Copyfutures

Forces of Anarchy

A recent article titled, "In the Copyright Wars, This Scholar Sides With the Anarchists," showcases Professor Siva Vaidhyanathan's book, The Anarchist in the Library.  His first book, Copyrights and Copywrongs: The Rise of Intellectual Property and How it Threatens Creativity was published in 2001 (and can be found if you scroll down the left side of this blog).  His new book has received great reviews and looks to be a very interesting read.  Donna Wentworth at Copyfight recently blogged on a new profile of Professor Vaidhyanathan. 

Professor Vaidhyanathan's blog contains a FAQ section about his book, The Anarchist in the Library.  It gives some interesting insights into his motivation for writing the book as well as previews some of his theories and arguments about the forces controlling the flow of information and culture.

Professor Vaidhyanathan describes the current cultural and informational dilemma as a struggle between anarchists and oligarchs.  The anarchists are those who want to let data and culture flow freely around the globe, and the oligarchs are big media companies, powerful governments, and police forces who "have an interest in making information scarce so they can charge more for it," and label it "as contraband so they can limit conversation and deliberation."   

Increasingly, the formats and delivery systems for cultural products are highly controlled and he says that this sparks an arms race.  He uses the example of the DVD and how it has created a "situation through this combination of excessive copyright laws and strong technology."  This leads to the obvious conflict between the media companies, the oligarchs, and the hackers, the anarchists, and the idea that anything that the media companies can encrypt, the hackers can hack better.  The arms race escalates and escalates and those of us who don't necessarily support either side pay the price for the excesses of both sides. 

One of his more interesting points is that even though most of us don't realize it, we participate in anarchist practice more and more every day by using the Internet, text messaging, and communicating globally.  Because these mediums of sharing information have become prevalent in our ever day lives, we don't realize that we are straying from the middle ground and siding with the anarchists without even knowing it.  And he says that the solution to this problem is recognition of civic republicanism.  "Even though we will allow a high measure of freedom in our information worlds, we must have a rich discussion of values and virtues."  But American political culture makes this unlikely.  And rather than taking this path, all industry leaders have done is suggest radical technological moves or simplistic legal moves.  He credits this approach as sending the message to the consumer that those who run the music industry don't respect him.  And as a result, the consumer denies respect right back (ie file sharing).  This idea seems correct.  One of the most common justifications for p2p is people say that they are tired of spending $18 per CD.  People feel ripped off so they don't feel there is anything wrong with taking advantage of technology and, I don't know if this is the correct term, ripping off the music industry. 

I am really interested in reading this book and seeing what Professor Vaidhyanathan has to say about these issues in more detail.  It is painfully obvious that our current system of copyright control and technological restrictions has created this arms race that is showing no signs of slowing.  And the more the two sides are separated the worse it is going to get.  How to avoid this porblem is the real issue, and it looks like Professor Vaidhyanathan has some good ideas. 

An Advertisement Effort by the MPAA

I recently came across this same advertisement on two separate occasions. The first time it was in FHM Magazine. The second time, a friend of mine at San Diego State University remembered my involvement with this course and brought it to my attention after noticing it in their school newspaper.

The advertisement is obviously a scare tactic. It claims that you can't hide from downloading movies (Note the advertisement was created by the Motion Picture Association of America- MPAA).

If you think you can get away will illegally swapping movies, you're wrong. Illegally trafficking in movies is not just a dirty little secret between you and your computer. You leave a trail. The message is simple: if you are downloading copyrighted movies without proper authorization, you are breaking the law. You face serious consequences if you illegally swap movies. The only way not to get caught is to stop.

Then the advertisement mentions the potential penalties.

Two things I noticed that were interesting about this advertisement. First, the two locations that I found this advertisement were quite different. The first location was the student newspaper. This I can understand since they are trying to scare the college age kids which are the primary readers of the student newspaper. The second was a monthly Men's magazine. The readership of the magazine is 34% 25 to 34 year olds, and 27% 35 and higher. That means that more than 60% of the readers are likely not in college. Their distribution of the monthly magazine is 1.7 million copies. Therefore, over 1 Million of the of their readers are not in college. Assuming the MPAA is mainly concerned with college kids since people who are out of college have a greater means to go purchase movies, this seems like a waste of money. Those same people who buy this magazine are likely the same people that buy DVDs. In fact that magazine will occasionally have DVD reviews inside it. So who pays for the advertisement? The MPAA will pass this cost on to the consumer through higher priced DVDs. Which means that the FHM subscriber is paying to see the advertisement in his magazine, and then getting to pay more for the DVD which paid for that advertisement.

