Expendables 3 and the negative effects of piracy

By , July 30, 2014.

This past week, a DVD quality copy of Expendables 3 leaked onto online pirate sites, weeks before its August 15 box office debut. Along with the news came the usual claims that filmmakers shouldn’t worry about pre-release piracy—it’s good promotion, says David Pierce at the Verge, and internet commenters offer scores of other rationalizations.

But over at the Technology Policy Institute Blog, researcher Michael W. Smith says the unauthorized pre-release copy will likely hurt box office revenues for the film. He and his colleagues studied the effect of pre-release movie piracy on box office revenue and found that, on average, it “results in a 19% reduction in box office revenue relative to what would have occurred if piracy were only available after the movie’s release.”

Smith’s study is the first peer-reviewed journal article to look at this particular form of piracy. It was recently accepted for publication in the Information Systems Research journal, but a pre-publication draft is available at SSRN.

The study casts doubts on claims that pre-release piracy has no impact on theatrical revenue or even has a beneficial effect by generating buzz. On the contrary, Smith finds that “pre-release piracy significantly reduces a movie’s expected box office revenue and that this impact is stronger earlier in a movie’s lifecycle than in later periods.”

Smith concludes the report by noting some of its limitations. It doesn’t look at the intensity of pre-release pirating, nor at the quality of the unauthorized copies, data which may provide additional insights. It also does not consider the effect of pre-release piracy on different types of films, nor does it examine the effects on revenue streams besides the box office, such as DVD sales.

These last two limitations are particularly worth further research. Most films—particularly indie and niche films—don’t ever screen in theaters, and even among those films that do, box office revenue is only a part of overall revenues.

While Smith’s study is the first peer-reviewed article to look specifically at pre-release piracy and its effects, it is not the first to look at the effects of other forms of piracy on films. In fact, in his article, Smith notes that eight peer-reviewed studies so far have looked at the effect of piracy on film sales, and, more significantly, seven of the eight studies have found “that piracy results in significant harm to motion picture sales.” A broader literature review – focusing not solely on films but on other types of works such as recorded music – found that “The vast majority of papers which have been published in peer-reviewed academic journals — papers spanning a variety of methods, time periods, and contexts — find that piracy causes a statistically significant decrease in sales.”

And yet some measure of file-sharing denialism persists. It, first, runs counter to common sense—yes, if people can get something for free they’ll buy less, and if people buy less of something, less of it will be produced. But it also, as seen above, is not supported by the overwhelming majority of empirical evidence.

In ‘The Expendables 3’ Torrent and the Techno-Utopian Delusion, Indiewire writer Sam Adams sees through this denialism, or, as he calls it, “sheer self-justifying delusion.” In doing so, he touches on a larger point.

Adams notes that some of the rationalization for downloading The Expendables 3 is based on the idea that it is not a movie but a show, one in which the experience of watching in the theater takes precedence (and thus justifies watching an illegitimate, lower-quality version). Because of this, he cautions:

And when you’re paying for the experience — not out of curiosity or as a way of supporting an ecosystem that allows the creation of new work — it only makes sense to sample the product beforehand. But in so doing, you’re pushing cinema in a direction where every movie has to be a show: Either it’s big and loud enough to make you feel like you’re missing out by watching it (legally or illegally) at home or it might as well not show up to play.

CNET’s Nick Statt raises similar concerns:

We often complain about “sequelitis” and the onslaught of low-quality, brainless action movies and series reboots, yet don’t ever seem to take responsibility for the fact that our collective unwillingness to pay for things that don’t have formulaic payout is what drives creative decision making.

In the current model, everything from “Boyhood” and “12 Years A Slave” to “Zero Dark Thirty” and “Gravity” are more harmed by systemic piracy because it devalues films as an art form. Risks are not rewarded when the only movie with a concrete return on its investment is a $200 million narrative train wreck about robot cars or a tongue-and-cheek ensemble action flick featuring Rocky, the former governor of California, and Han Solo.

I enjoy such films, as do millions of others. But it would be a shame if that was all we got to see. The ultimate point is that piracy has societal effects beyond any given film’s bottom line.

In Copyright Extremophiles: Do Creative Industries Thrive or Just Survive in China’s High-Piracy Environment? 127 Harvard Journal of Law & Technology 469 (2014). published earlier this year, Eric Priest digs into some of these less obvious effects of piracy in more detail. The claim is sometimes made that maybe copyright—the legal foundation that provides exchange value for creative works—is irrelevant since creativity still exists in areas, such as China, where piracy runs rampant. Priest refutes this by comparing creators in high-piracy areas to biological organisms known as extremophiles.

