Copyfutures

Can I Call This a "Solution" if I Don't Think There's a Problem?

    It seems as if no one in our class likes the current copyright regime.  What I find most interesting, however, is what we identify as its problem.  Some think the problem is that the regime is too restrictive, and concentrates too much power to a few large corporations.  Others think the problem is that the current regime is so easily, and repeatedly infringed upon, with little consequence that it's viability is in question.  I tend to agree more with the latter than the former. I will focus exclusively on the relationship between digital media copyrights (specifically music and movies) and P2P, the area we spent the most time on and also the most interesting.  I may post more, but this post will serve as my "final post" wherein I identify the problems I see with the current regime (including their tactics), and offer a practical solution on how to remedy them.

    The biggest problem I see with the current copyright regime is that it is so easily and repeatedly violated that I fear the content providers will seek to regulate emerging technologies in some way.  And succeed.   We may  feel smug in our "knowledge" that the "horse is out of the barn," but  content providers don't appear to uniformly hold this view.  Also, history shows the content industry isn't shy when it comes to prosecuting and regulating enabling technologies (Betamax, Napster, Grokster, INDUCE, etc.). 

My solution for content providers is three-pronged:

1. Selectively sue infringers
2. Tell your story more effectively
3. Cut prices

I. Selectively Sue Infringers

    Even at this late date, many people do not think of downloading content for personal use as "stealing."  This doesn't much matter so long as they know it's illegal and will be punished for it.  A recent Harris Poll  of 2,306 adults revealed some disturbing results:

Fully three in four adult Americans (75%) agree that "downloading and then selling the music is piracy and should be prohibited, downloading for personal use is an innocent act and should not be prohibited."

This is consistent with a Harris Interactive survey of teens released in October 2003 which showed that roughly three in four teens feel that downloading music files without paying (74%) and letting others download files from them (78%) should be legal.

Nearly two of three adult Americans (64%) agree that musicians and recording companies should get the full financial benefit of their work. (all emph. added)

    Certainly I can't be the only one who finds it strange that 75% of respondents would simultaneously believe that "downloading for personal use is an innocent act and should not be prohibited" and, that "musicians and recording companies should get the full financial benefit of their work."  If we're to assume - correctly, I might add - that the extent of the financial benefit musicians and record companies receive is almost exclusively a function of the legal rights afforded them, then this these two beliefs are contradictory.  Musicians and record labels   I suspect that most people don't view copyright law this way. 
   
    The majority also agreed w/ the first part of the statement that, "downloading and then selling the music is piracy and should be prohibited."  I think most people feel that if someone were to do this, they would receive the financial benefits that rightfully belong to the musician and record labels, thus depriving the rightful parties of that financial benefit.  I think  those same people feel that when they are "downloading for personal use[,]" they are committing an innocent act because they are not receiving any financial benefit.

    Content providers should file lawsuits against the largest individual infringers on the sharing (supply) side.  Fellow classmate, Tommy O'Reardon, has a similar proposal.  He seems to have been met with more skepticism, resulting in a post titled, "Why won't anybody listen to me?"  (I'm listening Tommy!).  Lawsuits would serve two purposes: (1) Reduce the number of large file-sharers, thus, reducing the number of copyrighted files on the network and (2) Educate the public that downloading or uploading  copyrighted content, even for personal use, is a crime.

    In, "Reducing Digital Copyright Infringement Without Restricting Innovation," author Mark Lemley states:

While the number of users of p2p networks such as Morpheus and (before the injunction) Napster is massive, the overwhelming majority of those users engage only in downloading. Indeed, by one estimate, 3% of the users of a p2p network upload 97% of the files on that network. These high-volume uploaders also seem to be the users most likely engaged in uploading illegal content, rather than providing access to legal files. They are easy to identify, both because they will repeatedly appear in content searches and because many run so-called "supernodes" that facilitate fast downloads.  (emph. added)

     While the exact effect is unknown, a likely drop in file sharing would occur.  The only question is how substantial that drop would be.  The content providers need not sue every infringer - a "solution" that many have rightfully criticized as impractical - to substantially reduce infringement.  The secondary effect would be to scare current uploaders to stop, as individuals benefit little from uploading.

    George Mason University Economist, Tyler Cowens, argues that, the lawsuits aren't done to scare off downloaders (a point I disagree with, if not in intent, at least in effect), but rather they are:

about spreading the idea that downloading is wrong and illegal... think of the lawsuits as one way to buy space in the newspaper, but without paying advertising rates.

    In a later post on his blog, Marginal Revolution,  Cowens gives us the bottom line:

I see the music companies as trying to hold back a new commercial norm. Specifically, the music companies are trying to maintain the old norm that you should always pay for music.

Two years ago most [American] downloaders did not know that their activities were illegal. Few uploaders felt guilty about making large numbers of songs available for free on the Internet. It was viewed as akin to lending your CDs out to your friends, except that the "friends" here were both anonymous and large in number. "Art should be free," right?
...
The music industry knows that the long run will bring a network of free music. It knows that free music may have illegal status, a "grey" status, white status (recorded from the radio), or perhaps be pirate (from abroad) but not illegal in the actionable sense. But there will be two networks, a pay network and a free network.
...
The music companies - present and future suppliers of the pay network - do not wish to face a ten year period where everyone is used to getting music for free. They do not want an entire generation to grow up thinking of music as a free commodity. They do not want hackers and illegal downloaders to become established as folk heroes.

