People Still Pirated Arrested Development Because People Pirate — It’s a common refrain. “People only turn to unauthorized sources of entertainment when authorized sources are unavailable.” But as Gizmodo points out, Netflix, which unveiled exclusive new episodes of cult phenomenon Arrested Development this weekend, was available in 4 of the top 5 countries in terms of Arrested Development piracy.

National Federation of the Blind, MPAA join forces to back book treaty — Despite efforts by copyright skeptics to derail an international treaty focused on making works more accessible to the visually impaired in order to erode copyright protections, the MPAA and the National Federation of the Blind announced yesterday that they are working together to make sure the treaty moves forward.

Google cashes in on hate videos: Internet giant puts ads alongside thousands of terror rants on YouTube — The Daily Mail reports, “Google is profiting from adverts which appear alongside vile terror videos on YouTube, it emerged last night. The Mail has found adverts for reputable companies on videos of Al Qaeda fanatics calling for jihad.”

Exclusive: Pandora Paywall Pays Off, Research Shows — Internet radio service Pandora capped the number of hours available to its free subscribers and the number of paying subscribers… increased? Good news for Pandora, though the result might cut into its argument that it needs Congress to cut the government-set license rates it pays to sound recording owners in order to remain profitable.

Did Boing Boing’s Cory Doctorow Even Read the IP Commission Report? — Cory Doctorow is the worst thing to happen to Boing Boing.

Why 3D Printing Is Overhyped (I Should Know, I Do It For a Living) — For some reason, hyping 3D printing (and its projected effects on intellectual property law) has become something of a cottage industry online. Nick Allen, founder of 3D printing company 3D Print UK, says don’t believe the hype.

Yes, Silicon Valley, You Are as Exactly as Vain as They Say — “Tech’s greed is a generally thoughtless one, the greed of children who don’t realize that by hoarding toys, the rest of the class gets less—the greed that sees itself as progress, as a thrill, never as greed at all.”

Live: Google, David Lowery and the BPI talk ad-funded piracy — Musically reports on a recent panel discussion featuring David Lowery, Theo Bertrand (UK policy manager at Google), Alexandra Scott (public policy manager at the Internet Advertising Bureau in the UK), and James Barton (artist manager at The Blue Team) on the subject of brand sponsored piracy. Some provocative remarks from Google’s Betrand, including this one: “It does seem to me to be an entirely sensible way to tackle piracy… most people doing piracy are not some guy in his bedroom altruistically sharing music with his friends. It’s people making money out of piracy, and it’s big business: some of these sites have 2m visitors regularly, and they’re not doing a bad business from advertising.”

Supreme Court Won’t Hear Challenge on Copyright Royalty BoardTwo weeks ago, I noted that SCOTUSBlog had named Intercollegiate Broadcasting System v. Copyright Royalty Board, a case involving the appointment of Copyright Royalty Judges in charge of setting royalty rates for a number of compulsory licenses, including webcasting licenses, as its petition of the day. But this week, the Court denied the cert petition, leaving the DC Circuit Court’s decision to stand.

Copyright Implications of Yahoo Buying Tumblr — PlagiarismToday’s Jonathan Bailey examines the copyright issues raised by Yahoo’s purchase of Tumblr earlier this week. The move won’t result in any drastic changes, though Bailey does point out “the consolidation should still give us all pause to worry. Every time we agree to a TOS, we’re giving away a license to our work and as those rights become more and more centralized, that gives companies an amazing amount of power not just in terms of what they know about us, but also what they can use that we create.”

Larry Page wants you to stop worrying and let him fix the world — Ars Technica profiles the growing desire to influence public policy displayed by Google co-founder Larry Page at a recent event. “But there’s more to debate over issues like health care data and immigration and consumer privacy than people not ‘getting it.’ And I’m not sure anyone would really be happy in a world that’s a mash-up of Ayn Rand’s Atlas Shrugged and Cory Doctorow’s Down and Out in the Magic Kingdom—except maybe Larry Page and the tech startup execs who want to emulate him.”

Debunking the “Stifling Innovation” Myth: The Music Business’s Successful Transition to Digital — A brief but thorough response in this month’s Wisconsin Law Review Online responding to an earlier law review article that repeats the tired claim that copyright stifles innovation.

Copyright Principles & Consensus? — Blistering and brilliant observations of last week’s copyright review hearing from David Newhoff. “So one can sit in tech-industry funded ivory towers and ruminate over the proposition that a novel by Steven Millhauser is of equal value to the random bits of personal detritus shared on social media, but if we consider for a moment that copyright ought to be amended based on this childishly whimsical proposition, then we might as well start burning the libraries this afternoon.”

Hey Derek…the Tech Industry is a “Special Interest” too! — Vox Indie’s Ellen Seidler looks at tech’s latest poster boy Derek Khanna and his response to last week’s copyright hearings. Seidler asks Khanna to “please remember that artists ARE innovators and that the tech industry represents a big ‘special interest.’ Next time hearings are held in Washington let’s hope that a diversity of creator’s voices is heard rather than a panel of legal theorists.”

Trichordist Bookshelf – Essential Reading for Artists Rights — The Trichordist highlights a handful of must-reads, many of which I’ve heartily endorsed on this site.

Last Thursday, the House Judiciary Committee Subcommittee on Courts, Intellectual Property, and the Internet held a hearing called “A Case Study for Consensus Building: The Copyright Principles Project.” The hearing is the first in an expected series of hearings that will take place in the upcoming months aimed at a comprehensive review of U.S. copyright law.