Just as microorganisms have evolved to thrive in superheated deep-sea vents or highly acidic environments, so too can a subset of creative professionals find ways to monetize their works even in a high-piracy environment. The fact that some monetization models can work for some types of producers or artists in China does not mean that optimal or even near-optimal conditions exist for the development of flourishing, healthy, and stable creative industries. In short, poor copyright enforcement inflicts significant and persistent harms on China’s music and film industries. To invoke the extremophiles analogy, China’s inhospitable creative industry environment may support narrow strains of creative “life,” but with an effective regime of copyright norms and enforcement, China’s creative ecosystem could more closely resemble a lush, diverse rain-forest.

Priest’s research unpacks some of the more pernicious results that piracy has on China’s film and music industries. Along with undermining the ability of a professional class of creators to sustain their livelihoods, high piracy has made these industries “neither robust nor stable” and lead them to become “hyper-dependent on a single revenue stream” (box office for films and ringback tones for music). Priest concludes:

This lack of revenue stream diversity distorts and undermines the creative ecosystem in at least three ways. First, the scarcity of monetization options creates a winner-take-all market dominated by big producers. The paucity of other revenue sources seriously undermines financial support for smaller, independent producers.

Second, rampant piracy and concentration of revenue streams distorts market signals to producers. For example, film producers are incentivized to invest in a relatively narrow range of works that attract the audience whose tastes are most easily monetized – young, urban cinemagoers. Music producers likely are incentivized to produce music that will make the most marketable ringtones.

Third, and perhaps most importantly, reduced revenue stream diversity disproportionately exposes producers to the whims of peculiar markets and exploitation by gatekeeper or monopsonist intermediaries. China’s music industry proves an especially vivid example, as ringback tones gross more than $4 billion annually, but the mobile operators who control ringback tone distribution keep more than ninety-eight percent of that revenue for themselves. The meager two percent that goes to copyright owners amounts to ninety percent of those copyright owners’ total income from recorded music. So if ringtones lose their appeal with consumers, the recording industry will collapse. Without other viable revenue streams to leverage, musicians, producers, and record labels have little choice but to grin and bear it while a state telecommunications monopoly enjoys the great bulk of the rewards of their artistic efforts.

It seems difficult to make a more compelling case for copyright. How creators and the film industry responds to pre-release and other forms of piracy is a wholly separate topic, but the fact remains that any type of piracy has a significant negative effect on revenues as well as the stability and vitality of creative and cultural industries. If we want to maintain robust and independent creativity, we should not be so quick to treat copyright as expendable.

References

References
↑1 27 Harvard Journal of Law & Technology 469 (2014).

Friday’s Endnotes – 07/25/14

By , July 25, 2014.

Garrett Brown: An Interview with a Visionary-Part 1 — Nick Friedman speaks with Garrett Brown, a cinematographer and inventor of the Steadicam, an innovation which, in the words of Stanley Kubrick (who famously used it in The Shining) “would revolutionize the way films are shot.”

Great Photos, Little Cash: The Problem of “Small Claims” in Copyright — Coinciding with the House Judiciary IP Subcommittee’s hearing on copyright remedies, attorney Tara Aaron highlights a recent default judgment against a website that had allegedly infringed a photographer’s copyrights. Though the court awarded the photographer statutory damages and attorney fees, because the award of attorney fees was limited by local rules, the photographer still ended up short. It’s a good case study for the need for a “small claims” procedure.

“Notice & Notice” does Not Contribute to a Balanced Copyright System — A comparison between the US notice-and-takedown system and Canada’s new notice-and-notice system and why the first is better for creators.

Disney’s corporate synergy, 1957 and today — Screenwriter John August shares an interesting chart from 1957 showing how “the various elements of the Walt Disney company fit together.” This holds true still today. “The company makes money in many ways, but feature films are still the key drivers. You don’t get Cars merchandise without the movie. The success of Frozen is an example of how Disney can capitalize on a hit film by using it in other divisions: Disneyland attractions, TV tie-ins (Once Upon a Time), music, books, merchandise, and possibly a Broadway musical.”

Report on the responses to the Public Consultation on the Review of the EU Copyright Rules — Like the US, the European Union is currently in the process of reviewing its copyright laws. Here is the result of a public consultation process that concluded earlier this year, generating nearly 10,000 responses. “The consultation covered a broad range of issues, identified in the Commission communication on content in the digital single market , i.e.: ‘territoriality in the Internal Market, harmonisation, limitations and exceptions to copyright in the digital age; fragmentation of the EU copyright market; and how to improve the effectiveness and efficiency of enforcement while underpinning its legitimacy in the wider context of copyright reform’.”