The second thing I noticed was the advertisement itself. It is just not that good. What do they mean by trail? Were there breadcrumbs? It is just to vague for the average user to comprehend. Even if they did comprehend what that meant, would it matter? The answer a college student gave me with regards to this advertisement was "Im still clicking." Until they actually enforce these laws on the average college student, they are just wasting money.

Yu on P2P

Peter K. Yu (Michigan State University College of Law) has posted P2P and the Future of Private Copying (University of Colorado Law Review, Vol. 76, 2005) on SSRN. Here is the abstract:

Since the beginning of the P2P file sharing controversy, commentators have discussed extensively the radical expansion of copyright law, the industry's controversial enforcement tactics, the need for new legislative and business models, the changing social norms, and the evolving interplay of politics and market conditions. Although these discussions have examined in detail the many aspects of the P2P file sharing controversy, none of them focuses on the big picture and explains how these issues fit within the larger P2P file sharing debate.

Using a holistic approach, this Article takes on the ambitious task of bringing together existing scholarship while offering some thoughts on the future of private copying. This Article does not seek to offer any new theory or model, which could become obsolete quickly, or even immediately, as digital and P2P technologies advance. Rather, the Article provides guidelines as to how policymakers can craft the "ultimate solution" to the unauthorized copying problem.

This Article begins by examining the RIAA's enforcement tactics, developments in copyright law in 2003, and possible challenges the entertainment industry will face in ensuing years. The Article then evaluates critically proposals commentators have put forward to solve the unauthorized copying problem: (1) mass licensing, (2) compulsory licensing, (3) voluntary collective licensing, (4) voluntary contribution, (5) technological protection, (6) copyright law revision, (7) dispute resolution proceeding, and (8) alternative compensation. Acknowledging the short-term and interim nature of many of these proposals, this Article contends that policymakers need to adopt a range of solutions that meet consumer needs while taking into account the Internet's structural resistance and networked feature and the changing social norms in the digital copyright world.

This Article concludes by challenging policymakers and commentators to step outside their mental boundaries to rethink the P2P file sharing debate. In the fashion of thought experiments, this Article compares the digital copyright wars to (1) a self-preservation battle between humans and machines, (2) an imaginary World War III, and (3) the conquest of Generation Y. By using these comparisons, this Article demonstrates that policymakers should not focus on legal solutions alone. Instead, they should pay more attention to the market, architecture, and social norms, which play equally important roles in crafting the "ultimate solution" to the unauthorized copying problem.

Prüfer on the Economics of Open Source

Jens Prüfer (University of Frankfurt) has posted Why Do Developers and Firms Contribute to the Production of Open Source Software? on SSRN. Here is the abstract:

This article explains why both software developers and firms contribute to the production of Open Source Software (OSS). Existing economic theories either focus on the supply side (developers) or the demand side (firms) of OSS development. This paper is the first to explain both sides in one integrated model by understanding the OSS production process as an application contest to the network of prominent developers. Programmers contribute because they aim for reputation and high salaries. Firms finance the process, since they receive inside information on highly talented developers not yet known on the regular job market.

Analogizing Intellectual Property Right or Wrong?

Mark Lemley, in his working paper “Property, Intellectual Property, and Free Riding” gives a very thorough explanation of how Judges and Scholars tendency to justify Intellectual Property rights based the theories of property law is incorrect. He describes why theories based on the economic rationale of property law concerning “free-riding”, a consumer benefiting from a positive externality of a composers intellectual property without proper compensation, creates an inadequate analogy for intellectual property. Lemley shows how not only property law, but also tort law and all other types of common law theories tend to leave out major considerations needed to adequately justify why and how intellectual property is or should be regulation.