Rep. Goodlatte, the House Judiciary Committee Chairman, chose the topic of the first hearing not to endorse the substance of recommendations of the Copyright Principles Project, but to set the tone for a process that is hoped to be characterized by civil discourse between those who hold diverse views rather than rhetoric and “sharp elbows.” In his opening statement, Chairman Goodlatte elaborated on his motivation for the hearings:

We should not be in a rush to focus on specific issues without first recognizing the fundamentals of copyright and the social and economic benefits that copyright brings to our economy. It is my intention to conduct this broad overview by hearing from everyone interested in copyright law as we begin by holding hearings on important fundamentals before we begin to look at more specific issues.

There are numerous questions that will be raised by interested parties during this review. I have several myself including:

How do we measure the success of copyright and what metrics are used?

How do we ensure that everyone’s voice is heard?

How is copyright working for individual artists?

How is copyright working for our nation’s economy?

These are only a few of the issues we will be looking into. This review of copyright law will not be a quick process simply because the issues are so numerous. However, we must undertake this review to ensure that copyright law continues to incentivize creativity and innovation in the digital age.

It’s an ambitious agenda even if it doesn’t make it to a point where legislation is contemplated. But fortunately, Congress does not have to reinvent the wheel when it comes to copyright review.

There already exists a large body of literature that pokes and prods at copyright law, asking many of the same questions that Rep. Goodlatte posed. Some of it sheds light on how current copyright law came to be shaped as it is, some of it identifies what issues recur most often or have proven most challenging. Together, this literature can prove valuable to Congress as it embarks on its own copyright review.

I want to highlight some of the literature I’m talking about. One can step way back and look at the very broad strokes of copyright law. Here you might focus on its philosophical underpinnings or justifications. You can also zoom in and examine individual doctrines and issues very closely. There are many books, articles, and papers that take both these perspectives. But one can also take a mid-level view of the copyright law as a cohesive whole and how it functions as a statute. This is, it would appear, the approach taken so far by the Subcommittee. And so this is the type of existing works I want to look at.

First, obviously, is the Copyright Principles Project itself, released in 2010. The Project describes a set of broad principles that copyright law should adhere to and than analyzes current law to see how aligned it is with those principles. It then offers a series of recommendations to revise copyright law. Thursday’s hearings did not focus so much on the substance of the Project but on its process itself, and the remarks from Subcommittee members suggested that here it fell short. Concerns over the lack of creators’ input during the project were raised several times during the hearing. Along with that, witness and Project participant Jon Baumgarten pointed out that while there was civil discourse during the process, very little actual consensus was reached in the end.

During the hearing, several references were made to the European Copyright Code, a publication of the Wittem Project. Sponsored in part by the Dutch Government, the European Copyright Code was drafted by a group of copyright scholars with the aim of providing a “model law” of sorts to facilitate future harmonization or unification in European copyright law. The Code was repeatedly referred to for its accomplishment of fitting a copyright law in less than 20 pages. While it did so by leaving out major components of a copyright law — most notably, it does not address infringement or remedies — it is still much shorter than the current U.S. Copyright Act. And although, like the Copyright Principles Project, the European Copyright Code was drafted by academics, its aim was descriptive rather than normative, so it may serve as a useful starting point when looking at how other countries approach copyright law.

Domestic Resources

For U.S. law specifically, one natural starting point is the U.S. Copyright Office, which, as the primary policy advisor for Congress, regularly engages in studying the U.S. Copyright Act. It was, after all, Register of Copyrights Maria Pallante who inspired Goodlatte to conduct the review with her earlier testimony on the Next Great Copyright Act. The Copyright Office has a number of reports that it has completed since the 1976 Copyright Act. Indeed, Pallante references a few in her Next Great Copyright Act article under the heading “Preparatory Work”. These include, to name a few, reports on digital first sale, orphan works, and statutory license for cable and satellite retransmission, as well as pending reports on resale royalties for visual artists, and solutions for enforcing small copyright claims.

The 1976 Copyright Act itself has produced volumes of legislative history (Subcommittee co-chair Rep. Marino could be seen paging through one such volume during Thursday’s hearings). But in terms of systematic and comprehensive discussion of copyright law and doctrines, nothing really compares to the series of copyright law revision studies prepared by the U.S. Copyright Office during this process. Although each tackles a specific area, the 34 studies together cover a range of issues that, for the most part, remain relevant today. Each not only provides a thorough historical background, but delves into many of the challenges and sticking points, surveying the diversity of opinions, highlighting the critical questions, and analyzing the different approaches. Drafts of each reports were submitted to an advisory panel of experts appointed by the Librarian of Congress; the comments and responses of panel members are also included in the reports, providing even more insights.

Although there hasn’t been a general revision since the 1976 Copyright Act was enacted, the 1997 Digital Millennium Copyright Act brought fairly substantial changes to the law, including many of the more contentious provisions today. The DMCA could be traced back to work done by the Working Group on Intellectual Property Rights in the National Information Infrastructure (NII). The NII grew out of the High Performance Computing Act of 1991 and laid a lot of the groundwork for the modern internet. In 1995, the Working Group released a report on Intellectual Property and the National Information Infrastructure. The report examined thoroughly current copyright law and doctrine, with an eye toward how that law would operate online, concluding with a set of recommendations for modernizing the law where necessary. The usefulness here is seeing the thought process behind the DMCA — where, for example, is it outdated because predictions it was based on failed to pan out and where has it fallen short despite accurate foresight because it hasn’t been implemented or interpreted properly.