Friday’s Endnotes – 07/18/14

By , July 18, 2014.

“Fifteen years of utter bollocks”: how a generation’s freeloading has starved creativity — A great essay from author Chris Ruen, whose excellent book Freeloading: How our insatiable appetite for free content is starving creativity has recently been released in the UK. “Any desperate excuse was good enough, so long as it justified the original campaign. Otherwise, the people who fought against copyright in this battle would have to confront the fact that they were never carrying the flag for freedom or ‘openness’, but for aggression, entitlement and selfishness masked by superficial delusions of grandeur.”

5 Major Publications that Cover Copyright Well — From Jonathan Bailey at PlagiarismToday, a nice list of mainstream news sources with above average copyright coverage.

Aereo Hits Roadblock in Effort to Become Cable System — Back in the District Court following the Supreme Court’s remand, Aereo pursued a new line of argument: that it is a cable system, and thus entitled to carry broadcast programming under the Copyright Act’s Section 111 compulsory license. This week, the Copyright Office rejected that argument (though it provisionally accepted the application until the court rules on the issue). Aereo still has the option of bringing the question to the FCC, but that would subject it to a host of regulations, including the need to negotiate retransmission consent with the broadcasters.

DMCA’s protection of copyright management information applied to non-electronic works — Evan Brown provides a heads-up on a recent decision involving § 1202, a lesser known section of the DMCA that prohibits the removal or alteration of “copyright management information.” The question here was whether that provision applies “only to electronic works intended for distribution over the internet, or whether it applies to more traditional works such as hard copy technical drawings.” The court here chose the latter.

Fishman on Creating Around Copyright — “It is generally understood that the copyright system constrains downstream creators by limiting their ability to use protected works in follow-on expression. Those who view the promotion of creativity as copyright’s mission usually consider this constraint to be a necessary evil at best and an unnecessary one at worst. This conventional wisdom rests on the seemingly intuitive premise that more creative choice will deliver more creativity. Yet that premise is belied by both the history of the arts and contemporary psychological research on the creative process. In fact, creativity flourishes best not under complete freedom, but rather under a moderate amount of restriction.”

A Brief History of US Copyright Term

By , July 15, 2014.

Today, the House Judiciary Committee Subcommittee on Courts, Intellectual Property, and the Internet is continuing its comprehensive review of US copyright law with a hearing on moral rights, termination rights, resale royalty, and copyright term.

Perhaps no other feature of copyright law is so widely criticized as its term — to the point where the declaration that “copyright lasts too long!” seemingly needs no further support.

But perhaps no other copyright doctrine is also subject to as much misinformation as the term of copyright. It’s not difficult to find those who are absolutely convinced copyright term will be extended within the next several years, because this is part of an indisputable pattern of extending copyright term every 20 years. 1See, for example, Timothy B. Lee, “15 years ago, Congress kept Mickey Mouse out of the public domain. Will they do it again?“, The Switch (Oct. 25, 2013); Jeff John Roberts, “Will copyright be extended 20 more years? An old debate returns“, GigaOM (Aug. 20, 2013); Eugene Volokh, “Copyright Extension Prediction?“, Volokh Conspiracy (Aug. 19, 2013). These and similar assertions evaporate under the slightest scrutiny. Therefore, before we can have a useful discussion on the length of copyright protection, it’s necessary to look at how the current term of copyright protection evolved in the US and how that compares to copyright protection in other countries.

The genesis of copyright law

The journey begins in England with the Statute of Anne. Passed in 1710, the Act is considered the first modern copyright law, vesting exclusive rights to reprint books to any and all authors. The Act also limited the exclusive rights to a term of fourteen years, with an option to renew protection for an additional fourteen years. At the end of this period, the exclusive rights expired, allowing anybody besides the author or publisher to print and reprint the work. This length was borrowed from the term for protection of letters patent that the earlier Statute of Monopolies established in 1624. 2Ronan Deazley, ‘Commentary on the Statute of Monopolies 1624‘, in Primary Sources on Copyright (1450-1900) (eds L. Bently & M. Kretschmer, 2008). And that term was, according to one scholar, “based on the idea that 2 sets of apprentices should, in 7 years each, be trained in the new techniques” that were protected under such letters patent. 3Fritz Machlup, “An Economic Review of the Patent System”, pg 5, Study of the Subcommittee on Patents, Trademarks, and Copyrights of the Committee on the Judiciary, United States Senate, United States Printing Office, Washington: 1958.