Once commercial norms become established, they are difficult to dislodge. We are all used to breathing air for free. Imagine the response if suddenly we had to pay for air as we now pay for ice cream cones. Maybe the air would have a better quality and the price would be very low. Still I predict there would be a public outcry....  They cannot live with a norm that music should be free.  (emph. added)

    This ties back in to that other horse, still in the barn.  This is the single most important tactic that content providers must implement.  The MPAA is has announced that it plans to sue infringers, a decision partly based on what they saw the music industry go through.  The MPAA believes that the RIAA acted too slowly in filing civil actions against infringers, resulting in unnecessary losses.  They also believe that the the music industry's recent uptick is in some part due to the RIAA's renewed vigor in pressing ahead with lawsuits.
   
    Almost every foreseeable consequence from filing suits favors the content providers.  There is very little downside to this tactic because in reality, consumers have little else to choose from.

II. Tell Your Story More Effectively

    America's media companies are the richest, most influential, and most effective in the world.  To gaze across the global expanse is to witness American cultural hegemony, in large part shaped by these media companies.  Which is why I am always surprised at how inept and ineffective their anti-piracy advertising campaigns always turn out.  Content providers should leverage their natural institutional skillset, emphasizing storytelling.
    Show real individuals - no millionaire rap stars, please -  that were really harmed in some way and tie that back to downloaders.  At the same time, dramatize a real life lawsuit that will be prosecuted without mercy to show what can happen to violators.  Make an example out of a particularly egregious violator and explain that anyone could be next.  And then prove it by dramatizing a real court case against an "average Joe" or "average Jane."

III. Cut Your Prices

    Content providers will have to accept the fact that they can not completely stop P2P infringement.  In turn, they can no longer depend on their traditional distribution channels to provide the revenue streams they once did.  This does not mean, however, that content industries are headed towards inevitable decline, but it does mean that they will have to compete with P2P in the short term until they can innovate new channels and/or mediums.  The DVD is a great example of this innovation.  The new format / medium enabled content providers to generate nearly pure profit via the reissuing of hit films from their catalog; films that were producing little or no revenue prior.  The same Harris Poll cited above also shows:

[A]lmost... 70% say, "If the price of CDs was a lot lower, there would be a lot less downloading of music off the Internet."

    The hope is that lawsuits, coupled with a "good cop / bad cop" media blitz should make illegal file sharing much less attractive.  However, most of the hesitation towards file sharing  should be as a result of fear of punishment rather than some moral epiphany from the ad blitz.  I have no delusions that the 75% of the population who think that "downloading for personal use is an innocent act and should not be prohibited" will now view their actions as culpable of deserving of prohibition.  When consumers have only two choices, as they do here, the attractiveness of either option is a function of the other.  If content provider, for example, were to implement a five fold increase in prices (e.g. $55 movie, $90 CD) at the same time, file downloading would appear much more attractive, especially to the large segment of the population that was effectively shut out from the legal market.   

    For the short-term (1-4 years), content providers should cut their prices 15-30% across the board.  This will have several effects:

1. Welcome Back!  Lower prices would soften the financial blow to those consumers that are being (re)-incorporated back into the legal market - helping to ease them (back) into the habit of paying for content.
2. It makes P2P less appealing, legal content more appealing: See above
3. It serves as a gesture of goodwill.  We punish those who cross us, reward those that are loyal.
4. Keeps "grudge factor" down.  There is a small segment of the population that possesses the technical skill and resources necessary to create very good P2P software.  Let's say one of these people were to develop an alternate program that closed all the loopholes that content providers had been currently using to identify infringers.  This would be an expensive setback until alternate means could be found.  In the meantime, content providers would have to fight the spread of this technology, losing money all the while.  The hope is to reduce the number of people who would do this - out of spite, or a sense of being wronged - from the subset of people that are capable of doing this.  Equally important, it serves as a hedge against wide adoption from the consumer base, so that even if a new P2P technology were to come out, the hope is that they will be used to paying what they believe is a fair price for their content.

After that, well, there should be some other innovation that makes these technology specific problems moot.

 

 

 

 

 

 

 

 

There was more than one horse in the barn!

        We've heard repeatedly that "the horse is out of the barn."  This phrase is used to refer to the proposition that because P2P and Internet technologies have such a large adoption rate, and are so easy to vary, any technology-based attempt to prevent infringement are futile.  This should not be taken as fact though, it would be possible to regulate at least domestic infringement if Congress were to adopt some extreme policies.  One easy way would be to impose a duty on every ISP to ensure that no copyrighted materials travel on their network except via a specifically authorized port requiring prior notice to the ISP.  From a realistic perspective, this is unlikely to happen, we can throw the phrase around w/o consequence.

    However, that's only one of the horses.  If our end goal is the prevention/reduction of copyright infringement, we can extend the metaphor a bit further.  The horse that hasn't quite made it out of the barn is the social norm of paying for music.  P2P has only been around for 6 years, and it's high popularity has probably been the case for only the last 4 years.  I was 11 years old when I made my first music purchase (Gun's n' Roses, Appetite for Destruction - laugh away!).  Using Kaus's Theorem (I'm not unique, many people must be like me!), we'll assume that people generally start buying music around 9-13.  People who illegally download music today have most likely been doing so for only 4 years or less. 

