Hearings to examine oversight of the U.S. Copyright Office.

This hearing will come to order. And uh welcome to everyone. Strong copyright protections encourage the creation of content which employs vast numbers of US citizens. This in turn leads to continued economic growth of our country and helps to solidify the United States as the world's cultural leader. According to one report, the contributions from all copyright industries added over three trillion dollars to US GDP and employed over twenty-one million workers those are staggering numbers. Without strong copyright laws, our favorite books and songs would likely never have been created in the first place. Thus, we must do everything in our power to ensure that strong, clear, reliable and predictable IP rights remain central to this country. While I'm extremely proud of the work that we've done in the past to strengthen copyright more needs to be done. We must press forward and continually iterate to ensure that our IP system remains strong, clear, reliable, and predictable. Because of the unfortunate reality because the unfortunate reality is that our nation's copyright system is under assault from adversaries both foreign and domestic. That's why I've partnered with Senator Coons, Blackburn, Schiff, and Representative Lofgren on draft legislation that would target foreign-operated web sites, which are dedicated to piracy. I've also partnered with Senator Schiff, Blackburn, and Coons on draft legislation that would target bad actors who create unauthorized and illegal live streams of live events and distribute those streams. And then there's AI. With the proliferation of AI, we should do we would do best to remember that there would not be anything to ingest for the training of AI models if it had not been for copyright law, which has encouraged the creation of content, content often created primarily here in the United States. And while there's no question that the US is in an AI race with China, the US should not be in a race to the bottom. Such a race would only weaken the very IP rights that have made the US an innovation and creation powerhouse. A careful balance must be struck between those training and creating AI AI tools and those creating the material which fuels those same tools. I look forward to the discussion today, but before I introduce the witness, I'll now turn to my ranking member and colleague, Senator Schiff.

Thank you, Mister Chairman, and and thanks for your incredible leadership of the subcommittee. It's really a privilege to work with you. Uh, Register Perlmutter, it's uh wonderful to see you again. Thank you for being here. Although the subcommittee holds this oversight hearing of the US copyright office every Congress, it's more important than ever that you come to Congress to underscore the unique and vital role that your office plays as a centralized independent administrator of our nation's copyright laws. The Copyright Office provides a critical bedrock of support for creators of all sizes, including millions of creators across my home state of California. The independence of this office is an important constitutional safeguard that ensures our copyright system remains focused on promoting human progress and ingenuity. Furthermore, this independence protects the unique functions of the office, from administering the Copyright Act and registering works to advising Congress through comprehensive reports and more. I want to touch on a couple topics that are of key importance to creators in California and across the country. First, from film sets to recording studios to local newspaper offices, the rapid rise of generative AI has created both incredible opportunity as well as significant anxiety. The role the Copyright Office has never been more critical in ensuring that protections for creators keep pace with technology. We have watched as AI models are trained on vast troves of copyrighted data, often without the consent or compensation of the original owners and authors. Creators are rightly concerned about whether their life work will be used to build systems that will eventually serve as market substitutes for the original authors. Creators are rightly concerned about whether their work will be uh used in this way and without any remuneration. This is a topic many in Congress care about, and I'm proud to have introduced the CLEAR Act with Senator Curtis to ensure creators have adequate transparency when their works are used to train generative AI models. Without this transparency, creators are left with very few options to protect their works. Beyond AI, rights holders are also continuing to face the persistent threat of foreign-based digital piracy, which drains billions from local economies. Digital privacy in the streaming age is no longer just a minor nuisance. It is a sophisticated two billion dollars a year global industry that costs the US economy hundreds of thousands of jobs and harms consumers alike. Because many of these operations are based outside of the reach of US courts, our traditional enforcement mechanisms are hitting a brick wall. That's why I'm really proud to team up with the Chairman uh as well as Senator Coons and Blackburn, on a legislative solution to allow for no-fault injunctions. Over forty countries have already moved in the direction to protect their creators, and it's time we discuss how the US can implement similar protections while maintaining robust safeguards for free expression and due process. Lastly, I look forward to hearing about the Copyright Office's modernization efforts to ensure creators and operations of all sizes can protect their livelihoods, whether it's the Copyright Claims Board, providing a streamlined alternative for small claims, disputes, or the long-awaited launch of the electronic copyright system, I'll be very interested in your office work to ensure there's no barrier to entry for copyright protection. Uh, thanks again, Mister Chairman, uh, for all of your work on the legislation, uh, as well as, uh, holding this hearing, and I yield back.