The United States was the second country to adopt a general copyright law. In 1790, Congress passed a Copyright Act that borrowed extensively from the Statute of Anne, including the “14 + 14” year term. 4See Oren Bracha, The Adventures of the Statute of Anne in the Land of Unlimited Possibilities: The Life of a Legal Transplant, 25 Berkeley Technology Law Journal 1427 (2010). The law was passed with only the most cursory of discussion in the legislature, so the importation of Britain’s act almost word for word was likely driven by expedience more than anything else.

The third modern copyright law came out of France, itself also emerging from a revolution, and it diverged from Britain and the US in terms of duration. In 1793, only three years after the first US Copyright Act was passed, the French National Convention passed a decree providing for copyright protection lasting the life of the author plus ten years. 5French Literary and Artistic Property Act, Paris (1793), Primary Sources on Copyright (1450-1900), eds L. Bently & M. Kretschmer, www.copyrighthistory.org. (Thomas Paine, who “counted copyright agitation among his many other revolutionary interests”, was a member of the legislature that passed the French act). 6William Patry, Copyright Law and Practice, Chapter 1 (BNA 2000).

The shift to a life-based term

England would follow France and adopt a term based on the life of the author shortly after the 19th century rolled around. In 1814, the term of protection was extended to the life of the author or 28 years, whichever was longer. 7Copyright Act, London (1814), Primary Sources on Copyright (1450-1900), eds L. Bently & M. Kretschmer. In 1842, England extended the copyright term to the life of the author plus seven years, or forty-two years, whichever was longer. 8Copyright Law Amendment Act, 1842, 5 & 6 Vict., c.45.

The US did not follow suit to a life of the author based term, though it did bump up the initial term of protection to 28 years in 1831 (the renewal period remained at 14 years). 9Copyright Act of 1831, 4 Stat. 436. And thus, despite being the second nation to provide for general copyright protection, it would fall behind international norms for the majority of its history. During the 19th century, many countries with copyright laws moved toward a “life plus” duration. One 19th century treatise provides this catalog:

Sweden, formerly perpetual, now for life and fifty years, no registration; Denmark, for life and thirty years, no registration or deposit; Switzerland, for life or thirty years; Russia, for life and fifty years, registration but not deposit being required, with complicated provisions as to new editions; Turkey, for forty years, or twenty for translations; Greece, for fifteen years, subject to royal extension; Mexico, which has perpetual literary copyright, registration and deposit being obligatory; Venezuela, for life and fourteen years, or deposit and registration; Chili, for life and five years; Brazil, for life and ten years ; Japan, for thirty years, with extension to forty-five. 10R.R. Bowker, Copyright, Its Law and Its Literature, pg. 24 (1886).

France would be one of the first countries to settle on life of the author plus 50 years, adopting that term in 1866. 11Walter Arthur Copinger, The Law of Copyright in Works of Literature and Art, pg. 238 (1870). Several other European countries would follow suit toward the latter half of the 19th century.

In 1887, the following countries adopted the Berne Convention, the world’s first multilateral international agreement on copyright: Australia, Belgium, Canada, France, Germany, Haiti, India, Italy, Liberia, Monaco, New Zealand, Spain, Sweden, Switzerland, Tunisia and the United Kingdom. The agreement set minimum standards for copyright protection that agreeing parties must extend to works of authors from member states. The original text did not address duration of protection, but that would soon change. 12It did, however, set a minimum term of protection for translations. Around this time, it became common to provide different terms of protection depending on subject matter (such as one term for literary works and a different term for sculptures or phonographs) as well as different terms depending on authorship (for example, different terms for anonymous authors or corporate authors. For simplicity purposes, I will subsequently refer only to the term of a natural author of a literary work when I discuss copyright duration.

The US effort to join the international community

At the turn of the 20th century, US lawmakers looked to revise the copyright law. At that time, R.R. Bowker of the American Copyright League pointed out:

A copyright term extending through and beyond the life of the author has been adopted by thirty-seven countries, or more than half of those which have copyright laws, while five others give perpetual copyright; the term of life and fifty years is adopted by France and fourteen other nations, and although life and thirty years is proposed in Lord Herschel’s British draft, life and fifty years has also been proposed as an alternative in England.

