yes. Thank you for that question. So far,
    the answer is yes, but we need to see how this evolves in the
    coming months and years. So far, the cases are coming in at a
    pretty steady rate and our fears in the beginning that we might
    be inundated have not yet happened, so there is plenty of work.
    At the moment, we have a team that is large enough to handle
    it. We will certainly come back and report if that turns out
    not to be the case.
        Mr. Moran. Speaking of reports, how are you keeping track
    of the statistics and the outcomes of the CCB cases? Talk to me
    about that.
        Ms. Perlmutter. A lot of data and information is publicly
    available on our website about the cases that have been filed.
    We are also developing internal charts and graphs to try to get
    a sense of what is happening and in what sectors. We will
    continue to make information available as is feasible.
        Mr. Moran. All right, and then finally, we have got about a
    minute, I want to go back to this NOI that you were talking
    about earlier. In August of this year, as you noted, ``the
    Copyright Office initiated a Notice of Inquiry to better
    understand the use of copyrighted works in training AI
    models.'' As of about September, mid-September, I think you
    guys have had 15,000 responses. I know we are not yet to the
    deadline of responses. Can you highlight some of the key
    feedback you have already received including before the NOI?
        Ms. Perlmutter. I think what tends to happen is that we
    will get a rush of early responses as soon as we publish our
    notice and that is what happened. That is why the numbers seem
    high. Then we will tend to get many of the much more detailed
    responses late, like probably right near the deadline. So, at
    present, we are still going through the responses we have
    received so far. I think they have tended to be mostly
    reactions to the fact that we are doing the study and people
    talking about how important this is and how major the impact
    could be on their lives and careers.
        Mr. Moran. OK, thank you, Director. I yield back.
        Mr. Issa. I think the gentleman. We now go to the
    gentlelady from North Carolina, Ms. Ross.
        Ms. Ross. Thank you, Mr. Chair. Thank you for joining us
    today, Register Perlmutter.
        My home district in North Carolina is home to creators in a
    variety of creative fields from musicians to visual artists to
    filmmakers to writers. As a matter of fact, we are having a
    bluegrass festival, international bluegrass festival this
    weekend which I am sorry I will not be there for. We all
    benefit from the work of these artists who make our lives
    fuller and richer with their creativity, their skill, their
    dedication, and their craft. They would not be able to produce
    the work they do without strong copyright protections that
    allow them to make a living as creators. So, I am grateful for
    this opportunity to hear from you about initiatives that the
    Copyright Office is taking to ensure that creators can continue
    to profit from their work.
        In June 2022, the Copyright Office report titled,
    ``Copyright Protections for Press Publishers,'' in that report,
    the Office addressed the fact that there is still no practical
    method available from the Copyright Office for copyright owners
    of dynamic and voluminous content, such as a news website or a
    mobile app to register their content. The advent of AI which
    enables new types of infringement puts publishers in an even
    more precarious position, as we know the news industry is also
    in a precarious position. In the report, the office stated the
    office takes these concerns seriously and is considering how to
    best address them as part of its ongoing modernization
    initiative.
        How has the office taken steps to address these concerns.
        Ms. Perlmutter. We do take the need for this very seriously
    and in fact, we are working on a Notice of Proposed Rulemaking
    at this moment on a group option for registering news websites,
    so that should appear soon. We believe we can do it within our
    existing technological capabilities and not wait until ECS is
    fully developed.
        Ms. Ross. Thank you. I am the lead democratic sponsor,
    along with the chair of a bill called the Pro Codes Act which
    would protect the copyrights of standards and codes
    incorporated into law while requiring a free version of each
    code to be published online. At our July markup of the Pro
    Codes Act, questions were raised about whether granting
    copyrights in industry standards such as the National
    Electrical Code was somehow improper or violated the government
    edicts doctrine. Given that the Copyright Office has issued
    thousands of copyright registrations for industry standards
    over the course of decades, it appears that the Copyright
    Office does consider such standards to be copyrightable.
        Can you further explain why allowing the private sector
    authors of standards to obtain and protect copyrights, even
    where those standards are later incorporated by reference into
    law does not violate the government edicts doctrine?
        Ms. Perlmutter. Our view is that the privately authored
    sets of standards are protected by copyright, as you note. This
    is an important incentive for the work that is required to
    develop these standards which can require a lot of thought and
    expertise, but that at the same time, the public should have
    access to them when they are incorporated into law because the
    public does have a right of access to the law.
        The courts have generally dealt with this issue so far by
    saying that while the standards themselves may be protected by
    copyright, the use of them generally falls under fair use if it
    is for purposes of using and applying and understanding the
    law. So, at present, we think the courts are handling this in
    an appropriate way.
        Ms. Ross. To compensate copyright holders for the use of
    their work to train AI models, some have suggested creating a
    licensing-type system for these works, similar to what the
    Music Modernization Act streamlined for music. From what you
    have seen of the Music Modernization Act effects, what do you
    think about these proposals?
        Ms. Perlmutter. First, I would say I think the Music
    Modernization Act is working very effectively. The issue of
    whether there should be a similar license for training AI is a
    complicated one. It would involve all types of works, not just
    musical works, and be far reaching in its scope. That is why we
    are asking questions about it in our Notice of Inquiry. I think
    there are a lot of practical issues involved that need to be
    explored including about how the license fees would be set, how
    it would be distributed, and if it is, how it can be made
    feasible given the volume of works that would be involved.
        Ms. Ross. Thank you, Mr. Chair. I yield back.
        Mr. Issa. Thank you. Thank you very much for your line of
    questioning.
        Now, we will go to the gentlelady from Florida, Ms. Lee.
        Ms. Lee. Good morning, and thank you so much for being
    here. I would like to start by returning to the discussion of
    the Copyright Claims Board and specifically, I think it is very
    interesting that you made great use of that, and it seems to be
    off to a productive start. I am interested though, there is a
    set of claims that were rejected because they were
    noncompliant, or they didn't meet the technical standards for
    going through that resolution process.
