Copyfutures

David vs. Goliath

As we have discussed in our class sessions, part of the problem with changing the current copyright regime is the massive power wielded by the entertainment industry. They have the consolidated money and lobbying powers that the consumer public simply doesn't have. One group, IPac, is hoping to change that. IPac is a nonpartisan group dedicated to preserving individual freedom through balanced intellectual property. They pledge to support candidates and elected officials who will fight for more balance in copyright law. Wired Magazine is running a story about IPac and their cause.

"Copyright is supposed to be a balance in the Constitution," said David Alpert, president of IPac, which launched about a month before the 2004 election. "The government should not be in the business of preventing technology changes just because some companies are afraid it might hurt their existing business models."

During the last election, IPac supported six candidates: Reps. Rick Boucher (D-Virginia), Zoe Lofgren (D-California), Joe Barton (R-Texas), Christopher Cox (R-California), John Doolittle (R-California) and newcomer Oklahoma Democrat Brad Carson for the Senate.

So far the group has raised over $7700 to help in their cause. While just a drop in the bucket compared to the amounts being spent on the opposing side, every little bit helps. In addition to raising money, the Ipac website will feature a blog to keep people informed of the latest news and updates about Congress and its actions regarding copyright and patent issues.

Chris Cohen comments in his blog

"IP is an area of legislation where politicians can hand huge rewards to companies at the expense of the public without really getting any negative attention. People just don't know how important IP law is, don't realize they are actually the ones losing out, or don't care because IP doesn't make for a great above-the-fold story. As the copyright law has expanded so massively in the last decade, however, the public's interest in IP has really been piqued. Part of this phenomenon (both as a cause of it and because of it) has been the rise of so many IP blogs, the IP blogs have brought together many people who are particularly knowledgeable about IP issues and has provided them an outlet to provide that knowledge to the public at large (or at least the many techies and geeks who read their sites) and some of them are now looking like true journalists themselves with huge readership. The good 'ol internet is working it's magic, bringing people with common interests together to bring attention to something they care deeply about."

RIAA Targets College Students with Latest Round of Suits

The RIAA, in an apparent attempt to reclaim its "most hated industry" title from the MPAA, has issued another 761 subpoenas directed at p2p file sharers. The latest attack is targeting students at twelve American universities. Tech Law Advisor mentions that, according to p2pnet.net, the suits are actually being used as a marketing ploy to force universities into promoting industry-backed p2p networks. According to RIAA president Cary Sherman:

The lawsuits are an educational tool ... They remind music fans about the law and provide incentives to university administrators to offer legal alternatives.

Right...keep in mind that Cary Sherman also co-chairs a Joint Committee of the Higher Education and Entertainment Communities. I'm sure the committee has university students' interests in mind. Basically, with the threat of more suits the RIAA is trying to impel universities into purchasing university-wide "legal" p2p networks (like this from an earlier post on this site).

I have to admit, this is a good approach by the RIAA. Instead of targeting individual users, they are attempting to net the bigger prize of thousands of university students. And, in reality, the universities are going to buckle to the threat of lawsuits involving potentially hundreds of their own students.

As a side note, I did some research on Cary Sherman and found that he was interviewed by the contributors and readers of blogcritics.org back in 2002. Overall, the interview is pretty uneventful -- Sherman being asked the typical questions and giving even more typical responses -- but there was an anwer he gave that did catch my attention. In response to someone questioning whether p2p filesharing is responsible for slumping CD sales, Sherman said:

I wish you were right that CD sales haven't been impacted by filesharing. (I hate that term, by the way. To me, "sharing" means we each get a little less. If I share my pie, I only get to eat half. If I share my car, I can't use it when the other person has it. "Filesharing" however means we each get the whole thing, and noboby gives up anything! That's not sharing, it's publishing!)

