Copyfutures

New pricing models on the way for Digital Music?

Apple computer announced digital box sets available for download from their online music store iTunes. These box sets would similar to the ones found in stores, which consist of compilations of music from an artist, usually spanning multiple albums.

The first release will be from U2, which will include every song they have written in addition to 25 unreleased tracks. The current pricing model that iTunes uses is 99 cents per song. This pricing model is followed by most of iTunes competitors as well. This box set will sell for $149.

At ordinary $9.99 album pricing on iTunes, the collection would cost about $185. If purchased by the individual track, it would run more than $425.

Many market analysts feel that this will be the start of new pricing models for online music. The market is on its way to maturity and it’s a lot easier to change the prices now since people are more comfortable with the idea. Ideas such as changing the price based on the popularity of the song instead of just having flat 99 cent pricing have started to emerge.

At the same time however, iTunes has had to continually update their software as hackers have found ways to share music through the program illegally. Apple currently gives 65 cents per song to the record labels. Will record labels want more if this becomes a problem? It will be interesting to see if the pricing has to adjust not only because of file popularity, but because of illegal downloads.

P2P as Political Speech

Peer-to-peer - that's just for copyright infringers, right? Or maybe we can work out a system for making it a legitimate means of commercial distribution. What about widespread dissemination of political speech? Surely that would be a fatal blow to the people who claim P2P is a bastion of the evil empire of piracy. What could be more American than protecting the right for citizens to speak their minds (or share those views digitally) about the political issues of the day?

Jon Stewart appeared a couple weeks ago on CNN's Crossfire program. Stewart made the appearance memorable after criticizing the show's hosts as "partisan hacks". The mini-controversy might not have gained so much steam if not for P2P. The blogger mentality kicked in, and internet observers started posting about the Crossfire show on blogs, message boards, and even on P2P in the form of video clips of the show. Ifilm supplied a clip of the show that has been viewed over 2 million times as of this writing. The actual television program had less than a million viewers. And the ifilm stats aren't even counting Bittorrent! Cnet reports that at one point during the week following the much discussed show there were over 1,100 sources available on the P2P program offering clips of the show with the Stewart segment. That's substantially more than the number of sources for the vast majority of even the most popular pirated movies/songs/games.

Surely no U.S. court would want to suppress political discussion between willing citizens just because it uses technology that could also be used for unauthorized distribution of copyrighted works. Another nail in the coffin for the quickly dying belief that P2P programs (even with the current technology) have no real potential for legitimate use.

We could realistically see the bloggers of the world (specifically the many politically minded ones) combine their brand of guerilla journalism with the technological power of P2P to distribute not only their opinions as written text, but also to show additional media. It could come from an individual who recorded a small town hall style meeting with a political candidate. Maybe the candidate says something particularly audacious and the outraged blogger could post the comments as mp3 files or as a digital video clip and encourage friends and readers to distribute the files via P2P. Would the traditional media outlets be willing to be so open? Maybe, but maybe not - that seems to be the whole blogger-as-reporter ethos anyway. Sure looks like the blog mentality, which often attracts the technologically oriented set anyway, is gaining steam. Using P2P to keep the current story from dying out in a few days (and to add a multimedia dimension to the issue) is a perfectly logical extension of what text based blogging is already striving to achieve. With the growth of that kind of thought, Bittorrent or other technologies like it could surely become common ways for people to speak freely about current political issues. We have one high profile example right here with Jon Stewart.

Unsustainanility of Open Source

Professor Richard Epstein has an op-ed in the Financial Times on the unsustainability of open source software. What exactly is open source software? Open source software is basically free software – it can be used, distributed, and modified freely. The source code of the open source software is also freely accessible to the public. Proprietary software, on the otherhand, is the type that most of us are used to – it is distributed subject to a licensing fee and the source code is not available to the public.

For those of us who are not versed in computer language – what exactly is source code? Mathias Strasser has written a paper (“A New Paradigm in Intellectual Property Law? The Case Against Open Sources”) in which he goes over the background of available legal protection for source code. Strasser summarizes the differences between source and object code in the following way: “First, while source code is intelligible to human beings, object code is not. Second, unlike source code, object code is directly executable on computers. Third, it is virtually impossible to recreate the source code of a piece of software on the basis of its object code.” One way in which source code gets legal protection is through copyright law because “source code is [] an expression of an idea, the idea being the algorithm on which it is based…, and the expression being its representation in a high-level language on a tangible storage medium…” The Open Source Movement believes that “software should not be subject to legal protection at all, or, in open source terminology, software should be free or ‘open.’”