        Could you share with us what your office is doing to
    provide resources or guidance for those who are trying to
    utilize the Copyright Claims Board process?
        Ms. Perlmutter. Yes, thank you for that question. I am very
    proud of what we are doing to help people use the process. We
    have a website with a wealth of information. We have a handbook
    to tell people what they need to do to use the system. We have
    people who answer the phone and answer questions if anyone
    calls. We are also reaching out to get law school clinics and
    volunteer lawyers for the arts signed up to help people
    navigate the system even though they do not need to be
    represented by an attorney. We are doing a lot of outreach, a
    lot of public speaking about it.
        The system is set up so that there are a number of
    safeguards against inappropriate claims being brought so that
    was very carefully thought through by Congress in enacting the
    CASE Act, of course, and there are several opportunities along
    the way if a claim is noncompliant, the Board attorneys will
    tell the claimant and the claimant has two opportunities to
    revise the claim to make it compliant. I will say some of the
    lack of compliance we see is people sometimes bringing claims
    that, for example, don't involve copyright law, maybe a patent
    claim, or a claim against a foreign respondent which is not
    permitted under the statute.
        Ms. Lee. Based on what you have seen so far with the
    inception of the program and its progress to date, what do you
    anticipate being the future of the program? Do you anticipate
    it is going to be broadly utilized? Any challenges or things
    that you need Congress to do to help you succeed?
        Ms. Perlmutter. It seems to be very successful so far. The
    public reaction, the public reviews of what is going on have
    been positive. The system is working. We have had a number of
    final decisions, some based on settlements that have been
    entered into the record and we have found that while some
    respondents opt out, many respondents also are happy to proceed
    in the CCB and prefer the certainty of knowing that their
    potential damages are limited. So, we think it is working well
    and the upward trend has been quite steady, so we think that it
    will continue to go up, but presumably unless something really
    unusual happens, the trajectory won't change. We may need
    further resources, especially as we seek to further develop the
    eCCB, which is the electronic case management system. We will
    keep the Subcommittee apprised.
        Ms. Lee. Speaking of your electronic case management
    system, one of the things you touched on in your testimony was
    your efforts to modernize and replace legacy IT systems. Would
    you share with us what you are working on there and your
    strategic plan to ensure that you are making the right
    investments that are going to stand the test of time?
        Ms. Perlmutter. It has been a huge priority for the
    Copyright Office. IT modernization, we are now in the fifth
    year of our originally planned modernization effort and now we
    are moving toward continuous development. The main highlights,
    as I described in my testimony, already we have moved from a
    very archaic paper-based recordation system in the last two
    years to one that is online. That has been huge. We are now
    focusing on registration. We expect in the next year to begin
    user testing for various components of the registration system
    including the handling of electronic deposits.
        We are also going to start recording Notices of Termination
    online which we have not yet been able to do and that will
    start in the next year. We are making more and more historical
    records available online, so people no longer need to come to
    our offices in Washington, DC, to do research. We are
    experimenting with AI tools ourselves to extract metadata from
    our records. So, we have a lot planned.
        Ms. Lee. Thank you. I yield the balance of my time to the
    Chair.
        Mr. Issa. Thank you. That metadata brings up just one quick
    question I will inject. You mentioned the disclaiming of AI
    produced. Can you envision that along with disclaiming that
    they include the metadata that shows where they--what they
    ingested, how it turned into what they produced that they are
    disclaiming? Are you considering that within your IT
    modernization?
        Ms. Perlmutter. That is a very interesting idea. We have
    not yet considered it. We generally have been trying, however,
    to make the application for registration as easy and simple as
    possible and have heard some concern that we might be asking
    for too many details and people would prefer that we make it
    still easy to fill out an application without having to provide
    a lot of information. We have to keep that in mind as we look
    at that.
        Mr. Issa. Thank you. To be continued. With that, I go to my
    colleague and classmate from many years ago in Congress, Mr.
    Schiff.
        Mr. Schiff. Thank you, Mr. Chair. Thank you, Director, for
    being here. Earlier this year, it was reported that TikTok was
    limiting a number of songs available within its app for some
    users in Australia in an attempt to test the importance of
    music to the app's users. As a result, the number of people
    using TikTok in Australia declined for three consecutive weeks
    after the rollout of the test, according to numbers from the
    data research firm data.ai.
        The test revealed what many creatives already know to be
    true. Much of TikTok's success can be attributed to copyright
    works by musical artists, many of whom I represent in my Los
    Angeles District, and who are often under compensated for the
    use of their work on TikTok's platform.
        Director, in light of what we have seen in Australia and
    what is suggests, what thoughts do you and your office have
    about how the United States can ensure that creators and rights
    holders are protected when their work is used on digital
    platforms?
        Ms. Perlmutter. Well, this is obviously a top priority for
    all of us in the copyright field. We have done a number of
    things over the years to contribute to that effort.
        We, of course, don't have enforcement capabilities in the
    Copyright Office, but we do provide input from a policy
    perspective on what the law should say. That has included over
    the last few years a report on Section 512 of the DMCA and some
    improvements that could be made in that section, as well as
    looking at how copyright owners are using technological
    measures to identify and protect their works. We continue to be
    interested in that and to look at ways that we can convene
    interested parties to continue to discuss improvements.
        We also continue to follow and review what other countries
    are doing in this respect and what tools have been adopted
    elsewhere that could be useful to American right holders.
        Finally, we work closely with the Executive Branch on
    initiatives that have to do with international enforcement,
    including the U.S. Trade Representatives Special 301 report and
    Notorious Markets report.
        Mr. Schiff. In terms of TikTok, do you think the remedy is
    primarily an enforcement one, or are there legislative changes
    you have recommended as a policy matter?
        Ms. Perlmutter. We have not, to date, looked at potential
    legislative changes. I have not been made aware of any
    proposals from stakeholders but would be interested in hearing
    more about it.