Thank you. Miss Perlmutter serves as the Register of Copyrights and Director of US Copyright Office. She was appointed in October of twenty twenty. Miss Perlmutter advises Congress and and the executive branch agencies on copyright policy and leads a workforce of nearly five hundred employees. Prior to her appointment as Register, Miss Perlmutter served as the Chief Policy Officer and Director for International Affairs at the US Patents and Trademark Office. And I I want to add to this, Miss Perlmutter, you've been remarkably accessible over the course of time that I've been in this position, you've been in yours, and we

I do.

May be seated. And begin your opening statement. I'm so happy I'm in the sixth and I'm really excited. Thank you to all of you who have helped us all throughout the

Of the US Copyright Office. On this fiftieth anniversary of the Copyright Act of seventy-six, it's an auspicious moment to take stock of how copyright and the Copyright Office continue to evolve. The office has provided its services for over a hundred and fifty years in the Library of Congress. We do so with a modest budget, and a dedicated staff of now about four hundred and fifty, significantly fewer than in nineteen seventy-six. When Congress enacted the seventy-six Act, it sought to make copyright law fit for the late twentieth century and beyond. The office played a critical role in drafting the act. Over the past fifty years, we've continued to advise and serve Congress, which has assigned us more responsibilities as both the copyright ecosystem and the statute have grown in complexity. These responsibilities now include operating or overseeing systems created by Congress in recent legislation, specifically the Copyright Small Claims Tribunal and the blanket compulsory license for musical works. We have also added an in-house economic research capability. To start with law and policy, one big success story has been the creation of the Copyright Claims Board providing access to justice for copyright small claims. The office submitted a report on the CCB's first three years of operations to Congress in February. We found that it had been working well, with growing demand for its services, but noted concerns about the length and complexity of proceedings and recommended some targeted amendments to the case act. The twenty eighteen Music Modernization Act tasked the office with designating the two entities that administer the blanket compulsory license. periodic review of those designations and will issue our recommendations soon. A major policy focus has been the issues raised for copyright by generative AI. The office launched a comprehensive AI initiative in twenty twenty three. After reviewing more than ten thousand comments from the public we issued a report in several parts. Part one addressed unauthorized digital replicas and concluded there was an urgent need for protection at the federal level. Part two addressed the copyrightability of AI outputs and outlined the human contributions that can qualify as authorship. In fact, the office has now registered more than seven thousand claims that incorporate AI-generated materials. Part three addressed the use of copyrighted works in training generative AI systems, concluding that the acts involved are likely to qualify as fair use in some circumstances but not in others. We look forward to assisting Congress as it considers AI-related topics that touch on copyright. In my written testimony, I identified certain additional topics as ripe for legislative action. The office has been and remains available for technical assistance on any of these. We're also in the process of adjusting our fees. Since we last did so in twenty twenty, the cost of providing services has increased significantly, in part due to inflation. We've proposed a new fee schedule that would allow recovery of a portion of our costs, closer to historical levels, and are now reviewing the comments. As to our administration of the copyright act, the office offers a variety of services, including registration, recordation, and education. My written testimony provides the recent statistics, which reflect strong demand and consistent production. Before the lapse of appropriations this past fall, Registration processing times were at historic lows. We expect to reduce them again in the coming months. The ongoing modernization of the office's IT services remains a top priority. We're committed to making regular updates to avoid again having to overhaul legacy systems. But budget uncertainties may impact timing. Development of the enterprise copyright system, ECS, is our primary project. I'm pleased to report that three of its four components are now in production and use. The fourth one, registration, is the largest and most complex. It will replace the existing on-line system, which is almost twenty years old. The office has worked with the library's chief information officer to reallocate resources so we can accelerate development. Finally, let me mention the budget. The office has been operating with basically a flat budget for two years. This year we are requesting funds to catch up with inflation and other cost increases. We anticipate that additional resources will be needed in fiscal twenty-eight to enable delivery of the full ECS on our planned timetable. I'd like to close by stressing that the Copyright Office plays a critical part in supporting the American economy and culture. We appreciate the subcommittee's continued support of our work, to benefit the creative community and the public. to serve Congress and to further the constitutional mission of promoting the progress of science and useful arts.