In that statement, Sherman exactly describes the difference between sharing something tangible, like a car, and sharing an mp3 file. The rivalrous vs. nonrivalrous distinction. He makes an interesting point; that because of this distinction it should not be called "sharing." That's a pretty lawyerly way to look at it, but if you are convinced that "publishing" is the proper label, then shouldn't rights of exclusion be presumed? Hmmm...I'm not entirely convinced yet, but I'll have to give it some more thought. Unfortunately, with finals coming up I'll have to subordinate that thought for awhile.

Open-source geeks are modern heroes

At least that is what a report by Demos, a British think tank, believes. The report (“The Pro-Am Revolution: How enthusiasts are changing our economy and society”) goes through a detailed analysis of how society was shaped by “Pro-Am’s”. A brief overview of the report can be found on ZDNet UK.

Pro-Am’s are defined as “amateurs who pursue a hobby or pastime, in many cases an all-consuming passion, to a professional standard.” Pro-Ams have made significant contributions to society. “Pro-Am astronomers have made significant contributions to our knowledge of the universe. And Pro-Am software programmers who are part of the ‘open-source’ movement are providing the only real challenge to Microsoft’s dominance of the personal computing market.”

The report lists a set of social and demographic factors leading to the emergence and growth of the Pro-Am culture:
1. The expanding life span (people are living between 10 and 20 years longer than they did 40 years ago)
2. Growing levels of education
3. A more open society in which people want a sense of individual fulfillment
4. The spread of horizontal social mobility as people develop distinctive lifestyles
5. Changes in occupational patterns which mean that people are increasingly likely to turn to second careers in their 40s and 50s
6. Increasing affluence, and an apparent willingness to downshift, trading income for time and better quality of life

A couple of weeks ago, Professor Richard Epstein had an op-ed on the unsustainability of open source. I actually think that certain things in this Demos report helps support why open source cannot be sustained and will not be able to compete with proprietary software. Pro-Am’s invest a lot of time and energy into doing what they do. People who contribute to the open source software movement, unless they are being paid by their employer to do it, are spending their own time and energy to develop the software. The Demos report mentions that it is usually the more affluent people that engage in these types of activities. This is because the more affluent people do not need the extra financial incentive to create. They are doing it as a hobby. Those who contribute to open source software that are in the software field will be benefited because it is already part of their job to work with software.

Open source software is a nice idea – in an ideal world. I still believe that something like this is more suited for academics. Academics are in their particular field to advance the science. They are not in it for significant financial gain. Of course, there will be new, innovative ideas from open-source. However, these innovations will not develop as quickly as proprietary. An estimate in the Demos report puts only 20 million people around the world using a version of Linux in 2004. How many are using Microsoft?

Kazaa's Achilles Heel(?)

Kazaa has always maintained that they are unable to control what the users do with Kazaa software.  Today (November 30th in Australia) the Australian Court discussed some facts suggesting otherwise.  An Australian news report states that:

Lawyers for the labels, including Universal, EMI, Sony BMG and Warner and Festival Mushroom, contend Sharman was fully aware that Kazaa was used to download unlicensed music.

Counsel for the labels, Tony Bannon, used Kazaa's own website as proof of Kazaa's knowledge.  The Kazaa website states:

If at any time Kazaa finds that you are using Kazaa to collect or distribute child pornography or other obscene material, (the software company) reserves the right to permanently bar you and your computers from accessing Kazaa and other Kazaa services.

Bannon's point is that if Kazaa can monitor and kick off users for sharing child pornography, why not for illegal copyright infringement?  If Kazaa's warning is true, Bannon has a valid point.  However, it is certainly possible that Kazaa does not in fact have the capability of monitoring users at all.  Maybe they just put the warning to help avoid liability.  Or maybe it was just an attempt to help curb child pornography because it is so vile and harmful.  Is Kazaa caught in a lie?  It will be interesting to see more facts as they develop.

Corporate Labels Still Not Getting It

OK, so a few major record labels have decided to embrace the peer to peer file sharing format, however they fail to embrace the reasons why the format has been so successful. That is, it’s been free.

According to an article on CNET and Wired News, Sony BMG, Universal Music Group, and Warner Music Group have hooked up with Wurld Media and agreed to distribute with their music via Peer Impact, Wurld’s legitimate p2p file distributing service.