        Mr. Schiff. Let me turn to something else. Earlier this
    year the Supreme Court decided the Warhol v. Goldsmith case
    dealing with fair use. How do you think that decision impacted
    or clarified the way courts are supposed to apply the fair use
    analysis? How do you expect this ruling to impact any future
    rulemaking from the Copyright Office regarding the use of
    copyrighted material to train AI models?
        Ms. Perlmutter. We agree with the Supreme Court decision,
    which adopted a lot of the analysis of the U.S. Government. The
    government participated in that case as an amicus.
        It may be that the case will have an influence on the fair
    use analysis of the ingestion of copyrighted works for purposes
    of machine learning. It requires, well, it affirms the need to
    look at the markets for both the original work and the work
    that is based on the original work, the work that is the
    subject of the infringement claim, and to look at the extent to
    which they are competitive, that they share the same market,
    and the extent to which the defendant's use is commercial in
    nature.
        So, how that will apply to the analysis of fair use in the
    ingestion of copyrighted content for AI training is still up in
    the air. It will certainly affect it. We are watching the court
    cases to see how the courts react. We will, we have asked
    questions about this in our Notice of Inquiry. We will be
    analyzing it once we receive the responses as well. It does
    seem as if it will have an impact.
        Mr. Schiff. Well, certainly by those measures, whether it
    is in competition, the marketplace that test I think would be
    met, and that it is economic in nature is also plainly the
    case. Well, thank you, Director. I appreciate your work.
        With that, I will yield back, Mr. Chair.
        Mr. Issa. Could I ask you yield to me?
        Mr. Schiff. Of course.
        Mr. Issa. I just wanted to followup on one thing. You said
    fair use and then said use in commerce. Would you like to
    expand that linkage that fair use for not commerce is
    dramatically different than fair use when it is, in fact,
    turned into revenue?
        Ms. Perlmutter. Well, fair use is very context specific and
    requires weighing a lot of factors, as I am sure you're aware,
    Mr. Chair. One of the factors are the nature of the use,
    including the extent to which it is commercial or
    noncommercial. So, the courts will look at that as part of the
    total weighing, but it is not determinative. What the Supreme
    Court did in the Warhol case was to elucidate a bit further
    what the relevance was of the commerciality of the use.
        Mr. Issa. Thank you. Thanks for expanding.
        With that, we go to the gentleman from South Carolina, Mr.
    Fry.
        Mr. Fry. Thank you, Mr. Chair.
        Thank you, Madam Register, for being here today. I really
    appreciate the importance of this hearing and your testimony
    today.
        Judge Moran hit on this earlier. I want to explore this
    topic a little bit further. In August of this year, the
    Copyright Office initiated the NOI, the Notice of Inquiry, to
    better understand the use of copyrighted works in training AI
    models. Judge Moran asked, ``but I want to expand on that a
    little bit.'' What is--and I understand the themes. I know that
    the time is not yet finished in which people can comment. What
    are some of the early themes that you are seeing or the
    individual comments that come to your mind as some of the early
    feedback that you are receiving on the NOI?
        Ms. Perlmutter. I can't say that I have read all the
    thousands of comments we have received so far. Lawyers in the
    office are in the process of doing that. My understanding is
    most of the early comments came from individual creators and
    artists expressing concerns over what is happening.
        Mr. Fry. Just about the use of AI within their field?
        Ms. Perlmutter. Yes.
        Mr. Fry. Are they making suggestions on how to fix that, or
    they are just airing grievances?
        Ms. Perlmutter. Let me get back to you with an answer to
    that question. I will say it is interesting because creators
    and artists are very much on both sides of the issue in various
    ways, because I do want to make the point that many of them are
    using AI as a tool in the creation process and want to be sure
    they can continue to do that. At the same time, they are
    concerned about what the impact will be if AI-generated content
    is competing in the marketplace with their works.
        Mr. Fry. Madam Register, do you have any idea on the timing
    of when the Copyright Office might be able to make
    recommendations to us or a report to us based on this feedback?
        Ms. Perlmutter. I would like to say as soon as possible. I
    know that timing is important here because technology is
    evolving very rapidly and its impact is likely to start being
    felt. We would like to be able to make recommendations in a
    short timeframe.
        At the same time, we are aware that we are likely to be
    getting tens if not hundreds of thousands of comments. The
    comment period will end at the end of November. We will need
    some time to finish analyzing and absorbing and then writing
    the report. Hopefully, it will certainly be in 2024. I
    certainly hope it will be in the first half of 2024.
        Mr. Fry. Thank you. Some of the most resource intensive
    projects that the Copyright Office has on its agenda over the
    next six months, I imagine that is probably one of them. Do you
    have the resources to appropriately carry out those tasks,
    taking into account stakeholder comments, where applicable, and
    giving them due consideration?
        Ms. Perlmutter. I really appreciate that question. I
    believe we have the resources to do that at this point. It is
    true that we find ourselves doing more and more work as the
    copyright policy issues proliferate these days. At some point,
    we may need further resources. At present, we are well equipped
    to handle the work on our plate.
        Mr. Fry. Thank you for that. Under the MMA, the Copyright
    Office has an ongoing regulatory authority to promulgate
    regulations, to implement the law, and ensure that proper
    functioning of the Medical Licensing Collective in its duties,
    including ensuring it acts as a neutral administrator serving
    three primary sets of stakeholders, songwriters, publishers,
    and digital service providers.
        What steps can the Copyright Office take within its
    existing authority to improve oversight and transparency of the
    MLC, particularly, as redesignation approaches in 2025?
        Ms. Perlmutter. We are taking a number of steps in that
    respect. We hold regular meetings separately with each of the
    interest groups, with the publishers, the songwriters, the
    digital service providers, and the MLC itself. We have open
    rulemakings. We continue to have an open door for people to
    raise issues with us. We will, as you mentioned, commence a
    public notice asking for input with respect to redesignation
    starting early next year. We do think it is very important to
    make sure that all sides are heard and feel that they are able
    to participate in the process.