Thank you, Miss Perlmutter, you may wanna copyright that opening statement because from the time that you gave it to the time you finished it you ended up packing the room with young people who I'm sure are here to uh to uh hear all about intellectual property, but uh for whatever reason you may be here, uh thank you for joining us today. Um, this is a problem where a web site is clearly dedicated to copyright infringement. But located abroad and beyond US jurisdiction, does the DMCA framework provide a truly meaningful remedy to protect American creators?

I think that the DMCA, uh, while very useful for many things, has not proved sufficient to deal with that particular problem.

So this is gonna be a no.

That would be a no.

Okay. Can you speak about the harm to the public caused by large-scale commercial foreign piracy sites and the harm of piracy more generally?

Yeah, well, of course, every member of the public these days who uses the internet is a creator. And so first of all, as a creator, they the members of the public stand to lose from infringement uh without compensation. Uh, but more broadly, what happens when you have that level of piracy is that it undermines incentives to create, it it uh gives an incentive not to make content available online, uh and at the end of the day it means that the public will have less access to as much high quality content uh from safe locations where they don't risk malware and other problems uh and in uh various distribution mechanisms of their choice so in the long run it hurts the American economy and As I think uh Senator Schiff alluded to that uh there's data out there that assigns some numbers to what those losses are. Uh so there are many different levels at which the public can be hurt as well.

Um have you had an opportunity to review uh Blockbeard uh or have your staff? It's a bill that we put together with uh Senator Schiff, Coons and Blackburn. And uh what are your what's your um uh assessment?

Yes, we have reviewed it, uh have been available to provide technical advice and comments on the language. Uh, I think that the time is ripe to move forward on this type of uh remedy that would allow for no fault injunctive relief. Uh, it's a way to make sure that uh infringement is curbed without having to assign liability, and without the risk of large amounts of damages.

Um, are there any areas uh that you all would say, you know, I we've talked before in the red, yellow, green category, is everything more or less in the green or do there are other things we should talk about to tighten it up before we may have an opportunity to move it.

Yeah, that's a good question. I would be happy to get back to you with more details. I think what's really important, I know the legislation does do this, is to make sure that there's adequate safeguards built in against the blocking of legal content and to ensure due process. I believe the legislation does that and I'm happy to engage further on the details.

Okay, I I think it's a good step forward, I'm a little

Thank you, Chairman. I just wanna follow up on your questions. Um, can you tell us the experience of other countries that have used those no-fault injunctions, uh, how they've been successful, how they haven't, uh, anything that you would improve upon in terms of what other countries are doing?

Mm.

Well, of course, different countries are doing somewhat different things. Uh, and as, uh, you pointed out earlier, we now have over forty countries internationally who have no fault injunctions in one form or another. I think what has well, first of all, I should say, uh, three years ago we looked at, uh, the evidence and the studies and found that work done by academics, by governments, court reviews, uh, everything indicated, and the private sector, all indicated that these injunctions could be very successful in curbing infringement if they were applied appropriately and broadly enough. Uh, I have not seen anything that questions that, uh, so we are convinced that they are helpful. Um, as to what made them work or not work, I think what was critical is to give the courts some discretion and ability to balance uh uh the interests on all sides in terms of the scope of the injunction and when it was appropriate and also an appropriate definition of what kinds of web sites we're talking about, foreign web sites, primarily dedicated to infringement. So it should not sweep up those web sites that are just multi-purpose uh sites.