    Music consumption, at least prolific music consumption (not necessarily purchase), typically occurs during the adolescence and early adulthood.  Record companies are under pressure because they recognize that it's not too late to re-socialize current P2P infringers to the norm of paying for music.  My concern is that the passage of time, coupled with a weak response from record companies during this time, will cause a generation of potential customers to believe that music should be free.  They will never, or only rarely, experience the act of paying for music, and in turn, will come to think of music as a free commodity rather than a valued good.

    This is the horse that really matters.  Perhaps you can accuse me of 20/20 hindsight, but I never thought that the solution was going to be purely technology-based.  More realistic would have been a government mandated technology standard, but fortunately, the CEA has successfully kept that "solution" at bay.  Software (P2P technology) is essentially information, and when coupled with the Internet, the result is a viral technology that is near impossible to stop.  We haven't been able to stop the distribution of strong encryption programs, a tool undoubtedly used for terrorist communications.  Likewise, we were unable to stop the dissemination of our nuclear secrets, which is arguably more important than copyright infringement.

    We must remember that any government attempt to hinder the development and spread of "bad" technology while enabling the growth of "good" technology is likely to have unintended consequences.  This is because government only has blunt tools at it's disposal; the Betamax case should offer easy proof.  That is a slippery slope not worth traveling down. 

    Technology has transformed our lives, mostly for the better.  It has enabled us to do great and terrible things.  The 9-11 hijackers went to travelocity.com in order to pick flights that had a low number of passengers so that they could more easily control them.  Travelocity provides real time data on passenger loads.  Good for us when vacationing, but good for terrorists also, when planning an attack.  Yet no one blames travelocity, and rightfully so. 

    The Internet was originally created so that our defense networks could continue to communicate with each other in the event of a nuclear attack.  In its early incarnation, it was a four node network between four universities, and primarily used by academics to collaborate on projects.  No one foresaw the tremendous potential the Internet held, and that is to be expected.  We shouldn't hinder the development of certain technologies simply because of how some choose to use it.  We should punish the act, not the technology.  When someone is murdered in a shooting, we don't punish the gun. Oh, wait...

Towards a New Copyright Regime: A Modest Proposal

Note: This post represents my proposal for an ideal copyright regime, free of any political considerations with respect to feasability of adoption.  My later post will differ in that I will advocate the use of  certain tactics by content providers, who, on the whole, I tend to support more than those who oppose them.

    "Property, a creation of law, does not arise from value, although exchangeable -- a matter of fact." So begins this post by Prof. Cass Sunstein, quoting J. Holmes in INS v. AP. Although Sunstein’s post is on a different topic, he explains the quote:

“What Holmes is saying here is that even though property is exchangeable, it doesn't arise from value; it's a creation of law. And that's simply a matter of fact.”
…

“Property rights, as we enjoy and live them, are a creation of law; they don't predate law.”

    Like Holmes, I take this as simply a matter of fact. It is the foundation for my proposal so if you disagree, you’ll have to play along for this post to make sense. Property rights, whether in real or intellectual property, are not “natural rights.”  Private property rights (aside from the Crown) is a relatively young idea and practice; the notion of property rights in IP even younger. This proposal is aimed at works that can be digitalized and easily and widely distributed; namely music and movies.

The 2 questions I’ll try to answer are:

1. What is the goal of copylaw?

2. What regime would best further that goal?

First Things:

    The Congress shall have Power… To promote the Progress of Science and useful Arts, by securing for limited Time to Authors and Inventors the exclusive Right to their writings. U.S. Const, Art I, sec. 8.

    Even though this proposal is an ideal one, free from political considerations, I’ve restricted myself from any solution that requires modifying the text of the Constitution. Since we’ve covered this in class, I’ll exclude any detailed discussion. Like real property rights, the goal of copylaw is essentially a public policy argument, “To promote… the useful Arts.” The usefulness, or utility, of a particular work varies depending on the person deriving utility. I find Milli Vanilli’s most recent album "useless" in this sense.  Perhaps you agree...

    In this light, my proposal serves a pure public policy goal, concerned only with maximizing overall utility.  While imperfect, I offer the free market system as the best mechanism to measure the utility, or value, of any particular piece of IP.  Simply put, the goal of copyright law is to make the most money possible for society as a whole.  Of course, we have to take into account fairness norms; we couldn't, for example, revoke someone's copyright simply because we thought they weren't maximizing the utility of a particular piece of IP.  In this sense, the proposal should greatly reflect the society's current notion of private property (and IP) as a natural right.

    We’re limited in our means: “securing for limited Time to Authors and Inventors the exclusive Right to their writings “

    Implicit in the text is the notion that a grant of exclusive right in a work – essentially,  the exclusive right to profit from ones labor – is an incentive that encourages the production of more “useful [a]rts” by society as a whole. This gain must be balanced against the lost potential gain the public bears for the duration of the copyright.  For example, George Clinton may have written a song back in the 70's that is no longer sold anywhere.  The Backstreet Boys may want to sample a riff from that song in order to create a new, hit song.  Clinton could refuse to sell the right to sample that riff, even if offered $1 million, and society overall would be poorer for it.  Following my proposal to an extreme conclusion, the governement would be authorized to rescind the right of exclusivity from Clinton and grant permission to the Backstreet Boys to use it.

    But this is an individual case, and even though we don't behave rationally in every instance, on the whole, the market behaves both rationally and efficiently.  Most people could be offered some price that they would agree to so the fact that there are some instances - and there always will be - where the market is not efficient does not show that the overall market system is inefficient.

