A Midlife Crisis? IP and the Internet After 40

i can't start with empty seats

sorry we're all watching scotus blog anyway so

That's probably where Hank is today. I want you to know that we did not get Spielberg to do the uh video for the for today. It was all clu cut and paste. So, you know, if if it if it doesn't wow you and it looks like last weekend's uh comic opening, okay, what can I say? The the committee was will come to order Today the subcommittee, uh, without objection, um, will be, uh, without objection, be authorized to declare a recess at any time. We welcome everyone here today for the Intellectual Property and Internet Subcommittee hearing, which will cover a broad range of current but important, uh, issues. Candidly, we in Congress often wait until there is a crisis to move. We're known for n- for the expression that what we do is nothing at all or overreact. We cannot afford to do either uh at this time. The growth of of various types of uh various types of theft of intellectual property through counterfeiting uh and piracy in fact has become an epidemic. Most of the rest of the world has at least made efforts to deal with these problems. This hearing will will es- will establish once and for all that the various pieces of legislation need to move and need to move quickly. That means that this committee must come together, along with the Senate, to deal with uh economic crimes around the world, but particularly those who come to our shores and take advantage of a weaker enforcement. Additionally, the growth of AI means that in the near future, what we see as a growing epidemic will rise even further. I wanna particularly, though, focus on something here today. It's not just the money that's stolen from people whose creative works uh are being taken. It is in fact the funding of criminal networks. Whether it's H- Hamas and Hezbollah, ISIS, Al-Qaeda, or others, almost all of these groups, in addition to the conventional drug cartels are operating criminal syndicates that include various forms of intellectual property theft. That means that in fact not doing something in a timely fashion is causing people to die, it's causing countries to live in terror, it's costing countless amounts of dollars that U- US citizens pay in addition to the loss of revenue to those who create intellectual property. I wanna make it clear. We all we all know that there are people who innocently think that watching on a c- on a bootleg channel something they would otherwise pay for, the cost is simply they're getting a deal of free. But if that money is in fact going to syndicates that are involved in other illegal activities, you are funding criminals, you are funding people Four dec- decades ago, advanced research project agency ARPANET adopted a communications protocol. I was a young lieutenant in those in those days, and we used it, we used it in a very limited fashion. One day somebody came up with the idea of a way to communicate that w- became known as email. In those decades, half a century or so, we have gone from a connection of military bases and universities for purposes of uh of of furthering research to the internet as we know today. In addition, the advantage of Moore's law in fact has made almost anything that you've ever seen in science fiction all the way back to Jules Verne and all the way through to the Terminator, a reality today or in the near future. Decades ago we passed the Internet Freedom Act and the DMCA laws to protect a fostering a nascent technology. They were good. They worked some. They have in fact been modified over times, and the notice and take-down orders have in fact made them more effective. The cooperation of all parties, including the internet providers, for whom this is simply overhead, in fact has been appreciated. It has not come without a cost. Recently the Supreme Court made decisions that provide certainty as to, in fact, whether there is liability for various actions or inactions. We're not here to talk about that today. We are in fact recognizing that we have to all work together if we're gonna stop copyright piracy piracy over the internet. Only a few days ago, I was honored to be at the White House to watch a UFC fight. It was amazing. The problem is, all over the world people are watching those fights for free. The cost of that v- that uh fight included three million dollars of set up and take down there at the White House. somebody has to recognize that that's not without a cost. In addition, those who took the blows deserved to be compensated. To do so requires that, in fact, the purveyors be able to put that out in a streaming format and have it, in fact, only go to those who pay the small amount to get it. Digital vid- vigi- digital video piracy includes illegal downloads, streamings of films, and television, And it has resulted in an estimate that of a loss of over two hundred and thirty thousand jobs, and conservatively forty-seven point five billion reduced to our GDP. That's the economic cost. I've already covered the, in fact, the cost that I'm not being uh, I'm not overreacting to say people have died as a result of the money that is gained from that piracy. While millions um millions of listings for copyright infringing content are removed every day under notice and take-down process, set forth in the Digital Millennium Copyright Act, right holders have raised concerns with the speed. Today our witnesses come prepared to answer the major question, what is the reasonable speed? Can we do it at the speed of sound? Can we do it at the speed of light? More import importantly, in a forty-five minute or sometimes a fraction of that, uh, live sports broadcast, can we do it soon enough to make it no longer profitable for those who pop up and sell their their clandestine wares? The internet is open to substantial new sales revenues for brands. That is enabling the trafficking of fake brands. And I wanna make it very clear, I live on the Mexican border. My district covers eighty miles of the Mexican border. In my district, we have a holding facility that can - that holds up to forty thousand square feet, racked three and four high, of illicit drugs. Those drugs often look like the real drug. They're in similar packaging. The uh the pill or other uh container always seems to look very legitimate. even has the right letters on it. But when it's fentanyl, it has led to people dying. So counterfeiting is not simply a matter of getting a purse that looks cool that you can take to a party and maybe no one'll know or even you may even brag that it's a fake. It is also includes the counterfeiting of pharmaceuticals that in fact once again lead to people dying. The patchwork of laws uh in many of these cases state by state asked the question should we continue to have states make decisions that make honest law abiding uh purveyors of products life difficult while in fact not effectively stopping the clandestine work we made this decision in nineteen seventy-two through both legislation and court that we weren't going to do it with copyright for music It's been a long time since that and there's needed to be some additional uh items done. But we have profited as a nation from having not just one standard, but having the federal government being able to aid states in the enforcement of copyright protection. The same needs to happen relative to AI. I think we all know it has to happen. And more importantly, if we're going to protect the law-abiding bi- citizen, we can't have it be simply a hod- uh an additional law on top of hodgepodge's laws that in fact can create conflicts or greater regulatory requirements. There needs to be a congressional act targeted in a measured way, meaning, don't overreact. Any federal legislation must balance three goals to avoid hobbling American innovation in on-line services and AI technology, which will in fact ensure the continued leadership around the globe of US technology. Let's make it sure in closing that there is one thing beyond all that I have mentioned that is at stake, and that is global leadership. America leads the world in high-tech. We do so because we welcome people from around the world to join us through immigration. Our universities are the envy of the world for both those who come and stay, and those who come and go back. But that leadership is challenged by many others, but particularly by a China that in fact does not respect intellectual property but does appreciate the innovation. They appreciate it so much they steal it. It is Congress's responsibility thus to in fact make clear make clear that uh uh that we are in a war We're in a battle, we're in a competition against China. And we are determined to win. Before I recognize the ranking member for his opening statement, I'd like to set a tone quickly with a short video, if we could please run the video. With audio.

Movies all over the world, from the last four Jurassic World films and too many locations to count, to Twisters in the great state of Oklahoma. Filmmaking is global, but truly gifted storytelling is an American specialty, and one worth protecting. I want to thank Chairman Issa and Bank Ranking Member Johnson for your important work. Today, our filmmakers have no remedy to combat rampant competition from piracy web sites based overseas, offering up exact digital copies of our work for free. This illegal marketplace is threatening the bedrock of America's creative economy. Congress has the ability to provide an effective remedy to this. Please pass the same laws already being used by our friends and allies in nearly sixty countries around the world. Sight-blocking legislation. Please act now to save millions of American livelihoods. Americans who get up each day to make the next dinosaur movie or sci-fi epic or rom-com that will bring joy and entertainment to audiences around the globe. all while bringing profits and jobs back to us here at home.

My name is Denise Huth, and I was the executive producer of The Walking Dead, which shot almost entirely in Georgia for over a decade. I come to you today with an urgent problem and a sincere hope for your help. The United States is the best incubator of talent and innovation in the world, as evidenced by the movies and TV shows that we make here every day. On the last season of The Walking Dead, we hired almost four thousand people in Georgia. spending over fifty seven million dollars over eleven months. But even more enduring than those statistics is the fact that the little town where we shot the series, Sonoy, Georgia, was completely revitalized from a few businesses when we arrived to becoming a thriving tourist mecca. Our local productions continue to be undermined by widespread digital piracy, accessible on websites and apps from any home with internet service. Most are based overseas, outside US law enforcement's reach. The United States needs sight-blocking legislation, urgently. We must give our hard-working American labor force the ability to be paid fairly for their work rather than have their success and the profits from it stolen by criminals overseas. Please protect these livelihoods, the millions of Americans working in the film and TV industry and the vitality of the culture that we export to the world.

My name is Wendy Feinerman, and I'm a film producer. America is the global leader in storytelling and innovation, and nowhere is is more evident than in the movies and TV shows that we export around the world. In all fifty states, over two million workers get up every day to make the entertainment that audiences love. For my most recent film, The Devil Wears Prada Two, we employed almost fifteen hundred local cast and crew in New York State alone. We paid more than forty-five million dollars in local wages and the production contributed over sixty-seven million dollars in economic activity to the local And that was just in forty-six days. But this work is increasingly undermined by widespread digital piracy. Each year, this piracy causes an estimated losses of between twenty-nine and seventy-one billion dollars from the US economy, and costs as many as five hundred and sixty thousand American jobs. Congress should enact the same laws already used by our friends and allies in over sixty countries around the world. The United States needs site-blocking legislation, and we

Hi. My name is Mark Varadian and I'm a film producer. I want to thank Chairman Issut and Ranking Member Johnson for the important work this subcommittee has been doing to address digital piracy. Last year I was happy to speak to visiting members of Congress at a field hearing in Los Angeles about the urgent need for a solution. Today, we can't release a movie without immediately losing significant income to piracy websites based overseas. This is an existential threat to the American film business at a time when Hollywood economics are under tremendous stress. America remains the world's best storyteller, exporting those stories globally and creating an economic engine here in the US that benefits millions of Americans in all fifty states. But those jobs are at risk from digital piracy. Congress can and should enact the same laws already being used by our friends and allies in nearly sixty countries around the world. The United States needs site-blocking legislation. We need it today. Please act now to protect one of America's most successful export industries, preserve millions of well-paying jobs, and ensure the future generations of American filmmakers will continue creating the stories that move audiences around the world.

I'm Scott Turow. I certainly don't need to remind this audience that protection of authors and their copyrights is delegated to the Congress in the Constitution. It reflects the vision of our founders that an independent class of creators, supported by their audience, not by the government, not by private patrons, is essential to the flourishing of our democracy and the free flow of ideas. For more than a decade now, that constitutional vision has been jeopardized by the existence of offshore pirate sites that have sold millions of stolen e-books without a cent in compensation to authors or their publishers. If this was a storefront selling stolen books, we'd have no hesitation about closing it down. And we should have no hesitation in this case either about the needed federal legislation that will allow authors to enforce their rights in the face of theft that has been organized and industrial and flourishing beyond our borders.

My name is Lee Thomas Miller. I'm the president of the National Songwriters Association International, and I am an American songwriter. Growing up on a farm in Nicholasville, Kentucky, the radio was my window to the world. I dreamed of someday being part of the music industry. After moving to Nashville, I struggled for eleven years and a ten year town, trying to pay the bills with a wife, four young kids. Along the way, I signed a music publishing deal. And one day I finally started hearing my songs on the radio. But over the last few decades, the internet has made that tough. First came music piracy. It is hard to make a living when your creation being illegally offered for free. Then there was music streaming, almost free. Pay so low that our jobs were immediately threatened. Now there's artificial intelligence, software that takes what I create without my permission or payment, creating songs for which I get nothing. I thank the subcommittee for today's hearing. American songwriters need your help. Thank you.

I now recognize the ranking member of the subcommittee for his opening statement.