In Professor Epstein’s op-ed, he discusses how these Open Source advocates achieve their goal of free software through a General Public License (GPL). These provisions say something to the effect of: “You must cause any work you distribute or publish, that in whole or in part contains or is derived from the Program or any part thereof, to be licensed as a whole at no charge to all third parties under the terms of this License.” Professor Epstein states that there are two weaknesses to the open source. One is that the GPL provision has not been tested – specifically, it “does not specify the appropriate remedy when some portion of the open source code is incorporated into an otherwise proprietary program.” Second, the clause may only bind those people that know they are using open source code. Professor Epstein then goes on to compare the open source movement to a workers’ commune in order to illustrate its unsustainability:

“To see the long-term difficulty, imagine a commune entirely owned by its original workers who share pro rata in its increases in value. The system might work well in the early days when the workforce remains fixed. But what happens when a given worker wants to quit? Does that worker receive in cash or kind his share of the gain in value during the period of his employment? If not, then the run-up in value during his period of employment will be gobbled up by his successor – a recipe for immense resentment. Yet that danger can be ducked only by creating a capital structure that gives present employees separable interests in either debt or equity exchange for their contributions to the company. But once that is done, then the worker commune is converted into a traditional company whose shareholders and creditors contain a large fraction of its present and former employers.”

In the end, open source, like idealistic communes, cannot continue to exist. Professor James Boyle from the Duke University School of Law responds to Professor Epstein’s piece by basically saying that Professor Epstein’s fears are exaggerated. Professor Boyle then goes on to present counterarguments. It is interesting, but I do not find it very persuasive.

We know that source code is protected through copyright law. By providing this protection, the creators have incentive to further create and improve upon existing programs. In an “ideal world,” open source sounds like a very good idea. I am sure there are people out there that create source code for the sake of creating source code. This sounds more like what academics would do though. Academics do what they do to advance the science without any expectation of significant monetary gain. In a world where technology changes by the nanosecond, open source will not likely be able to compete with proprietary software, in which millions of dollars have been invested into its development. The incentive provided by copyright law (and trade secret and patent) will cause proprietary software to advance at a much faster rate than open source.

For a very detailed look at the case against open source, see Mathias Strasser’s paper.

Global Copyright?

John Lofti posted earlier in the week about project Gutenberg Australia's battle with Margaret Mitchell's estate over the copyright of Gone with the Wind. Lofti pointed out that Australia's copyright protection only last 50 years from the author's death, while in the US protection will last until 2031. Whats the reason for this difference? In the world of global copyright, many countries have not crafted laws consistent with the US copyright agenda. In fact, the large majority of countries provide protection for life+50 years or fewer. A small list would include: Albania, Algeria, Angola, Argentina, Armenia, Australia, Azerbaijan, Bahrain, Bangladesh, Barbados, Belarus, Belize, Bolivia, Benin, Brunei, Bulgaria, Cambodia, Canada, Chile, China, Cuba, Egypt, El Salvador, Fiji, Ghana, Iceland, Indonesia, Iraq (under US occupation rules), Japan, Jordan, Kazakhstan, Kenya, (South) Korea, Kuwait, Lebanon, Malaysia, Moldova, Mongolia, Morocco, Namibia, Nepal, New Zealand, Niger, Oman, Pakistan, Panama, Papua New Guinea, the Philippines, Qatar, St. Vincent and the Grenadines, Saudi Arabia, Serbia and Montenegro, Singapore, Solomon Islands, South Africa, Syria, Taiwan, Tanzania, Thailand, Tonga, Trinidad and Tobago, Tunisia, Ukraine, the United Arab Emirates, Uruguay, Uzbekistan, Vietnam, and Zambia. In contrast, the life+70 years period is enforced in primarily EU countries, the US, and a few others. Quite a few countries include only a life+25 period, and some have no copyright protection at all (noably Afghanistan).