An early version of a US revision bill in 1906 proposed a term of life of the author plus fifty years. 13S. 6330 and H.R. 19853, Section 18(c), 59th Congress, 1st Session. The proposal was ultimately dropped in favor of the existing convention of a set term with an optional renewal term, as this was seen as more favorable to authors. The renewal term, however, was extended to match the initial term of 28 years. 14Copyright Act of 1909.

The Berne Convention, which was gradually adding new member parties, had set a voluntary minimum term of life of the author plus 50 years in 1908. England adopted this term in 1911, which extended to its Commonwealth Countries — Australia, Canada, India, New Zealand, etc. 15Copyright Act of 1911. Other countries would slowly but surely follow suit, and Berne made the term mandatory in 1948. The decades following the US enactment of the 1909 Act saw a number of unsuccessful efforts to join Berne, hampered in part by two World Wars and a Great Depression. Bills introduced in 1924, 1925, 1926, 1930, and 1940 called for a term of life of the author plus 50 years; advocates for this term also voiced their views at hearings on other bills during this timeframe. 16James J. Guinan, Jr., Duration of Copyright, Copyright Law Revision Study No. 30, Copyright Office (1957).

But it would not be until 1955 that the US began in earnest the process that would lead to the 1976 Copyright Act, the current law. In that year, Congress appropriated funds to the US Copyright Office to engage in a series of studies on issues relating to copyright revision. One study covered the duration of copyright and noted that by this point over half of all countries with copyright laws protected a work for life of the author plus 50 years.

In this group are Australia, Austria, Belgium, Canada, Chile, Costa Rica, Czechoslovakia, Denmark, Ecuador, Finland, France, Germany, Great Britain, Greece, Guatemala, Hungary, Iceland, Eire, Italy, Lebanon, Luxembourg, Monaco, Netherlands, New Zealand, Norway, Paraguay, Switzerland, Syria, Turkey, Union of South Africa, and Vatican.

Some countries had longer post-life terms and some had shorter; however, by the 1950s, the US stood alone with the Phillippine Islands in diverging from a “life plus” copyright term.

By 1965, a general revision bill included a term of life of the author plus 50 years. But revision efforts stalled, primarily due to stark disagreements over a number of unresolved issues such as library photocopying and community antenna television providers. 17See William Patry, Copyright Law and Practice, Chapter 1 (BNA 2000). Congress was concerned about the inequities that would fall upon authors because of a bogged-down legislative process, so during this time period, it passed a series of nine interim extensions to copyright duration. 18Scott M. Martin, The Mythology of the Public Domain: Exploring the Myths Behind Attacks on the Duration of Copyright Protection, 36 Loyola L.A. Law Review 253, 260-61 (2002). (Lawrence Lessig counts each of these nine interim extensions when he makes his famous claim that Congress extended copyright term 11 times since 1962 and also defines this series of interim extensions preceding the general revision as “a practice that has defined copyright law since). 19Free Culture, pg. 134. The revision finally passed in 1976, going into effect in 1978, over a century since France adopted a life plus 50 term and decades after most every other country had followed suit. 20Copyright Act of 1976, 90 Stat. 2541.

But the US continued to lag behind. In 1965, for example, Germany adopted a term of life of the author plus seventy years.

The shift to “life plus 70”

A 1971 guide from WIPO on the Berne Convention, which then consisted of over 60 member parties, explained the justification of a life plus fifty term:

By computing the term of protection from the date of the author’s death, the Convention binds the work to its creator. Honest men can differ on how long this should be: some feel it should be for ever since the nature of the work of the mind remains, throughout the ages, a reflection of the character of its creator. Like a fine piece of furniture, it gives pleasure to generation upon generation. But the particular nature of intellectual property, resulting in a need, in the interests of the public at large, for it to be made known without let or hindrance for the enrichment of culture, suggest some limit on the duration of the monopoly enjoyed by authors and their heirs in the exploitation of their works.

It is not merely by chance that fifty years was chosen. Most countries have felt it fair and right that the average lifetime of an author and his direct descendants should be covered, i.e., three generations.

In 1993, the Council of European Communities, finding that “the minimum term of protection laid down by the Berne Convention, namely the life of the author and 50 years after his death, was intended to provide protection for the author and the first two generations of his descendants; whereas the average lifespan in the Community has grown longer, to the point where this term is no longer sufficient to cover two generations”, directed its Member States which hadn’t already granted the term to adopt a “life plus seventy” copyright duration. 21Council Directive 93/98, 1993 O.J. (L 290/9). The U.S., narrowing the lag behind international norms, adopted a term of life plus seventy in 1997, 22Copyright Term Extension Act, 112 Stat. 2827. citing a need to harmonize protection with its global trading partners. 23Senate Report No. 104-315, 104th Cong., 2d Sess (1996).