Thank you, Mr. Chairman. When the modern internet was born in January of nineteen eighty-three, many considered it just another department of defense project for the military. But thanks to taxpayer funding, the United States was able to partner with research universities and eventually private companies to harness this innovation for use by the general public. Over its first ten years, the internet evolved from an application to compete with the Soviets to a place where people could socially connect, conduct business,

Yes.

and communicate with others,

Yeah.

and even to It evolved into a medium for artistic expression. Today it's hard for many of us to imagine a world without new recipes at our fingertips, instant news updates, or pictures of our friends and family on our social media news feeds. Good or bad is no longer the question. The internet is inescapable from modern society. This is quickly becoming the same with generative artificial intelligence, which has been adopted by businesses and consumers alike in just a few short years. Even with widespread adoption of transformative technology, it is imperative that we continue to protect rights holders when technology is used to steal intellectual property, defraud consumers, and inc- and increase inequality. Products available online from a trusted web site can seem identical to those at brick-and-mortar stores, but instead are produced with harmful chemicals or contain dangerous malware. These nearly identical knock-offs can damage your favorite brand's reputation and harm their ability to stay in business. Web sites that miraculously have Project Hail Mary streaming for free really are too good to be true. And that's and that product with Tom Hanks in the commercial may not have actually been endorsed by Tom Hanks, just a replica created with AI. Some of these may seem harmless at at first glance, but they matter to me and my constituents. Film and TV spending in Georgia, the Hollywood of the South, hit four point four billion dollars in twenty twenty two with four hundred and twelve productions but increased costs have devastated our film and TV market. Spending was down two point three billion dollars in the last fiscal year with just two hundred and forty five productions. Our writers and actors need jobs to keep creating, and market changes have made that all the more difficult to achieve. Across creative industries, innovators from writers and software developers to musicians and painters are watching their works used to train AI models for free, while the barrier to entry gets higher and higher. If Congress's role today is to play armchair psychologist to the internet's midlife crisis, it is imperative we view harms to creators as the symptom of a more pernicious disease. The question we should be asking ourselves is, are the innovations before us serving the American people, or do they exclusively benefit a small hand-feel, handful of the wealthiest, most powerful corporations and individuals in the world? Georgia's eleven million plus residents have a medium household income, of just under eighty-two thousand dollars. Mark Zuckerberg is worth two hundred and twenty billion dollars as of December the twenty December, twenty twenty five. Groceries in Georgia were found to be the eleventh highest in the country earlier this month. Elon Musk just became the world's first trillionaire. Homes in seventy nine percent of Georgia's counties. are considered unaffordable for the average worker. Jeff Bezos just spent an estimated nearly fifty million dollars on his wedding. Americans are clearly facing an affordability crisis, but those at the very top are doing well and getting wealthier and wealthier every day. The price of everyday consumer devices, such as your laptops and computers, have continued to climb, now to an estimated fifteen to twenty-five percent. Data centers are driving up utility costs, straining the grid, and degrading the quality of the everyday appliances families depend on, like our air conditioning and heating systems. Senior citizens are having to choose between paying their utility bills and their prescriptions. And the rich get richer. the middle class shrinks, and the poor get poorer. The benefits from technological innovations, while impressive, are minimized if everyone can't enjoy their benefits. We can do this by meaningfully, meaningfully deploying technology in a way that uplifts us all. This means acknowledging creators as a key part of the ecosystem that is building AI, and comp- and compensating them as such. This means enacting protections for American workers, building responsibility, and deploying equitably. I look forward to hearing from the witnesses how we can better protect America's artists, innovators, and and the creative fields. I thank Chairman Issa for holding this important hearing and I yield back the balance of my time.

Chairman Yilsbach, thank you. Uh, we now recognize the Chairman of the full committee, Mister Jordan, for his opening statement.

Thank you. Thank you, Mister Chairman. I I'll be brief. I just wanna thank you for your work um for now over two decades on trying to stop copyright piracy uh piracy and harmful uses of AI while not harming choice innovation and maybe most importantly First Amendment liberties. Um, we appreciate your tireless work and uh I know this is your last session in Congress, we'll probably have a few more hearings But I I did wanna take the time to thank you for this issue and so many others that you've worked so hard on, and I look forward to thank our witnesses for being here and look forward to hearing from uh today's panel. With that I yield back.

I thank the chairman. I profusely thank the chairman. We now recognize the ranking member of the full committee, Mr. Raskin, for his opening statement.

Thank you kindly, Mr. Chairman. Welcome to our witnesses. Uh,

Really?

couple months ago I got a postcard in my mailbox,

Fine, okay.

uh, which let me know that three books that um I've written over the course of my career had been used to train Anthropic's Clawed-AI large language models and because of this, I was entitled to be part of the settlement in the Barts versus Anthropic case. Now this surprised me because first of all it reminded me that I used to uh write books, now I just post two hundred and eighty characters every day. Um but it also surprised me because I didn't know anything about the litigation, much less did I know anything about the fact that Anthropic had essentially swallowed up the contents of uh three of my books, apparently rejecting the relevance and the utility of several other books I'd written. Uh but uh Anthropic had never called uh to ask me to use my books. Um but a judge found that Anthropic's ingestion and digestion of my books without payment was fair use. Um Clawed AI may not be allowed to simply reprint my book and regurgitate it line for line and sell it, but it may profit off of uh my word choice, my cadence, my style, such as it is uh my conceptualizations and my research, among other attributes of my writing, for free. Um now if I finally get around to filling out the form um which means I have to finally get around to finding the postcard Um, I may get a de minimis check in the mail, um, because the judge did find Anthropic had used pirated versions of the books that it used to train its large language model, and the parties, including apparently me, settled shortly after this holding. Now, we'd be cavalier to write these training episodes off as a random or minor incidents. AI companies intentionally select works with which to train their large language models, often with zero intention, of paying the creators any royalties for use of their creative intellectual labor. Barthes versus Anthropic is just one ominous decision floating in a sea of developing case law in this brave new world, uh, to engage in a fair use vernacular borrowing of H. G. Wells' famous work of science fiction. But it's illustrative of the proliferating tensions between existing law and social values that have materialized as we live through this time of astonishing technological transformation. The advent of the internet and the explosive emergence of AI have fundamentally changed the way that we interact with each other, the way we conduct business, the way we think about human thought, human feelings, and human work, and the way we create and consume books, songs, and other creative works. Um, now I tend uh much more to the heady enthusiast side of such changes over the brooding luddite side when it comes to technological innovation, but that's only because I have a profound faith in democracy, in our capacity to manage technological change when we put our minds to it. So now is the time to pose and grapple with urgent and searching searching questions about the moment. How do we integrate titanic new technological changes in a way that supports rather than undermines the basic needs and values of our society? We know from experience that innovations mean little if they are left to create inequality and domination, joblessness and poverty? How do we prevent the concentration of power and wealth, uh, but instead work to fairly distribute the benefits of new technology so they become part of our common life and inheritance? In this new era, we must ask ourselves what is fair and what is just, and what will secure the greatest good to the greatest number of people. And that's what I hope we will be doing today. When the DMCA became governing copyright law, nearly thirty years ago, dangerous products and merchandise that infringed on intellectual property rights overwhelmingly had to be bought, bought in person. Movie and music pirates created physical copies of recordings and literally sold them on the street corners. Our laws did not contemplate the spread of streaming, where content piracy occurs on a daily basis all over the world, as far away as Vietnam and the Philippines, and the pirates can create a new infringing site the moment one gets taken down. Consumer products used to be bought almost exclusively in stores, with the occasional counterfeit handbag on the street. Today, harmful counterfeit products like exploding batteries, toxic baby cream, and asbestos-laden crayons can be bought often, usually unwittingly, by consumers online, and they arrive at their doorsteps in a matter of hours. Even our music laws were designed for a world where listeners discovered music through their stereos, which is why we are left with laws that prevent performers from being paid when their music is played on the radio. These issues affect not just the two million employees of the movie industry or the nearly twelve billion dollars in revenue from the music industry but also the consumers who end up paying the cost of counterfeit goods that break or cause harm or just drive up the price of the real product. The laws on the books may no longer be fair, for these affected industries, and they are almost certainly unfair to consumers. I understand there are many proposals out there with ideas for improving on the current situation. I'm a proud cosponsor of one of them, the American Music Fairness Act, which would ensure that performers are paid when their music is actually played on the radio. In many ways, AI has supercharged problems that have been percolating since the advent of the internet. Generative AI models allow us to use the internet faster, more accurately, and beyond our individual technological capacities, but our laws have not kept pace with all the changes. Our intellectual property laws were created at a time when it was safe to presume that one must be human to have a cognition and an intellect. Some would argue that's no longer the case. It's long past time we considered how to continue protecting the creative fields and address the ramifications of the proliferation of deep fakes, training AI models on copyrighted material, and other areas where AI may be unfair to both consumers and creators. I know some of my colleagues wanna do away with the regulation of AI companies altogether, but we can protect content creators and help businesses thrive at the same time. We don't have to choose. Congress should help provide for the safe adoption of generative AI models that take into account the environmental labor and social consequences of such technology. And we should do so while allowing the states to experiment with different approaches. I'm dismayed by those who have caved to a small group of billionaires and now a trillionaire who own these AI models and have proposed broad preemption of state common law causes of action and state legislative decision-making with no federal regulation at all. There's no reason we should do away with common law tort claims that act as the basic national safety net for fairness. The National Institute of Science in Technology should absolutely be allowed to test frontier models. And if AI models are being built on the hard work of artists, writers and inventors, we should be thinking long term to ensure that there are more artists, writers and inventors, a generation from now crea- creating material to sustainably train the next wave of genera- of uh generative innovation um to come. The rational next step for this committee is to ask ourselves how we can map a path forward for all Americans to use technology while ensuring laws that protect consumers, end creators, workers and families. Thank you, Mr. Chairman. I yield back to you.

The gentleman yields back. Without objection, all other opening statements will be included in the record. We now go to our distinguished panel of witnesses. Mister Sean Astin. Mister Astin is the president of the Screen Actors Guild. By the way, one of the few things I haven't done and I continue to say, I'm available for a bit part.

Mm-hmm.

Uh, am I allowed to do that? Anyhow, um, uh, the American Federation of Television and Radio Artists, commonly known as SAG-AFTRA, he is himself an actor and a long distinguished career in film and television. To name just a few, he has appeared in The Goonies, Rudy, by the way, we're gonna talk about Rudy, yeah, that's gonna happen, how can we not? even if you didn't go to the right college. The Lord of the Rings trilogy, Stranger Things, Teenage Mutant Mutant Ninja Turtles, and many more. Thank you for being here as a well knowledgeable expert witness in addition to your current role. Mister Chris Floyd. Mister Floyd is a legal and business strategy advisor to Ablin Entertainment and film and television production company, basically He's Steven Spielberg's most trusted advisor. He previously served as the Chief Operating Officer and General Counsel at his the partnership for a decade and held various positions with DreamWorks Studios, Universal Pictures, Paramount, and Walt Disney Productions. Welcome. Mister Steve Francis. Mister Francis is the Executive Chairman and President of IP House, a global intelligent, excuse me, intellectual property enforcement company. He previously served as the Acting Executive Associate Director of Homeland Security Investigations as the Director of National Intelli- Intellectual Property Rights Coordinator. Thank you and very much welcome. Mister Christopher Moore. Mister Moore is President and Chief Executive Officer of the Software and Information Industry Association, a collection of entertainment, consumer and business software companies. He previously served as a senior president for intellectual property and general counsel at the same organization, where he led the association's intellectual property, policy and anti-piracy. Lastly, but not leastly by a long shot, uh, doctor Baha Baha Tha- let me hold on, Vizwan Athan, uh, or close to it. The doctor is a non-resident fellow at, uh, uh the uh Kern- Kernishan Center for Law, Media and the Arts at Columbia University. She is also a visiting assistant professor of uh uh at the univers- at at Suffolk University Law School, where she teaches courses in contract and transitional law, transactional law. The doctor is in fact the author of a number of of pieces in a a number of books, including how to create industry how how creative industries can harness intellectual property to survive in a digital age. Welcome and I apologize. You know, as one left-hander to another, I said I'm not gonna mess this up, and between my horse throat and the other, I apologize. I want to thank all of you for being here. Pursuant to the committee rules, I'd ask you please rise, raise your right hand to take the oath. Do you solemnly swear or affirm under penalty of perjury that the testimony you're about to give is true and correct to the best of your knowledge, information, and belief, so up you got? Thank you. You may be seated. Let the record reflect that all witnesses answered in the affirmative. If you've watched C-SPAN, you know I have to give this admonishment that you'll have five minutes in your opening statements But one hundred percent of all the material you brought with you in your opening statement, plus additional material you may supplement with, will be placed on the record, thus leaving you completely free not to just read what you brought, although some of you just might. So with that we begin. Mister Austin.