        Mr. Fry. What are some of the issues that are brought up in
    this, I guess, this sphere?
        Ms. Perlmutter. Well, the issues are constantly ongoing.
    Som there is, I think in general the process is working quite
    well. We do hear questions about perceptions that the board is
    not balanced because there are more members from the publishing
    community than the songwriter community. That is something that
    is set by statute. So, that would be an issue for Congress to
    address.
        Mr. Fry. OK. Final question. Given the increased usage of
    name, image, and likeness in the outputs of generative AI, what
    are your thoughts on how Congress can best understand and
    legislate on this issue?
        Ms. Perlmutter. This is also one of the issues that we are
    asking for input on in our Notice of Inquiry. A few years ago,
    the Copyright Office did a study on moral rights in the United
    States and as part of that study suggested that Congress would
    consider, might consider enacting a Federal right of publicity.
    There are a number of State laws that could cover the imitation
    of name, voice, and likeness that is currently taking place
    using generative AI. It is a patchwork of different laws in
    different States. So, the question is whether a Federal law
    that might either preempt State laws or at least set a ceiling
    or floor for what State laws can say would be desirable.
        Mr. Fry. Thank you. I really appreciate that.
        With that, Mr. Chair, I yield back.
        Mr. Issa. Thank you.
        With that, we go to the gentlelady from California, Ms.
    Lofgren.
        Mr. Lofgren. It is Lofgren.
        Thank you very much. Thank you--
        Mr. Issa. Sorry, Zoe.
        Mr. Lofgren. Ms. Perlmutter. First, just a kudos for the
    modernization efforts. I know we are not done yet, but we have
    made great progress. I want to thank you and the Librarian as
    well.
        Just a note on music modernization, I thoroughly think that
    was a triumph of collegiality and cooperation. There are a few
    bumps in the road. Part of it may be our fault. In terms of the
    songwriters, I am hoping that you can make an extra effort to
    reach out to them because of the, what Congress did, because we
    want to make sure everyone is heard. I know you believe in
    that.
        I want to talk about the right to repair. We haven't talked
    that much about Section 1201 in terms of reform. I raise that
    with some trepidation because people who have content worry,
    and I understand that. If you have a software tool that
    protects content, if it protects a movie, if it protects your
    song, if it protects your book, if it protects your visual art,
    you shouldn't be able to break that. So, I am not suggesting
    that.
        However, if you are using a software tool to protect
    something that isn't content, which is what you have addressed,
    that is a different situation. I am wondering, you can legally
    fix your tractor now, but you can't get the software that
    allows you to fix your tractor under 1201.
        So, I am wondering if we could craft a narrow exception
    that would not cause any concern among the content community
    that is specifically, narrowly, and unequivocally only directed
    toward the right to repair. Do you think that is possible to
    do? If so, would you help us?
        Ms. Perlmutter. Yes, I do think it is possible. In our
    office's report a couple of years ago on Section 1201, we noted
    that we had been recommending and the Librarian had been
    issuing exemptions to permit repair in certain circumstances
    and that it might make sense to have a permanent statutory
    exemption, so that this didn't need to be revisited every three
    years. We would still support that.
        Mr. Lofgren. We do have the triannual process for 1201
    exemptions. I want to thank you. When we did 1201, and I was
    here in the Congress when we wrote it, we didn't intend to
    allow cell phone companies to protect their monopolies. It was
    about protecting content, not factors, cell phones, or other
    equipment.
        You have a lot of work to do. I appreciate that, that you
    are not asking for more staff. If we were able to either
    streamline the 1201 process when it relates to noncontent
    issues or create a narrow exception that protects content,
    wouldn't that help relieve the workload in your office?
        Ms. Perlmutter. Yes, I think there are several areas where
    1201 could be amended that would make the process easier. I
    have to say I was around also when 1201 was written.
        Mr. Lofgren. Yes.
        Ms. Perlmutter. The idea of the amount of work it would
    require terrified me at the time. We have learned how to handle
    it. It is a lot of work.
        Mr. Lofgren. In terms of the right to your person, you have
    talked about that. It is really State law, publicity about
    yourself. It is important that we take steps more urgently on
    that given the artificial intelligence is already here. People
    are going to need to take action to protect their appearance
    and their personhood in AI.
        We don't have a statute I think in mind yet. I would very
    much welcome and ask for your assistance in crafting something
    that would provide that protection, but more importantly, that
    would think through how we might give people an easy avenue to
    enforce that right, because AI is massive. It is here. It is
    not going to be stopped. Yet, the potential for people to have
    their personhood misused is real, already here. Having a right
    and being able to enforce that right are two different things.
    Do you have comments on that?
        Ms. Perlmutter. We would be happy to assist in drafting.
        Mr. Lofgren. I appreciate that very much. We will followup
    with you.
        Mr. Chair, I yield back and thank you.
        Mr. Issa. I thank the gentlelady.
        We now go to the other gentleperson from California, Mr.
    Lieu.
        Mr. Lieu. Thank you, Mr. Chair. I want to thank Chair Issa
    and Ranking Member Johnson for holding this important hearing
    on copyright issues and to you, Register Perlmutter, for being
    here today and for your hard work and leadership.
        I also want to align myself with the comments of
    Congresswoman Zoe Lofgren in terms of the Music Modernization
    Act, which is coming up on the five-year anniversary. I was
    proud to have been a cosponsor of the Act. The MMA transformed
    the way songwriters, music publishers, and tech platforms
    operate under streaming models.
        The creation of the Mechanical License Collective has
    streamlined the administration, collection, and distribution of
    mechanical royalties. To date, it has paid out more than 1.3
    billion to songwriters and publishers. As Co-Chair of the
    Songwriters Caucus, I want to thank you and your entire team
    for continuing to work with the MLC in meeting its mandate to
    serve songwriters and ensure that they are compensated.