An explanation comes in the way international copyright has unfolded. Primarily, it has been pushed through by a few of the larger, more commercialized countries in the form of treaties, or more recently, under the guise of requirements to join the WTO and UCC. A little history lesson:

Almost all countries have adopted the Universal Copyright Convention's copyright limitations, which are life +25 years. Most of these countries later signed on to the Berne Convention, which specifies a life +50 year period. Those that did not participate or ratify the convention, have either done so since or were "forced" to as a condition to join the World Trade Organization. What this all basically amounts to is a few major countries where most copyright originates (i.e. US, UK) using other economic benefits (WTO) to strongarm smaller countries into adopting copyright laws that benefit the "biggies."

But politics aside, there is still a very real problem with the +50/+70 gap in international copyright. Gone with the Wind puts this problem into stark contrast: who wins out? who decides? and perhaps more importantly, how is it enforced, especially in the wired world of today?

Joe Gratz asks a similar question on his weblog. Procedurally, how can Mitchell's estate bring an actionable suit in this circumstance? Are their cease-and desist-orders merely a strawman attempt to bully Australia into co-operating? Can SM jurisdiction be established? Can PJ? How would an Asahi/International Shoe minimum contacts test be applied?

I believe that this situation is un-actionable in the US court system. Any kind of minimum contacts test requires at least a purposeful availment of resources from state/country. But Project Gutenberg is a non-profit organization. One would be hard pressed to argue that PG-Australia is receiving any undue benefits from putting Gone with the Wind online.

Could then a case be brought under an international court system? The WTO offers a dispute settlement body (here's an overview). Since both are members of the WTO, it seems far more likely that the US, if it chooses, will try to throw its weight around and attempt to make Australia at least demurr to US copyright law in such instances where dissonance causes a US copyright holder damage. But that begs the question: is any decision enforceable? I doubt that the US can argue the shutdown of all PG-Australia. Can Australia then merely block American IP's from accessing the PG-Australia website? I'm not versed in html coding, but I'm pretty sure IP's can be conealed/changed, mirrored, etc. Is there technology available to enforce an American IP restriction? (any response from classmates more educated in this field would be appreciated). If the internet+broadband connection allows users from around the world to access information stored in any one country, how much longer can different copyright protection periods last?

A False Step in the Right Direction

Instead of trying to supplant legitimate use of P2P programs with overly broad legislation, the Washington Post reports (free registration required) that Attorney General John Ashcroft has turned to education in order to thwart intellectual property theft.

Recently, Court TV and the government formed a partnership that culminated in the inviting of 100 local high school students to attend a forum on intellectual property theft. In addition to Ashcroft’s speech, the forum consisted of Q&A sessions with IP owners and convicted IP thieves.

Sure education is a great tool, but it seems we have been down this road before. Ashcroft’s speech was almost apocalyptic: this is your brain on IP theft.

“He talked of songwriters and film production workers who suddenly found themselves jobless because of revenue stolen from their companies by Internet pirates. He told of a young man who plugged his cell phone into a charger at night, then woke to find his desk and computer in flames -- the malfunctioning battery he used was a knockoff of a name brand, which Ashcroft described as another form of intellectual property theft. Then there was the tale of the Long Island boy who suffered grave medical reactions after he was mistakenly given a knockoff prescription medicine after a liver transplant.”

I just don’t think that the “if you download songs you help burn peoples houses down” approach is going to work here; kids are too well informed (“thanks Internet”, he says semi-sarcastically). After all the D.A.R.E. movement probably did more to peak curiosity than it did to prevent drug use.

The forum should air on Court TV in about a month.

If You Can't Beat Them, Join Them

It was inevitable. Copyfight posts that Sony BMG is partnering with Grokster, on the "Mashboxx" venture. When Grokster users search for a Sony BMG song, the system will only allow download of an authorized version of the song. While the details are still being worked out, most likely this will be a free, low quality version of the song, with an offer to purchase the higher quality version.

If Forrester Research statistics (in one of my previous posts) are accurate, it shows that about 13% of P2P users substitute their CD purchases with P2P downloads. But for nearly 40% of users, P2P downloading is a way to sample music, which they end up buying if they like the song. Mashboxx seems like it would accomplish this goal of allowing sampling of music while preventing illegal downloads of the copyrighted song (the high quality version).

The problem will be to get P2P software companies to join up. So far, only Grokster and one other file-sharing company have signed up to the Mashboxx idea. P2P software companies are afraid that if they implement the service, their users will just switch to another P2P software. Getting the other major record labels on board also might be a problem. So far, they haven't announced anything similar. They may just be waiting to see how this venture turns out.