    My argument is that an exclusive right to profit, for a limited time, from a piece of IP is the regime that would best serve the goal.  The time should be limited to 70 years from the time of creation (roughly one generation), however, this is not to be applied retroactively.  I support this long duration because certain works and brands possess great value and reflect a substantial investment on the part of the copyright holder.  Disney holds copyrights to their many characters and their movies, which they have invested a substantial amount in.  Protecting their ability to profit from this work is in society's best economic interest - unless you believe that society at large would be better able to generate revenue from Disney's copyrights.

    Registry: There should be a registry of all works copyrighted, more to serve notice to potential infringers than anything else.  However, the registry should be free, much like the "Do Not Call" registry.  This is to prevent an undue burden being placed on individuals who create IP.

The Music Industry's Star Witness In Their Case Against Kazaa

As Scott Ford posted earlier, music companies suing Kazaa contend that Kazaa was able to track users that were sharing copyrightinfringed material and were able to stop them from sharing. The music industries contention is based on a label on Kazaa’s website which states that users who share child pornography or other obscene material will be banned from Kazaa. This appears to be somewhat of a res ipsa loquitur argument. If Kazaa says they can ban people then they must have a way to track them and stop them. Scott offered some alternative explanations for this label such as an idle threat to deter sharing obscene material or for legal protection. However, now the music industry is brining an even stronger argument to the table. The music industry has introduced MediaSentry as a witness in there case to prove that Kazaa could track individuals sharing copyrighted materials and communicate with the users as well.

Tom Mizzone, vice president of MediaSentry, contends the IP addresses allocated for Internet service providers in

Australia

can be traced through the "scanners" his company uses to track down sound recordings and user information within the Kazaa system. He added that MediaSentry is also able to detect the copyright-infringing music files made available for download in the Kazaa system's shared folders. Further, Kazaa could communicate with users through the instant messaging program in the Kazaa. This evidence could prove deadly for Kazaa’s contention that  they are unable to track users and that they are unable to stop their use.

The introduction of MediaSentry as a witness brings up several questions, however.

1)      Can Media Sentry really identify copyrighted material on Kazaa? MediaSentry contends that it can identify which users are sharing copyrighted material through Kazaa, however, it will be interesting to see how efficient their system is. The company says that it uses a process of “scanning” to identify which users have copyrighted material, but it is unclear how this process actually works. Is the process a mere visual scan of the file’s title? Or does the scan look at the ID3 tag on the file? Or does it use another system of tracking such as other tags or looking at sections of code? Obviously the more accurate the system, the more damaging for Kazaa, but it is unclear how the method works.

2)      Should Kazaa have to develop or use a method of tracking? Even if MediaSentry can identify which users are sharing copyrighted material, does this mean that Kazaa should have or even could have developed or bought this technology? MediaSentry says their method is something that any other user on Kazaa could do. They contend that any user can look at the shared files of another user and from there identify if copyrighted materials were being shared. This tends to indicate that the “scanning” process is a mere visual identification of the files label. The average user could probably look at a file named “Metallica – Unforgiven” and recognize that it is a Metallica song named Unforgiven and know that it is copyrighted. However, this technique is not full proof especially given the growing number of “spoof” files being distributed by companies. A mere visual inspection would not indicate whether the file was real or a spoof and this could lead to erroneous identification. Further, users could easily circumvent this visual scanning technique by renaming the files to something not as obvious or changing certain characters in the file such as what happened when Napster began cracking down on certain files being shared.

If the “scanning” technique is more complex than a mere visual search of looking at the file name, should Kazaa have to develop or purchase such a means of identification? There are tons of products put out on the market that the manufacturer has no idea how the product will be used once it is sold. There are the extreme examples of guns and other weapons, but even closer to our topic we have video cassettes, audio cassettes, cdr, dvdr, hard drives, flash memory and a plethora of other digital media. These products could be distinguished from P2P since the other products are not as easily tracked once distributed, but is it fair to put a greater onus on the P2P companies just because tracking may be possible? The answer to this question depends on which side of the fence you are on. Kazaa would contend that this process is overly burdensome and not very effective given the methods available. Whereas, the music industry will contend that this is an easy method to employ and given the gravity of the harm, Kazaa should ensure its product is used correctly. There is no simple answer to this question and it appears either side has viable arguments to support their cause.

3)      Can they communicate with them? MediaSentry also contends that Kazaa can communicate with its users through the instant messaging program built into Kazaa. However, having an instant messaging program does not necessarily mean Kazaa can actually communicate with users. Many users don’t even use the messaging system or ignore many messages if they do. The communication aspect seems a small point, however, since identifying copyright infringers is the biggest issue.

4)      Can Kazaa stop users even if they can track or talk to them? The biggest concern with the MediaSentry contention is that even if Kazaa can identify users and communicate with them, can they even stop them if they wanted to? This goes to the horse is out of the barn argument, that once the product is released, there is nothing Kazaa can do to stop it. MediaSentry only claims it can identify users and communicate with them, but it does not say that it can stop users once they are identified. The only evidence the music companies have used to show Kazaa can stop users from sharing is the warning label on Kazaa’s website that states they can ban users for sharing child porn or other obscene material. This is a rather weak argument unless they can actually prove the ability to stop users.

It would seem that since the IP address is used to track the individuals then the user should be able to be stopped by some means. If nothing else the IP provider could disable the user from connecting to the network. But should the burden be on Kazaa to contact the IP provider for every user they think is breaking copyright infringement laws? This seems to be very burdensome and possibly and impracticable method for Kazaa to employ. However, if MediaSentry or the music industry can prove that Kazaa can prevent sharing through a less obtrusive and burdensome means, then there would be more pressure on Kazaa to show why they didn’t use this means.