Lemley explains important differences between intellectual property and real property. One being that real property is a scarce commodity, whereas intellectual property is not. Or perhaps it is not scarce as long as there are people alive and incentives exist, whether economical or personal, to allow the authors of novel information to recoup the effort put in to creating new works.

(Non)Rivalrous and (Non)Excludability

Current real property rights are based on the view that public or common ownership of real property is inefficient, because without any negotiating or laws to regulate use each owner will use the land to his fullest benefit. This type of unbridled use will destroy the land, this is known as the tragedy of commons problem.

Real property is classified as rivalrous, meaning consumption by one precludes the consumption by another. In other words, if I eat the apple, you cannot. Real property is also categorized as an excludable good. We can build fences around real property and exclude out neighbors from using our land. This type of good is, or the benefits from these types “private goods” flourish more efficiently in private markets.

Intellectual property, as it stands today, is unlike real property in both of these definitions. If I was to be listening to music on a radio, or had a copy of the same CD as my friend, we could both be listening to the same song at the same time without degradation to the others enjoyment. I could listen to the song an infinite (almost) amount of times, and it would not diminish the quality of the song for my friend to listen to it a million times more. Therefore, this type of good is considered non-rivalrous.

As seen from the current debate and court cases, it is getting near impossible to stop people from sharing certain works of art, intellectual property, over the internet. The ability to duplicate and mass distribute new songs has shown that intellectual property is not only non-rivalrous, but it is non-excludable. This is an abstract way of viewing intellectual property, especially since it was at one time possible to exclude others from the works of art. One could take this view even further to say that if intellectual property continues to be completely non-excludable, this may completely diminish incentives for composers to create, which could in theory exclude everyone from all future intellectual property, like no more new songs as record companies are threatening. Hypothetically speaking, there is probably a threshold point of diminishing returns for the creation of new music, so IP could actually be considered a Club Good. But in this abstract view, it is hard to say that the threshold will come from a rivalrous affect, to many people listening without paying decreases the value of the music, or if it comes from the affects of not excluding the music.

Public Goods

The problem with technology creating the possibility of non-excludability is relatively new, and is what I think is creating part of the problem in analogizing intellectual property with real property. It is also the reason why current statutes based on earlier beliefs that IP is analogous to real property are inadequate for regulating copyrights, and this is the reason there is a need for updating copyright laws.

Professor Solum states that pure information, in the digital form shared on the internet, is both non-rivalrous and non-excludable. Making this type of good best regulated as a public good, meaning the government should control it. An example of a public goods currently controlled by the government is our air, and similarly our national defense. Controlling is usually meant to be taxing the public.

Arshan Amiri’s blog, Musical Socialism 2.0, discusses some current views on different schemes for government control of intellectual property, at least in the music industry. Copyright law is already a way for government to create scarcity in a market where it does not exist in order to create an economic benefit or incentive, why not make it a subsidized commodity controlled by the government. See Arshan Amiri’s blog, Musical Socialism 2.0, where he discusses some current views on different schemes for government control of intellectual property, at least in the music industry.

Lemley argues that:

Nonetheless, the analogy has problems. The public has to pay directly for the social benefits of welfare in taxes. By contrast, the subsidies in intellectual property law are mediated through the market – only those who want to buy creative works or inventions are affected, though as a practical matter you would find it difficult to survive in modern society without using a copyrighted or patented product. More importantly, I am concerned that drawing the analogy to welfare may have a problem similar to the problem with the property story: it brings with it too much baggage. Welfare is not popular, even among liberals, and much legislative effort has been devoted to reducing, reforming, or eliminating it.

Although, one can seem similarities in governing IP like a public good, none of these analogies are perfect, and Lemley argues that perhaps the problem is drawing an analogy in the first place. He argues that intellectual property, although it may have aspects of contracts, property, torts and criminal law, is its own body of law and should be analyzed as such. Lemley states:

The economics of intellectual property law should focus on the economic characteristics of intellectual property rights, not on inapposite economic analysis borrowed from the very different case of land.

Personally, I think it may even begin to be impossible to analyze the economics of different types of IP together. I think that because of varying types of copynorms, the law needs to also recognize that Intellectual Property found in music and film have a much higher price tag then for instance a book on science, unfortunately. Not to mention incentives for inventing intellectual property differed based on the content.