And is there adequate provision i uh in those other models for a situation where a pirate site simply changes its domain, moves one uh web page to another? Um, do the court orders have enough fluidity to flexibility to travel the internet and uh enjoying them wherever they move.

Yes, I think those are in in effect the new and updated and improved models for no fault and junctions are those that uh are dynamic and are able to ensure that it's not just one site allowing uh the uh infringer to move from one place to another at will.

Um one thing that I I think is fascinating and I think you're trying to strike the right balance here is to what degree do the copyright laws protect the output of AI.

Mm-hmm.

Um, and requiring a substantial human component, not enough just to ask prompts, but but more engagement than that. Um, does that mean, as the consequence of that, that if a studio, for example, were, or an individual, were to produce an entire, let's say, animated film, where the story was written by AI, all the graphics, the action, the um, the different, uh, animation technologies are all driven by AI, that, and put that film out in theaters, that it would have no protection whatsoever.

I think it's unlikely in that circumstance that there would not be human contributions that might qualify as authorship. It's just a question of, uh, what they would cover within the film. So the components that were entirely generated by AI would not be protected by copyright. But what we've tried to uh elucidate is that if you have a human that selects, coordinates and arranges uh the outcome, the output, that that can be sufficiently creative uh to to qualify.

But it it is and I would imagine if it's a studio, they'll make sure they have enough human input, whether it's needed or not, to qualify. But um but does that mean though that if I used AI to write a movie, produce the movie, developed the animation, the the and I put it out that others could put it out at will because it would have no protection.

Probably those portions of it that did not involve the human contribution could be copied from a copyright perspective. There might be other bodies of law, contract law, trademark law, that might also come into play.

Um, how's the copyright claims board working? And uh And what can we do to make it even more effective and efficient and uh accessible for people?

I have to say I I in many ways think of the copyright claims board as being uh a miracle that it came into being so quickly and so smoothly uh it's been working very well uh the decisions it's final determinations have been hailed as being reasonable and appropriate uh and thoughtful uh we have a panel of really fantastic uh officials. on the board, uh three of them, uh a copyright claims officers, um and what I find particularly uh persuasive is not only that they've issued excellent decisions, uh and within and with very appropriate and reasonable amounts of damages, but they've also uh facilitated a lot of settlements, both those we know about and those that we don't necessarily get reported to us. They've also incentivized licensing and private negotiations, and perhaps the most important, they've uh, I would say, greatly enhanced respect for copyright because the existence of a forum where rights where claims can be litigated practically as a practical matter, uh, means that copyright rights are meaningful in a way they weren't necessarily before. Having said that, we did identify a number of ways in which the system could be improved to make it faster, and less complicated. And uh we would be delighted to work with you to uh look at legislative language to take that forward.

Thank you.

Senator Blackburn, you earned the uh Timing Award today, you're recognized.

Awesome. Uh we like winning the Timing Award and it's very timely that you're in front of us, and thank you again for the time that you spent with me a couple of weeks ago. I appreciate it. As you know, with all of our creators in uh, Tennessee, and our patent holders, copyright holders. Uh, the work you do is really so incredibly important. And you and I discussed the work I've done on creating one rule book for AI.

Mm-hmm.

And of course, the discussion draft is out on my Trump America AI act, which really responds to the president's executive order. to bring together the necessity for that one rule book and to put in place protections for what I call the four Cs, which are children, creators, communities from high electric rates and job loss, and censorship that gets um and the bias that is in the training for a lot of these LLMs and of course, you know, um you all have been so supportive of the work that Senator Coons and I have done on the no fake side. And getting this on the books and we are uh really pushing for Senator Grassley to get that marked up at committee. So we can get it moved forward. But I'd love for you to talk for just a moment about why it is important to have that one rule book when it comes to AI and why it is imperative that we get some guardrails in place.