5)      What should Kazaa be liable for? Even if Kazaa could prevent users from sharing music or other copyrighted files, what should they be liable for? Should they be liable for any way the product was used, reasonably foreseeable uses, or merely the uses they intended the program to be used for? This question will likely be based on the governing law of the land and will liking vary depending on the territory. This brings up another interesting question then of what law should be enforced.

6)      What law to use? Kazaa is being sued in Australiasince that is where the company is located, however, it appears the majority of users are in the

United States

, so which laws should Kazaa be held under? I will defer this question to someone more savvy in the area of international law, but regardless of the law used it would seem to add to the need for international organizations, such as WIPO, to develop an uniform system of international copyright laws to decrease any confusion in the world of cyberspace.

This case could be decisive in determining the future of copyright and the future of P2P in particular. The case is in

Australia

and the holding will not be binding on any other country, but the result will likely influence many future decisions regardless of the outcome. Copyfight reported that updates on the trial can be found at the APC Magazine's KazaaGate blog, which promises "whispers from the court gallery of the world's-biggest-copyright-case for the Internet's most-downloaded-program-in-history...and other hyperbole, nonsense and mischief." Be sure to stay tuned to developments as the case will likely deal with so many issues that have come up throughout the semester. Should be interesting!!

A Seat at the Table

On the same note as our class discussion about the various players in proposing copyright legislation, CNET news recently ran an interview with Philip Corwin, head lobbist for Sherman Networks, the parent company of Kazaa.  The interview contains some brief discussions the Induce Act, a tax benefiting copyright holders, and being heard in the copyright legislation process. 

You really get a sence from this interview how frustrating it must be to have been shut out from much of legislative making process.  When asked about why he thought the Induce Act failed, Corwin responded, 

Neither Sharman Networks nor any of the other peer-to-peer companies were invited to participate in those negotiations. We were just labeled as bad actors, while other people talked about the method and timing of our execution.

His frustration is clear.  It is as though he was forced to stand by and watch as someone else tried to decide the future of his client.  But as we have discussed, this is nothing new.  Those with major interests at stake were originaly blocked from the DMCA discussions as well.  And he is definitely weary of the potential dangers of a secondary liability cause of action being put into law.

It's clear that they'd like to create a new cause of action of secondary infringement that would penalize new technologies and business models. That's very dangerous. Hollywood with its very deep pockets would use a law like that to crush new companies that were guilty of nothing.

But what is most unsetteling about Corwin's position is that the client he represents is still the little guy in all of this.  Kazaa boasts 2.4 million users per day.  But the majority of those 2.4 million users are uninterested in copyright issues and legislation even though they have significant economic interests in the enactment of new legislation.  And until the average person takes some interest in copyright legislation, nothing will change, and it will be impossible to find any sort of compromise that satisfies the content industry, the consumer electronics industry, the p2p industry, and the consumer.  Because as of right now, the p2p industry and the consumer are not at the negotiating table.

So even though he hints that Kazaa may be willing to accept some sort of copyright holder compensation program he is still in a terrible position.  He says that he has, in the past, written policy papers for Congress concerning some sort of IP use fee.  But it is clear that these discussions are still, and it looks like for quite some time, going to be dominated by the major players (the content industry and the consumer electronics industry) leaving the less wealthy major players (p2p and the consumer) without a seat at the table.

The Omnibus now a MiniBus

Wendy Seltzer, on her blog, recently posted on the latest legislation heading to the House.  According to an article in Wired News, on Saturday, the Senate met and passed the Family Entertainment and Copyright Act of 2004, a revised version of the Intellectual Property Protection Act, which had cobbled together a handful of copyright-related bills. Now the bill heads to the House of Representatives for consideration in early December.

While Wendy acknowledges that much has removed from the controversial Intellectual Property Protection Act, she notes "much that's harmful remains. Particularly egregious is a provision that hasn't gotten much attention, the 'Fraudulent Online Identity Sanctions Act.'   The provision she discusses reads:

• it shall be a rebuttable presumption that the violation is willful for purposes of determining relief if the violator,or a person acting in concert with the violator,knowingly provided or knowingly caused to be provided materially false contact information to a domain name registrar, main name registry,or other domain name registration authority in registering,maintaining, or renewing a domain name used in connection with the violation.

• (A)the term ‘falsely registers ’means registers in a manner that prevents the effective identification of or contact with the person who registers.

According to Wendy, this provision, while "Ostensibly aimed at infringers who hide behind false domain name registrations, the provision seriously penalizes those who merely want to protect their privacy."  And I agree.  What exactly prevents "effective communication of or contact with a person who registers.  Sometimes, registration requires exposing your address or telephone number, which is sometimes less than desirable.  While this is not the biggest deal in the world, it is just another minor infringement of the "private" nature of the Internet.  And of course, it will be a useful tool to identify infringers, but what about other registrants who have no interest in piracy, yet want to remain antonymous.

As Wendy points out, "Because there's no way to opt-out of publication of private address information in the WHOIS database when you register a domain name, your choices are to expose your address and phone number; use a possibly unreliable intermediary; or fake it. Unfortunately, if you choose the last option and FOISA passes, you'll now be presumed to be a willful infringer of copyright or trademark. A critic who makes liberal use of a company trademark, or a commentator who quotes a chunk from another's text, both now face a much steeper hurdle in their fair use defenses. "

Some brightspots of the bill which might please Professor Samuelson, who mentioned the impracticability and potential disaster with the DOJ becoming Hollywood's personal police squad.