Foreign and International Resources

A number of countries outside the U.S. have (or currently are) engaged in similar copyright reviews. Many of these reviews have resulted in comprehensive reports that could provide guidance and illumination on many copyright issues.

In the UK, for example, an independent review of copyright law was commissioned by Prime Minister David Cameron. The review, by Cardiff University professor Ian Hargreaves, was released in May 2011, and contains extensive findings, as well as ten recommendations for modernizing that country’s copyright law.

Australia has similarly engaged in a review of its copyright law. The Australian Law Review Commission, an independent statutory body that was established to conduct reviews of Australian law and offer recommendations, is currently in the midst of a review of copyright law. Last August, it released an issues paper on Copyright and the Digital Economy, identifying a number of questions it wished to examine and soliciting comments on the questions. Its final report is scheduled to be released November 2013.

In the international realm, nothing compares to the Berne Convention for the Protection of Literary and Artistic Works both in breadth (it is currently joined by 165 parties) and in vintage (it was first implemented in 1886). WIPO, which administers the treaty, has previously published a guide to the Berne Convention. Although the guide may be outdated in places (it was written over three decades ago), it remains essential reading for anyone engaged in copyright review. The guide explains each of the treaty’s provisions, along with its “nature, aims, and scope.” If one is looking for international norms in copyright law, this is a good place to start.

This is far from an exhaustive list of literature relating to copyright review, but it does provide an adequate foundation before one begins jumping into specific issues.

The Constitutional Foundations of Intellectual Property Law — Randolph May and Seth Cooper of the Free State Foundation look at some of the philosophical underpinnings that drove the inclusion of copyright and patent protection into the United States Constitution. According to May and Cooper, the origin of the right is explicitly Lockean, while the protection of the right is explicitly Madisonian. An engaging and enlightening read.

Where to Watch — A new site that lists authorized online services where you can watch movies and television.

America’s New Oligarchs—Fwd.us and Silicon Valley’s Shady 1 Percenter — Joel Kotkin of the Daily Beast pens a devastating critique of the new tech giants and the economic and cultural effects they are inflicting, yet at the same time enjoying immense popularity among the public. A must read, with Kotkin concluding that “today’s new autocrats seek not only market control but the right to sell access to our most private details, and employ that technology to elect candidates who will do their bidding. Their claque in the media may allow them to market their ascendency as “progressive” and even liberating, but the new world being ushered into existence by the new oligarchs promises to be neither of those things.”

Watch Paul Williams Open up about Working with Daft Punk — Songwriter, and ASCAP CEO, Paul Williams is always fascinating to watch, especially when he is talking about the craft of writing songs. Here he discusses his collaboration with Daft Punk on the song Touch off their new album Random Access Memories.

Petition of the Day: Intercollegiate Broadcasting System v. Copyright Royalty Board — SCOTUSBlog this week named the appeal in Intercollegiate Broadcasting System as its petition of the day. As you may remember, Intercollegiate appealed a ratesetting determination to federal court a while back, adding a claim that the Copyright Royalty Judges were unconstitutionally appointed. Last year, the DC Circuit held that they were, but remedied this defect by nullifying the limitations on the Librarian of Congress’s removal authority for Royalty Judges. Intercollegiate has appealed, arguing that this remedy was insufficient to cure the constitutional defect.

When Freedom of Expression and Copyright Meet — The Afro-IP blog takes a closer look at a report called The Right to Share, released a month ago by an organization called Article 19. In it, the organization purports to examine the interaction between copyright law and freedom of expression, though the Afro-IP author “found some of it a bit hard to swallow.” She looks in more detail at particular areas of the report, noting especially that it heavily relies on US and UK based law and principles, to the detriment of more Continental and African based views.

The Dollars and Sense of Intellectual Property — Adam Mossoff has a much better review than the one I wrote earlier this week about Laws of Creation: Property Rights in the World of Ideas.

How Chairman Goodlatte Could Stop the Ennui of Learned Helplessness — Yesterday, of course, was the first in a series of comprehensive hearings on copyright law, which I’ll be writing about sometime next week here. But until then, Chris Castle shares his thoughts on how one of the ideas bandied about, a copyright small claims court, may be useful in helping small and independent creators by making the DMCA takedown procedure more effective in accomplishing its original goal of minimizing the harm of online piracy.

Zechariah Chafee, a godfather of 20th century legal philosophy, wrote an influential article on copyright law in the early twentieth century.1 At that time, technology was exploding: for the first time in history, it was not only possible to record sound and images, but to transmit them across vast distances instantaneously.

The law of copyright struggled to keep up with this technological advancement. In the 1950s, Congress began a comprehensive revision process. As it stretched into its second decade, former U.S. Register of Copyrights Barbara Ringer shared her thoughts on the process in her 1974 essay, The Demonology of Copyright (PDF). Ringer called back to Chafee’s article, adding her own lessons won from experience about what copyright law should look like:

In his 1945 article, Chafee suggested six ideals to which a copyright statute should aspire: 1) complete coverage ; 2) unified protection, enabling the author to control all the channels through which the work reaches the public; 3) international protection, with no discrimination against foreign authors ; 4) protection that does not go substantially beyond the purposes it seeks to serve; 5) protection that is not so broad as to stifle independent creation by others ; and 6) legal rules that are convenient to handle.