        So, I know you have answered a number of questions on fair
    use. I just want to understand. You are currently investigating
    the issue of whether it constitutes essentially fair use if a
    large language AI model trains itself on copyrighted works. Is
    that correct?
        Ms. Perlmutter. Yes, it is part of the questions in our
    Notice of Inquiry. Of course, it also will depend on the exact
    circumstances. So, not every use in training will be the same
    for fair use purposes.
        Mr. Lieu. When do you expect that to be completed?
        Ms. Perlmutter. Well, that will be part of our report or
    reports coming out of the NOI, so as early as possible in 2024.
        Mr. Lieu. OK. As part of the investigation, it is not only
    whether a large language model, let's say it trains itself on
    copyrighted Taylor Swift songs, but also you are looking at if
    it outputs lyrics in the style of Taylor Swift songs. Are you
    looking at whether that is fair use as well?
        Ms. Perlmutter. Yes. Of course, it will also be, whatever
    we say in our report will also be informed by any court
    decisions that have come out by that point in time in the cases
    that have been brought.
        Mr. Lieu. You have also said that essentially perhaps it
    should be essentially a Federal right for voice recordings
    because right now audio is not copyrighted, correct?
        Ms. Perlmutter. The style or sound of a voice is not
    protected by copyright.
        Mr. Lieu. Your office had issued a report basically
    suggesting that there should be some sort of Federal name,
    image, and likeness law essentially.
        Ms. Perlmutter. We recommended that Congress consider that,
    yes.
        Mr. Lieu. OK. That report laid out essentially a proposal
    that was around the same level as what California's protections
    are. Is that correct?
        Ms. Perlmutter. I am not sure if I would say it was the
    same level. It contained some of, it talked about the elements
    of that legislation in California. Of course, the report came
    out before we had the generative AI that we have today. So, any
    legislation would need to take into account what the current
    capabilities and contexts are.
        Mr. Lieu. All right. Thank you. In March of this year, your
    office issued, basically announced that a work that involves
    ``sufficient human authorship'' can be copyrightable. So, let's
    say someone uses AI to write a song of which over half the
    lyrics are written by AI. Would that constitute sufficient
    human authorship? How do you determine what that means?
        Ms. Perlmutter. I wouldn't impose any strict percentage or
    numerical limit. So, less than half could be sufficient human
    authorship. It is really decided on a case-by-case basis. I
    find it very useful to think of this by analogizing it to a
    human and human situation. So, for example, if two people
    collaborated in writing a song, did each of them contribute
    enough authorship to make them co-author of the song? If the
    answer is yes in that context, then it should be the same in
    the AI context.
        Mr. Lieu. Ultimately for this you are just going to have to
    rely on trust, right, that someone actually discloses they use
    AI to help them with whatever creative work they are trying to
    copyright.
        Ms. Perlmutter. Yes, but that is true of all applications
    we receive. Applicants have to certify that what they are
    saying is truthful. It is a government document. There are
    penalties for making false statements. Of course, you could
    risk losing your registration.
        Mr. Lieu. Do you view AI software as different than other
    kinds of software that creators have been using for decades to
    make their creations better?
        Ms. Perlmutter. Yes, that is a good question. I think what
    we are seeing with the new generative AI in the last nine
    months or so does seem to be different, not just in speed but
    in kind from the technologies that were used before. I think in
    the past AI was used more as a tool. Now, what we see is that
    it is generating content that if it were generated by a human
    being would be protected by copyright. So, I think we have
    moved to a somewhat different world than we were in before.
        Mr. Lieu. Thank you.
        I yield back.
        Mr. Issa. I thank the gentleman.
        We now go to the gentlelady from Pennsylvania, Ms. Dean.
        Ms. Dean. I thank you, Chair. I thank the Ranking Member
    for hosting and holding this oversight hearing. Thank you,
    Register Perlmutter, for your work and the work of your 444-
    person team to carry out the mission of the U.S. Copyright
    Office, which is promoting creativity and free expression by
    administering the Nation's copyright laws and by providing
    impartial expert advice. I thank you for that work.
        As an author myself, I benefit from and importantly rely
    upon the protections that copyright law provides. As we have
    all been discussing here, with the rise of AI these protections
    are more important than ever. So, I guess my theme for my five
    minutes is twofold. We must protect the spark of ingenuity that
    makes copyrighted work uniquely human, and so at this
    precipice, what are the top things we do to protect human
    content.
        So, I was thinking about your office. Are you able to
    identify AI-generated work? Are you concerned about applicants
    hiding AI copyright, AI work within a copyright registration
    request application? What are the steps that you go through? I
    have to say nightmarishly I go back to the days when I was a
    professor of writing. I would be reading papers and wondering
    are those student's words or are they someone else's. So, what
    is it that you have to do now in this world to identify AI
    within an application?
        Ms. Perlmutter. Our examiners look carefully at an
    application. We have issued this guidance that tells people if
    AI-generated content is included they need to disclose it. You
    are right. We have to trust, and we do take as factual the
    statements that are made in an application unless we have some
    reason to think they are not accurate.
        So, there have been situations where it has been obvious
    from the face of an application that some of the content in the
    work may have been generated by AI. So, our examiners will go
    back and ask the applicant about it and engage in some
    correspondence. What we have seen so far in some of the cases
    we have had is that the result is that the applicant will then
    end up disclaiming some portion of the work that is submitted.
    So that has worked, for example, in books where the
    illustration was generated by AI, but the text and the
    selection and arrangement of the text with the images was done
    by the human applicant.
        So, there is no way to be 100 percent sure. We are not
    unique in having that problem in today's world. We do our best
    to see from the face of the application and the deposit whether
    we think there is AI-generated content. Again, there are some
    legal requirements for people to be honest in the content, in
    the statements that they make to a government office.