Today, 167 countries are Member Parties of the Berne Convention and provide for a minimum of life of the author plus fifty years. Over 65 of these countries provide for life of the author plus seventy years, while an additional seven provide greater length. 24Wikipedia, List of countries’ copyright lengths, visited July 14, 2014.

How long should copyright last?

One can argue over the “optimal” length of copyright protection—a discussion beyond the scope of this already lengthy article—but one can’t assert after surveying this history that, for example, Congress extends copyright every time Disney’s Steamboat Willie is about to enter the public domain. 25In his recent book, Intellectual Privilege, Tom Bell spends considerable effort—including illustrations—to imply a correlation between US copyright term length and the entry of Steamboat Willie into the public domain before dismissing it by saying, “No one can, of course, say with certainty whether or to what degree lobbying by the Walt Disney Company drove those copyright extensions.”

Copyright duration is a hot topic. But it is also a bit of a red herring. Creators’ main concern is lack of effective protection now, so the length of protection is somewhat a moot point. And issues raised by user communities are only tangentially related to duration, meaning any changes to term would only result in marginal differences to the real issues.

References

References
↑1 See, for example, Timothy B. Lee, “15 years ago, Congress kept Mickey Mouse out of the public domain. Will they do it again?“, The Switch (Oct. 25, 2013); Jeff John Roberts, “Will copyright be extended 20 more years? An old debate returns“, GigaOM (Aug. 20, 2013); Eugene Volokh, “Copyright Extension Prediction?“, Volokh Conspiracy (Aug. 19, 2013).
↑2 Ronan Deazley, ‘Commentary on the Statute of Monopolies 1624‘, in Primary Sources on Copyright (1450-1900) (eds L. Bently & M. Kretschmer, 2008).
↑3 Fritz Machlup, “An Economic Review of the Patent System”, pg 5, Study of the Subcommittee on Patents, Trademarks, and Copyrights of the Committee on the Judiciary, United States Senate, United States Printing Office, Washington: 1958.
↑4 See Oren Bracha, The Adventures of the Statute of Anne in the Land of Unlimited Possibilities: The Life of a Legal Transplant, 25 Berkeley Technology Law Journal 1427 (2010).
↑5 French Literary and Artistic Property Act, Paris (1793), Primary Sources on Copyright (1450-1900), eds L. Bently & M. Kretschmer, www.copyrighthistory.org.
↑6 William Patry, Copyright Law and Practice, Chapter 1 (BNA 2000).
↑7 Copyright Act, London (1814), Primary Sources on Copyright (1450-1900), eds L. Bently & M. Kretschmer.
↑8 Copyright Law Amendment Act, 1842, 5 & 6 Vict., c.45.
↑9 Copyright Act of 1831, 4 Stat. 436.
↑10 R.R. Bowker, Copyright, Its Law and Its Literature, pg. 24 (1886).
↑11 Walter Arthur Copinger, The Law of Copyright in Works of Literature and Art, pg. 238 (1870).
↑12 It did, however, set a minimum term of protection for translations. Around this time, it became common to provide different terms of protection depending on subject matter (such as one term for literary works and a different term for sculptures or phonographs) as well as different terms depending on authorship (for example, different terms for anonymous authors or corporate authors. For simplicity purposes, I will subsequently refer only to the term of a natural author of a literary work when I discuss copyright duration.
↑13 S. 6330 and H.R. 19853, Section 18(c), 59th Congress, 1st Session.
↑14 Copyright Act of 1909.
↑15 Copyright Act of 1911.
↑16 James J. Guinan, Jr., Duration of Copyright, Copyright Law Revision Study No. 30, Copyright Office (1957).
↑17 See William Patry, Copyright Law and Practice, Chapter 1 (BNA 2000).
↑18 Scott M. Martin, The Mythology of the Public Domain: Exploring the Myths Behind Attacks on the Duration of Copyright Protection, 36 Loyola L.A. Law Review 253, 260-61 (2002).
↑19 Free Culture, pg. 134.
↑20 Copyright Act of 1976, 90 Stat. 2541.
↑21 Council Directive 93/98, 1993 O.J. (L 290/9).
↑22 Copyright Term Extension Act, 112 Stat. 2827.
↑23 Senate Report No. 104-315, 104th Cong., 2d Sess (1996).
↑24 Wikipedia, List of countries’ copyright lengths, visited July 14, 2014.
↑25 In his recent book, Intellectual Privilege, Tom Bell spends considerable effort—including illustrations—to imply a correlation between US copyright term length and the entry of Steamboat Willie into the public domain before dismissing it by saying, “No one can, of course, say with certainty whether or to what degree lobbying by the Walt Disney Company drove those copyright extensions.”