There is a seventh goal, which Chafee could not have been as aware of in 1945 as he would be today, and which in fact may be the most important copyright goal of all. It can he stated very simply: a substantial increase in the rights of the author, considered not as a copyright owner but as a separate creative individual. It involves recognition that committees don’t create works and corporations don’t create works, and machines don’t create works. If, for the sake of convenience of companies or societies or governments, the copyright law forces individual authors back into a collective straitjacket or makes them into human writing machines, it will indeed have become a tool of the devil.

A case study for consensus building

Today, the House Judiciary Committee Subcommittee on Courts, Intellectual Property and the Internet will hold a hearing titled, “A Case Study for Consensus Building: The Copyright Principles Project.” The hearing is the first in a planned series that will take place over the next several months aimed at a comprehensive review of U.S. copyright law.

Testifying at the hearing will be Copyright Principles Project convenor Pamela Samuelson (University of California at Berkeley Law School), as well as Project participants Jon Baumgarten (former General Counsel of the U.S. Copyright Office), Laura Gasaway (University of North Carolina Law School), Daniel Gervais (Vanderbilt Law School Intellectual Property Program), and Jule Sigall (Assistant General Counsel for Copyright at Microsoft).

The goal of the hearing appears to be on setting the tone for how Congress discusses copyright issues in a post-SOPA world, and it looks as though it will do so in two ways. First, it will begin by identifying overarching principles that should guide copyright law. And second, it will look specifically at the Copyright Principles Project as a case study for building consensus in an area of law that can sometimes generate a good deal of contention.

The Copyright Principles Project (PDF of report) began in 2007 with participants who included copyright law scholars, private practioners, and lawyers from broader industry firms. It concluded with a broad set of principles as well as a number of recommendations for bringing copyright law more in line with those principles. At the highest level, the Project participants wrote:

A well-functioning copyright law carefully balances the interests of the public in access to expressive works and the sound advancement of knowledge and technology, on the one hand, with the interests of copyright owners in being compensated for uses of their works and deterring infringers from making market-harmful appropriations of their works, on the other. Copyright law should enable the formation of well-functioning markets for creative and informative works that yield benefits for all stakeholders.

Agreeing on principles

The Copyright Principles Project suggests that consensus in the copyright realm is possible. And by leading with the Project as a case study in building consensus, the Subcommittee is sending a signal about how important consensus will be to the future of copyright policy. The Project participants testifying at the hearing should be able to provide the Subcommittee with valuable insights into how it can build its own consensus as it seeks to review copyright law to find out how well it is working.

Many of the Project’s broader points echo what Chafee wrote and Ringer endorsed half a century ago. At the same time, other contemporary scholars have offered their own principles to guide policy makers in ensuring that copyright law works for all.

In Justifying Intellectual Property, legal scholar Robert Merges argues in favor of foundational pluralism — a fancy way of saying that while we may disagree about the deeper principles of copyright (Is it utilitarian? Is it a natural right?) we can reach consensus on midlevel principles that guide how the law is shaped and applied.

Merges then offers his own principles that complement those identified in the Copyright Principles Project. He specifically identifies four midlevel principles in his theory of IP law: (1) efficiency (in the economic sense), (2) nonremoval (“information and ideas in the public domain must not be taken away or privatized”), (3) proportionality (“the scope of a property right ought to be commensurate with the magnitude of the contribution underlying the right”), and (4) dignity (“works covered by IP rights reflect and embody personal attributes of individual creators, therefore justifying special protection for some aspects of creative works”). You can see how readily these principles overlap and augment those other sets already discussed.

Keeping the Creator in Copyright Review

Of course, just as Ringer was concerned forty years ago that individual creators were in danger of being left behind, there is concern that the Copyright Principles Project had not heard from these voices. While it’s true that among the Project participants were private practitioners who have experience dealing with creators when something goes wrong, their perspective only tells a small part of the story of how copyright impacts creators.

In its positive sense, copyright provides the framework that encourages the creation and commercialization of expressive works that advance society at its highest level. To ask whether copyright is working, then, depends not only on whether it provides appropriate judicial remedies for infringement, but whether it is effective on a day-to-day basis. To answer that question, it is imperative that Congress has input from those in the trenches. Creators are engaged in copyright law decisions every day, both when they are creating — where is the line between permitted copying and misappropriation? What is fair use? — and when they are disseminating their works to the public — whether on their own or through various intermediaries.

U.S. Register of Copyrights Maria Pallante noted in her remarks about the Next Great Copyright Act (PDF) that “readability” should also be among the goals of any copyright law discussion. As more and more are affected by copyright laws, it’s important that one should not need “an army of lawyers to understand the basic precepts of the law.” The ideal copyright law will reflect artist and creator concerns in a clear and understandable way. It should not only spell out their rights, but provide meaningful protection of those rights — not only against infringers but also against those who would take advantage of them.

David Lowery spoke about this in a recent Politico op-ed:

Creators are the most affected by the “Project’s” many proposed changes to copyright law. But creators were apparently not even considered as eligible to participate in discussions with these elites.

Any number of creators (including me) would have been glad to hash out ideas for reforms. Ideas we get from on-the-ground practical experience. Experience you won’t find in the ivory towers of academia or corporate corner offices.

As technology makes it easier for all of us to participate in our culture as creators, it is even more important than ever to heed Ringer’s admonition that artists and authors are recognized not only as copyright holders but as separate individual creators. Any review of copyright law should keep that principle in mind above all. It is my hope that the Subcommittee uses the Copyright Principles Project as the title of the hearing suggests: as a case study for building its own consensus de novo — one that includes creators front and center — for reviewing copyright.