"Sony BMG, Universal Music Group and Warner Music Group have signed a deal, announced this week, with Wurld Media to provide music for its peer-to-peer service called Peer Impact. The company is also negotiating with EMI to add its content.

Peer Impact is scheduled for launch in the first quarter of 2005. The company also plans to offer a legal way to download movies and games in addition to music, according to Wurld Media CEO Greg Kerber. ‘We hope to be the consumer's one-stop platform for digital media,' Kerber said. 'If it can be digitized, we can monetize it.’"

They have the program set up to allow consumers to download files from one another, utilizing the p2p format, yet still charging a dollar a song.

"The download itself is free and resides on a user's desktop. Unlike Kazaa and other P2P services, Peer Impact will distribute only licensed and public-domain content. It will seed the network with its authorized files, and customers who pay for the track will download it from those who have already paid for the file.

Like iTunes and Napster, songs will cost a dollar each. The company is also looking at offering subscription services. The catalog will exceed a million tracks by the end of the first quarter, Kerber said."

Something's not adding up here. What they are offering is the ability to download music via a peer to peer network, like Kazaa, while still being allowed to pay for it. The seed files may be of better quality and the risk of downloading a spoof greatly reduced, however, I think I’ll pass. I already have iTunes with a catalog greatly exceeding that of Peer Impact. And apparently I’m not the only one who feels this way.

"Von Lohmann [an attorney with the Electronic Frontier Foundation]said at this point there's no real benefit to the new service from the customer's point of view.

‘Basically you're picking the pockets of your customers for the same price that they can get on iTunes,’ Von Lohmann said. ‘Your customers are paying for your bandwidth and your storage.’

Instead, the recording industry should be looking to services like Weed and Altnet, which put authorized files on open networks that people are already using..."

Weed seems like a viable alternative. I posted last week on the Weed service and it's potential benefits to the music community. It allows for free downloads and three free plays, after which the user is prompted to pay for the song. This would allow for the sampling of music and still guarantee that copyright holders get paid for anything beyond sampling. Right now only independent labels and artists are taking advantage of this service.

Napster update

Napster has been enjoying a second life, as has been commented on this blog previously (see "The New Napster"). In fact, it's been little over a year since Napster officially relaunched. At launch, the service had about 500,000 tracks available for download, today that number is over 1mm. This puts the company's library of music only slightly behind that of Apple's iTunes music store, which passed the 1mm mark back in August (see cdfreaks link ). Napster may be a sentimental favorite when it comes to the world of online music distribution. Their comeback story reminds me a little bit of Atari, a company which has enjoyed a resurgence or two. Both companies were the first to enter into their respective markets, and really created the markets for each. Both now exist in severely dimished roles in those markets, still managing to survive.

Cutting down on Counterfeit by giving software away?

Microsoft is allowing users in the UK of pirated Windows XP to trade in their copies to get legitimate ones.  The program allows up to five copies per user and is going on through the end of the year.  To be eligible, the UK resident must have purchased the computer in the UK prior to November 1 with a preinstalled copy of Windows XP, either home or professional edition. 

So what’s the catch?

In order to trade in a bogus copy for a sanctioned one, Microsoft first requires the user to send in all documentation on the software, including user manuals and warranties; the receipt from the original purchase; and a signed witness statement form explaining how the software was obtained.  This, of course, tells Microsoft who is selling pirated versions of its intellectual property.

Microsoft basically wants information is on who is selling their software illegally and is using the free copies as a bargaining tool.  Microsoft claims that they do not want to prosecute the individual, just go after the source.  They are “evaluating many tactics to educate the software community about piracy, engineer products that address it, and enforce anti-piracy laws and policies.” 

A study by the Business Software Alliance says that 29% of all software installed in the UK in the last year is not legal.  Microsoft clearly has reason to be concerned if close to a third of the market in the UK had illegal software installed within the last year.  But is trading free software for information fair?  What are the penalties for the people they find?  What if the person who sold the computer did not know it was illegal?  It is almost as though Microsoft is taking police power to some degree into their hands by trying to obtain information, and that alone is questionable.