Well, this is good stuff. You're gonna wanna hear it. Uh, Chairman Issa, Ranking Member Johnson, members of the committee, thank you very much for convening the hearing and for your continued work modernizing American intellectual property law. Thank you, Representative Lofgren, for your leadership on combating foreign digital piracy, and Chairman Issa for all of your work and for your work on the American Music Fairness Act. The issues therein matter to the livelihoods of the hundred and sixty thousand union performers and media professionals I represent as president of SAG-AFTRA. Today, I'd like to speak about the abuse of non-consensual digital replicas of our voices and likenesses. For all of human history, If someone saw your face, they knew it was you. If they heard your voice, they knew you had spoken. For thousands of years, that simple connection was enough. Your face, your voice, your presence. Reality itself was affirmed and simply put, we knew who we were to each other. Artificial intelligence has begun to intervene and break that ancient connection. Today, someone can realistically make you appear to say something you never said, to endorse something you don't believe in, or even convincingly depict you confessing to something you had no knowledge of. For the first time in human history, the experiences we've always shared are no longer secure. Our relationship to community is distorting, thanks to a wave of technology made widely available without much concern for public safety. In my line of work, we deal with emotions. So on behalf of our performers, I'm here to tell you what this moment feels like. To begin, we make our livings by granting the use of our voices and likenesses to our employers. That's what they pay us for. Through every audition and with every career set-back, we know, we rely on the fact that when the jobs finally come, we have something uniquely ours to offer. Now, imagine a performer waking up one morning to discover on their phone a version of themselves that never was but they're watching it and so is the rest of the world. The voice and face are a perfect match. For the performer, it's a moment of terror. Who is seeing it? Will anyone ever hire them again? Will their reputation built over a lifetime be destroyed in a moment? Every casting director, every producer, every executive, every member of the public can see it. Even their family may hesitate for a moment. But they can reach for something deeper. He would never say that. That's not who she is. But who are we? Think about anyone you love. Your understanding of them is built from memory. Imagine that memory being contaminated. The thing that brings us back to the real person is our faith in who they truly are. In the world of deepfakes, the damage is done instantly and without mercy. The public has no obligation to discover the truth about someone. They just keep scrolling. Our members have no ability to protect themselves from this kind of abuse. Neither does the teenager, humiliated by a fabricated image. Neither do parents, trying to protect their children. Neither does anyone whose reputation can be threatened by a digital replica they never authorized. Artificial intelligence is changing the way human beings experience life. We all know that this moment demands wisdom and action. Technology is not our enemy. Throughout our history, America has chosen both innovation and responsibility, usually sadly only after ordinary people have suffered some calamity. But there is a right path. It is obvious that civilization is in the throes of a technological world win, the likes of which we have never seen, and as of this moment, Americans are being forced to surrender their basic relationship to one another. We don't wanna stop progress. We need to civilize it. Many Americans may never own a home or accumulate significant financial wealth, but every American does possess something of immeasurable value, their identity. That God-given gift really should belong to us, and surely we can all agree that no one else should be permitted to commercially exploit our identity without consent. In the world of entertainment, our image and likeness have been the substance of our transactions, but in the wild, We do not own them. We should, and you can make it so. Members of the committee, what I'm saying about this moment and about who we are is that every human being should remain the author of their own existence. Reality should remain verifiable. Consent is not a nuisance. Reputation matters. And truth is truth, and it's worth protecting. Thank you very much.

I thank the gentleman, Mister Floyd.

Chairman Issa, Ranking Member Johnson, and distinguished members of the subcommittee, thank you for inviting me here today. I am of counsel at Amblin Enter- Entertainment, Steven Spielberg's film and television company. I worked in the Amblin family for twenty years, including a decade as Chief Operating Officer in general counsel. I've overseen many business and legal functions, including content protection. Two weeks ago, Amblin and Universal released Steven's film, Disclosure Day. adding to his legacy of films like War of the Worlds and Minority Report, Disclosure Day fully embodies Steven's beloved sci-fi genre, embracing modern technology that makes transporting audiences to another world even more thrilling. However, these technological advancements also present challenges. Steven's prior sci-fi movies were released in a drastically different marketplace, before the internet supercharged digital piracy. When Minority Report was released in two thousand two, piracy was still limited largely to hard goods. DVD bootlegs from camcorders in a theater with muddled sound and shaky video then sold on street corners. They were poor knock-offs and customers knew it. While the scale of piracy was reason for some concern then, today, digital piracy costs the US economy a staggering amount, at least twenty-nine billion dollars annually. We now expect each release will be made available immediately in perfect digital form from off-shore pirate sites with global reach. This substantial increase in quality, coupled with wide and immediate availability on any device, makes this an urgent economic and consumer safety problem. Together with our studio distribution partners, we spent hours seeking removal of these infringing videos. Additionally, all the studios and streamers created the Alliance for Creativity and Entertainment, to work with global law enforcement to combat piracy. But even with these extensive efforts, representing tens of millions of dollars and countless work hours, piracy still inflicts huge harm on the market for our films. When we find Disclosure Day online, we have limited recourse, primarily because most pirate sites are operated by overseas criminal enterprises. We have laws that enable us to go after pirate sites in the US, but Bulgaria, Vietnam, the Philippines, these jurisdictions sit outside the practical reach of US law enforcement, but easily reach U. S. consumers online. Now global revenues from U. S. films are shared with cast and crew and residuals and pension, health and welfare payments. Profits are poured into new productions in every state of the union, including with local businesses. Shooting a one-hour television episode generates around four hundred and seventy-five thousand dollars per day locally, while a feature film generates six hundred and seventy thousand dollars per day. The billions siphoned from our economy by these overseas criminals should be available for these future productions and payments to industry workers, but they're not. Today, piracy detrimentally impacts millions of creatives in the U. S. entertainment industry and the economy as a whole, while funding a global network of crime. According to Digital Citizens Alliance, European authorities dismantled a piracy operation across eleven countries in twenty twenty four, that generated three point five billion dollars yearly, seizing drugs, weapons, and millions in cryptocurrency. In Spain, Operation Fake exposed another site that also dealt in drug trafficking and money laundering, resulting in thirty arrests and millions in frozen assets. So, what is to be done? Well, I ask you today for the tool proven effective in nearly sixty countries globally, but still lacking in the US. Judicial site blocking. Under these laws, when a court determines through a full and transparent process that an offshore site is a ded- is dedicated to piracy, it can direct internet providers to block local access. Studies prove site blocking results in fewer visits to piracy sites, and an increase to legitimate sites. Portugal witnessed a seventy percent drop in traffic, Australia Australia saw a twenty-five percent district uh decrease, and the UK experienced a ten percent surge to legal services. This would be a game-changer for our industry's two point three million workers and America's creative economy. Historically the US led the world in IP enforcement, but we've lagged behind for the past decade. Other countries have shown us how to do this without impacting speech, due process, or the internet. It's time the US reasserts its leadership role on anti-piracy. And finally, allow me to turn briefly to artificial intelligence, where the US is the leader in innovation as it should be. As a tool, AI can further empower us to tell compelling stories and reach audiences. But as we consider how to maintain America's competitive advantage against China and other countries, We must also remain the global leader in both the innovation and creative industries. How these AI companies win the AI race and how they treat copyrighted work will affect the force of human creativity in the future. We'll never maintain America's lead by lowering our IP standards to match those of the Chinese. That's why our industry supports the No Fakes uh uh uh uh act, which combats dissemination of unauthorized AI-generated deepfakes while safeguarding protected expressions such as parody news and biopics. My community thanks the subcommittee for your dedication and as we we're look forward to working together to rebuild a vibrant U. S. entertainment industry. Thank you.

I thank the gentlemen. Mister Francis.

Chairman Issa, Ranking Member Johnson, and distinguished members of the subcommittee, thank you for the opportunity to testify today. I spent over twenty-five years in federal law enforcement, including as the Director of the National IPR Center. Working alongside colleagues from Homeland Security Investigations, U. S. Customs and Border Protection, the Department of Justice, and Law Enforcement partners across more than thirty countries. I've seen IP enforcement from multiple angles. I know where the government excels and where the prioritization creates challenges for enforcement. I appear today on behalf of IP house, a global IP protection enforcement company I co-founded, and re- after recognizing critical gaps in the enforcement landscape. IP house operates across every major jurisdiction because IP crime is truly global. We detect and disrupt infringement networks at scale, bringing global intelligence and operational visibility that complements the work of governments and rights holders wor- worldwide. What I see at IP house confirms what I witnessed throughout my career. As commerce has moved online, IP crime has grown more sophisticated, more organized, and harder to disrupt. Criminal networks now exploit the speed, scale, and anonymity of the internet to steal IP and endanger consumers on a global scale. So today's hearing is incredibly timely. Counterfeiters operate through anonymous digital storefronts, on the trusted online marketplaces American consumers use every day. They rapidly cycle through seller identi- identities, domains, and payment processors to evade enforcement, often moving illicit proceeds long before traditional legal remedies can take effect. That is why IP House focuses on following the w- networks and the money, not just removing individual listings, to dismantle criminal organizations rather than chasing one product at a time. They are not harmless knock-offs. They include counterfeit pharmaceuticals, automotive parts, electronics, children's toys, and household products that threaten the health and safety of the American consumers. One of the most effective U. S. civil tools against counterfeiting is what practitioners call Schedule A litigation. It allows rights holders to bring a single action against multiple anonymous foreign sellers engaged in the same infringing conduct. Just as importantly, it allows the courts to quickly freeze the seller accounts and related assets before these proceeds disappear beyond the reach of U. S. jurisdiction. That changes the economics of infringement. Without this tool, right holders are forced to file dozens or even hundreds of nearly identical lawsuits against anonymous defendants who have moved assets and simply reappear under new identities faster than the courts can reach a judgment. Schedule A is one of the most is one of the few law enforcement tools capable of matching the speed, scale, and anonymity today's online infringes while preserving judicial efficiency and due process. Online piracy presents an equally sophisticated challenge. Our recent organized piracy crime report, published with the Digital Citizens Alliance, demonstrates the ma- that many of today's piracy operations have evolved into criminal enterprises built on the systematic theft of American intellectual property. A single network we examined reached more than twenty-two million subscribers and generated roughly two hundred and eighty-eight million dollars a month. When law enforcement dismantled that operation, they uncovered drugs, weapons, and cryptocurrency, evidence that these organizations are engaged in far more copyright infringement. Large-scale piracy networks view IP theft as low-risk, high-reward criminal enterprise. And changing the calculation is what IP house is built to do. The enforcement gap is real and measurable. Rights holders are stuck with reactive platform tools that provide relief measured in just hours. More than forty peer nations now use court-ordered site blocking to cut off foreign, fully infringing content sites and services at the source. The results have been significant, and the UK traffic to the targeted piracy fell nearly eighty-nine percent after blocking orders took effect. The U- United States has not kept pace with its international partners, leaving creators, consumers and businesses at a competitive disadvantage. Meanwhile, criminal organizations are now using generative AI to accelerate infringement to an unprecedented scale. These include mass-produced counterfeit listings and brand appreciation to synthetic media as well as the name, image, and likeness violations. While the technology is new, the underlying challenge is not. Bad actors continue to exploit innovation faster than our enforcement tools can adapt. I hope my testimony today provides the subcommittee with an operational perspective on how today's on-line infringement networks actually function. Where the current enforcement tools are succeeding and where meaningful gaps remain. IPLS is committed to working with Congress to ensure American innovators, creators, consumers, and businesses are protected in the digital age. Thank you and I welcome you.