Yes, thank you, uh, Senator. And, uh, I I will only speak to the copyright issues since I am not an expert in the other three Cs.

That's right. That's right.

Um. I think it is, uh, it it was critical a year and a half when we ago when we issued part one of our AI report to move to protect at a federal level, to have good, strong, consistent protection against the unauthorized distribution of digital replicas. I think people are being harmed every day by that, economically, personally, uh, reputationally, uh, so uh, we absolutely applaud the work that's being done in that respect. And I know another big part of uh the proposed legislation

Mm-hmm.

uh deals with transparency and enabling copyright owners to know when their works have been used to train AI systems. I think that's a critically important goal because without that knowledge, it's very difficult to either be able to enforce rights or to be able to license rights. So, uh, I definitely applaud, uh, those, uh, portions of the bill. Thank you.

And, uh, speak for a minute about fair use when it comes to music, because in, uh, Nashville we refer to fair the fair use doctrine doctrine as a fairly useful way to steal my music. And that is the way so many um have looked at it and i- then you look at um the the Warhol case the Supreme Court took up and the judgment there went in favor of the photographer who took that first picture. which was a big win and kind of gives us precedent. So talk a little bit about the some of the work you all have done with fair use.

Well, in the AI context, I think uh the comments we received from the public very much agreed that fair use was the right way to assess uh the legality of the use of copyrighted works in AI training. They of course disagreed completely on how fair use applied. Um and in our in part three of our report we concluded that some in some circumstances uh the ingestion of copyrighted works could be fair use and in some circumstances, they were likely not to be. Um the value of fair use of course on the one hand is that it lets you take into account all of the circumstances. So we identified in particular was the source legal or was it pirated? Uh were there guardrails to make sure that the output didn't include copyrighted what exactly is the purpose of the use, how transformational is it, and then what is the impact on the market. Uh, so the beauty of the doctrine is it allows you to consider all of these things. The negative is that it is not entirely predictable. And right now we're seeing the courts struggle with that. We're getting some diverse uh opinions, judgments being made on the basis of different factors, and so we will have to see where the courts go with that. Um.

Great.

I do think it's important to recognize that uh this is a nuanced issue, like in what circumstances, if you're using copyrighted content in training in order to produce something different or in order to do research and analysis, there is a strong fair use case.

Right, looking at that in use I think is vitally important,

Mm-hmm.

and that comes to bear whether it's photographs or art or music or publications, uh beginning to look at that, you know, in December Senator Welch and I introduced the Visual Artist Copyright Reform Act,

Mm.

because so few of our photographers actually use the register. And uh I know that is something that you and your office are trying to fix. And we appreciate the efforts that you have made there. So thank you, Mr. Chairman.

Thank you. Senator Rona.

Thank you. Um I find the b the discussion about fair use really um interesting and oh, by the way, it's nice to see you.

Thank you.

We have an expert in front of us. So as I was listening to your your discussion on fair use, would you say that we should still leave it alone or leave it alone for the courts to continue to develop the case law around fair use? As opposed to trying to come up with legislation that better

You know

provides guidance?

Yeah, it's a very good question, because obviously it will take a long time to get clarity on fair use. It might take a Supreme Court decision eventually if the courts continue

Mm-hmm.

to look at different issues and possibly go in different directions. On the other hand, I think it's very difficult to legislate in this area and to come

Mm-hmm.

up with legislative language that captures the relevant nuances What I find very encouraging is how much uh licensing markets are developing in the interim. And of course licensing is a very good way to avoid the uncertainties of fair use. So in a sense uh that continued process in the courts is

Mm.

incentivizing uh discussions among uh the interested parties.

It thus sounds as though we should kind of let let things develop without uh legislation. I do have a question um about um the fact that uh President Trump tried to um illegally fire you. You don't need to discuss the case et cetera. I I realize that uh that's not something you can do, but can you h can you speak about the value rooted in a long history of the copyright office being within the legislative branch as opposed to the executive branch?