        Ms. Dean. Absolutely. I was thinking of Mr. Lieu's question
    and sort of the reverse side of that. The office, your office
    instructs applicants to disclose all AI-generated content that
    is more than de minimis. What is de minimis?
        Ms. Perlmutter. It is not a new concept. So, the same rules
    apply, for example, if the work contains content created by a
    third party. That also has to be disclaimed if it is more than
    de minimis.
        We had a Webinar, we held a Webinar this spring where we
    walked people through the guidance and gave them a number of
    examples and told people that essentially what we mean by de
    minimis is, more than de minimis is if the material that is
    generated by AI would be protected by copyright if it were
    generated by a human being, then it should be disclaimed.
        Ms. Dean. Interesting, yes.
        Ms. Perlmutter. So, we are not talking about just some
    small portion or something incidental, but something that,
    again, if a third party had generated it, if a human being had
    generated it, you would disclaim it as a separately
    copyrightable work.
        Ms. Dean. That is logical. That makes sense.
        Finally, in the few seconds I have left, what has your
    office thought about or learned as a result of the labor
    disputes with the writers and the studios? Full disclosure, my
    son was on strike. He is part of the Writers Guild. In terms
    of, obviously one of the big issues was use of AI in written
    materials and in writers rooms. How is the Copyright Office
    connected there? What clear rules should we be developing?
        Ms. Perlmutter. Well, it is a good question. Clearly the
    strike, both strikes, SAG-AFTRA and the Writers Guild, showed
    how important AI has become to authors and performers, because
    it was a critical part as I understand it of the negotiations.
        We are now looking at what came out of the settlement on AI
    and analyzing it. Of course, we don't play a role because these
    are private party negotiations. It is not really a question of
    what the law says. It is a question of what they agree to. It
    is helpful to see what was thought to be important and what was
    thought to be reasonable as the private parties were
    negotiating. So, we will be looking carefully at the result.
        Ms. Dean. Again, I thank you for all the work that you and
    your office does.
        I yield back.
        Mr. Issa. I thank the gentlelady.
        We now go to the gentleman from California, Mr. Kiley.
        Mr. Kiley. I am going to yield the balance of my time. I
    did just want to say thank you for your testimony. I know that
    your office has been very active in getting input on these very
    novel and vexing issues related to AI. I have certainly heard
    from a lot of creators who have concerns in this area. I think
    it is really important that we be mindful of the ability of
    creators to protect their rights and intellectual property
    moving forward.
        So, with that, I yield to the Chair.
        Mr. Issa. I thank the gentleman.
        I am going to try and use up a little bit of Mr. Kiley's
    time to challenge you to expand on making the record clear as
    much as we can.
        So, let me go through some things that might happen to
    somebody's writings. You tell me whether they are clearly
    disclaimable, clearly ineligible, or clearly not a factor, de
    minimis as was said earlier. Spell check.
        Ms. Perlmutter. No need to disclaim. That is a tool that
    has been commonly used for a long time.
        Mr. Issa. Word substitution to create enhancements such as
    sort of a thesaurus might do.
        Ms. Perlmutter. I would say the same thing.
        Mr. Issa. Phrase enhancement, how is it better said.
        Ms. Perlmutter. I would also just say the use of a tool to
    enhance something that is created by a human would not raise an
    issue as to copyrightability.
        Mr. Issa. Enhancement of desirability based on machine-
    learned desirability and focus group analysis.
        Ms. Perlmutter. I also would see that more as a tool.
    Again, the machine is not generating something that would be
    copyrightable if a human generated it.
        Mr. Issa. Final question in this series. Using these types
    of tools but a regenerative AI, if you ingested an entire book
    and 40 percent of the words, phrases, and content were changed
    while, in fact, the underlying intent of the author wasn't and
    that, but enhanced the desirability and all those other
    phrases, would that, in fact, be either disclaimable or
    ineligible?
        Ms. Perlmutter. So, the applicant wrote a book, and then 40
    percent of the book was--
        Mr. Issa. Ingested, has the book evaluated by AI for all
    these and other ideas, and the book, although the same book
    with the same happy ending or unhappy ending was modified with
    40 percent of the words and/or phrases being changed. I am
    using 40 as an arbitrary number.
        Ms. Perlmutter. It is a tougher question. I think what we
    are talking about here is you have got an original
    copyrightable work by a human, which is the book, and then a
    derivative work created by the machine, which probably would
    not be copyrightable as a separate work.
        Mr. Issa. If you publish only the one, which is--and I am
    using the example for a reason. Ms. Dean said it very well. You
    are a professor. You are evaluating somebody's work. In my day,
    I had to put up with the nuns in my college objecting to my
    handwriting and my spelling. That has now been collectively,
    creatively enhanced in a way that I would probably do better in
    at least theology. However, I also wrote a book. I probably
    would have written a much better book if it was ingested by
    regenerative AI today.
        The question is if Ms. Dean's book and my book were thrown
    in and hypothetically 40 percent of the words and phrases were,
    according to the machine, enhanced, but, in fact, the book was
    still a true copy of the author's work, what do you disclaim?
    What is copyrightable? What is not? It is an arbitrary
    question, but I thought for the record if you would give us
    your best analysis.
        Ms. Perlmutter. Yes, it is a tough question. I think one
    thing that is important to understand is that what we require
    in a disclaimer is just something that says the work
    incorporates AI-generated content and an explanation of what
    the human contribution was. So, it doesn't require really fine
    tuning and specificity.
        I think what your question really goes to is that these are
    not easy decisions. They are not easy lines to draw. So, one of
    the things when I talk about the Copyright Office being a
    natural laboratory for this is we are looking at individual
    applications and making case by case determinations, which is,
    of course, something that copyright law always requires. How do
    you draw the line between an idea and expression? How do you
    determine whether someone has contributed enough to be a co-
    author?
        We are learning more and more each day as we look at more
    and more of these applications and make decisions on them. Some
    of those decisions are being challenged in the courts and will
    be being reviewed.