Thank you, Mr. General. You're back. Mister Moore.

Chairman Issa, Ranking Member Johnson, and members of the subcommittee, uh, thank you for the opportunity to appear here today. Uh, before I get into the substance, I just want to take a moment to thank you, Mister Chairman, on behalf of our members. Uh, you've been a genuine ally to us on patents, and a straight shooter even when we've disagreed. That leadership shows up here too, convening round tables on foreign piracy, advancing thoughtful site-blocking discussions, and choosing an educational hearing over a rush to mark-up. It's been a privilege to work with you, and we're grateful for the way that you've sought to both protect and advance American innovation. SIA represents more than three hundred and fifty companies in the business of information, AI developers publishers, financial data firms, and software creators. Unusually for a technology trade association, our members sit on both sides of many IP issues. We have platforms that distribute works and their rights holders. Some of our members have both functions. Over the course of our forty year existence, we've seen a lot of technological change that's affected member operations, some of which caused them to bring competing world views. When examining new IP and other policy proposals, we tend to ask the same questions every time. Does existing law already address the harm? What new risk does the technology create? And what limits make a statute both effective and constitutional? I'm gonna briefly highlight two areas. Two years ago, SIA testified in front of this committee about unauthorized digital replicas. And on digital replicas, the harm that these unauthorized uses cause is real. These AI-generated voices and likenesses are already defrauding consumers and exploiting performers. We support the creation of a federal right here, and we supported the Take It Down Act last year p- as proof Congress can build precise targeted tools for AI-enabled harms. In terms of vehicles that have recently moved, the No Fakes Act has received a lot of attention. But from our perspective, there are four problems that remain, and each one is fixable. First, the preemption clause grandfathers an existing state law and only displaces state regimes for expressive works, so the bill doesn't really deliver on the promise of a national standard. Second, the counter-notification safeguard against wrongful takedowns only exists inside the Bill's safe harbor framework. As statutory damages up to seven hundred and fifty thousand dollars per work and a life plus seventy term, no company will risk staying outside framework so in practice this isn't a narrow opt-in category, it's close to the entire digital ecosystem operating under a take-down regime with no guarantee necessarily to put wrongly removed content back up that raises concerns over speech at scale. Third, there's no general intent requirement risking liability for general purpose AI tools and inadvertent look-alikes alongside the actual bad actors and fourth, again this goes to scope, the bill's framed as touching only user content platforms, but it reaches deep into the broader digital economy and shifts section two thirty treatment along the way. We don't have a problem with that resolution, but it emphasizes the importance of getting the details right. Now, we've supplied red line language on these issues, and these are fixes, not objections to the bill's premise. And we're ready to keep working on it until we handle these problems correctly. The second pop- topic that I'm going to address uh, is foreign piracy. This is w- and site blocking specifically. This is a different question, and our members are genuinely split on site blocking as a remedy. And I g- my goal here is not to advocate a specific solution, but to present the equities that Congress has already begun to consider. First, the underlying problem is real, these pirate sites sit outside US courts' reach, and they keep operating through mirrored domains, And offshore hosting, no matter how many times, they're shut down. But the concerns over how blocking gets implemented are just as real. Blocking at the level of DNS resolvers doesn't respect boarders. Targets increasingly share cloud infrastructure with thousands of unrelated lawful sites, so a narrow order can have overbroad effects. And foreign experience shows that legitimate services can get swept up by mistake. So we're not here to endorse or oppose a specific proposal. We're here to say that if Congress moves forward, four guardrails should be non-negotiable. Real judicial process with some adversarial testing, not rubber-stamped petitions, targeting precise enough to protect shared infrastructure and lawful content, strong good faith safe harbors for the providers required to comply, and no mandate for a sing- single government-prescribed technical method. On both issues, our position is the same, get the goal right, get the mechanism right, and we and we all win. And our members are gonna have to operate under whatever regime Congress creates. Thank you again for the opportunity to testify, and I welcome your questions.

Thank you. Doctor Viswanathan.

Chairman Issa, Ranking Member Jordan, Ranking Member Raskin, thank you. Johnson, pardon me. Um, it's catching. Um, thank you so much for having me. My name is Bamathevis Swanathan. I teach at Suffolk Law School, where I teach copyright law, um, constitutional law, contracts, and artificial intelligence in the law, happily for all of us I am here today to talk about contracts, I and copyright, both, um, and not constitutional law. Um, and I wanna frame this with, uh, three thoughts quickly, and then I'm gonna move on to three potential solutions that I see. Um, the framing is, I'm gonna take it from the title of this hearing which um struck me, the midlife crisis question. Um those of us who sit around thinking about our midlife sometimes um think of midlife as both a crisis sometimes but also an opportunity. It's an opportunity to rethink and it's a very strategic moment for us to rethink. Disruption as we found with the internet forty years ago, which is how we framed this hearing, begins with opportunity and it begins with innovation. It also begins with disruption. And we're at another moment and another flexion point. Um, and I want to frame this by saying we're not talking about one industry, we're talking about two, two critical industries. So, Mister Issa, you said that America leads the world in high tech. Yes, we also lead the world in arts and entertainment, in culture, two billion dollar industry for tech. Many people are surprised to hear three point three trillion dollars and more in twenty twenty four was the estimate that was given so two robust industries, we cannot kill the goose that lays the golden eggs, we need the goose to be alive and we need the eggs to be culled right, we need both sides. Second, we believe in our IP system. We have a strong and robust IP system, it's the it's the pride of our and joy of our country and it's in our constitution. Sorry I said I wasn't gonna talk about Kanlan, I just did, um but we believe in the patent system, the patent system is strong and robust, We need to make sure that the copyright side is strong and robust too. We can't just throw up up and scrap it at at the at the behest of a few tech companies that say, oh, we're gonna lose the arms race. There are multiple arms races going on here. Our arts and culture, no one compares to it. K-pop, Bollywood, Eurovision, sorry, nothing is as great as our export of IP in both areas of technology and culture. It's a new time, we need new rights, and importantly, we need new So let me get to my three solutions that I think are strong on the table, and that we should really contemplate right now as urgent. The first, as you've heard my my fellow panelists speak about, uh judicial site blocking. For those of you who don't know what that is, it's a process through which you ask a court to stop an infringing website. You know already that it exists, almost exclusively to to disseminate infringing materials. So you're worried about a bad actor here. And there are due process uh steps in place to say, okay, we need to make sure that's true, but once we've made sure that's true, what can we do? We can ask a court to say through a no fault process, without seeking damages, you need to shut this down because we can't. We can't go after these bad actors. They're often extraterritorial. We really have no other recourse. It's Over fifty countries have have adopted it, as you've heard. The US Copyright Office has written a letter of support to to you, Congress, about it. It's it's timely, and I think it's a a a fair and reasonable balanced solution. Second, I'm going to talk very quickly about digital web because cuz I know you've heard about them a lot. They are a problem. They affect people. And because we are people, we have personal property rights in our identity and in our autonomy. Let's not forget why this exists. its rights in ourselves. As Mister Astin said, we have human rights and those rights deserve to be federalized. They deserve to be made into a federal property right, and this needs to be made something that that occurs across the country. We can carve out First Amendment concerns, we can carve out the scope of it, but it's something that needs to be addressed now. Thirdly, and perhaps nearest and dearest to my heart, is the question of the treatment of the ingestion of copyrighted materials by large language models, LLMs. What does that mean? We use this word a lot, we say LLMs train themselves on copyrighted materials. Well they can train, but just like the rest of us who train, they have to pay for the training. Licensing agreements need to flourish. They are beginning to happen. We need to make sure that creators, creators who create the stuff that we consume are compensated, small creators too, not just large intermediaries, and we need to do that now. There's a lot of court cases pending, as Mr. Raskin said, fair use cases, but we also need to make sure that there are licensing and market-based solutions that make it fair for all of us. Thank you so much for giving me the time to hear.

Thank you, Doctor. We will now proceed under the five minute rule uh for questions. By mutual agreement, we will go to the gentleman from Virginia, Mister Klein, first.

Thank you, Mister Chairman, thank you for your leadership on this issue. Uh, you've given us a historical perspective that, uh, dates back many decades, and I know many here and watching have been a - a large part of that history. And so, as you said in your opening remarks, it's important to remember, uh, that history, but also to, um, be cautious in our - in any movement that we take moving forward, uh, recognizing that the DMCA, notice and take down, All of these things that were put in place twenty years ago uh may need updating, but don't need wholesale replacing. Not gonna throw out the baby with the bathwater, the goose that laid the golden eggs, whatever uh metaphor we wanna use. Uh, Mister Moore in Cox versus Sony, the Spring, the Supreme Court held nine to zero that an internet service provider's not contributarily liable for its users' piracy unless it induced the infringement or tailored its service to it which retired the older knowledge plus material contribution theory, with that route against intermediates now narrowed, does a no-fault judicial remedy to restrict access to foreign piracy sites become, both the cleaner legal tool, and the more realistic one, since it turns on blocking rather than on anyone's fault.

So I think I think certainly from the rights holder side of our constituency, that that is exactly how they view the significance of the uh, Cox decision. Um, I I will say that, uh, for the platforms that we represent, that they're the, you know, the problem, however, of these offshore sites uh existed well before the uh the Cox decision uh was decided. And the folks that are uh the the folks like Sci-Hub or the f- that I mentioned in my testimony and the other sites that are ripping off the other folks on this panel, uh, don't don't care about cocks. And so that's really the reason for the, uh, you know, for from the copyright owner's side for the push for, uh, site blocking orders because they needed a way to get at websites, um, that US courts can't reach. Because if these websites existed in the United States, they would not last long.

Um, you're absolutely right. Uh, and the chairman, uh, led a delegation of members on a visit to the UK and other countries more than a year ago and - and, uh, to see firsthand how their site-blocking regimes are working. And what we saw very clearly was that these remedies can work to reduce traffic to foreign pirate sites and increase traffic to legitimate sites while safeguarding speech due process and legitimate internet activities, all without imposing undue burden reliability risks on the ISP's that are directed to implement the court orders. My understanding is that liability concerns on the part of domestic ISP's has been the most significant impediment to advancing legislation in the US, though I'm also told that the proposals offered to date in the House and Senate all include provisions to address that concern. My questions are these. First, do we n- n- n- now know enough from the experience of the many foreign jurisdictions that have implemented this remedy successfully over the last fifteen years that we can confidently move forward with the US legislation and avoid any interrupt- in- unintended consequences and two in light of the Cox decision, is the concern about ISP liability now a moot issue.

I'm not sure I understand the second part of that question. Um, with respect to the first part, I think, uh, uh, as my testimony makes clear, I'm not in a position where I can say a a bill is good, a bill is bad. Um, but what I can say is, you know, is that a bill that, uh, contains the guardrails is one that I believe Congress can advance. And those guardrails, uh, I mentioned in the opening, but adversarial testing, the targeting is the biggest concern because the internet architecture, again, from from the kind of infrastructure side slash internet side of our membership, right, the architecture of the internet is not desi is designed to efficiently distribute, not necessarily it's not designed to throttle. And so the risk then of over-blocking because of that architecture and, you know, liability for over- over-blocking from the standpoint of those providers is real. And so with respect to the guardrails, if the safe harbors are there, you know, if there's no tech mandate, um if the targeting is precise and the process is fair, that is a road map for a successful site blocking bill. And then again, double's in the details and I am not in a position where I can give you those.

Thank you. Yield back. Chairman.

Gentleman yields back. We now go to the ranking member of the subcommittee, Mister Johnson, for his five minutes.