Friday’s Endnotes – 07/11/14

By , July 11, 2014.

Is Silicon Valley Funding the Wrong Stuff? — Eye-opening: “Consider this. The entire market for advertising is around $100 billion a year in the U.S. (Globally it’s close to $500 billion.) Yet the nation’s gross domestic product is more than $16 trillion. That means every venture-backed startup chasing advertising revenue is going after just 0.6% of the economy. Put in employment terms, the ad-related economy employs just a few million people, versus 140 million Americans whose job it is to do everything else. Still, the pursuit of advertising dollars includes about every startup that is going for scale first and says it will figure out how to ‘monetize’ its users ‘once it has the eyeballs.'”

Number of Statehouse Reporters Is in Decline, Study Shows — “The nation’s statehouses lost more than one-third of the journalists devoted to covering legislative matters full time, according to a study released on Thursday morning by the Journalism Project at the Pew Research Center.” Potato salad Kickstarter coverage remains unchanged.

Under Tariff 8, Barenaked Ladies would need 9,216 plays of “If I Had $1,000,000″ to earn enough royalties to buy one box of Kraft Dinner — A recent decision by the Copyright Board of Canada has set one of the worst royalty rates in the world for music streaming.

Taking on Amazon — If you haven’t checked out Scott Timberg’s blog CultureCrash, I highly recommend it. A great blog that covers issues relating to the sustainability of creative individuals and industries. Here he reports on several items related to Amazon and its dealings with authors and publishers.

A Notice of Author Obviation — “Dear Content Creator, We are happy to announce that our recent efforts in fiction generation have been successful, and we are now able to feed the entirety of any individual writer’s output into our computer and procedurally generate new works using a combination of Markov chains and random syntax sampling. A regular expression-based pattern matching system then determines which sentences are most similar in style to ones you would have personally constructed, and arranges them in terms of plot development (or what passes for plot in your novels). In essence, we have rendered you obsolete.”

Copyrights are more than just federal “privileges” — As Tom Sydnor explains, copyright “alone creates a system for producing expressive works that lets private creators and investors make the risky, long-term investments of financial and human capital needed to produce expressive works designed to inspire or entertain large numbers of private, ordinary citizens – rather than works designed to indulge the preferences of Tenure Committees, rich philanthropists, or government bureaucrats.”

From Google to Amazon: EU goes to war against power of US digital giants — “Google’s earnings from search have drained advertising spending from European newspapers, magazines and radio stations. Piracy, facilitated by search engines and broadband, has hit revenues for record labels hard. Bookshops and electronics stores have disappeared from high streets as sales migrate to Amazon and even Apple’s bricks and mortar retail outlets. Europe’s mobile phone networks, once considered global technology pioneers, have handed fortunes to Apple and South Korea’s Samsung in subsidies for mobile phone handsets. The sense of injustice has been reinforced by revelations about tax. Amazon, Google and Apple have found ways to reduce their corporation tax payments on international revenues to single-digit percentages of profits. Now fear has been added to the mix, with Edward Snowden’s revelations about digital surveillance.”

Happy 4th of July to my US readers!

By , July 04, 2014.

Biscuit the Democat, by Eric Hart. Posted with permission.

It may with propriety be remarked, that in all countries where literature is protected, and it never can flourish where it is not, the works of an author are his legal property; and to treat letters in any other light than this, is to banish them from the country, or strangle them in the birth.

Thomas Paine, 1792.

The Problem with the Aereo Dissent

By , July 03, 2014.

On Monday, I looked at the majority’s opinion in American Broadcasting Companies v. Aereo, which held that the online television provider performed to the public under the Copyright Act. Today, I want to take a closer look at the dissent.