The RIAA, though, continues to file lawsuits against P2P users, adding 750 more lawsuits in its latest round. Studies from Pew Internet in January and May 2004 (based on Comscore Media Metrix numbers) show P2P population was devasted by the suits. For a while, it seemed the number of users were in decline. The RIAA claimed victory and seemed to be encouraged by the results, and still continues to file large numbers of infringement suits against P2P users. The Pew Internet study though, was only tracking WinMX, Grokster, and KaZaA. Combined, they represent pretty much the largest block of P2P users, which was why they are regular targets of the RIAA. Most of the user lawsuits seem to be against KaZaA users, while the Grokster and Streamcast companies themselves were being sued. A recent study (by caida.org titled "Is P2P dying or just hiding?"), however, disputes that P2P traffic and population were ever down. Rather, it's gotten much more difficult to track the usage because the softwares are no longer using fixed ports and the P2P technology is becoming more advanced (BitTorrent). According to their statistics, the P2P traffic levels were at least the same as a year ago.

These studies could be consistent with each other. Slashdot recently posted that the eDonkey P2P client took the lead from the FastTrack group (which includes KaZaA and Grokster) in terms of the number of users. And for while, it remained in the lead, although Slyck.com statistics show FastTrack has edged out in front again. What this means though, that while FastTrack traffic may have decreased due to the large number of lawsuits against FastTrack users, it may only have been a temporary displacement -- the users may have just (temporarily) switched to other P2P clients.

So, if you can't beat 'em, why not join 'em? Mashboxx is a step in the right direction. It should have been something the music industry should have done from the beginning, instead of trying to shut down P2P file-sharing networks completely. There are other significant noninfringing uses of P2P networks that we can't allow it to be shut down. The ability to sample music before you buy, I think, is one of the greatest features of online music stores like iTunes, and just recently, Walmart Music Downloads Store (which by the way, is only 88 cents per song). The current Mashboxx proposal allows users to actually download a low quality version of a song. That's an added plus, but not even necessary. It could just stream just enough of the song, like the online music stores, for you to sample the track before you buy. The only concern I see is how the Mashboxx search filtering will work. Not all searches for, say, "Usher" is a search for the copyrighted song. It could be Edgar Allan Poe's House of Usher. Or it may be some obscure, self-recorded song by some not-so-famous person also named Usher. That may be an initial problem with Mashboxx, but I think most of the kinks will be eventually worked out. Besides, that may be better than the current alternative of having 75 P2P users sued a day.

There is Still an Incentive to Rediscover Lesser Known Works in the Public Domain

Landes and Posner argue in their article “Indefinitely Renewable Copyright” that an indefinitely renewable copyright is more economically efficient than allowing limited copyright duration and eventually allowing creations to become public works. As Ryan Friedl discussed in an earlier post, one fear of public domain works is that the commercial value of works will deteriorate from congestion and overkill. Another concern is that publishers will not have the incentive to rediscover old works and attempt to publish them because of the “free rider” effect it could create. However, as we discussed in class, it appears the free rider problem may be defeated with the help of time and a little creativity.

The basic premise behind the free rider concern is that there are relatively few old works that are capable of making a profitable resurgence in the market and it can be very costly to do the initial testing and research to discover theses works. Posner and Landes suggest this initial spending would be futile since once a work is found to be profitable any free rider may skip initial research and testing costs and go straight to publishing the new work for a profit. Landes and Ponser use the following example to illustrate this point.

Suppose an enterprising publisher has only a 20 percent chance of success with obscure public-domain authors. He publishes the works of five such authors in order to have one success. In the absence of copyright protection, other publishers can wait and see which author sells and then bring out their own version of his works. Publishers who wait avoid the costs of failure, but their free riding on the market information developed by the first to publish reduces the incentive of any publisher to search for potentially successful public domain works. The tendency would be for only works of already well-known and safe authors whose works were in the public domain to be published.

At first blush, their rationale seems very logical and potentially troubling for the vitality of rediscovering lesser known authors in the public domain. However, there are some potential ways of defeating the free rider problem and still making it profitable for publishers to expand the time and money to rediscover past authors. The culmination of the first mover advantage, thin copyright, and extras could provide publishers the incentive to rediscover works, despite potential free riders.