Thank you, Mr. Chairman. Uh, Professor Viswanathan, uh, AI systems require massive amounts of data for their training and development. And AI companies are continuing to train on copyrighted material to release better and better models. Should AI developers be required to disclose the data sets used to train their models?

Thank you so much for asking me that question, Mister Johnson. Um, I wanna start by saying we use the word " training", and I'm not sure that that is always the right word. They do ingest enormous amounts of material to generate what they generate. When we train, when we when I train, when we learn, when we go use things, we pay for those materials. We license them or we buy them. I buy a book in the bookstore, I use it in the library which has already paid a licensing fee. I am training in a respect, but that's not the same thing that the AI companies are doing. What they're doing is they're gobbling up huge amounts of material. Do they need to disclose their data sets? Yes, that's I think one part of it. I think that um in the fair use cases I've been talking about that Mister Raskin was just referring to the one where um his books were ingested, right? Um what happened there? I don't think they ever paid you for those books. You will be paid, go find that postcard, in the settlement, because it's the point is, right, it's not just disclosing what they trained on. By the way, in Bart's, in the Bart's case, we'd found that they, and we're in fact training on pirate sites as well, right? So we're learning what they're training on and it's not good, but they should also be made to realize that you can't just take it. Y- it's not a get-out-of-jail-for-free card to say, oh, it's expensive to license. They need to license the materials that they're using. As one does, it needs to I think market-based solutions are are the preferred solution, because parties come to them. But we can't we need to monitor what in fact they're doing. I think disclosure is a part of that, but not the entire story. I think it's an important part of it. But most of all, I think we need to recognize that harm is being done to the markets, the actual and potential markets of copyright holders. That is not what fair use, in the copyright fair use uh term, was ever legally or in the spirit meant to to have happen, right? It was not meant to be a, oh, it's beneficial and so you get to use it for free. It's beneficial, but it's also valuable, and the value needs to be paid.

Thank you. Um, Mister Floyd, how has the proliferation of internet piracy changed the way that movies are made?

Um, it's had a direct impact on uh the number of movies that we make and which mo- movies we make. When we're making a decision as to go forward with the film, we do a a a a profit and loss analysis, and we look at the history of the movies in the last few years, and we look and see what kind of revenues have been generated. As piracy cuts down on the revenues, the l- the legitimate revenues that we're getting, uh, we determine that our next movie is gonna make fewer dollars, and so that m- impacts, uh, maybe our ability to spend a certain amount of money on a movie, or make that movie at all. So what you end up with are fewer movies being made, fewer people being, uh, employed along the way, and more risk being taken by the studios on the movies um, that they do go forward on.

Thank you. Uh, Mr. Austen, you've made a career off of your name, image, likeness and voice. Everything we talk about when we examine digital replica legislation. What about individuals whose names or likenesses is not a commercial business? Do you think those individuals need to be protected as well?

Absolutely. They need it as much if not more. I mean, the and they're yes. If you're this, I mentioned testimony that uh if you're a teenager somewhere in your district, and for example, and and uh for whatever reason, with very little difficulty, someone's able to depict you as you, sa- not you, this imagined teenager saying or doing something. I I uh Or you too. We all, everyone in here. Yeah. I mean, we we traffic in in our identity and our reputations all the time. Well, so does a fourteen year old kid. And yet, these big platforms benefit financially from when some horrible, uh, you know, depiction is done of them, and they have no ability to do anything about it. So, yes, they should have, uh, their identity, uh, protected there as a as a right. Thanks.

Thank you. Uh, you're back.

The gentleman yields back. We now go to the gentleman from

Thank you, Chairman. Um, I just wanted to go back to February of twenty twenty four for a moment because that's when our committee first uh began discussing the issue of AI and digital replicas. Um, and I see a lot of familiar faces uh on the witness uh stand as well, and in the audience where we also uh we were in Los Angeles for that field hearing. Um, Mister Moore, in fact, I you testified at that hearing if I remember correctly, And um it was also the first time I think Mister Astin was was there as well, that first time we met. Um Mister Moore, let me start with you. When you testified in twenty twenty four at that field hearing, you mentioned that there are already a number of state and federal laws that address many of the concerns with digital replicas. Um so if Congress were to act uh and it should act in areas where AI poses a particular risk of harm, left undre- unaddressed, by current federal state laws. Um, so i- i- is that still kind of your testimony today or has anything changed in the past two years since we last debated kind of the issue of AI?

So I I think what I would say is that um it is true that uh a number of the harms that occur from the unauthorized use of digital replicas are covered by i- in many instances will be covered by existing uh state laws and remedies, but there is no federal remedy. And that presents an opportunity uh for Congress to present uh a uniform rule and uniform protection, which will benefit uh both the folks who are injured and the businesses that actually have to implement this. by a uniform set of rules and a uh a clear standard of what's allowed and what's not al- allowed. And in order to do that, there are a number of, you know, equities that that this body will have to balance. But, you know, our members view the current state of digital replica law as an opportunity to legislate constructively.

Mister Astin, um, let me come to you. I remember that we were able to visit in LA Uh, I know this is kind of general and and wide open, but why is the federal digital replica right? Why why is it important to you and those that are in the entertainment industry right now? What what's prompting people to uh kind of move in one direction or another?

Well, every day we're having our images and our our voices and our faces and us created, you know, fictitiously in ways that people don't can't tell the difference. So it looks like I'm saying or doing things. It's happening all all the time. I had one friend, a colleague, I saw a video image of him and he was really upset in this image and he was talking uh in great detail about some problem that happened. And I called him up and I said, " Hey man, are you okay?" And he goes, " Yeah, what are you talking about?" And I said, " Well, I saw that you were so upset about this thing." He said, " No, I wasn't." I said, " You were sitting in this room and there was a thing behind you." He said, " No, I wasn't." And his wife walks in and says, " I can't believe you fell for that fake." And I'm thinking, I went back and looked at it and I I opened it up and I I I couldn't tell the difference between him and this creation. So you know what, it's like uh could you please take this down, YouTube? Could you please pull this off your site? They need this law in order to have the instruction that it's okay to take it down. And yeah.

And and the process to do that is tedious. I mean

No, they're f- they're They just have to know it's okay. Let them work out the tech. Are w- these these guys back here have it worked out pretty good, right? You got, they got a system for how to take it down, right? Yeah.

So that's good.

They're, it's working, but you just have, they have to know that it's okay, that it, we've got our first amendment, but that we love and we wa- and we have to protect. And and and the first, the first amendment is implicated in this no-fix uh act in both directions. You have to be able to um do satire tell the news, you have to be able to tell historical things, you have to be able to do all these things. You also can't rob someone else of their first amendment, right, by having it misrepresented as them. So, the, it needs to be clarified for these companies where this country stands in federal law on the nature of, you know, intellectual property. Individual intellectual property.

Very Very well said.

Thank you for asking.

Very well said. I'll yield back, sure.

Oh, would the gentleman yield?

I do yield.

Um, I just wanna cover one thing. Doctor, you uh you said you're not gonna do constitution, but since you're here, I'm gonna pinch you a little bit. Is it true that states under the constitution don't have international reach? In other words, they by definition might be able to pass a law, but to enforce against countries outside the US is completely limited in the constitution. to the federal government.

I invite you to my con law class next year, and we'll talk. Um, it's it it's still to a certain extent an an an open question, but yes, what you're saying is essentially true. Um, there's a case called Vetter right now that's pending that's asking about international reach of, um, certain copyrights that we have. Um, and that case is, uh, is in the fifth circuit. So it's uh and going up hopefully and it's unclear uh so i think that one thing that federalizing laws like the digital replicas law does is it gives us a level of security that we're playing at a national level and that we're not getting into the morass of states rights versus international rights um sight blocking too when this is something that's so agreed upon among so many countries in the developed world i think it's relatively uncontroversial at this

Thank you, Doctor. That tees it up for our constitutional scholar here on the dais, the gentleman, the ran- the ranking member, Mister Raskin.

M- well, thank you for that, Mister Chairman, I have to get you a copy of some of my books. Um, I downloaded them already, what do you thought?

Not pirated.

Um, so Professor Professor Vishwanathan, um, the uh Northern District Court in California held in Barts versus Anthropic um, that the use of copyrighted works for AI training constitutes fair use. You just voiced your skepticism about thinking that it is training Um, but according to court, Anthropic is permitted to purchase a copy of a book and then use that work to train the model on language writing and story. Um, do you agree with the court's conclusion? I- is that, is that a r- the right analysis?

That's const- not constitutional, that's a leading question.

Yeah.

Um, I think that the court is, I think that courts are struggling. And they're struggling for the same reason we are. The court said, to be accurate, that it was transformative. But it's still a question about fair use. Y'all, for those of you who are not copyright people, I'm sorry for you, but, you know, there's still time, and I will help you through this, right? So,

Mm-hmm. Mm-hmm.

you say, I I say to you, um, you infringed. And you say, well, you're right, I did, but I did it for good reason. It's an affirmative defense, and it has four prongs to it. The biggest ones are Did you do something really important, transformative, did you change it in some meaningful way that makes it important that we preserve that? And the fourth factor is, does it affect the market? And I wanna point this out, actual or potential market, right, for the work, for the original work. The courts are confused and they're they're concerned because they see the effect on potential markets, at least the Barts court does, right?

Right.

What's the potential market? you could license that work otherwise.

Right, so are there licensing regimes in copyright law that can serve as a model?

Right? So Absolutely there are. There are licensing regimes that exist right now. You just asked someone a a couple moments ago how are movies made? They license and cross-license all the time. That's how movies get made. When you embed a piece of song into a movie, you license it, you cross-license it. So there are regimes that exist and fair use is not an open and shut case. There's over a hundred cases

All right, so w- let me just ask you, are we gonna be able to get to the solution within the existing contours of copyright law or do we need to legislate to address the brave new world we're in?

It's hard because we're at a we're at a moment right now where we wanna go with a light hand because we don't wanna hamper innovation we'd like to encourage licensing regimes the thing I'm concerned about, mister Eskin, is the small creator who can't go up against the big tech company and say help me here. There are also, by the way, schemes to help pay small creators. We have BMI and ASCEP standing as examples of collective rights, collective rights organizations that clear rights for people so that they can get their royalties. So what exists right now, there's a lot that exists right now that we need to tap into.

Okay. Um, thank you. Mister Astin, I know that digital replicas are a big issue for SAG-AFTRA. You negotiated a hundreds of pages of a four year deal with the Motion Picture Association that would prevent studios from creating fake actors, as I understand it, absent some compelling reason for doing so, or replicating real ones, uh, and that seems to be more categorical, you can't do that, um, to get out of using living, breathing individuals on screen. Could you explain why collective bargaining agreements with provisions like those um are necessary and then answer whether they're sufficient to protect creators from individuals using AI to replicate name image likeness voice intonation, and so on.

Yeah, absolutely. So they're uh absolutely necessary because um the relationship between uh workers and their bosses is often fraught with uh being taken advantage of and so um we're very grateful that um the companies uh in in the previous cycle when we had our big strike but in this cycle, were willing to um work with us to try and figure out how to manage um the fairness when it comes to digital replication and what you were talking about was synthetics um and you know when it comes to digital replication we're able in bargaining to achieve a um an understanding about how much you you should be compensated.

Is that sufficient in your field? Does it cover all of the people in the workforce. Um.

Well, our c- our collective bargaining agreement is our our our labor. So no,

Yeah.

I mean, each each different union, the directors, the directors, the IOTC, everybody has to make their own deal.

But is everybody represented such that they could come up with a a similar agreement?

So Everybody has to try to accomplish what we did first, which is to get meaningful l- a- artificial intelligence, protections, language in our bargaining. And the and we are um we're respected. I mean SAG-AFTRA and and our policy writers, our our contract uh negotiating team is is really been in the vanguard in this. But to me, for this moment, the important thing is um it's only good for for contracts that we are working with, that you know, people who are signatory to our union. This uh no-fakes act and the digital replication we're talking about exists everywhere else. And that's where no- nobody other than this body can offer the protections that we require. Which is why we really appreciate you all working so hard on uh the piracy, but on this uh no-fakes act.