Sampling: P-Funk Style

A recent federal court decision comes down hard on rappers, insisting that they pay for every music sample used in their recordings, "even minor, unrecognizable snippets of music."  However, this decision is not entirely out of the blue.  Previous decisions by lower courts have required that musicians pay for any music sampled from other artists.  However, it was always legal to use "music snippets" without compensating the other artist, as long as the snippets could not be identified.

A 6th Circuit Court in Cincinnati has dissolved this distinction between the legality of paying for identifiable snippets vs. free use of unidentifiable snippets.   The judges rationalized that "federal laws aimed at stopping piracy of recordings applies to digital sampling."  They also explained their views of the inconsistency in prohibiting an entire song to be sampled but allowing parts of that same song to be sampled (or "lifted").   The judges defended their decision as still allowing creativity among rap artists.   A license to sample the song from the original artist is all that is needed. 

Critics of the decision have argued that it is "too restrictive."  Many rap artists frequently "rhyme" over samples of older songs, and this decision will be especially difficult to follow in such situations.  For example, in Nashville alone there have been more than 800 lawsuits filed against artists who have sampled snippets from older songs.  One such lawsuit was the driving force behind this decision.

'100 Miles and Runnin' by NWA "samples a three-note guitar riff from Get Off Your Ass and Jam by '70s funk-master George Clinton and Parliament Funkadelic.  The original song was somewhat distorted for its use in the rap song: "the guitar pitch has been lowered, and the copied piece was 'looped' and extended to 16 beats."   The song was featured in "I Got the Hook Up," a 1988 Film by No Limit Productions. 

Bridgeport Music and Westbound Records own the copyright to the George Clinton song, and were disputing No Limit's claim that the "sample was not protected by copyright law."  The original suit led to a summary judgment for No Limit.  The court held that "the riff in Clinton's song was entitled to copyright protection, but the sampling "did not rise to the level of legally cognizable appropriation."  Clinton's record label appealed and was successful in the appeals court. 

Any artist who recognizes that he or she is sampling should also recognize the potential liability at stake in using the song without the consent of the original artist, "even when the source of a sample is unrecognizable."  This decision also rested on the fact that No Limit failed to dispute that they "digitally sampled a copyrighted sound recording."  Undoubtedly, the result of this litigation is sure to have serious financial consequences for the music industry, in particular rap artists. 

Who Owns Fantasy Sports Statistics?

A recent Cardozo Law Review article entitled "Who Owns the Back of a Baseball Card?: A Baseball Player's Rights In His Performance Statistics" sheds some light on the copyright infringement and IP violation dangers new technology imparts on professional sports, Major League Baseball in particular.

A decline in attendance and revenue was a key reason in MLB's decision to incorporate new technology into the League in hopes of "revitalizing the game."  Web sites, satellite radio, e-commerce, "real time" gamecasts, fantasy sports leagues and virtual sports teams are becoming commonplace, as well as significantly increasing revenue for all professional sports.  The Internet is by far the most creative outlet for new technology; many minor league sports teams offer their fans live web casts or radio broadcasts of games.  The Internet is also host to over 30,000 fantasy sports websites - another technological advancement of professional sports that has grown exponentially over the past few years. 

The success of an "owner's" fantasy baseball team depends on his players' statistics throughout the season.  There are many Internet services which will provide "assistance" with statistics (for a fee, of course)  strengthening the argument that "at the center of the fantasy league concept is access to real life/ real time performance statistics.  Without access to these performance statistics and the names of players, the game loses its real feel."

Since most MLB player statistics are complied in some sort of database, the copyright issue is "whether any ownership or property interest in the database or compilation is protected by federal or state law?"  The concern is that without protection, the economic value of the database significantly decreases.   The article notes that although most databases/compilations are made up of pre-existing statistics, there are certain instances in which copyright protection will be afforded.