The first mover advantage is the concept that there will be an initial surge when a work becomes popular and there is a time lag before another publisher can publish a copy of the same work to compete with the initial publishers’ sales. This initial surge period will produce high sales at the outset, potentially high enough to make a worthwhile profit from the get go. Further, the time lag will restrict competition with your sales for hopefully a sizeable period. While the turnaround time to publish a work can be relatively short, the time is typically proportional to the quality as well. So the faster the competitors work is released, the lower the quality may be. The competing work may not even take away many sales because the quality is not very high and people are willing to spend a little more or even the same price to get the nicer version. If competitors wanted to compete, it would seem they would need to create a work of similar quality, which would take more time – more time in which the initial work has to sell without any competition.

The next aid is a thin copyright. The thin copyright will protect the format of the work you publish including the style, any new art, revisions made to the work and other nuances that make your version unique. The oft used adage, “you can’t judge a book by its cover” may be very true, but when it’s the same book, you might as well get the one that looks nicer. It would seem the use of better cover art on a book or DVD folder will entice people to buy your work over the same thing without the great designs. Also, tying in with the time lag, it is doubtful and free rider will be able to expend the time or money to produce original cover art or other unique attributes to his version, thus maintaining the initial works appeal. Plus, hopefully the first work will be of better quality – whether it be nicer paper, better DVD media, clearer words, better font, etc., which will maintain the original works luster on the shelf.

Obviously, if your work is priced way higher, there will come a point where no matter how pretty the pictures are people will not buy your version. However, it would seem there is a certain threshold where your version with the pictures or other particularities would make it worth the little extra money.

Another feature that could preserve the initial works vitality is the creation of extras. Extra footage, alternative endings, biographies on the author, pictures or anything else that would make your work unique and more appealing than a cheap knockoff. Granted these extras might take more time and money upfront, but they could enable long term success as opposed to reliance on just the initial boom and time lag.

A final concept could be the spin you put on your version. The initial creator can plug and market the extras, making any other version completely inferior and a waste of time. He can also market his book as the original republishing – not to buy cheap imitations or knockoffs. I’m sure there could be a ton of different angles publishers could take to hype up their version of work over another.

It appears that free riders may pose a problem as they do force the initial publisher to really make a unique and quality product. However, these characteristics would seem very beneficial long term and to make the most out of the initial surge as well – people like better products. We live in a competitive market where there are many similar products out there that compete with each other. It really just comes down to who sells their product better and takes advantage of the situation. It seems the initial publisher just needs to take full advantage right away and he will be just fine in outlasting the free riders.

Terry Fisher Guest-Blogging At Lessig Blog

Okay, Okay…I know that we already killed Musical Socialism, but I’m going to resurrect it for a moment. Why? Because Professor Terry Fisher is guest-blogging this week for Larry Lessig. Anyway, I think that the name “Musical Socialism” just has a bad connotation, so instead I will refer to it, as Fisher does in his book Promises To Keep, as an Alternative Compensation System (Ch. 6). This chapter was actually a class topic that we were going to discuss until we [killed it]. However, I discussed this chapter very briefly in a previous post. And with Fisher’s book coming out and his guest-blogging appearance, this chapter has been a hot topic.

Fisher begins by discussing some of the problems with the current system and the effects music sharing has had. The responding comments quickly turn into a discussion forum for Ch. 6, and Fisher has essentially spent the week on this topic alone. The discussion has been very interesting and informative, with readers asking numerous questions about the proposed system, many of which being identical to questions posed in our class. Fisher has responded to the questions thoughtfully and has some pretty good suggestions regarding the feasibility of his Alternative Compensation System. I will highlight a few of the questions that were similar to those raised in our class and include Fisher’s response.

(1) Does such a system “scale” internationally (see John Allsopp’s post)? This is definitely one of the weaknesses of an ACS. If adopted in only one country (say, the U.S.), it would “leak” across national boundaries – in the sense that French artists whose creations are downloaded in the U.S. would be paid portions of the tax revenues collected by the American government from American consumers, while French consumers would gain free access through the Internet to the creations of American artists, and American artists would not collect anything from French taxpayers. … Modification of the pertinent international treaties (most likely, the TRIPS Agreement) to force other nations to adopt similar regimes is extremely unlikely in the near future. Harmonization thus would have to occur through voluntary adoption of ACSs by other countries.