Thank you, Mr. Chairman. You're back.

I thank the gentleman. We now go to the gentleman from Texas, Mister Gooden, for five minutes.

Thank you. And I'm I'm impressed with the ranking member who can turn a Republican witness into a collective bargaining. uh chat that's not surprised but impressed. I um I I actually have questions.

You do know that uh Ronald Reagan once sat in a similar position. It it can happen.

It can happen, yes. No, we're not surprised. Uh I professor, I was I'm so fascinated with fascinated with some of the things I've heard. Um these long these these LLMs, how do they ingest all of this material? like these the books we're talking about, the things that you're talking about they should have um paid in, so to speak, for. How do they g- how do they consume all of this information?

Think of them as a giant hoover. They suck them up. Um where do they get them? They get them, they trawl the internet. They get them from various websites. As I said, it's come out in some discovery in some of the cases that they get them from pirate websites as well. In the anthropic case, interestingly, they bought tons of books and ripped the covers off of them and copied them. But it's essentially disambiguating and copying.

So what do you say, uh I'm not trying to be combative, I'm genuinely curious. What do you say when someone, cuz you said you and I have to pay for these books before we read them. What would you say if I said, well yeah, but what if I paid for the book and give it to you? You're not gonna then go write a check to the author, you're just gonna read the book I gave you. So how is that any different than me just giving a book to an LLM?

It's not, but who's given it to them? I don't give them my book. I I I wrote a book and called Cultivating Copyright and it was uploaded to ResearchGate a pirate web site in about three minutes. Um, I mean I know I don't get a lot of royalties on my book, okay, but that's two hundred two hundred book.

I'm sure it was interesting too.

Uh no, it wasn't, but it was two hundred bucks, that could have been a couple Starbucks, you know. So um I I think that that it's it's a little false to say that they are, it's just like receiving a book. Um and sure the first sale doctor would say that you could receive a book, but they're not receiving it, they're trawling the internet. they're fining it, they're taking it, I mean they're actually claiming fair use and again, I'll just say fair use means you're saying I infringed. You're not saying I have the right to this, you're saying I infringed but I did this for a good reason. So there's an admission there that they're in fact taking stuff that's c- under copyright the whole point of copyright law y'all is to make sure that creators get incentivized but also that they get paid so that they keep doing what they do Right, we all work because we love what we do, but we also need to put food on the table.

Do y- do you think that there's um a solution that they would go for? Or do you believe, is is it your impression that they're just against any and all, no matter what?

No, I think that there have been some licensing agreements, especially like in music licensings, for example, that have been emerging. I just think they think it's very expensive and they think that in terms of the arms race against China it might gr- put gr- you know, salt in the gears. and that it might be you know slow things down but again i wanna just emphasize that two industries here we can't just talk about the cost to the to the tech industry we should talk about the cost to the copyright industries

thank you i've uh enjoyed hearing you and i would love to take one of your classes someday yield back

would the gentleman yield

of course always welcome

take my time sir please

i thank you uh i wanna i wanna follow up on uh the uh the question of fair use and so on. Uh, as you say it, Doctor, um, clearly the right to input, in other words the right to read a book, isn't in controversy. The right to read or to learn from what's on the internet is not in controversy. So, the part that I - I wanna ask all our panelists for a moment is, as we look at the absolute right to read, we seem that we have two questions. Do you pay for that which is copyrighted, similar to the way you would buy a book? And that's a fairly straightforward the cost is is uh the cost of your books is on the cover of it, so to speak. The question, though, that I have for all of you is once somebody has learned from, should this committee look to the nature of the output? Meaning, cuz I wanna go back to fair use, which you cited very accurately, Shaquille O'Neal took my very words and put it in one of his rap songs, literally my voice, not my likeness, but my voice. When I asked him about it one day, he looked down at me and said, " Fair use." Uh, I've never forgotten that I never followed up after he said it. So the question though is, should we be looking at output more than input, meaning some input is the result of education, meaning it doesn't look like the original input in any way, shape or form. It's a result of learning. Some has a similarity and some, as Rudy would say, if you will, is him, his likeness. Should that be a standard that is not in any of the current legislation per se relative to the ingesters? I'll let you quickly answer.

Quickly. It's tough.

Each of you.

It quickly is it's tough. I it's a complicated, law professor's favorite answer. Um, it is complicated. Um, when, this is why I take exception to the word training. When I as a creator artist train, I train so that I can learn things, so that I can make something new. Some people use AI, right, in these large language models to create new things, and I think we should encourage that. I also think we should be restrained in saying you took something in my style. We don't wanna start copyright copyrighting style, cuz style is something that we wanna see develop and grow, and it's not something that's copyrightable in fact. And I don't think it should be. Your exact words, boy, I mean maybe a short phrase was not copyrightable. If you took a paragraph from your book, that'd be less likely to be fair use.

It wasn't my book, it was me saying, " Protected by viper,

I know, it was you saying something.

stand back."

Yeah, protect- okay. Well, that's a tough one, right? As a short phrase. But, yeah, but the point stands, right? We should be able to use short phrases from each other, I think, unless it's a trademark violation, which is another, you know, question altogether. The question about about outputs is tough. Right? When they're exact copies, we already have copyright to l- to protect against that kind of infringement. It gets squishier and more difficult. The other question is, as those outputs get more and more created by prompts, and less and less created by humans, do we wanna copyright that stuff at all? Well, if there's some human authorship, the copyright office has drawn a hard line and said there needs to be an author behind that, and I think that is the right line to draw.

Okay, and on that note, I I think one answer was gonna have to be sufficient. We now go to the gentlelady, my friend and and indulgent to my question, Miss Lofgren.

Uh, thank you, Mister Chairman. Uh, Mister Mori, uh, you're in your testimony you note that uh copyright holders currently lack a targeted judicial uh remedy against foreign uh pirate sites operating beyond the reach of US courts and so uh current law isn't effectively reaching many of the worst foreign piracy sites. That's exactly the gap that the Foreign Anti-Digital Piracy Act, uh, it's a - is intended to address. The bill is, uh, bipartisan and bicameral, and it was crafted really, uh, very carefully for more than two years, actually. Uh, I engaged with copyright holders, uh, technology experts, service providers, public interest advocates, and, um, after two years of sorting through the various issues, it resulted in the that bill commonly known by the unlovely sounding FADPA. Um, it's grounded in a simple principle that Congress can fight on-line uh piracy without sacrificing due process, re-expression, privacy, or the open internet. Now, I've continued uh working with colleagues both in the Senate and here on discussion graphs. Uh, we uh are working and dialoguing, trying to find a viable uh path forward. I'd just like to mention people have understandably raised the role that I played in SOPA so many years ago. As many of you know, I played a central role in stopping that adoption, and that's not because I support piracy. Uh, I don't. Uh it was because those proposals raised real risks to the open internet and free inspra uh expression and due process so I'm hopeful that we will be able to make uh progress even in this Congress or if necessary in in the next in getting something like FADPA uh adopted uh Professor your testimony uh describes uh judicial sight-blocking as kind of a no fault process no damages no blame assigned no effort to hold providers liable for infringement. Given that, is it fair to say that Congress can provide strong liability protections for service providers that comply with the court order without also codifying broader secondary liability rules from Cox what do you think of that?

Yeah, if you're asking me whether there are sufficient pro- um protections built into judicial site blocking I think absolutely there are. We've been talking about it for a while now, and we've seen it implemented in various countries, and I think, yes, I think legitimate, non-infringing uses will still flourish. I think the question is really the bad actors, the pirate sites that we can't go at. It's whack-a-mole.

Right.

That's that's what we're trying to solve.

Yeah. Yeah. I'm interested, you know, uh, as w- we noted, Congress is not usually quick to act, um, and, uh, we've discussed the ruling in the in California and fair use, um, essentially finding that data for training models is transformative, non-expressive, and therefore protected. Um, a reasonable argument can be made on the other side. Meanwhile, we're not doing much here. And I'm wondering if anybody can address the technological protections that could be available to individuals. Uh, there can be digital watermarking and it is possible to make sites unavailable to um to AI scoping up. And the question is, does c- would Congress by rule or could the executive by rule, or do we need to by rule, enhance that opportunity for people to take technological steps to protect themselves from uh the uh hoovering up of data. Anybody got an idea on

So far it's been sort of leaky. There are watermarks and there are there's encryption and there are there are ways, but there's so many end runs, and I think that's part of the problem. One of the things I think uh Ms. Lofgren that we could do is perhaps incentivize companies that are creating technologies um possibly by subsidizing them somewhat I think the caution is fair and reasonable I think we can't progress And again, we're concerned about stifling innovation. It's a very reasonable concern. But, um, I think the technological solutions have been, um, there's a will, and hopefully where there's a will there's a way, but so far they haven't been perfect. And meanwhile, um, technology's moving so rapidly.

I, I, the copyright office was working on what's copyrightable. Their ultimate conclusion was you have to have a a human author. uh to have the protection I agree with that but here's the the the rub if a human author is using AI to create then they should have protection and where where do you draw the line between it's AI generated and it's a human using AI as a tool unfortunately before they reached the end of that process um the president illegally fired the registrar and then fired the um the librarian and they've not been refilled. Do you think existing copyright law sufficiently addresses AI's role in creating or do we need some more revision and guidance from experts in the copyright office, Professor?

And you can briefly answer that, although we're out of time.

Yeah, at the moment I think the copyright office is holding a fair line. It's basically saying show us, the human, back here. If you can show what you did, how you prompted. I tell my students this, show me your prompts, and I better be able to do it, my doing those prompts as well. That's copyrightable. I think that's fair. It shows that the human in fact guided the AI. That's gonna happen like with any tool. Whether we can continue to do that or not remains to be seen.

I thank the gentle ladies. We now go to the gentle lady from Florida, Miss Lee.

Thank you, Mister Chairman, as we're hearing today, the internet has created extraordinary opportunities for innovation, but it has also made it easier to steal intellectual property and exploit identity through AI-generated content. And as Congress considers whether our laws have kept pace, we have a responsibility to protect creators, innovators, and everyday Americans while preserving free expression and ensuring that the United States remains the global leader in AI innovation. So I thank all of you for being here today to share your insights and your expertise in helping us strike that balance. Mister Floyd, I'd like to start with you. You made the point that America should win the AI race, but not at the expense of lowering our intellectual property standards to match those of countries like China and I think that's exactly the right that we shouldn't have to choose between innovation and protecting American creativity. As counsel to Amblin Entertainment, you've seen firsthand how much investment, planning, and talent go into bringing a project from script to screen. And it's important that we recognize that uncertainty surrounding AI generated digital replicas affects, not just actors, but studios, production companies, and the thousands of people whose jobs depend on the success of the creative industries. How would a clear federal framework like the No Fakes Act provide the certainty needed to continue investing in American storytelling while preserving our leadership in AI innovation?

Thank you for that question. Um, it's a good balance, and we've, uh, the other witnesses have talked about we do need to balance the interests of AI and the interests of of our of our creative industry and uh and the rules do that. Uh uh something like no fakes uh they uh carve out exceptions for um bio-pics and news and documentaries so we have a a legal standard and a balance, so we know going in what can be used and what can't be used. And we spent uh a motion picture company will spend anywhere from ten to two hundred million dollars on a project. And so that is a huge investment, it's thousands of people uh who are working on on on on on on on disclosure day, we had four thousand um, employees. And so to spend that kind of money and to hire that amount of people, we need to have the ground rules to know that our investment is gonna be protected along the way and balancing those with a s- a s- a federal law would help that.