• the bill removed several provisions that had upset consumer advocates, like the Pirate Act, which would have allowed the attorney general to file civil lawsuits against copyright infringers. Critics argued that this would use taxpayer money to fund the copyright battles of the movie and music industries. Entertainment companies have already filed against alleged infringers.

• the bill doesn't have new criminal penalties for file sharers: In contrast, The Pirate Act would have taken 'willfulness' out of the definition of a criminal violation, so you could be judged a criminal without willfully infringing copyright

All things considered, this bill doesn't look so bad, but through our recent experiences with the Induce Act and the Pirate Act, getting anything through is going to be a difficult task.

Send All the Webcasts You Want

Donna Wentworth, at Copyfight, blogged that a United States Government proposal to extend copyright protection for television and radio productions to cover webcasting has been put on halt. The proposal was made to the World Intellectual Property Organization (WIPO), which helps determine world intellectual property rights and laws. The U.S.proposed a revampment of the 1961 Rome Convention, which protects intellectual property rights of performers, record producers, television and radio broadcasters. Talks of changing the Convention have been ongoing since 1997, but this marked a hiatus to possible changes in the world law. Wentworth reports, "this coalition shatters the illusion that there is a technology consensus on this issue."

The Electronic Frontier Foundation (EFF) voiced its disapproval of the changes in a letter sent to the WIPO. The letter listed rejected the Webcasting Provision for two major reasons:

1.    The Internet depends on permission-free access. This is reflected in the exemptions in many countries' copyright laws for online and internet service providers. When authors or rights-holders' permission has been required for fixation, copying, retransmission or decoding in other situations, the negotiation of licenses from creators and copyright rights-holders have provided ample protection for all parties. Adding a new layer of intermediaries, over and above copyright holders, for the re-use of information on the Internet benefits no one -- save those intermediaries. If an Internet company has the rights to a work, or need not secure the rights to a work due to a limitation in copyright, or because the work is in the public domain, there is no rational reason to require that the company also seek the permission of a further intermediary whose sole creative contribution to the work is in making it available.

2.    There is no demonstrable problem. Internet businesses are famously, legendarily well-capitalized from angels, venture capitalists, public markets, private investors, governments and every other source of capital imaginable. Proponents of webcasting rights have offered no credible evidence that the lack of legal protection for webcasting rights has precluded the establishment of any new Internet businesses. Indeed, the businesses most volubly calling for Webcasting protection are among the best-capitalized in the history of the world. There is no certainty of benefit here, but it *is* certain that the creation of a new psuedo-copyright will slow down adoption and innovation in Internet markets by requiring all content-related businesses to negotiate yet another layer of license agreements before they can offer new products or services to the public. The most likely result of introducing these new rights will be to skew the market; in practice it will provide financial assistance to incumbents who will be able to assure investors of their right to exclude their competitors and new entrants from the market. At the same time, it is likely to constrain, not increase, the creation of more information products for the public.

The WIPO apparently agreed with EFF as it struck down the proposed changes. The EFF letter focused on the need or lack of need to give further protection and the lack of benefits from the plan. There has been no showing that webcast owners are not protected by the current standards or that there has been any abuse or threats of future abuse of these rights.

Apparently the updated treaty was aimed partly at tackling pirated re-broadcasting of TV or radio to developing countries. There have been many copyright issues concerning applications, especially those of Microsoft, and this looks like a United States plan to curb a potential problem before it starts. However, the rest of the world didn’t go along with the U.S. and alternative reforms will have to be developed if the U.S. wants to curb this potential problem. Apparently, the rest of the world is more concerned with the distribution of knowledge, instead of the price tag you can put on that knowledge.

Some are still concenred that the proposal can still pose a threat, but as for now the webcasters are safe and many are happy. As Wentworth stated "I love it when a negotiation process like this actually works, 100 per cent against the odds."

It will be important to see how talks in WIPO progress as it appears world IP issues will be on the table for quite a while. Much of the changes in the United States copyright laws will depend on how the rest of the world enforces these changes. If there isn’t world support for protecting copyrights, then much of the efforts done in the United States itself will be essentially futile. Stopping 250 million people from violating copyrights is great, but that is nothing if there are still another 5 billion out there not following the rules.

Deciding whose Rules to Use

Donna Wentworth on Copyfight and Cory Doctorow on Boing Boing blogged yesterday about an article written yesterday by James Boyle, “A natural experiment” on Financial Times.  The article compares how IP law that is made drastically and detrimentally different from, or as Doctorow says “the crazy way that IP policy gets made -- without any evidence, without any followup” the FDA allowing a new drug to go on the market.  This article fits in nicely with the discussion we are having in class about how legislation is made.  Boyle presents the following question:

So how do we decide the ground-rules of the information age? Representatives of interested industries come to regulators and ask for another heaping slice of monopoly rent in the form of an intellectual property right. They have doom-laden predictions, they have anecdotes, carefully selected to pluck the heartstrings of legislators, they have celebrities who testify - often incoherently, but with palpable charisma - and they have very, very simple economic models. The basic economic model here is “If you give me a larger right, I will have a larger incentive to innovate. Thus the bigger the rights, the more innovation we will get. Right?” Well, not exactly. Even without data, the models are obviously flawed - copyrighting the alphabet will not produce more books, patenting E=MC2 will not yield more scientific innovation. Intellectual property creates barriers to, as well as incentives towards, innovation. Clearly the “more is better” argument has limits. Extensions of rights can help or hurt, but without economic evidence beforehand and review afterwards, we will never know. In the absence of evidence on either side, the presumption should obviously still be against creating a new legalised monopoly, but still the empirical emptiness of the debates is frustrating.