(2) Would artists really be compensated in proportion to the frequency with which their creations are consumed? The ability of the system to assuage both concerns depends on the quality of the sampling system used to count consumption rates. In Chapter 6, I devote a fair amount of space to a discussion of how one might design an effective sampling system.

3) Won’t unscrupulous artists and third parties “game” the system, artificially inflating the number of times their works are supposedly “consumed” and thus depriving deserving artists of their fair shares of the ACS fund? The primary answer to this serious source of concern is that, once again, a great deal depends upon the quality of the sampling system used to estimate consumption rates. A secondary response is that the “gaming” problem is most serious with respect to downloads and is much less worrisome with respect to streamed works.

Many comments raised the concern of how to implement the system. Fisher acknowledged this difficulty, but stated that the system did not have to start full scale. Instead, a small-scale experiment could be attempted using a particular genre of music. As far as actually attempting this and whether Congress would buy it, he went on to say:

We’re beginning work along these lines at the Berkman Center. But, to be frank, I’m not optimistic that even complete success in launching a small-scale entertainment coop would be enough to persuade Congress, in the face of continued opposition from the record companies and film studios, to adopt the plan in the near term. Real hope lies in countries that either are more desperate for a workable system (e.g., China) or have a less deeply rooted tradition of suspicion of “big government” (e.g., Brazil) or both. Demonstrated success in such a venue might then prompt Congress to follow suit. That, anyway, is my hope.

It appears to me that Fisher believes in his proposed system; he believes that it offers a innovation-friendly improvement to the current Copyright regime, that consumers will benefit by paying less overall (on average) than they do now while having access to legal entertainment media at their fingertips, that the current distributors will actually buy into this new system because they still profit (perhaps, this system may actually save them), and that implementing such a system is possible over time and will eventually completely overtake the current regime. He admits his proposed system has faults, and details still need to be worked out. Fair enough. No law is perfect, and as my Con Law professor constantly stressed, every law will affect someone negatively in some way.

This whole copyright mess that we’re in as a result of newly developing technology has to be great for law professors. The way it goes in academia, so I’ve heard, is “publish or perish,” and at the very least, p2p technology has given many professors something to write about. They’re all coming up with their own solutions, some just modifications of the current system, while others propose a complete over of Intellectual Property law. Sometimes I have to wonder whether they really believe in their proposed solutions, or just write them for the sake of publishing and to give people something to talk about. Well, I think Fisher really believes, and with his system he’s at least attempting to please all the parties involved. So, who knows, maybe his ACS is a real solution to the current dilemma.

Save Mary-Kate

A website has recently started selling "Save Mary-Kate" T-shirts, in reference to the anorexic battles of the former "Full House" star. Despite the success of the item, the owners of the mary-kateandashley brand have threatened litigation if the sellers of the t-shirt do not cease sales and production immediately.

The "Olsen twins empire," and their legal representation Dualstar Entertainment, is basing their claim against Randy and Moss, an L.A. design company on grounds that the t-shirt (which featuers a drawing of an "emaciated Mary-Kate") is not only violating trademark laws, but also Mary-Kate's publicity and privacy rights. Mary-Kate entered a treatment facility for an eating disorder in June of 2004, which sparked the production and sales of the t-shirt. Randy and Moss alleged that they planned on giving 20% of profits of t-shirt sales to America's National Eating Disorder Association. However, the NEDA rejected thier donation offer. Randy and Moss co-founder Melissa Moss says, "I'm disappointed. It started out as a good gesture. A positive thing. We did get cease-and-desisted and we are no longer selling them, and we have received many emails asking, 'Please can I get a shirt?' Eating disorders aren't beautiful and we wanted to show the way that she was looking, which isn't at her most glamorous. Her ribs were sticking out. Here we are getting denied trying to donate money. It was really a shock to me."

Although Randy and Moss might have had good intentions when creating the idea for the t-shirt, they were greatly overshadowed by the controversy caused among the Olsen Empire. "One night we were working on designs and reading magazines that featured Mary-Kate's eating disorder," says Randy and Moss cofounder Melissa Moss. After making the shirts available on the website cafepress.com, Randy and Moss created a blog specifically designed for the shirts - savemarykate.blogspot.com. They even created a motto for the blog: "Together we can do this. One T-shirt at a time."