Footnotes

  1. Reflections on the Law of Copyright, 45 Columbia Law Review 503 (1945). []

Laws of Creation: Property Rights in the World of Ideas

Are copyright protections anti-consumer and anti-innovation? And is copyright law currently broken?

No, say legal scholars Ronald A. Cass (Dean Emeritus, Boston University School of Law, and President, Cass & Associates, PC) and Keith N. Hylton (Honorable Paul J. Liacos Professor of Law at Boston University School of Law). And the steady drumbeat of opinions saying otherwise — especially from academia — led the two to offer a defense of intellectual property and its legal framework.

In their new book, Laws of Creation: Property Rights in the World of Ideas, Cass and Hylton provide an overview of the economic foundations of intellectual property. In doing so, they reject the “zero-sum” approach to IP law that has steadily gained acceptance by scholars — where any gain to rights holders is seen as a loss to downstream users and the public. The two instead look at intellectual property in the same way as any other property rights. Generally speaking, these rights “make society better off by increasing incentives to find or create property, to preserve and promote property, and to allocate its uses wisely.”

Their approach is explicitly utilitarian. So long as the dynamic benefits of intellectual property protection outweigh the static costs incurred, such protection is beneficial to society. Cass and Hylton conclude that current IP law succeeds in this regard.

The bulk of the book is a theoretical analysis of these static and dynamic effects of the four major areas of intellectual property law: patent, trade secrets, copyright, and trademark. Two chapters are devoted to examining issues at the intersection of intellectual property regimes and tensions between intellectual property law and antitrust law.

Cass and Hylton conclude with a discussion examing their motivations for writing the book, namely, the “need to regain a more balanced and reasonable perspective on the way our laws treat the world of ideas.” As noted above, the book challenges the “zero sum” view of IP that has increasingly found favor among academics. This has led to a skepticism about IP rights. One need only spend a few minutes online to realize that this skepticism has spilled out of the academy and permeates many discussions of technology and media issues. The authors speculate about some of the possible causes for this view gaining ground in recent decades, but ultimately their book is most useful to counter the erroneous zero sum approach.

Critics might point out that the book has little to say that is negative of intellectual property rights. Surely the authors are looking through rose colored glasses! But Cass and Hylton are careful to point out that their discussion does not imply that each aspect of IP law is unimpeachable. And the book intentionally takes a birds-eye view of policy, meaning that there is little attention devoted to specific issues or concerns. IP, like any other area of the law, can always benefit from tweaking and improvement, but it is not as irredeemably broken as its critics make it out to be. This approach makes the book especially timely as Congress looks to begin a comprehensive review of the Copyright Act.

The book would seem to be most valuable to law students and those looking for an introduction to intellectual property law. Legal practitioners and others with a working knowledge of copyright may not find anything particularly novel between the covers of Laws of Creation; while the book is a straightforward and commonsense look at IP, much of it may be familiar territory. But the fact that its reasonable and rational approach is so contrary to much modern IP scholarship makes it worth a read and a space on any intellectual property wonk’s bookshelf.

Rhapsody adds liner notes, but how detailed is the information it holds? — As Helienne Lindvall points out, this is a welcome announcement, as the scores of individuals who lend their talents to the production of recorded music deserve recognition. The problem? Rhapsody will likely need to add this information itself, as it is not readily available.

New ways to support great content on YouTube — The long-awaited announcement from YouTube about paid subscription channels. “Starting today, we’re launching a pilot program for a small group of partners that will offer paid channels on YouTube with subscription fees starting at $0.99 per month. Every channel has a 14-day free trial, and many offer discounted yearly rates. For example, Sesame Street will be offering full episodes on their paid channel when it launches. And UFC fans can see classic fights, like a full version of their first event from UFC’s new channel.”

Permission, Privacy and Piracy: Where Creators and Consumers Meet — The Trichordist examines the intersection between privacy and piracy: “How are privacy and piracy related? It’s simple, both privacy and piracy revolve around how we view the importance of the individuals right to grant consent. An individual should have the right to grant the specific permissions to access information about us and how that information can be used.”

Kim Dotcom’s Truth = Nothing but Lies — Indie filmmaker Ellen Seidler takes on Kim Dotcom and his recent “white paper” defending Megaupload. Says Seidler, “Kim Dotcom is not Robin Hood and he’s not a hero. He’s a (wealthy) thief who, thanks to technical know-how and a black market business acumen, was able to exploit the work of content creators across the globe for his own, personal gain. Dotcom’s lies cloaked as ‘truth’ may gain him sympathy from his acolytes, but it won’t change the fact that stealing from others isn’t sharing, it’s theft.”

Why is Video Piracy Still Called A “Censorship” Problem? — “When we talk about video piracy, we’re talking about accessing someone’s creative property for free. It is true that you cannot copyright ideas but once those ideas are set down and given life as a recording, book, film, etc. they become the creator’s intellectual property. One may have issues with how long the protection should last, but that protection serves several important purposes: 1) It compensates the content providers and enables them to make a living; 2) It encourages people to continue producing content in hopes that they will be able to make a living.”

In a new “white paper” released today, Kim Dotcom’s lawyers come to the surprising conclusion that Kim Dotcom is not guilty.

Shocking, right?