I also think there is a stigma against having the government chose what is to be created or researched. Although I don’t think they are given enough credit either. It is typically the government funding defense projects that give birth to advanced technologies that advance our society.

AN ALTERNATIVE INTERPRETATION OF FAIR USE

Judge Richard Posner recently guest-blogged at Professor Lessig’s blog page. One of the many topics on which Judge Posner writes about is the concept of fair use in copyright. As it is now, the fair use doctrine is very vague. Judge Posner has recently written an article, which will appear in the California Law Review, that offers an alternative interpretation of the fair use doctrine.

I. Current Law

The current law that governs fair use is given in Section 107 of the Copyright Act of 1976.
Section 107 gives four factors to be considered in determining whether the use of a work in any particular case is a fair use:
1. the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
2. the nature of the copyrighted work;
3. the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
4. the effect of the use upon the potential market for or value of the copyrighted work.
In one of Judge Posner’s posts, he notes that the weighing of the factors is often quite subjective. Each person may give different weight to each factor. The subjective weighing of the factors will, of course, lead to an inconsistent standard for determining what type of use is considered fair use.

II. Alternative Interpretation

In another post, Judge Posner mentions an article (co-authored with Bill Patry) that will soon appear in the California Law Review, which offers an alternative interpretation of fair use. This new interpretation will solve the problems that arise with extending copyright terms. Specifically, Judge Posner and Mr. Patry argue “it should be considered fair use to copy an old work if the copyright owner hasn’t taken reasonable steps to provide notice of his continued rights, as by entering his name and address in a copyright registry.” By following this alternative, it will reduce problems that may arise like those encountered by JibJab Media, Inc.

III. JibJab

A recent situation arose in which a group, JibJab Media, Inc., was using the Woody Guthrie song “This Land Is Your Land” in a political parody where President George W. Bush and Senator John Kerry are slinging insults at each other. Ludlow Music, Inc. claims to own the copyright to the song. In the complaint, JibJab claimed that their use of “This Land Is Your Land” was fair use. If the alternative interpretation of fair use proposed by Judge Posner and Patry were used, it would be a simple matter of checking a national registry to see if the owner of the song’s copyright had indeed taken steps to protect his/her rights in the song.
As it turned out, JibJab and Ludlow Music settled and JibJab dismissed its suit. According to the Electronic Frontier Foundation, the song went into the public domain in the early 1970s. Guthrie wrote “This Land Is Your Land” in 1940, when copyright laws granted a term of twenty-eight years. The copyright term was triggered in 1945 when Guthrie sold the first version as sheet music. The copyright on the song ran out when Guthrie failed to renew the term. Of course, Ludlow disputes this, but the matter is now moot because the parties have settled. As part of the settlement, JibJab will remain free to distribute its parody.

IV. Conclusion

As shown by the JibJab situation, the alternative proposed by Judge Posner and Patry will save a lot of time. If it was not for the parties settling, the case may have been a long, drawn out process. Following the alternative interpretation, all one would have to do is check something like a national registry to see if the copyright owner had taken steps to protect his/her rights. This will likely create more consistency in the interpretation of what is considered fair use, instead of generating inconsistency by weighing the four factors in Section 107 of the Copyright Act.

Sterk on Real P and IP

Stewart Sterk of Cardozo Law School has a very interesting new paper up on SSRN. The title is What's In a Name?: The Troublesome Analogies Between Real and Intellectual Property. Here's a taste from the abstract:

After exploring the weak correlation between justifications for rights in land and in works of authorship, the article explores how the disparate justifications should and do shape doctrine. In particular, the article suggests that differences in duration of rights, in the scope or the right to exclude, and in the availability of injunctive relief can be explained by differences in justification for property rights. The article then turns to the interplay between copyright and contract, and suggests that here, too, the difference in foundation for real and intellectual property rights cautions against resort to easy analogies to resolve unique and difficult problems.