        Mr. Issa. I thank the gentlelady. I thank the gentleman for
    yielding the time.
        We now go to Mr. Ivey for five minutes.
        Mr. Ivey. Thank you, Mr. Chair. I want to commend you for
    having this hearing. I have only been on the Committee for
    about nine months now. I think we have done, of all the hearing
    we have done, I think we have done four that I would put in the
    substantive category. Three of them have been yours. I greatly
    appreciate that fact.
        Thank you, ma'am, for coming today. I appreciate the great
    work you are doing.
        I think we are in the hair-splitting segment of the hearing
    now. I am going to followup on some of the questions the Chair.
    I am trying to figure this out. I am a lawyer by training, but
    not productive law. I did litigation, unlike the copyright
    world where you are helping actual creations being made and
    protected.
        One of the things I was wondering about was, and I think
    you mentioned this earlier. So, you have got sort of a human
    creator who generates let's say a song and uses AI to help with
    the--there is a portion of the song that is in part generated
    by the AI. That is AI that has been trained and ingested other
    information or music from other sources. I think what you were
    saying was that the creator, when the human creator comes to
    seek a copyright, has to explain or disclaim that there was AI
    generation as part of the final overall work. Is that right?
        Ms. Perlmutter. Yes, they would not have to disclaim the
    use of AI as the tool, like to provide a beat or that kind of
    thing or to change a rhythm. They would if there was let's say
    a melody created entirely by AI that they incorporated into
    their larger musical work.
        Mr. Ivey. OK. So, we will go forward with that. I have got
    a son that creates beats. He would disagree with where you drew
    that line right there, but we will set that to the side.
        So, the melody line, so, and let's say then that, because
    we have got people who approached me, for example, and they
    were complaining about AI being trained using their creative
    work product. So, in the song that you and I just made, and
    this author says I had AI-trained assistance in generating this
    song. How was, or has there been a determination that has been
    made with respect to the people who helped create the content
    that was used to train the AI that was then used in this song?
    How are they, or compensated for their work, or is it
    recognized even?
        Ms. Perlmutter. Yes, well, that is a critical question
    right now. I know--and by the way I am a reformed litigator
    myself. I know there are a number of cases pending in the
    courts asking exactly that question.
        So, assuming that the technology requires the reproduction
    of the works in the computer for purposes of the machine
    learning, there would be a prima facie case of infringement.
    Then the question would be whether it is fair use. Whether it
    is fair use might depend both on how it is used in the training
    and also what the output is going to be and the extent to which
    it competes in the market with the original.
        Mr. Ivey. To what extent is this all going to be reliant on
    I think your term was honesty, I'll say honor code, but, the
    individual who--and I will preface the question with this just
    in my experience, to the extent compensation and the dollars
    get bigger, the honesty and honor code gets sometimes
    marginalized.
        So, you mentioned some of this before, which is the
    certification gets signed and the like. Are there stronger
    enforcement and protections that could be out there for the
    creators of the original content that was ingested by the AI
    model?
        Ms. Perlmutter. Yes, well, the honor issue and the accuracy
    and statements made to the government agency has to do more
    with the applications for registration.
        In terms of litigation, what is interesting is I am seeing
    that more and more some of the companies that are producing and
    distributing AI technology and tools are beginning to say that
    they will license the copyrighted content that they use. Some
    companies that create or license themselves copyrighted content
    are saying that they are now going to create AI using that
    licensed content. So, we may be getting more and more people
    who are interested in making sure that there are no legal
    questions surrounding their use of copyrighted works to train
    the AI.
        Other than that, the way to keep people honest I suppose is
    these lawsuits that are being brought, some of them as class
    actions. We will see what the courts have to say about the
    legality of proceeding without a license.
        Mr. Ivey. Spoken like a true litigator, right.
        Then the last question in relation to that, the CCB I guess
    is sort of an alternative approach. So, instead of going to
    court, they can choose this path, but it is voluntary. I did
    have a question about copyright trolls. Also, on the point you
    just made, to what extent could that be an avenue where these
    sorts of disputes get hashed out in a way that--again, a lot of
    the people who are musicians or writing songs are, oh, jeez, I
    am over my time, I apologize, Mr. Chair, aren't wealthy people.
        Mr. Issa. You are the second last. So, you are only holding
    up my questions. You are good.
        Mr. Ivey. Thank you, Mr. Chair. I appreciate it.
        Their ability to hire litigators can be limited. Is the CCB
    an option or an avenue that might be a viable approach for them
    or not so much?
        Ms. Perlmutter. The CCB would be a possible approach. The
    limitation is that they can't issue injunctions. So, they can't
    order anyone to stop infringing. There is a limit of $30,000 in
    damages.
        So, certainly, the other option and the one that has been
    pursued so far has been bringing cases in Federal court where
    presumably, especially if it is a class action, there are
    lawyers who will get compensated at the end of the day if the
    action is successful.
        So, I have been wondering whether we will start to see many
    cases involving generative AI in the CCB. So, far that has not
    begun to happen.
        Mr. Ivey. Thank you, ma'am. Keep up the good work.
        Thank you, Mr. Chair, for your indulgence.
        Mr. Issa. Thank you. Thank you for your question, because I
    am going to followup directly on that.
        The CCB, as you say, voluntary, $30,000 limit, creation of
    Congress, still in the early stages. However, the gentleman
    from Maryland mentioned the word copyright trolls. We are
    seeing a growth of what many would call copyright trolls,
    people who gather a few earlier words, and even when they are
    dramatically different, they still make the claim. There is a
    high cost in Federal court.
        As you know, your experience in the past at the Patent and
    Trademark Office we created PTAB, and it is an alternate. It
    serves a similar purpose of adjudicating and is appealable to
    the Federal Circuit. It also, though, has a significant role in
    changing, if items end up in the Federal court, how the Federal
    court looks at them, because they give the obvious deference to
    the decision of PTAB.