Taking your case to the court of public opinion could be a sign that your case in a court of law is not going well. But ever since the US government charged Kim Dotcom, 6 other defendants, and 2 companies, including Megaupload, for charges relating to massive copyright infringement in January 2012, Dotcom has been on a full court press to convince the public that multi-millionaries (like him) should be allowed to rip off working class creators (like Ellen Seidler).1 The latest move is the “white paper”, titled Megaupload, the Copyright Lobby, and the Future of Digital Rights (with the self-aggrandizing subtitle, “The United States vs. You (and Kim Dotcom)”). Part of this public relations campaign has involved an attempt to characterize Dotcom as some kind of hacker hero — the white paper places Dotcom in the same pantheon as Steve Jobs and Steve Wozniak. Really? Kim Dotcom is to hacking what the 1995 movie Hackers is to hacking.

And the conspiracy theories described in this white paper seem one relic shy of a Dan Brown novel.2

But what about the legal arguments presented in the paper?

The citations to case law may lead the casual reader to the conclusion that there are valid legal arguments within the paper. But for the most part, the arguments are legal sleight of hand, a series of court quotes that, while true, are inapplicable and immaterial to the point being argued. There is little here that Dotcom hasn’t argued in public or in court (unsuccessfully, so far) before.

No Criminal Liability for Secondary Copyright Infringement

The basic premise of this argument is that in the civil context, liability for indirect infringement derives from the common law, not the Copyright Act. Since criminal law as a rule derives entirely from statute, there can be no criminal liability for indirect infringement.

This argument is a red herring.

First, Dotcom and the Megaupload defendants simply are not being charged under any of the tort-based indirect liability standards — which include contributory infringement, vicarious liability, and inducement. They are being charged with direct infringement, aiding and abetting infringement, and conspiracy to commit infringement.3 The latter two could be considered forms of secondary liability, but they are criminal, not tort forms, and they are provided for by statute.

Next, the white paper wholly skips over the fact that Dotcom has been charged with two counts of direct criminal copyright infringement. Among the allegations supporting these charges is at least one instance where one of the defendants himself uploaded an infringing copy of a film that had not been commercially released yet to Megaupload.4

But the indictment also alleges multiple instances where copyrighted works were made available to the public through the Megaupload sites. Many courts, and the leading copyright treatise, view making a work available to the public as an infringement of the distribution right.5

Also conveniently left out of the white paper is that a federal court has already stated, in a separate, civil lawsuit, that Megaupload exercises the requisite volition to be held liable for direct infringement. In Perfect 10 v. Megaupload, the Southern District Court of California said:

Drawing all reasonable inferences in Perfect 10′s favor, Megaupload serves as more than a passive conduit, and more than a mere “file storage” company: it has created distinct websites, presumably in an effort to streamline users’ access to different types of media (e.g., megaporn.com, megavideo.com); it encourages and, in some cases pays, its users to upload vast amounts of popular media through its Rewards Programs; it disseminates URLs for various files throughout the internet; it provides payouts to affiliate websites who maintain a catalogue of all available files; and last, at a minimum, it is plausibly aware of the ongoing, rampant infringement taking place on its websites. Taken together, Perfect 10 has adequately alleged Megaupload has engaged in volitional conduct sufficient to hold it liable for direct infringement. [Emphasis added].

(The lawsuit settled before proceeding much further.)

Substantial Non-Infringing Uses

The White Paper next argues that “the U.S. government cannot even argue that the conduct of Megaupload and its executives gives rise to civil liability for secondary infringement, much less criminal liability” under the Supreme Court’s 1984 holding in Sony Corp v. Universal City Studios. The problem with this argument is that it has thoroughly and repeatedly been rejected by courts in cases involving similar services.

The Ninth Circuit rejected it in 2001.6 The Seventh Circuit rejected it in 2003.7 And, most importantly, the Supreme Court rejected it in 2005. In MGM v. Grokster, Justice Souter explained, “Sony‘s rule limits imputing culpable intent as a matter of law from the characteristics or uses of a distributed product. But nothing in Sony requires courts to ignore evidence of intent if there is such evidence, and the case was never meant to foreclose rules of fault-based liability derived from the common law.”

Other courts have pointed out that Sony only applies if you’re focusing on liability for the design of a product rather than conduct8 or if there is no continuing relationship between the maker of a product and the user.9 But whatever the case, the fact remains that courts have consistently found Sony inapplicable to online service providers like Megaupload for over a decade. It’s telling that this was the strongest argument the white paper could muster.

Rewards Program Not a Contributor to Infringement

Next, the white paper says that the argument that its rewards program encouraged or contributed to infringement is a “glaring falsehood.” Megaupload claims that its program that paid uploaders depending on the popularity of the files they uploaded didn’t encourage infringement because someone’s family photos could just as likely be as popular as a copy of the latest blockbuster film. That’s silly.

More to the point, Megaupload’s rewards program was previously found to support a contributory infringement claim. Again, from Perfect 10:

Tellingly, in its motion to dismiss, Megaupload does not dispute Perfect 10′s allegation that it induces, causes, or materially contributes to infringing conduct. Nor could it, given the allegations that Megaupload encourages, and in some cases, pays its users to upload vast amounts of popular media through its Rewards Programs, disseminates URLs that provide access to such media, and has provided payouts to affiliates who catalogue the URLs for all available media.