"A ‘compilation’ is a work formed by the collection and assembling of preexisting materials or of data that are selected, coordinated, or arranged in such a way that the resulting work as a whole constitutes an original work of authorship. The Term ‘compilation’ includes collective works."  This definition is important because the Supreme Court has long held that originality is necessary in obtaining copyright protection.   The grey area in fantasy sports exists because facts, or the act of gathering them, do not qualify as original works  - they are not works of authorship.  The angle databases are arguing is that the compilation itself is a "work of authorship," and therefore warrants protection.  The other side of the coin is that originality equates an independent creation, not simply copying other works and compiling them into a database ("the sweat of the brow does not originality make").

An important decision in Feist Publications, Inc. v. Rural Telephone Service Co., Inc. is applicable here.  Not only did the court reject the "sweat of the brow" position and reiterate the need for originality, but they went on to consider the question whether a factual compilation was worthy of protection.   Reasoning that "certain factual works may possess the requisite modicum of creativity to warrant copyright protection," the court held that in some cases, compilations could be protected under copyright law.

So, compilations can often have the necessary degree of originality essential in obtaining copyright protection.  What separates fantasy sports statistical compilations from an ordinary, purely factual database is that "a compilation selects specific facts, in what order to place them, and how to arrange data so that readers can effectively use (the information.)"  The economic value of a compilation - in this case, the fee charged by Internet services to fantasy baseball players - is not sufficient in itself to be considered worthy of copyright protection.

A player's individual right to publicity, however, negates the "original" argument to some extent, as they help protect statistics and make it seem apparent that "a third party may not use a database of players' names and performance statistics in a fantasy league game without consent or some form of compensation."  If the Internet services would pay a portion of their profits to the MLBPA (or the MLB itself, depending on who owns the rights to a game, the League or the player - a subject under heated debate), perhaps the problem would be solved.   But for now, copyright law grants limited protection to compilations that meet the 'original' standard, and publicity rights protect players and league owners from unauthorized or uncompensated use of performance statistics.

Oh What Damage Piracy Hath Wrought

As I previously mentioned, there is an emerging battle over the next generation DVD technology being offered by Sony and Toshiba. As this article mentions, a number of major movie studios have, for the moment, sided with Toshiba's HD-DVD format. While this is unsurprising, the article sites piracy as a key concern of the movie studios:

Both formats promise increased storage capacity and movie resolution superior enough to get the most out of high-definition TV sets. And both would contain stronger anti-piracy protection, a key factor in the studio's anxiousness to adopt a new format. Now, the software protecting DVD is easily circumvented and DVD piracy is an enormous problem for the industry.

While it is absolutely true that piracy will is an ever-growing concern among all who work in the entertainment media industry, it is remarkable that the industry has had such luck in pushing the idea that they are currently facing "an enormous problem". In fact, there is no evidence that the major movie studios, or Hollywood in general, have seen any significant decline in sales due to Internet piracy yet.

This, of course, does not mean there is no piracy, nor does it mean that piracy isn't illegal. But both the MPAA and the RIAA are waging massive campaigns to spread the message that they are under siege by legions or corrupt and immoral downloaders. The President of the MPAA, Dan Glickman, has said that the information age "threaten to unleash a wave of intellectual piracy that will undermine the very foundations of moviemaking.” (from the MPAA).  Glickman also noted that he is eager "to work with the new Congress to protect against piracy and on other issues important to the movie industry and its hundreds of thousands of workers."

Well of course he is. But that's like saying that the starting quarterback is eager to take a few snaps--eager because he's first in line to do so? Or eager because only the industry heavyweights have any meaningful voice at the legislative table? The MPAA and the RIAA are not the underdogs, despite what their ad campaigns would have us believe. They are not victims--the best they can say is that they are trapped in a complicated copyright system just like content users, but they have the money and the resources to reshape the system as they like. Don't believe the hype. Piracy may prove damaging to the industry someday, but so far Hollywood is having an excellent year and Blockbuster is still doing just fine. They just have better PR than the average P2P user.