A Paper on the Future of Copyright

Check out Reducing Digital Copyright Infringement Without Restricting Innovation by R. ANTHONY REESE and MARK A. LEMLEY on SSRN. Here is the abstract:

Suing actual infringers is passe in copyright law. In the digital environment, the real stakes lie in suing those who facilitate infringement by others. There is of course a good reason copyright owners are filing such suits. They see themselves as under threat from a flood of cheap, easy copies and a dramatic increase in the number of people who can make those copies. The high volume of illegal uses, and the low return to suing any individual, make it more cost-effective to aim as far up the chain as possible. From the perspective of the movie industry, it's easier and more effective to shut down Napster than to sue the millions of people who traded files illegally on Napster. So far, the courts have been willing to go along, shutting down a number of innovative services in the digital music realm.

In this article, we argue that unrestricted liability for anyone who is in any way involved with copyright infringement is a bad idea. Indirect liability is a continuum, in which acts most closely related to infringement and with the fewest affirmative benefits are the easiest to condemn. Going after makers of technology for the uses to which their technologies may be put threatens to stifle innovation. The fundamental difficulty is that while courts can make decisions about direct infringement on a case-by-case basis, lawsuits based on indirect liability necessarily sweep together both socially beneficial and socially harmful uses of a program or service, either permitting both uses or condemning both.

Optimal digital copyright policy would do two things: stop deterring innovators, and permit cost-effective enforcement of copyright in the digital environment. In this paper, we suggest at least two possible alternatives that might provide ways out of the digital copyright morass. Both alternatives stem from the basic economics of copyright enforcement. It is not currently cost-effective for copyright owners to sue individual infringers, because there are tens of millions of them, because lawsuits are expensive, and because each infringer would be liable only for minimal damages. They are happy to sue facilitators instead, because there are fewer of them and both damages and the benefits of injunctive relief are substantial. Copyright owners have no incentive to permit optimal innovation by facilitators, because they do not benefit from that innovation except indirectly. Individual infringers in turn have no incentive to change their behavior or to subscribe to fee-based services, because they suffer none of the costs of infringement.

One solution is to change the incentives of individuals. Because individual users of peer-to-peer (p2p) networks know that it is extremely unlikely they will be sued, economic theory suggests that the only way to effectively deter infringement is to increase the effective sanction substantially for those who are caught. Were the government to begin criminally prosecuting selected users of peer-to-peer services - or were the RIAA to sue end users in earnest - it could have a substantial deterrent effect on many illegal users. Selective prosecution has other advantages as well - the government could target the relatively few keystone providers of illegal files on p2p sites, and those are precisely the users who are least likely to be engaged in fair use. While particular prosecutions won't stop illegal file trading altogether, copyright owners have never been able to prevent all piracy. All they need to do is reduce piracy enough that they can make a return on their investment.

Another solution is to change the incentives of copyright owners to sue individual infringers by reducing the cost of such a suit. One such approach would be a levy system. Levies on equipment or services have the virtue of permitting automatic collection of royalties, reducing the enforcement cost dramatically, but at the cost of taxing legal as well as illegal uses. A levy solves the enforcement problem at the front end, but it is similar in many ways to the current approach of suing facilitators. The main difference is that under a levy system the copyright owner is protected by a compulsory license rather than a property rule.

An alternative proposal to reduce the cost of enforcement is to create some sort of quick, cheap arbitration system that enables copyright owners to get some limited relief against abusers of p2p systems. The existing domain name trademark arbitration system is a model in some respects - its speed and low cost - but a cautionary tale in others - its lack of process protections. Such a system would permit low-cost enforcement of copyright infringement against direct infringers, reducing the need for content owners to sue facilitators. Relative to levies, an arbitration system would trade off some increase in cost for accuracy, targeting only those making illegal uses rather than all users of computers or p2p networks. It would be fairer than selective criminal prosecution, because the burden would fall more evenly on each wrongdoer, rather than imposing stark punishment on a few in order to serve society's interest in deterring the rest. The system could also be designed to improve accuracy relative to the binary choice the courts face in indirect infringement cases today. We could design the system so that it is limited to clear cases. We could also build in a defense for arguable fair uses, so that a user who could prove they were space-shifting CDs they already own would have a defense.

Felten on Wu & Lemley

Ed Felten has a nice post on recent articles by Tim Wu and Ed Felten. Here is a taste:

Recently I read two great articles on copyright: Tim Wu's Copyright's Communications Policy and Mark Lemley's Ex Ante Versus Ex Post Justifications for Intellectual Property.