Safe Harbor and Beyond

The white paper finally argues that Megaupload should not be liable for the massive infringement it caused and contributed to because it is eligible for safe harbor under the DMCA. That begs the question that DMCA safe harbors are even available for criminal defendants — I’ve written previously that the language of the statute doesn’t support such a conclusion. What’s more, even in the unlikely case a court finds that safe harbors are available in the criminal context, it is difficult to see the service being able to show it complied with the statute’s requirements that protect good-faith, passive service providers.10

Procedural Arguments

The white paper next turns from making substantive arguments to procedural arguments. It argues that “U.S. federal court lacks jurisdiction over Megaupload” because it “is a wholly foreign corporation; it is not incorporated in the United States, and it has no agents or offices in the United States.” Chief among the support for this argument is that the U.S. cannot serve Megaupload under Rule 4 of the Federal Rules of Criminal Procedure.

Note how this argument begins with such a broad statement about a lack of jurisdiction but ends up being really about a minor procedural point. Note too that this argument has no impact on the case against Kim Dotcom himself, his holding company, or any of the other personal defendants. This argument only involves the corporate entity of Megaupload Limited. So the suggestion that we should be concerned about some breach of the rule of law is a bit disingenuous. The dismissal of charges against Megaupload would have little effect on the case against the other defendants except that it might free up assets to pay for the defendants’ attorneys (and even that is not a foregone conclusion).

Last July, I briefly looked at this argument; its substance has evolved very little since then. Megaupload essentially takes the position that corporations who operate within the United States and violate U.S. laws should get a free pass so long as they don’t have a mailbox in the U.S. Note that this argument isn’t limited to criminal copyright laws — corporations would be able to commit financial crimes, environmental crimes, fraud, and more with impunity. This result defies common sense and the rule of law — I’d imagine quite a few people would disagree with Megaupload’s argument that corporations deserve a free pass from obeying the law.

The court rejected this argument last October, stating that even if Megaupload doesn’t have a “last known address” within the district or a “principal place of business” within the U.S., there are several alternatives available to the U.S. to perfect service. In its most recent filing, the U.S. notes additional alternatives available to serve Megaupload, a company that leased thousands of servers in the United States to operate a service that allegedly violated U.S. laws within the U.S. harming U.S. creators, regardless of where Kim Dotcom picks up his mail.11

This hasn’t prevented Megaupload from continuing to make the argument in court, despite the fact that less than two months ago, a court in the very same district rejected the idea that the mailing requirement in Rule 4 is a jurisdictional requirement.12 So now Megaupload persists in making the argument in its white paper here.

The remaining claims made in the white paper follow the same pattern as those discussed above, full of red herrings, already rejected arguments, and faulty logic. No doubt that matters little to those who worship Dotcom as a hero, buying completely into his celebrity-esque posturing.

Footnotes

  1. A study released in March demonstrated that the Megaupload shutdown caused a 6-10% increase in digital film revenues, revenues that not only help fund the continued creation of films but also that directly go to union members in the form of residuals. []
  2. Even Techdirt describes them as a “massive exaggeration.” []
  3. See Superseding Indictment. []
  4. Superseding Indictment, pg. 44. []
  5. See Nimmer Changes his Tune: “Making Available” is Distribution. []
  6. A & M Records v. Napster, 239 F. 3d 1004, 1020; “Napster claims that it is nevertheless protected from contributory liability by the teaching of Sony Corp. v. Universal City Studios, Inc. We disagree. We observe that Napster’s actual, specific knowledge of direct infringement renders Sony‘s holding of limited assistance to Napster.” []
  7. In re Aimster Copyright Litigation, 334 F. 3d 643, 651; “We also do not buy Aimster’s argument that since the Supreme Court distinguished, in the long passage from the Sony opinion that we quoted earlier, between actual and potential noninfringing uses, all Aimster has to show in order to escape liability for contributory infringement is that its file-sharing system could be used in noninfringing ways, which obviously it could be. Were that the law, the seller of a product or service used solely to facilitate copyright infringement, though it was capable in principle of noninfringing uses, would be immune from liability for contributory infringement. That would be an extreme result, and one not envisaged by the Sony majority.” []
  8. Perfect 10 v. Amazon, 508 F. 3d 1146, 1171 (9th Cir. 2007). []
  9. CoStar Group v. Loopnet, 164 F. Supp. 2d 688, 697 (D. Md. 2001). []
  10. See, for example, Megaupload, the DMCA and Lockers in General; Megaupload’s DMCA Shell Games; Why Megaupload Doesn’t Have a DMCA Shelter. []
  11. The U.S. says in its May 2nd filing “As discussed in prior pleadings, Defendant Megaupload has had at least two addresses within the Eastern District of Virginia — a constructive address at the Commonwealth of Virginia’s State Corporation Commission and an address at the Carpathia datacenter where the company maintained its U.S.-based nerve center.” []
  12. United States v. Kolon Industries, 2013 WL 682896, *5–6 (ED Va. Feb. 22, 2013). []

Giving a Wide Berth to Artists of Cable TV — David Carr takes a look at Difficult Men: Behind the Scenes of a Creative Revolution a new book by Brett Martin coming out in July. The book details the recent shift in television storytelling toward darker and highly creative dramas, embodied by such shows as the Sopranos, Mad Men, and Breaking Bad. It is an innovation driven not by algorithms and data centers, but by “men who typed for a living.”

MusicTank to focus on piracy site advertisers — Later this month, rock star David Lowery and Google’s UK Policy Manager Theo Bertram will discuss ad-sponsored piracy at a MusicTank Think Tank event in London. Should be very interesting.

Dear Congress: Please Consider These Points for Your Massive Copyright Overhaul… — Paul Resnikoff of Digital Music News presents what he considers are important points worthy of Congress’s attention. Though I may not necessarily agree with all of them, it is certainly a thoughtful and thought-provoking set of points.