Yeah. Uh th thank you for that question. Um obviously the copyright office has been in the legislative since its inception, we're talking about more than a hundred and fifty years now. Uh, and I think the value that we've seen is first of all our role working with the Congress as a as non-partisan apolitical experts and I think that's been very important and very valuable uh we produce multiple deeply researched reports every year, uh and provide technical assistance uh informally and formally. Uh second, because of our location, uh, we have a very close relationship with the Library of Congress, and part of that is the fact that it's a natural home for copyright, given the overlap in our missions. Our mission is to promote creativity and to, uh incentivize the creation of more expressive works, and the library's mission is to preserve culture and knowledge, uh and so it's a very good fit. uh we also make major contributions, the copyright system makes major contributions to the collections of the library, uh approximately over time approximately a quarter of the collections come from the copyright system uh without the need for Congress to appropriate that money to the library for purchases uh and then I also would say the system has just been working well um we are very productive we are accomplishing a lot, especially given the size of our office and our budget um and any change that would involve moving the copyright office elsewhere would inevitably result in additional cost and disruption.

I um I agree with you. I think that uh the copyright office should remain within the library of Congress. Uh the Supreme Court made a uh issued a a decision relatively recently in March, Cox v. Sony, and uh they severely narrowed the secondary liability in the context of copyright law. And um Justice Sotomayor issued a concurrence wherein she said it upends the statutory incentive structure that Congress created. Can you just briefly go over uh the balance that Congress struck in the DMCA, and whether that balance survives Cox v. Sony?

Yeah. I think it's fair to say that Cox v. Sony did change the landscape dramatically for secondary liability in the copyright space. And regardless of who one thinks should have won, uh it is a significant narrowing of potential secondary liability. Uh it remains to be seen how lower courts will interpret and apply it, uh but it will take some time again uh for that to become clear. And meanwhile it has definitely altered the incentives uh for online service providers uh to take steps to curb infringement, and that's what the DMCA was intended to address as well.

Mm.

Um, we've already seen some effects from this, some lawsuits that have been withdrawn, some uh negotiations that have stopped. Um and in my view there m maybe uh this might be an appropriate moment for a legislative response. Uh the question is what that should look like.

Mm-hmm.

And I will say uh while one possibility could be to codify the doctrine of contributary infringement, uh another possibility is to directly address specific context of online infringement and cooperation from service providers. And that could be done in part through the tailored approach of no fault injunctions.

Thank you. Thank you, Mr. Chairman.

And thank you for bringing up that point, Senator Rono. That was gonna be one of the next questions I ask. I have a few more on the subject, but now I will turn to Senator Welch.

Uh, thank you very much, Mr. Chairman, and I wanna commend you and your staff for doing a very good job in stabilizing things, uh, and improving things. So thank you very much for that. Um, I have a couple areas where I wanna talk about the train act, I wanna talk about high um uh volume artist fee adjustments and also the right to repair. Uh, first of all I speak to you as a senator from Vermont, which is uh, as you all know, is the music capital of the world. Uh, Noah Kahn, Noah Kahn or Noah Kahn in uh uh Stratford, Vermont, uh, home of seventeen hundred other souls, Fish and Burlington. Grace Potter and Mortown. So I've got my plug in. But here's a concern they have. Uh the TRAIN Act, which uh uh Senator Blackburn and I introduced, is about having copyright uh enforcement for people whose works have been utilized uh in large language models. And what it would do is uh create uh a good faith opportunity for people to get information get a subpoena uh to determine whether they're um work has been used uh in a it has been used and them not being compensated. Do you have a point of view on the train act and what it's intended to do?

Well, definitely uh I support the idea that we need transparency uh for copyright owners to be able to know when their works are used. Uh the train act seems to me to be a a very creative idea of how to go about doing that, and it is uh similar in some ways to approach being discussed in France right now. Uh, I think we should consider all options on the table. The issue has been, uh, in many of these areas, if you require, if you just on its own require disclosure, uh, how much detail needs to be disclosed. And that's where a lot of the debate has been.

Right, but absent the ability

And the Trade-In Act represents an alternative approach.