And, Mister Astin, you spoke about the impact that AI-generated digital replicas can have on performers, but also that these same technologies are increasingly being used to target everyday Americans as well. Whether it is an actor whose performance is replicated without consent, or a teacher, a veteran, a small business owner, a teenager, uh whose voice and likeness is cloned to commit fraud or damage their reputation, the underlying harm is the same. Someone is exploiting another person's identity without permission. Would you speak um to how protecting an individual's voice and likeness uh should be a right for all of those people, but also what you're hoping to see Congress do to make that a reality.

Absolutely. Thank you so much for that. Um, you know, it's it's easy and obvious when you look at performers, if something happens with their reputation, their identity, their their their likeness and their voice, the impact to their to our uh our business is immediate. Um, but really what's at stake is you want to have some mechanism to stop someone from doing something harmful to you. And the way you do that is Congress tells these companies, you're not allowed to use a deepfake of some, I keep, uh, to me, I don't know if it's because I have three daughters. Uh, I picture they're, they're, oh gosh, they're getting older now, sorry guys, they're twenty nine, twenty three and twenty. And if somebody deepfakes them, and there's nothing I can do about it, uh, it's, it's feels so, it's so horrible. So the idea that you guys could pass a law that says I can go to, YouTube and say, please take this down, or my daughters on their own behalf can say, please take this down. And they have a law that says, oh yes, we, that's been established as a deepfake, that's not your identi- And they can take it down. They, I just wanna live in a world where they, they just can't abuse people like this. They just can't make you, you know, i- it's an, it should be an outlier that uh someone steals your identity, your credit card identity, whatever. You know, it should be an outlier that somebody bad, there's a bad actor out there, bad behavior, right? This is like so massively available to everybody to do without just, it's so simple. You just prompt a little thing, make Sean look like he's doing this and whatever, and it looks so realistic, and their creativity, their nefariousness can have me doing something. And we're just sitting here like, uh, that should not be allowed. It's just as plain as the nose on your face. It should not be allowed to make somebody do something, or say something they didn't do or they didn't say. And uh and that that goes for every American. It goes for everybody around the world, but I'd appreciate it if you guys would fix that for us.

Well, Mister Astin, as a policy maker and as a parent, I agree wholeheartedly with that assessment. So thank you for your input and Mister Chairman, I yield back.

I think, the General Lady, I might note that a generation ago somebody once said, where do I go to get my reputation back? And perhaps that's a lot of what we're talking about with deepfakes.

You wanna hear a a Shakespeare one or it's a it's sort of a paraphrase of a Shakespeare Oh, sorry.

I'll acknowledge that I won't yield my time.

N- exactly.

All right.

Please sir.

But this is a good one. You take away my life, you take that which is bestial, you take away my reputation, you take the immortal part of my soul. So that's a paraphrase, but it sounds good.

Okay, he went back further than I could uh without you go to the gentlelady from North Carolina.

We've gone from the constitutional to the biblical. Um, Mister Francis, you haven't gotten much action, um, and uh many of my questions about um, about AI have been taken, so I'm gonna ask you the next question, which by the way my secretary of state is very interested in, because she ends up having to enforce counterfeit laws in North Carolina because there are not enough federal resources to do it and by the way, she used to get grants to do that from the federal government, and about twenty years ago that dried up. And so I want to ask you a few questions and then also ask you about who our partners should be in enforcing some of these trademark and copyright counterfeit laws. So, you testified that counterfeits in our supply chain pose significant risk to Americans' health and safety. They range from unsafe counterfeit auto parts, dangerous technology knockoffs, poisonous prescription drugs, and toxic personal care products. So what happens when counterfeits steal the goodwill that legitimate companies have spent decades building, um, and use it to sell products that put customers' health and safety at risk? And how would the Shop Act help with that?

Well, I will start with the partnerships. Uh, the Secretary of State, uh, in North Carolina. There are s- so many task forces that at the state and local levels that do tremendous amount of work. And yes, ma'am, you're right. Uh, the Bureau of Justice Assistance grants that were uh available for almost twenty-five years have essentially s- uh been stopped funding these task forces, which have a significant impact on enforcing intellectual property. Uh, and we would love to see the support of that bringing these grants back, because we know the consequences uh without the Bureau of Ju- Ju- Justice Assistance grants. Uh, yeah, these counterfeit goods uh remain to be uh an extreme problem uh especially with the health and safety risk to the American consumers. Um, I think, um, it's very difficult to kind of assess the entirety of the issue. Uh, but when we're looking at these marketplaces that have, uh, these anonymous foreign sellers that are distri- selling goods online, there's very few effective, uh, ways to take them down from state and local law enforcement. Uh, and you know, something I we have seen as a very useful tool, our schedule A litigation. This allows, uh, a rights holder to file a lawsuit, uh, and join all these anonymous foreign sellers online in an effort to recover some of the losses to them. Um, as it relates to the Shop Safe Act, um, I'm, you know, from a consumer's perspective, uh, I can answer it, uh, that way. I would As a consumer, uh, expect to understand where the origin of these products came from,

Mm-hmm.

uh, to and I think most consumers believe that there's a continuous uh monitoring of these sellers online, uh, and we'd love to have and see a continuous vetting of these sellers and where the products came from.

Right, but basically there has not been effective um enforcement, either at the federal level or now it's pretty much unfunded at the state level, we're leaving it up to state legislatures to decide whether or not they're gonna give state law enforcement the tools they need. Is that correct?

That is correct, yeah.

And that's unfortunate. That's something Congress could do, right?

Yeah, and I and I'll speak for the entire, yeah, IP industry, uh, the grants that are provided to the state and locals are, you know, incredibly valuable. Uh, I today with the, you know, priorities of the federal government, I think there's no one more important than state level uh, law enforcement that are actually doing the work on the ground each and every day.

Great. Thank you so much. I do wanna pick up on something that the chairman asked about the output, because we've been focusing a lot on the input and we've had this anthropic lawsuit and I took copyright law when I was in uh and I had great, I had David Lang at Duke University who taught me copy copyright law, it was so much fun, we started with Ansel Adams. But I I wanna talk about the output because I know that the copyright office is coming up with rules for what is um produced and whether or not there's human content. But Professor, could you tell us a little bit about how we could apply copyright law that from derivative works to this because it seems to me that if you're actually using something that somebody else had you should have gotten the license in the first place. It wasn't a fair use. But then it is considered a derivative work, and a derivative work has to have the attribution and all those other things, and so I'm gonna ask for indulgence for the answer to that question.

Great question. Definitely product of Professor Lange's excellent instruction. It's a it's a good question. Derivative works are works that come from other works, right? And as a copyright holder, you have rights in your own derivative works. For example, the translation of your book. Right, you have that right. So if AI is being used to create a work that's clearly a derivative work, we have the copyright law now, we keep talking about how we wanna amend the copyright act, it's now fifty years old, and that's fair, there are new things that need to come into place, but let's use the tools we have now. The derivative rights um, right is an important part of it, it's an important part of it, it's not the only part of it. What the the tough question becomes what if somebody co- creates something that's Close, but not the same. We want to encourage that, but we also want to say you can't come too close, right? You can't take where the authorship is. What did I put into that thing that made me the author? An author, by the way, can talk about a musician or anybody else creative. So copyright law exists and has been enforced for fifty years successfully. We can apply it to this space in the question of derivative works.

Thank you very much, and I yield back.

i thank the gentlelady i now ask unanimous consent that uh a letter statement uh from the entertainment software association be placed in the record without objection so ordered additionally we'll be placing in the record the uh fifth circuit decision in vedder versus resnick uh since it's been uh included so much as a part of this hearing without objection so ordered and we now go to the gentleman from south carolina for five minutes

Thank you, Mister Chairman, for having this hearing, thank you guys for for being here today, um appreciate your testimony. Uh Mister Astin, the actors that you represent are generally not the copyright owners in the films uh and television shows on which they appear. Uh can you explain how piracy however impacts you uh or the the members that you represent, and and is the adoption of site-blocking in the US important to those members, and why?

We see our work exhibited in places like on YouTube and around the world, where they have not made an agreement with the people who hold the copyrights. So we are powerless in two directions. We're powerless to go to those big companies and get them to compensate us according to our contracts and we, the people we have those, contracts with don't seem to be doing anything about it. So, and that's not actually true. Uh, yesterday a uh a lawsuit was filed and so we're very we're looking forward to it. But, you know, we're on the we're on the business end of a lot of this stuff and we don't have a lot of control so we do the best we can to negotiate the best deals that we can and then we, um, hope that the companies we're in business with advocate for the protection of their IP. Um, and we really want them to be good at that.

Would side-blocking be something that you, you, you and your members would uh like to see and appreciate and would that would that have an impact for your members

well just as as i said it it the the ability for our uh employers who we have our collective bargaining with to successfully impose the uh you know the the the law or the uh you know that copyright to protect their copyright if that if that mechanism if that tool is gonna help them then we're all for it absolutely

Fr- from a global perspective, I think it's been testified today that we were a leader, and maybe still are in some aspects, but we're a leader in establishing standards for strong IP, uh but we've got some catching up to do, uh that if we were to do something uh create a more robust system to to target these offshore criminal actors, can you explain that what this would mean for the US uh generally, and our ability to maintain the status as that global leader in creativity and innovation?

I think my colleagues would probably speak to it better than I would. They, I mean, I was pretty moved by what I heard here today about the other sixty countries that are, you know, our collaborators in other areas are, you know, accomplishing in this space, but I I would rather hear their experts in that, you know.

Mister, Mister Francis, uh, IP house and digital citizens alliance issued a report in April, uh, exploring the growing connection between global organized crime and online piracy. Uh, what are some of your top-line observations of that? um uh to the us economy and also to our citizens

yeah the um joint publication uh organize piracy and crime uh just reiterated that i think we are seeing a shift towards uh criminal organization syndicates when the you know profits are very high and the risks are very low uh we're seeing a significant amount of um bad actors organized in many ways we show that these are criminal organizations because they have a structure, they have operators, they have supply chains, they have ways to finance the funds, they have IT technology, uh, and it's significantly impacting the way, uh, you know, these networks need to be looked at, right? I think the UN, Interpol, Europol have all said that these types of behaviors are more towards in indicators of organized crime syndicates.

How does that affect our citizens, though? I mean, what does that translate to to the average person in South Carolina or New York or California, what uh uh that that are not say directly involved with uh these criminal syndicates, uh or in the film industries or the um uh TV or whatever, how how does it affect normal Americans, everybody?

So I think the effect is the malware that, you know, when when they're watching these uh subs- you know, unpaid or paid subscriptions that are illicit and piracy, that the malware that they're downloading, it impacts them because There's a significant amount of data that shows that they're also victims of identity theft. Uh, I think it also shows that, you know, there probably not enough education and awareness around this issue. Uh, and this report with the Digital Citizens Alliance really highlights the importance of education around this area of digital piracy. Uh, it has a significant economic impact, uh, really across all sectors and around the world.

Thank you for that. Mister Floyd, real quick, as we as we wrap up. Uh, can you, what are the on-line effects or s- or the effects of on-line piracy on the economics of film and television productions from uh the in- uh the industry itself, to the the workers, uh to legitimate streaming sites and even our citizens, what's, what are the uh, what are the effect?

So the impact uh uh it will hit both the company and deciding what movies to make and and how often to make them and it will impact the, the, so that impacts the workers and how many people get hired and paid. It also impacts people like Mister Astin's uh group who are, who've already made a movie. What happens is when - when someone streams it online and pays for it legitimately, we automatically share a portion of those revenues with the Screen Actors Guild with the directors with all those people who worked on the movie, that's uh that gives them a - a buffer for when they're not working. It's a - it's sort of like a mini retirement plan. If we're not receiving that money, we don't have the money to share, so they end up making less money along the way for the work they've already done. So it impacts us and our ability to hire new people and it impacts them and their ability to make a living off the work they've already done.

So, in effect, I mean, a lot of I think starving actors in LA, the the stereotype is that they're like baristas first or bartenders. So you're saying that we might actually see a scenario where they're making less as an actor than a barista or bartender.

