Letter to Texas Senate on S.B. No. 1960

AI and Personhood
AI technology, particularly generative AI, also raises questions around the integrity of an individual’s likeness and voice that have particular resonance in the music industry. DIMA members have nothing to gain from deceptive music in their supply chain and believe that those who would falsely capitalize on the creative identity and expression of the artists their customers love should be held accountable. Accordingly, DIMA supports appropriate safeguards to protect an individual’s personhood and is committed to working toward solutions that ensure such protections in the age of AI.

At the same time, we have significant concerns with S.B. No. 1960, and we urge the Committee to proceed with caution so as not to inadvertently disrupt the AI technologies that are already being deployed successfully throughout the industry, or the balance with creativity and protected speech that any policy in this area must seek to strike.

Concerns and Approach
We are concerned that S.B. No. 1960 would create legal and creative uncertainty, including through introducing new and ambiguous terms, would increase barriers to entry for new competition, and would have a chilling effect on the current operation of audio streaming and its future growth.

In particular, we are concerned that S.B. No. 1960 could ultimately discourage speech, creative expression, and innovation, while imposing devastating damages and significant (and potentially unworkable) commercial burdens on businesses. We have described our concerns in more detail below.

Catastrophic Damages & Liability
S.B. No. 1960 includes potentially astronomical and catastrophic damages for online services. Music streaming services would face statutory damages of $5000 per violation, in which a violation is defined as each transmission of the work. A single work transmitted 50,000 times (a relatively low volume, given the massive volume of streaming), could generate $250 million in statutory damages, even in the absence of actual harm. This would jeopardize every single streaming service that operates today and would encourage an onslaught of meritless claims and frivolous litigation. Notably, damages under the U.S. Copyright Act are measured per work, not per violation. We believe any damages should be limited to actual damages. If the legislation
continues to carry statutory damages, they should be measured per work, not per violation.

Focusing liability primarily on the distributor of music to the consumer raises concerns. The music supply chain is complex, and most music streaming services do not receive music directly from creators. Instead, there are other intermediaries not contemplated by this legislation that may be in a better position to identify and remove violative digital replicas as they have a direct relationship with the uploader. Any legislation in this space should recognize the inherent complexity of the music ecosystem.

Vague Definitions & Liability Concerns
In its current form, the definition of replica in S.B. No. 1960 is ambiguous and could be broadly interpreted in a manner that would lead to frivolous lawsuits. To avoid this outcome, the definition of digital replica should be tightened to make clear that a replica is a likeness that a reasonable person would believe is only of that particular, actual individual.

Further, to avoid self-imposed censorship due to potentially ruinous liability, all services should have the protection and incentive of a notice-and-takedown safe harbor.

Exceptions to liability should be consistent with the rights granted by the Texas Constitution and the First Amendment of the United States Constitution. As drafted, however, the legislation purports to narrow those rights.

Unworkable Commercial Burdens
S.B. No. 1960 establishes obligations for companies to filter content in a manner that is not widely commercially or technologically feasible. In addition to requiring significant resources to attempt to build and implement new filtering technology, even if this technology did exist on a broad scale, appropriately balancing filters to recognize satire, parody, and First Amendment activity, and other exceptions has not yet proven feasible on a broad scale. Requiring removal of content in “all instances” would impose impractical, and potentially impossible, burdens on businesses and risk significant stifling or chilling of speech because companies would have to over remove content to comply with the terms in the bill. In some circumstances, online distributors may not be able to remove content from third-party applications or accounts, and the disproportionate liability in the legislation could force, for example, an App Store to remove an entire news application when only an article is purported to contain an unauthorized digital replica.

Inconsistent Post-Mortem Rights
S.B. No. 1960 deviates from Texas’s current post-mortem Right of Publicity Statute. Existing Right of Publicity law applies to uses “in connection with products, merchandise, or goods” or “for the purpose of advertising, selling, or soliciting the purchase of products, merchandise, goods, or services.” It seems only appropriate for this new digital replica right to mirror existing provisions, but the pending legislation fails to do so.

Other Issues
While we are supportive of requiring a reasonable description of uses in licenses, as laid out in the legislation, it is important that the legislation should not otherwise limit the freedom to contract.

We also believe that actions under the legislation should only be brought by an exclusive rights holder, not non-exclusive licensees.

Finally, crafting legislation that establishes technological mandates that only a handful of companies are capable of complying with will chill innovation and lock out future competition. This is particularly true when the damages for noncompliance are potentially catastrophic.

Partner for Solutions

DIMA’s members invest significantly to ensure their services provide quality content that fans and consumers want to hear. As such, DIMA and its members are aligned with the goal of seeking to protect an individual’s personhood, including their voice, from unauthorized replica or appropriation by bad actors that seek to create content that can confuse consumers and strip individuals of their identity, livelihood, and creative expression.

Our members care deeply about protecting the integrity of the music ecosystem and stand ready to serve as a resource to the Committee as considerations continue. We look forward to ongoing discussions with Committee members and appreciate your attention to this matter and to the views of all impacted stakeholders.

Sincerely,