        Although it is not universally loved here on the dais, in
    this case, if we were to take the model in its infancy of CCB
    but empower it to be a right to go and, in fact, the decisions
    of it be if not substantive enough to be automatically
    considered adjudication, if we considered them to be admissible
    and some deference by the Federal court, would that be in your
    opinion a helpful use and expansion of the role of that?
        The reason I ask it is Federal judges are perplexed trying
    to understand if this piece of a lyric should or shouldn't.
    They generally get one case in a career, where you have 500
    cases in front of you today.
        Ms. Perlmutter. It is an interesting question. I hadn't
    thought about that before. I will say, again, it is early days.
    We have only had one full written decision on the merits so
    far. We do have a very good board with three officers who are
    extremely experienced with litigation on both sides of the
    copyright issues. I have a lot of confidence in the quality of
    the decisions that are going to be issued.
        So, yes, it could be that they could be useful as
    precedent. They certainly would be available to the public to
    look at. I think that is a very important aspect of the CCB.
        Mr. Issa. One of the reasons that I ask that question is
    that I am an old Oversight and Reform Chair. The reforms that
    are probably needed going forward to the institution of
    Congress for which you oversee it really do have to do with how
    the Patent and Trademark Office has been able to set fees, fund
    itself, and expand to serve the very people whose intellectual
    property is being protected. You have not been. You are a much
    smaller entity, in no small part because you depend on Congress
    to fund you.
        So, one of the reforms that I want to put out here today
    during your visit is the idea that we have the ability on this
    Committee to change the structure, to provide for fee setting,
    to provide for a level of autonomy and expansion to meet the
    demands of, in fact, those entities you serve. I want to make
    sure that we make it clear that is something we would like to
    have an ongoing dialog about.
        I will stop you because I don't want to be too long in this
    final one.
        Earlier today we talked about what I call standard
    essential copyright, in other words, copyrights that are put
    into products or even into standards. Would it be helpful for
    Congress to, in fact, as we pretty well define standard
    essential patents as something which does not give up the right
    of the patent holder but gives a requirement to make available,
    even at a fee but still available? Should copyrights that are
    embedded in products, whether it is inside the deep bowels of
    an automobile or the toner cartridge of a photocopier, should
    that, in fact, be something that Congress addresses and
    defines?
        Ms. Perlmutter. I think that is an area where attention
    could be useful. It may be that in the process of putting a
    permanent exemption into Section 1201, which as I have said we
    support, we could look at how to define the scope of that
    exception.
        Mr. Issa. Thank you. Last, copyright is a little different
    than patents in that just because something has been
    copyrighted 100 years ago or 1,000 years ago it doesn't take a
    lot to, in fact, create a new copyright. Would you agree?
        Ms. Perlmutter. Yes.
        Mr. Issa. However, your office and the offices around the
    world today do not maintain a single database so that one can
    at least reference the scope and the prior art, if you will.
        Do you believe that in the 21st century we should establish
    a global copyright database, meaning that all the entities like
    you around the world should, in fact, have an interoperable
    database so that when there is a question of whether something
    is new and original, or simply lifted as the gentlelady from
    Pennsylvania implied as a former professor, in fact, that there
    be an ever-expanding database? For lack of that, is that level
    of trust on the author perhaps a little greater than it should
    be in the 21st century?
        Ms. Perlmutter. There is a lot to unpack in that question.
    So, I would say, first, more data being available to the
    public, including internationally, is definitely a positive
    thing. It is certainly something that people have long
    advocated for in the music space, because it would be very
    useful given the complexity of music licensing to have that
    kind of complete database.
        One question is the extent to which that should be a
    function of government and the extent to which it should be a
    privately run database, which might be a little bit more
    flexible and easy to keep up to date.
        One of the issues with having some kind of international
    government-run database is that, of course, copyright
    registration is not mandatory. Not all works are registered.
    So, by definition, it won't be completely comprehensive.
    Another problem is that many countries around the world don't
    have a registration system. So, we probably have the most
    extensive registration system that exists. So, there are a lot
    of issues to be dealt with.
        Then, of course, it is also the case that, unlike patent
    law, with copyright law the fact that someone else came up with
    something similar in the past doesn't mean that your use is
    infringing. It has to actually be copied from the original. So,
    the mere fact that something was in a database, and you did
    something similar would not necessarily establish infringement.
    So, in a sense, there is less of a need on the copyright side
    than there is in industrial property.
        Mr. Issa. In closing, in discussions with many of the, or
    three of the regenerative AI producers, they all tell me that,
    in fact, providing the metadata that goes with the portion of
    the ingested material, which, if you will, the AI brain used,
    is, in fact, relatively easy if written into the code.
        Should, like Europe, as we address mandates, should, in
    fact, we ensure that this information is written into the code
    so that, in fact, for you and other users that metadata is
    available, and by the way, yes, potentially for litigators?
        Ms. Perlmutter. This is definitely one of the issues we
    heard a lot about in our listening sessions earlier this year
    and something that we are asking about in the NOI. I think
    there is a strong argument that some level of transparency is
    important for many reasons, as you say, including for the
    ability of copyright owners to know that their works were
    incorporated in some way in the machine learning.
        Mr. Issa. Thank you. Last, would you agree to take
    questions for the record if they come to you timely in the next
    week or so?
        Ms. Perlmutter. I would be happy to. Thank you.
        Mr. Issa. Thank you.
        With that, this concludes today's hearing. I want to thank
    our witnesses for appearing before the Committee.
        Without objection, all Members will have five legislative
    days to submit additional written questions for the witness and
    additional materials for the record.
        Without objection, this hearing is adjourned.
        [Whereupon, at 11:53 a.m., the Subcommittee was adjourned.]

        All materials submitted for the record by Members of the
    Subcommittee on Courts, Intellectual Property, and the Internet
    can
    be found at: https://docs.house.gov/Committee/Calendar/ByEvent
    .aspx?EventID=116404.

                                     [all]