But absent the ability of the artist to actually get information about the use of her or his product, they basically lose any protection that copyright is intended to provide, correct?

Yes, I agree that this needs to be dealt with.

Okay, thank you. And then the high volume artist, I think uh Senator Blackburn asked you a question about this, but uh that oftentimes is the photographers and you and I, when we spoke uh you mentioned the work you're doing there, perhaps you could just on the record go over that again.

Yeah. Uh, we're very aware that photographers uh, visual artists, but especially photographers are among the groups that have the most issues with being able to register effectively. And the office over the years has done a number of things to try to ameliorate that for them, uh going way back to when we first established group registrations for photographs. Uh in two thousand we established an on-line group registration for up to seven hundred and fifty photographs in one application. Uh but we know that that's not enough uh for what

Right.

photographers do today with the technology they have. So we've done a number of things. Uh, first of all, the establishment of the CCB was something that photographers very much wanted, because it is very difficult for them for it to be cost-effective for them to go uh initiate federal litigation in court. So that was a big step forward for photographers.

Okay.

Uh

I'm gonna interrupt cuz I have one other question, but I just wanna thank you, cuz that does appear to be responsive and user-friendly, and we've gotta protect those artists and make what is a very, very difficult oftentimes financially unrewarding occupation within reach for people who do so much for us. So thank you for that. Another topic was the right to repair. Uh,

Mm-hmm.

one of the concerns I've had is that farmers these days, uh, no longer can fix their tractors. They, uh, are under, uh, per uh prohibitions from the tractor companies. And if there's anything that farmers do well, it's fix things. And it's estimated that the farmers lose about four point two billion a year three billion to tractor downtime and one point two billion in excess repair costs. Now it may seem odd that I'm asking you about right to r uh repair, but I understand that you're involved in the right to repair with respect to how copyright uh has an impact on it. Could you elaborate on that?

Copyright uh ends up being a very important part of right to repair because uh so much of the machinery and technology these days is software enabled and software is protected by copyright. and the law makes it illegal to circumvent uh technical measures used to protect copyrighted works like software. So copyright does get implicated. And over the years in the triennial rulemaking uh that we operate for the Librarian of Congress, uh we have recommended and the librarian has adopted various exceptions to allow the repair of machinery. Uh we believe it would be that the time is ripe uh, for Congress to consider making some of those exceptions permanent, including uh for repairing farm machinery.

So this is a m a tractor, for instance, that you might buy for these can be a half a million dollars, and all it would allow would be the person who bought it to fix it.

Yeah.

Well, I appreciate your cooperation on the right to repair and giving s the consumer, the person who paid the big price, the opportunity to keep that equipment going without all this downtime and expense. Thank you. Uh, Mister, uh, Mister Chairman, I yield back.

Uh, thank you, Senator Welch. Uh. Senator Schiff and I were, you you prompted me to initiate a discussion with Senator Schiff cuz I would assert that North Carolina is the movie capital of the world. Um, uh, I think Senator Coons is coming along and I have a a follow-up question. It's a it's uh related somewhat to the discussion you had with uh Senator Hirono. You know, I've heard uh, let's just let the court settle it thing. Um, but it's one of the reasons and, uh, for pair. Uh, one of the reasons why we're pushing something not related to you, but patent eligibility. The courts did opine on a lot of stuff and now we're trying to aggregate it. And so I'm gonna come back after I turn to Senator Coons and ask you some follow-up questions on how we should handle the some hundred court, uh, cases pending right now. Senator Coons.