Nigeria: Create Sound IP Policies in Nigeria, Microsoft Tells Govt — The software company chaired a discussion in Lagos last week as part of World IP Day. The article notes this remark from popular Nigerian artist Lanre Dabiri on one of the panels: “Piracy suppresses innovation! A lot goes into nurturing an idea or product to fruition. When this idea gets stolen, it means you cannot recoup the resources that went into putting your thoughts together and this is unfair to the artist or property owner.”

Second Circuit Rules Most Appropriation Art is Fair Use: Cariou v. Prince — Paul Fakler of Title 17 has a great write up on the recent appropriation art decision from the Second Circuit. Fakler does an especially good job pointing out some of the procedural corners cut by the court, a point that is concerning regardless of how you feel about the court’s ultimate outcome on the legal issues.

Earlier today, the National Research Council of the National Academies has released a long-awaited report, Copyright in the Digital Era: Building Evidence for Policy.

The report aims to identify gaps in available research that the authors suggest can assist in shaping copyright policy. In particular, the Council recommends that further study can focus on the “incentive calculus for various actors”, the “costs of voluntary copyright transactions”, “enforcement challenges”, and the “balance between copyright protection and exceptions.”

The report also examines what it calls the “data infrastructure for an empirical approach to copyright policy research.” It identifies existing sources of data that could be helpful to researchers. It also inquires about reducing bottlenecks to certain private datasets in existence. That is, data that could assist researchers may already be out there, just not easily accessible — for example, it might be in the hands of private firms.

The Trees

Copyright in the Digital Era is substantial and could provide ample discussion among academics, researchers, and policy makers. Indeed, there is much to agree with in the 102 page report.

For example, the Council calls for more data “to assess the magnitude and policy implications of the orphan works problem.” The U.S. Copyright Office has been actively studying orphan works over the past several years to determine if legislation is necessary to facilitate productive uses of works where the copyright owner cannot be identified or located. If comments it has received from potential users of orphan works are any indication, further research could reveal that the magnitude of the problem is far more limited than it has been made out to be. Any legislative fix for orphan works should equally be limited and circumscribed.

The Council also recommends further study of copyright litigation in civil courts. Research in this area could provide a wealth of information concerning costs of litigation, outcomes of lawsuits, and judgments awarded. This data would seem to be very helpful for another Copyright Office project: its study on small copyright claim proceedings.

The Forest

Unfortunately, the report suffers from a number of fundamental errors.

First, it presumes that the aim of copyright is to “encourage creative expression and the dissemination and preservation of creative works without stifling cumulative creativity, technological innovation, or free expression.” It goes on to say that research could help determine, for example, “under what circumstances sources of monetary and/or non-monetary motivation outside of that provided by copyright are effective in motivating creative activity.”

The presumption that copyright exists primarily to motivate the creation of expressive works is common, but not entirely accurate.

Copyright also motivates the commercialization of expressive works. This purpose is just as important, if not more important, than the incentive to create. The Supreme Court made this point less than a year ago in Golan v. Holder.

Nothing in the text of the Copyright Clause confines the “Progress of Science” exclusively to “incentives for creation.” Evidence from the founding, moreover, suggests that inducing dissemination—as opposed to creation—was viewed as an appropriate means to promote science. Until 1976, in fact, Congress made “federal copyright contingent on publication[,] [thereby] providing incentives not primarily for creation,” but for dissemination. Our decisions correspondingly recognize that “copyright supplies the economic incentive to create and disseminate ideas.”

This economic incentive doesn’t come in the form of financial rewards from the government but in the form of exclusive, private property rights secured by the government — rights that allow for private ordering and a functioning market that promotes progress in the same fashion as any free market system.1

If you focus solely on the motivation to create, as this report tends to do, than you will end up with a skewed copyright policy that leads to suboptimal results.

I saved the most troubling aspect of Copyright in the Digital Era for last. The report only briefly mentions that “not all copyright policy questions are amenable to economic analysis.” This is an understatement if there ever was one.

Simply put: copyright promotes important noneconomic values. Courts and others regularly recognize that copyright, at times, protects free speech interests.2 While U.S. law doesn’t recognize “moral rights” of authors in the same way as other countries, the inherent dignity of creators that these rights protect are implicit in many copyright provisions.3

On another note, the subject matter of copyright and its purpose of promoting knowledge and culture mean that a lot of its aspects are simply unquantifiable. What is the value of a cat video? What is the value of an episode of Game of Thrones? And if a certain policy favors the creation and dissemination of one at the expense of the other, how do you measure the effect of that trade-off? It’s vital that policy makers remain cognizant that not everything in the copyright world can be reduced to numbers and data.

So long as the noneconomic values that copyright promotes are recognized, and Copyright in the Digital Era is placed in the proper context, it can play a role in aiding copyright policy discussions. But there likely exists a strong temptation to treat the research questions in the report as covering the entire universe of copyright policy questions.

Footnotes

  1. Adam Mossoff explores the commercialization policy of copyright in more detail in his recent paper, How Copyright Drives Innovation in Scholarly Publishing. []
  2. “[T]he Framers intended copyright itself to be the engine of free expression.” Eldred v. Ashcroft, 537 US 186, 219 (2003), quoting Harper & Row v. Nation Enterprises, 471 US at 539, 558 (1985). []
  3. See Photos are worth more than the paper they’re printed on. []