Boyle makes some very interesting points.  One being that we increase rights to intellectual property because all of the proponents say it is necessary to continue incentives for innovation.  But the truth is, that the extension of IP rights both hinders and increases innovation.  There is a fine balance.  One that I don't think current legislation has not found.  In fact it was impossible for the two main players (Lobbyists) to decide how to stabilize this balance when the Content industry and the Consumer electronic industry tried to negotiate a bill for the INDUCE Act. 

I don’t think that Boyle’s main concern lies with a committee that has listened to both sides of the story and has almost put the issue to rest because neither party will concede a huge loss. This type of committee at least had two sides of the issue (although there may be more sides), which as proven by our country’s history is what is required to make a fair decision.  I think Boyle’s main concern, is that legislation is being made by hearing only one side present the issue.  Furthermore,  and  more importantly, legislation is being made with by no evidence to support lobbyist reasoning, and no review is being made to determine if the legislation is balancing one way or the other.

Extensions of rights can help or hurt, but without economic evidence beforehand and review afterwards, we will never know. In the absence of evidence on either side, the presumption should obviously still be against creating a new legalised monopoly, but still the empirical emptiness of the debates is frustrating.

Boyle analyzes the example of copyrighting databases.  The question of database copyright-ability was presented to the Supreme Court in 1991, and they found that databases should not be copyrighted.  Supposedly this came as big surprise to many in the database industry.  Boyle chooses this area as an example because it is easily compared to another market, Europe, that chose allow databases to be copyrighted.  There were strong proponents of the copyright law for database who claimed that without this law granting a copyright there will be no incentive to create databases.  Boyle asserts that if copyright law for databases was the way to go, then:

1.  The European database community would have flourished since 1996 while the US market has languished.

2.  In light of the new law, European creators of databases were creating databases they wouldn't have necessarily created without the right.

3.  The right is promoting innovation and competition rather than stifling it.

As far as analyzing these issues, Boyle points out that one of the major problems with the current situation is that Europe has not conducted a review of the effects of granting the right, it is three years late, so all of the evidence may not be in.  However, Boyle’s has done some preliminary research and has found support suggesting the negative to the three issues he proposes should be examined. 

First rule of thumb for regulators: when someone with a profit margin over 20% asks you for additional monopoly protection, pause before agreeing.

Boyle's research states that major Database producers such as Lexis and Westlaw have been yeilding over 20% in the last few years, hardly languishing.  AS for Europe:

But database growth rates have gone back to pre-Directive levels, while the anti-competitive costs of database protection are now a permanent fixture of the European landscape. The US, by contrast, gets a nice steady growth rate in databases without paying the monopoly cost. (Second rule of thumb for regulators: Do no harm! Do not create rights without strong evidence that the incentive effect is worth the anti-competitive cost.)

Finally, Boyle points out that innovation has not flourished, although he also points out that it is hard to judge what "wasn't" invented:

In fact, academic scientific bodies have been among the strongest critics of database protection. But negative evidence, by its nature, is hard to produce; “show me the science that did not get done!” Certainly, both US science and commerce have benefited extraordinarily from the openness of US data policy.

Boyle advocates that a true review of the effects of the copyright law on databases be conducted as soon as possible, so that a true outlook be determined. 

I found this article to be very interesting.  Whether or not these same types of comparisons can be done for other types of copyrights will take some more time for us to find out.  For instance we could do a similar study of works in Australia where the copyright limit was not extended as far as ours in the US.  But it may take some time to actually see the effects of time limits on copyrights as it is just recently that popular classical works are starting to enter the public domain.

Boyle’s arguments on creating IP legislation and suggestions on procedures that can work across the board for developing legislation, and deciding which regulations to implement are very persuasive.  When looking at the law that was argued by Hollywood to have copyrights extended to 120 years, it has been difficult to see the benefit or any change at all in encouraging people to create new works.  I think it would be beneficial for society to spend some time looking at the results and effects of the copyright extension law.  So when the studies show that the law has not encouraged more people to be innovative, and perhaps has hindered more than helped, we can then use this solid evidence to prove copyright limits should be reduced.

Now You can Run the Copyright World

I posted previously about some of the programs that Congress approved or disapproved of last weekend in their $388 billon spending frenzy. News.com reported another interesting twist in the bill that allows the President to appoint an anti-piracy czar.

Under the program, the president can appoint a copyright law enforcement officer whose job is to coordinate law enforcement efforts aimed at stopping international copyright infringement and to oversee a federal umbrella agency responsible for administering intellectual property law.

The czar’s central role will be to coordinate the different agencies (the Library of Congress, the Justice and State departments and the U.S. Trade Representative) that deal with intellectual property. The aim is to have a single federal effort and goal towards protecting copyright. Most agencies have a head, so the intellectual property one should probably have one as well. It’s actually a bit surprising that there wasn’t a head until now. Though I guess intellectual property problems have only recently skyrocketed and it takes some time to create new programs.