Thank you very much, uh, Chairman Tillis, Ranking Member, uh, Schiff, it's great to be with you again, uh, Register Perlmutter. Uh and thank you for your service and for everyone who works in the corporate office. Um I know there's been conversation while I've been at another hearing on this topic, but I think it bears a re-examination about digital piracy and no fault injunctions. Um the ready availability of copyrighted material on foreign web sites for piracy is a huge problem for America's creative community uh and I introduced a bill last summer with Senators uh Tillis and Schiff and Blackburn um called the Blockbeard Act. Um, tackling this issue with no-fault injunctions, and I appreciate your office's feedback and engagement as we work to advance this bill. Um, we've been working on this quite a while, and I'm eager for us to reach a conclusion. Uh, one thing I've heard from opponents is that site-blocking orders can be too broad, um, arguments that the orders block access to lawful content and restrict free speech, or that orders are issued without sufficient due process or public notice and engagement. Your office has generally been supportive of site blocking. What would you say in response to those critiques? And are any of our peer countries, in your view, striking the right balance between protecting and promoting free speech and protecting creators?

Yeah, very good question. I think those are the key questions. How do you avoid both of those problems? Uh and I believe a number of countries have done so effectively. Uh I would point to the UK, which was perhaps the first country to Um and I think what's key is to have the courts have some discretion and have uh the ability to balance uh the interests at stake and to tailor the injunctions appropriately. Uh if that's done and if the type of website that can be targeted is appropriately defined, to be those that are, I I don't wanna uh limit myself to specific words here for legislation, but those that are primarily dedicated to infringement,

Right.

uh then I think you avoid uh most of that problem.

So if you focus on um web sites whose principal purpose is commercial benefit from piracy of copyrighted material, you think we strike the right balance.

Yes.

Thank you. I I hope my colleagues agree. Um fees, um something I've been very attentive to is the ability of both the Patent and Trademark Office and the Copyright Office to set their own fees. You just published an NPRM notice of proposed rulemaking, proposing increasing copyright fees by more than forty percent, in some rare cases more than two hundred. Help me understand why those are necessary and what those fees would be used for.

Mm-hmm. We last raised our fees six years ago, based on ten year old data about our costs. Uh, under the statute, um, the register may adjust fees after doing a cost study. uh not above the actual cost but can include uh inflationary and cost increases. So that's essentially what we're doing. What happened

A salutary capability that I hope we can also extend to the Patent and Trademark Office.

Uh we're in a slightly different position because we've never been entirely fee funded for a number of reasons, uh but in recent decades we've been approximately sixty percent fee funded, forty percent appropriations. What's happened now over the last six years, cause of inflation and cost increases especially for IT uh related work. Uh we're now at forty sixty, so we've reversed uh the percentage, so we're proposing numbers that would get us back closer. And that forty three percent is an average, so what we did is to say about thirty three percent is what inflation has been over the last six years and then we adjusted for three years of estimated inflation into the future. But then we uh, tweaked numbers a bit so that individual creators would pay less of a percentage increase than uh corporate entities. Um, I'm I'm simplifying a little bit, but that's essentially what we did. And the problem is if we can't increase the fees by something along these, this line these lines right now, we're going to need to seek a greater percentage of our funding through appropriations. So that's the situation we find ours ourselves in. We're trying to be good stewards of the public money. Um, and I will say a standard application, uh, the proposed fee would be eighty-five dollars. That is still way below other government fees, like for example for getting a passport or for registering a single class of trademark.

Yes, I do. I have one last question for you if I might.

Sure.

Um, I was a cosponsor of the case act that helped, uh, create the copyright claims board. Um, now it's been up and running several years, your office just issued a report about the CCB. How is it working in your view? why so few cases to a final judgment, and are there a few legislative fixes you'd like to point us towards?

It's working well, and uh we're getting an increasing number of cases coming in, steady increase, not overwhelming. Um, it has managed to issue very good reasonable decisions, uh it has incentivized and facilitated settlements and negotiations and licensing and really helped improve respect for copyright, uh around the country. Um I there are issues uh that were probably unforeseen. There was a lot of concern about making sure we built due process safeguards into the act and it means a lot of time lag because each step takes a couple of months. So a lot of claims get made that are not within the CCB's jurisdiction, have to be examined three times with uh multiple opportunities to amend. Uh I won't go into the details, but we've proposed a number of ways to make uh the process more streamlined, quicker and simpler, which should also make it easier for the board to get to the merits of uh appropriate claims.