Absolutely. When when there are millions of dollars gone and then we're un unable to share, they're losing a lot of money.

Thank you for that, Mister Chairman, I have to see my time has expired, I yield back.

I thank the gentleman. We now go to the gentlelady from California.

Thank you, Mister Chair. Uh Thank you, Mister Chair, and I wanna start by saying that I'm glad that we are finally having a hearing on the issue of IP. From my district's perspective, today is the day when we're actually talking about issues that the American people care about. Uh, we have had twelve hearings in this subcommittee and this is the first one on this issue. I think the videos that were played at the beginning are a testament to the critical nature of this topic and I actually hope we have more hearings, because each of these topics deserve their own hearing. Uh, this is personal to me, my district includes Los Angeles and Culver City. It is home to actors and musicians, writers, journalists, content creators, video game developers, and everyday Americans, and for these and more of my constituents, their voice, their image, their likeness, uh, and their performance, that is their livelihood. AI we know can create opportunities, but it can also be used to profit off of humans' identities, their voices and their likeness. I'm also reminded of a scene in Anaconda between these two char- Paul Rudd's character and Jack Black's character, and Paul Rudd's character says, " Who cares about IP?" And Black's response is, " Literally everyone." That is what big movies are about.

Yeah.

That is why we are here. I'm also gonna make a plug for my Republican colleagues to join on as a cosponsor to the No Fakes Act. So the No Face Act ex includes exclusions for documentaries, news, commentary, satire, parody, and fleeting uses as well as safe harbors for multi-purpose creative tools, unless they are primarily designed to produce unauthorized digital replicas. The video game industry has raised some good faith concerns that because games rely on fictional characters, background characters, user created avatars, that the bill could unintentionally capture lawful content or expose developers to claims based on incidental resemblance. So, Mister Floyd, how can Congress make sure that the bill doesn't sweep in fictional characters, incidental likenesses, or legitimate tools, uh, that are used in these interactive games?

Well, I think as long as there are guidelines i- in the legislation to help guide whatever one uh uh moves forward on it it would be helpful. there are under the copyright laws now you can have incidental uses or uh uses that are similar but it's the it's the substantiality of what goes on so uh the legislation talks about that that will help give guidance to everybody as as to know so there's if there's one background actor that looks similar maybe that's not enough but if it's an exact one exact um replica would be too much but many that are similar might be too much but you have that balancing act sort of with those guidelines

Thank you for that. Uh, this has come up about um counterfeiters. Mister Francis, I know you don't know this about m- me, but I support the resale marketplace in a very real way, and trusted resale marketplaces are incredibly important. One problem is that bad actors use on-line spaces to traffic counterfeit goods. We talked about pharmaceuticals. Um, but it really harms consumers and legitimate businesses, and we do need policies to crack down on counterfeiters while clearly distinguishing uh organized counterfeit trafficking from lawful resale so mister francis how do counterfeiters exploit the ambiguity between legitimate resale and sale of infringing goods online and why is consumer confusion so important to mitigate in this context

yeah i think thank you congressman i think it's just deliberate deception uh that the confusion really is the goal of these counterfeiters and it's very challenging when you are a consumer and trying to distinguish between what's real, what's fake, the listings, the reviews, uh these are very extremely deliberate uh and of course extremely challenging for a consumer.

Mm-hmm. Mm-hmm.

Uh and yes I we're very much in favor of the re- e-commerce platforms, uh I think it's a growing market and it's one that really needs to pay particular attention from what other marketplaces have been dealing with you know, in the sense of they've also been deceived, these marketplaces,

Mm-hmm.

but, you know, this resale market, yes, it's very uh, especially with antiques and luxury brands and other products that I think are growing in this space.

Right. Right. And, um, Mister Floyd, in the remaining time I have left about piracy, how much traffic do pirated web sites receive? And outside of copyrighted content being stolen, what are the harms that consumers face when they enter these sites? and are asked to enter personal information to access the content.

I don't have the exact numbers on the traffic, right, but I can get a on that back to you. It is massive though, uh, and because when you get on one of these sites, uh, you're uh you're you're put on it looks you you type in, um, you know, watch dis- um, disclosure day and you think you're going to a regular site and then you end up on one of these pirate sites that has thousands of movies that are available. And what happens then is the consumer thinks it's a legitimate site. It looks like Netflix. It has thumbnail photographs of everything, it has the list of people who worked on the movie, you think you're in a a legitimate site, and you type in your credit card. And when you type in your credit card, now that uh that now and that money is now used for all kinds of nefarious purposes. Also you uh there's malware that's on the ads, if you i- i- if you click on one of those, you're now impacted that way, uh and they may steal your credit card information. So you as a regular innocent consumer have now been detrimentally harmed for trying to watch one movie online.

Hmm. Thank you for that. And, Mister Chair, I'd like to enter I ask unanimous consent to enter into the record a statement from the Motion Picture Association uh before this subcommittee on this particular hearing topic.

Without obj without objection, so ordered.

Thank you so much.

And I wanna thank the gentlelady for her comments. Uh the the twelve hearings we've done um some have been clearly, many have been on IP, but the fact that this one focuses on piracy specifically I take note that I if I had to do over again, I'd have done more and I'd have done sooner. So, uh, uh, with that, I will recognize myself for my five minutes. Five minutes isn't enough to deal with all the issues we're dealing with. I think that's clear. So I'm gonna ask all of you to please revise, extend. Give us your thoughts. Uh, doctor, we'll take it all, eh, re- even though we couldn't have it all here. I wanna focus on a couple of things. Um, first of all, it is it is clear that we have some laws that the courts have found they're unable to uh use effectively and, Mister Moore, I'm gonna ask you a tough one, one that you may not have actually come prepared for. Um, in the uh the uh clear the clear correct case, uh the Fed Circuit Limited uh the uh the itc from enforcing essentially what we would be been talking about here they can't enforce that which comes in from outside the the country which is intangible um and i'm gonna ask you and then the others as we look to do site blocking and the other enforcements including and notwithstanding states that try to enforce federal law or contract should we be looking to empower organizations like the ITC and any other existing body to in fact have the ability to deal in this growing thing of intangible or non-physical property uh in a way that would allow for a broader enforcement of our laws. And I and I use that example because it is frustrating, most of us didn't know until that case,

that the itc can tell the customs to seize the fake dvd but they can't seize the incoming uh if you will fake product and when we talk about site blocking if the itc had that authority perhaps they already would have done and i'll start with you mister moore uh you weren't kidding about that being a tough question um so what i would say what i would say is this i think when you look at site I think a couple of things. One, putting aside the merits of the decision itself, right? If you are looking, my mind would go to what the remedy is. And so, in that sense, what would the ITC have to do to stop this? They couldn't issue an order in the abstract. They would have to find someone, an entity, and tell it, okay, you might not be doing this conduct, but you must cease enabling it. that is essentially where site that that is site blocking.

Sure.

Right? And so the question then becomes for us, the questions would become what the guardrails are and whether they're appropriate.

Absolutely. I I'm not gonna claim that ways and means and we wouldn't have a lot to do. But, Mister Francis, I'm gonna stay on this line because it's the one thing we didn't cover. The port of entry into America is Baltimore, Los Angeles, et cetera, Seattle, But the port of entry for products that are worth countless billions, literally trillions of dollars, in fact, today is the internet. Are we, to a great extent, looking at the customs process coming into the United States of cl- of product that has not been paid for a product that is in fact counterfeit? Are we looking at customs in the broadest sense having to be expanded to include intangible and it should that be the work of this and the other committees for the foreseeable future

yes mr. chairman i do think that the you know the non-tangible items have been a concern uh when i was even at the director of the ipr center uh that we didn't really focus our efforts there but i do think that there could be some legislative and uh enforcement frameworks that can be built around that to insure that we can do something beyond just the tangible items that we're seizing as reports of entry.

Quickly, Mister Fro- Floyd, uh, would you say that, uh, that in fact the problem is bigger than today's hearing and bigger than this committee's jurisdiction if we do that?

Uh, yes, it is a it is a massive problem. So, yeah, it it we're very happy that this c- that this committee is working on it, but it is it it it will go m- much beyond this, yes.

Mister Austin, you've been, uh, a superb witness And uh I'm a fan of your work before you had this job, but um you you mentioned uh support for deepfakes. Mister Moore and others have shown us some areas that where there could be some unintended prob problems. Is it your position that if we can find the solutions that meet the goal of deepfakes, that in fact you'd be equally supportive as an organization to that as long as we can get to it?

Well, I'll do you one better. I've been watching for three years, our team and the other incredible coalition work hard to meet every single one of these potential um concerns, with openness, with creativity. And so, you know, I mentioned YouTube, YouTube is a part of this coalition. OpenAI is part of this coalition. Is it complex? Yes, it's very, very complex. But they know they're r- As far as I'm concerned, the core, the essence of this no-fakes act is to protect people's identity. So, I've actually been reading and learning and watching some podcasts about all your laws and all these kind of, That's a different, that's a different lifetime. Um, but this sausage is coming together nice from my point of view. And so I, I, I feel like the group that's here and the group that you're working with will do it. And of course SAG after stands four square behind getting no fakes passed into law.

Mr. Moore, I'd like you to be able to close on on where you think we can get to the goal of deep fakes and other legislation uh and where the challenges remain.

I think the ch- when we talk about the challenges, I mean, I think um I list four, I'm gonna focus on two. Um, the first one is preemption. So what we don't want is a situation where the rights are uneven, um, and that leads to uncertainty both for individuals and for the developers of these tools, uh, some of whom are now the subject of state statutes that would purport to create standards for them. That should be, I think, in the domain of digital replicas, a matter of federal law. The second thing I would uh wanna mention uh is that for us, the counter-notification piece of this, which is uh, you know, I come back to uh something Mister Astin said before, in that there was a a situation where uh a friend of his uh had a video and he simply couldn't tell who the whether it was real or not. Um and I think of there are instances where there will be things that are real and we can't yet tell the difference. And so in those circumstances, we should take care to ensure that uh those particular instances of expression remain available as best we can.

That was good, succinct. Um, I understand that you have a unanimous consent. The gentleman is recognized.

Thank you, Mister Chairman, I ask unanimous consent to enter into the record a letter from the council for innovation promotion supporting the no-fakes act the shop-safe act and judicial site-blocking legislation without objection so ordered in closing this is in

Yeah

fact not our last uh and not this committee's last hearing on this subject hopefully though it will be the last one before some of this legislation begins to move i think that in fact people you've seen on both sides of this uh hearing

are close. Uh, the issues that Mister Moore i- uh, you know, mentioned are of great concern, but they do seem to be surmountable. I'm gonna make one closing statement, uh, rights of the chairman, if you will. This legislation is going to, if I have my way, move under my watch. It means that those who have said they're they're they're close, they're not opposed to it, but, you know, they want to we're gonna test that, which is that enough is known, language is being distributed on fi- on what we though believe is final uh compromises to get to legislation, and it's gonna be my intention, with the help of my chairman and old friend, Mister Jordan, that we will move it out of this committee. And I say so today because I think all of you have made the case that allowing this continued damage is simply no longer possible. I'm gonna further close by saying just one thing, which is I started in the era of protecting my trademarks. And I certainly understood that the standard for confusion as to source was all you really had to prove in order to prove that you had been infringed. It shocks me many years later, and Professor, you know the history of this, but that we didn't use that standard in the courts. Having said that, if the courts weren't willing to use trademark for likeness, then we will have to give them the authority and the mandate to do so. And that will be the goal of this committee. Cons- The part I have to say at the close is simply that we will have five legislative days, which with our current schedule could give you a lot more than five days, uh to accept additional statements here and questions for all of you, and then a reasonable time to respond. Will all of you agree to take those questions and answer them to the best of your ability?

Yes.

Thank you all. You've been very generous with your time. This committee, subcommittee stands adjourned.