Appeals Court Rules Against Mandatory Deposit

In a decision handed down today, The United States Court of Appeals for the District of Columbia Circuit has ruled that the mandatory deposit requirement under the copyright act, as it was enforced by the United States Copyright Office (USCO), is a violation of the takings clause.

The mandatory deposit requirement is covered under section 407 of the copyright act. It gives the Register of Copyrights, the head of the USCO, the authority to demand deposited copies of work published works and levee fines if those requirements are not met.

According to the USCO, they demanded some 27,847 titles from 2013 through 2019, with each work facing a fine of up to $250 if they are not submitted. 

This ended up being a particularly thorny issue for Valancourt Books, a small independent publisher from Virginia that specializes in rare, out of print and obscure books. 

In June 2018, the USCO sent a demand that that publisher submit at least one complete copy of some 341 books. When the publisher protested, the USCO reduced the number of books requested to 240, noting that many works were public domain.

However, Valancourt said that such a submission would still be onerous and teamed up with the Institute for Justice, a non-profit law firm, to file a lawsuit against the USCO, claiming that the requirement was a violation of both their first and fifth amendment rights.

Unfortunately for Valancourt, the district court ruled against them, finding that the law was constitutional and that the USCO acted within its rights. However, the publisher appealed that decision, with the appeals court now siding with them.

The decision specifically examined whether the deposit requirement, as executed by the USCO, was a violation of the takings clause of the fifth amendment, which prevents the taking of private property for public use without just compensation.

But, while this is a major win for Valancourt, it is probably best to understand that this is a limited decision that isn’t likely to significantly impact the deposit requirement. That said, it could still be important as it may force the USCO and lawmakers to reevaluate this antiquated practice.

A Big But Limited Decision

The logic behind the appeals court decision is fairly straightforward. Under the current copyright system, works are protected by copyright in the United States the moment that they are fixed into a tangible medium of expression. 

However, the deposit requirement is triggered by the publication of the work. This means that, the work already enjoys copyright protection when the deposit requirement kicks in. That means there is no benefit to the copyright holder in complying with the deposit requirement, other than avoiding the potential fine.

This presented a problem for the USCO, who had two ways to avoid issues with the takings clause. First, it could be presented as a voluntary exchange one where the publisher receives a benefit for participating, and the other would be to claim that the deposit requirement didn’t amount to a taking.

The first, however, was roadblocked by the lack of any meaningful benefit for compliance. The law makes it clear that copyright protection is not dependent on complying with the deposit requirement, so rightsholders gain nothing. The government attempted to argue that could just abandon the copyright, but owners are required to pay a $125 to register a notice of abandonment, creating a different cost.

With regards to the second argument, the USCO attempted to argue that they would accept electronic copies and that those were not a burden on the publisher. However, there were two problems there. First, at least some of the books had no electronic version available. Second, the original demands were for physical copies and the offer to use electronic ones only came about later.

While these issues caused the appeals court to rule against the USCO in this case, it also provided two separate paths for the USCO to avoid a similar judgment in the future.

The first was to demand electronic copies. The decision did not address if requiring electronic deposits would be allowed, only ruling that it was irrelevant in this case. The second was that providing a clear and cost-free way to abandon copyright in a work may have changed the outcome.

To be clear, we don’t if or how either of those changes would have impacted the outcome. However, the decision did indicate that they might, but that they were not relevant to this case.

In short, it’s likely that the way the USCO handles these kinds of demands will change as a result of this decision (barring an appeal to the Supreme Court). However, it likely won’t kill the deposit requirement in full. At least not yet.

The Bigger Issue

To many people reading this who are unfamiliar with the deposit requirement, this likely sounds completely insane. The USCO can demand publishers give them two physical copies of every book they publish for the Library of Congress.

It, along with the registration requirement (Section 408), are both antiquated holdovers from an older copyright system. They make no sense in an internet-first age and actively harm smaller rightsholders who struggle under the financial, technical and legal obligations. 

Is your website published or unpublished? That is a surprisingly difficult question. When is it acceptable to submit electronic copies, and when is it required to send physical ones? That is largely at the discretion of the USCO. These are just some of the challenges faced under the current system.

To prove how archaic this system is. It wasn’t until 2020 that the USCO created a process for registering blogs. That’s more than 25 years after the format first became popular. However, even that system is kludgy, outdated and doesn’t take advantage of simple, existing technologies that could make registration simple, if not automatic.

While the current ruling only applies to the deposit requirement, it exposes just how antiquated all of the current system we have is. Furthermore, it’s going to likely force the USCO to make changes in the way it handles this requirement moving forward, changes that will likely be very positive for publishers.

However, it’s also an opportunity to reevaluate the entire system. As pointed and limited as this ruling is, it shines a light on a very dark part of the U.S. copyright system. A part that doesn’t have any analogue anywhere in the world, and one that is hopelessly out of date and out of touch with the needs of modern creators.

Hopefully, this ruling will be an opportunity for a deeper reflection on the system and present an opportunity to either reform it for real, or get rid of it altogether.

Bottom Line

In the end, the most likely outcome is that the USCO will make minor changes to how it handles the deposit requirement and that will be it. It’s doubtful that this opportunity will be taken.

The reason is that the large stakeholders, including major publishers, record labels, movie studios and so forth, don’t find the system onerous or problematic. It’s smaller creators who don’t know their obligations, can’t afford to comply with them or simply can’t navigate the systems who are primarily hurt.

Valancourt was unique in that they are large enough to earn the ire of the USCO, but still small and niche enough to face serious harms from compliance. They were the perfect candidate for this test.

While it would be great if this led to a larger evaluation of both the deposit and the registration requirements, it’s just not likely. 

So while this is a major win for Valancourt, don’t expect it to become a major shift for either requirement. Simply put, the decision didn’t look at the registration requirement at all, and the likely changes to the deposit requirement are likely small at best.

Without some kind of major push or shift, it’s unlikely that this decision will do anything to improve the lives of most content creators, even large ones.