The pair received mixed reactions from the t-shirts; however, the shirts sold out after only a few weeks.
Although many letters and emails of support appeared on the blog, not everyone appreciated the alleged "good gesture" of the company. "The shirts (were) not sanctioned by either the Olsen camp or the National Eating Disorders Association."

""I'm not sure what Mary-Kate needs saving from,' says Michael Pagnotta, the Olsens' rep. He is quick to point out that the shirts are not endorsed by Olsen and suggests that the twins' company, Dualstar, may look into a possible copyright-infringement claim."

In fact, neither the Olsen twins nor their representation ever released a statement confirming Mary-Kate's eating disorder. Even if the illness had been made public, "this image does not portray a positive approach to Mary-Kate's well-being," said Dualstar CEO Lynn Grefe. She also added, in response to the t-shirts, "it is once more sensationalizing eating disorders, rather than respecting the privacy of those affected and educating others to the severity of the illness."

Although both sales and demand were at a high for the shirt, the company ceased production and sales following Dualstar's threatened litigation. Randy and Moss possibly feared that further sales of the shirt would be a direct violation of various sections of the U.S. Lanham Act.

Use of "Fair Use" gets More Fair

“Fair use” is often touted as the balancing force that prevents copyright from totaling eclipsing the rights of free expression. In theory, this is true. Unfortunately, in practice this theoretical force has often failed to effectively serve its purpose. That is, perhaps, until now.

The reason why fair use has generally failed to effectively balance the rights of free expression with those of copyright owners is because it has always been viewed as an affirmative defense. Without at least a letter from a copyright owner threatening litigation, fair users have found themselves without standing in federal court, making it very difficult for them to affirmatively assert their rights to fair use. Even if a threat letter created sufficient standing for the fair user, the copyright owner has generally had the ability to moot the case at any point by issuing a covenant not to sue. And regardless of the outcome, fair users have almost always been forced to pay their own attorney’s fees. As a result, fair users have generally been unable to establish any precedent for their fair uses and copyright owners have been able to indiscriminately issue takedown notices (or cease and desist orders), understanding that most individuals would rather comply than pay the litigation costs.

Well, thanks to the recent federal district court decision in Online Policy Group v. Diebold, this may all be changing. As Fred von Lohmann points out, the Diebold decision has shaken up this practice by enabling ISPs and online publishers to assert affirmative claims against copyright owners who misuse the DMCA’s “notice and takedown” provision and attempt to censor non-infringing (fair) uses.

The case, a very interesting one, arose over a controversy surrounding online voting machines. I won’t relay the details (b/c you can look them up if you like), but the bottom line is that Diebold, a manufacturer of these machines, attempted to take advantage of the DMCA’s “notice and takedown provision” (codified at 17 U.S.C. §512) by issuing several such notices in order to prevent the dissemination of embarrassing, but not infringing, material. While most of the recipients complied (likely for reasons listed above), two did not. Rather, these two parties chose to file their own causes of action against Diebold under the previously obscure §512(f) of the Copyright Act. §512(f), a provision aimed at guarding against improper censoring by copyright owners, provides fair users on the internet with a cause of action for damages, costs and attorney’s fees for any injury caused by a knowing material misrepresentation that an item is infringing. As the first reported case to apply this provision, Diebold found in favor of the fair users, establishing that copyright owners who recklessly and inappropriately attempt to assert their copyrights will be held liable.

Although the Diebold case is only a district court decision at this point, the effects of its outcome on the landscape of copyright could be very significant. If nothing else, the decision has drawn more attention to the potentially powerful fair use weapon found in §512(f). Not only can we expect to see more fair users applying this provision to affirmatively assert their own rights and establish pro-fair use precedents, but perhaps more importantly, we should see a dramatic increase in the level of discretion exercised by copyright owners issuing takedown notices to ISPs and online publishers.

This decision represents a necessary, and long overdue, revelation for copyright. Previously, fair use could be more aptly described as a theoretical defense justifying the existence of copyright, rather than a right protecting free expression. By putting some actual teeth behind fair use and allowing fair users to get offensive, §512(f) has made fair use an active part of the law and allowed it to serve the balancing purpose for which it was originally intended. Although the true impact of this change is yet to be shown, it is undoubtedly a step in the right direction.