It will be interesting which direction the new IP leader will try to push the anti-piracy efforts or if he will really have enough influence to really do so. If the czar is actually a true czar and has almost unrestrained control of how and what anti-piracy programs are run, the choice for czar could have a TREMENDOUS impact on the world of IP in the come years. Imagine the extremes the czar could take. He could be ultra harsh and decide that criminal penalties and harsh civil sanctions are the only true means of enforcing copyright law. We could have half the high school and college population in jail. Or he could take the pirate's side and try to create a world of music socialism (much more czar like) or even go as far to destroy the idea of copyright completely.

Obviously these ideas are extreme and more likely not to even come close to fruition. It is more likely that this idea will act like many government agencies and make minor if any changes at all. It would seem as if something by the government must be done…or does it? Realistically the government could leave all the responsibility up to private companies to bring suit for infringement. This will either lead to a huge increase in IP suits or it will cost too much money and the private companies will be forced to come up with a new way of protecting their music. We live in a world of privatization and capitalism, so it wouldn’t be surprising if the major changes do come from the companies changing and not the government making new laws.

However, Congress is at least making it look like they want to help the world of copyright. They have considered several bills and passed some. The new legislation is also funding the National Intellectual Property Law Enforcement Coordination Council (NIPLAC) for the first time.

NIPLAC is charged with establishing policies, objectives and priorities designed to protect American intellectual property overseas and to coordinate and oversee implementation of intellectual property law enforcement throughout the government. While NIPLAC has been around since the early 1990s, it has never done anything, and appropriators hope that giving the organization $2 million and a new charter will make the office effective.

The NIPLAC appears to be the “new” government agency for protecting IP, however, the agency has been dead for over 10 years, so we’ll see if it’s new life will bring any change. Support of this agency could just be the first step for the government’s increasing role in copyright or it could just be a decoy to appease the copyright owners for now. We’ll see if this leads to the government acting as the attorney for the copyright owners or if it leads to just more wasted dollars thrown into an agency to appease a few big voices.

So who will run this show is my big question? Will we get a leading academic in the field? Will it be a member of the MPAA or RIAA? Will it be a known pirate and freedom protector? Could it be one of us? The choice has the potential to have huge impact on the future of copyright, so it might behoove of us to start campaigning now.

Senate Passes a Scaled Back Copyright Measure

The Senate decided on a multitude of different copyright bills on their table this last week. The Senate appeared to take a middle ground in passing some of the more egregious acts, while permitting many of the still socially acceptable acts.

There will now be criminal penalties for individuals who start the infringement process such as those who video tape movies in theaters or distribute pre-release material. Individuals who video tape movies in theaters will face up to 3 years in prison, while pre-release distributors will face stiffer penalties than previously on the books. It will be interesting to see how big of a deterrent these acts will be. It will first take cooperation from the movie theaters in catching individuals in the act of video taping and then reporting them to the authorities. Maybe the MPAA will start providing incentives to theaters who catch video tapers or possibly start providing their own security at theaters if the theaters themselves can not manage the problem.

The association that deals with the Academy Awards has already attempted to prevent pre-release movies from hitting the market. The association sent Oscar voters a special player to view the movies to ensure the movie could not be so easily ripped and distributed to the public. It is unclear how effective this technique will be, but it is surely more effective then just sending a normal DVD to the voters and others.

The Senate, however, refused to give jail time to most internet song swappers and allowing editing of movies to make more appropriate for kids. The Senate elected not to pass a bill which would have given up to 3 years in jail for individuals who share over 1,000 copyrighted works and also refused to allow civil suits by the Department of Justice. Many file swappers will probably breathe huge sighs of relief after these bills were uprooted, however, they still face civil suits by the Copyright owners themselves. The non passage of these measures indicates that Copynorms are still favoring P2P use and that people don’t want to send high school and college kids to jail because they are sharing songs and movies.

The bill also shields "family friendly" services like ClearPlay that strip violent or sexually explicit scenes from movies. Copyright owners say this process should be illegal as it violates their copyright without permission, however, we see again that society wants to protect the eyes and ears of our youth. This could likely be seen as a fair use in any case. Taking out some violent, sexual, or other inappropriate scenes will not significantly alter the movie and allows a wider range of viewers to actually enjoy the work at an appropriate level. In fact, almost every movie that airs on the major networks is trimmed down so everyone can watch it. Even the move Saving Private Ryan was forced to be altered for its intense scenes. Fighting this bill seems a bit odd on the part of copyright owners. I understand that their works are altered in some way, but if more users are able view their works with these slight alterations, then this likely means much larger profits for the artists. This may be seen as “selling out” to an extent, but let’s be honest, almost every artist sells out a bit just to make it.

A final bill that didn’t pass, which has been of much discussion on our Blog, was a bill that would have made it illegal to edit out commercials. This means that DVR owners and makers can still skip right over annoying ads. It will be interesting to see how DVR manufacturers will react to this bill not being passed. Will TiVo continue to use its own commercials or will this make DVR’s that completely skip commercials even more popular. I would think the latter would almost have to be true unless TiVo comes up with some other unique feature that makes commercials acceptable.

Much of this legislation will surely be on the Senates table again. It is curious whether much of the legislation was not passed simply because it was a lame duck session or if this trend will continue into the new Congress. If this trend continues, it will force copyright owners to be more proactive themselves and require more civil lawsuits or other measures to curb copyright infringement. At some point this will cost way too much and will not be a viable option unless a new method of enforcement or deterrence is created. It will definitely be interesting to see what happens when Congress reconvenes next year.