The dissent’s argument begins with the assertion, relying on a copyright treatise, that “The Networks’ claim is governed by a simple but profoundly important rule: A defendant may be held directly liable only if it has engaged in volitional conduct that violates the Act.” It then states that “This requirement is firmly grounded in the Act’s text, which defines ‘perform’ in active, affirmative terms: One ‘perform[s]’ a copyrighted ‘audiovisual work,’ such as a movie or news broadcast, by ‘show[ing] its images in any sequence’ or ‘mak[ing] the sounds accompanying it audible.’” Already, the soundness of the dissent’s argument is on shaky ground, as there is nothing necessarily “active” about the making of sounds of a broadcast audible. 1The dissent also asserts that “Every Court of Appeals to have considered an automated-service provider’s direct liability for copyright infringement has adopted that rule.” But that’s not entirely the case, at least when it comes to the Ninth Circuit’s decision in Fox Broadcasting Co. v. Dish Network. The court there did not once utter the word “volition”, and district courts in the Circuit apparently don’t believe the test was adopted. See, e.g., Order Granting in Part and Denying in Part Allvoice’s Motion to Dismiss Plaintiff’s First Amended Complaint, Oppenheimer v. Allvoices, Inc., No. C-14-00499 (ND Cali June 10, 2014) (“Although the Netcom requirement of “volitional” conduct for direct liability has been adopted by the Second and Fourth Circuits, the Ninth Circuit has not yet addressed the issue, and courts within this Circuit are split on it”); Order Granting in Part and Denying in Part Defendant’s Motion to Dismiss, National Photo Group, LLC v. Allvoices, Inc., No. C-13-03627 (ND Cali Jan. 24, 2014) (noting volitional conduct “requirement has not been adopted by the Ninth Circuit and Courts within this Circuit are divided on whether the requirement is valid”).

But there’s a bigger problem with how the dissent defines perform, a definition which shapes its entire analysis of the issue: it is incorrect as a textual matter.

Statutory Interpretation

Examining the meaning of a word in a statute with the context of the whole act is a fundamental principle.

The meaning of terms on the statute books ought to be determined, not on the basis of which meaning can be shown to have been understood by a larger handful of the Members of Congress; but rather on the basis of which meaning is (1) most in accord with context and ordinary usage, and thus most likely to have been understood by the whole Congress which voted on the words of the statute (not to mention the citizens subject to it), and (2) most compatible with the surrounding body of law into which the provision must be integrated — a compatibility which, by a benign fiction, we assume Congress always has in mind. 2Green v. Bock Laundry Machine Co., 490 US 504, 528 (1989) (J. Scalia concurrence).

Obviously, the assumption is even stronger when we are talking not about provisions adopted at separate times but provisions enacted at the same time.

Along with this rule, the Supreme Court has called it “a cardinal principle of statutory construction” that statutes should be interpreted in a way that prevents any clause or provision from being rendered superfluous. 3Bennett v. Spear, 520 US 154, 173 (1997) (quoting US v. Menasche, 348 US 528, 538 (1955).

If we take heed of these canons, we can see that the majority in Aereo had the better interpretation of “perform.”

To begin with, it may not matter how active or affirmative Section 101 of the Copyright Act defines the act of performing, since the language of Section 106 establishes infringement in broader terms. It is only partially correct that Section 106 provides copyright owners the right to perform works publicly. Section 106 actually provides that “the owner of copyright under this title has the exclusive rights to do and to authorize” any of the enumerated acts such as public performance. (Emphasis added). The “and to authorize” language confirms that the exclusive domain of the copyright owner can be encroached by conduct beyond “active, affirmative” acts.

The Exceptions that Prove the Rule

The text of Section 111 supplies further support. Section 111(a) creates exceptions from copyright infringement for certain secondary transmissions of primary (broadcast) transmissions. One of these, Section 111(a)(3), exempts a carrier from liability “who has no direct or indirect control over the content or selection of the primary transmission or over the particular recipients of the secondary transmission, and whose activities with respect to the secondary transmission consist solely of providing wires, cables, or other communications channels for the use of others.” I don’t see how one can come up with a more passive system than this. The statutory text here also undermines the dissent’s argument that the key issue in determining who is directly liable is who selects the content since this exception applies only to carriers who do not select the content.

The exception in Section 111(a)(1) is even more clear. That provision declares that a transmission is not infringement if “the secondary transmission is not made by a cable system, and consists entirely of the relaying, by the management of a hotel, apartment house, or similar establishment, of signals transmitted by a broadcast station licensed by the Federal Communications Commission, within the local service area of such station, to the private lodgings of guests or residents of such establishment, and no direct charge is made to see or hear the secondary transmission.” Save for the fact that Aereo was charging for its transmission, this sounds a lot like how it characterized its service when it argued that it was not performing: “do[ing] no more than supply[ing] equipment that ‘emulate[s] the operation of a home antenna.’” Yet if that does not constitute performing under the Copyright Act, there would be no need for the 111(a)(1) exception.

The dissent’s misstep is reminiscent of the 1892 Supreme Court decision in Church of the Holy Trinity v. United States, which decided that a federal statute that referred to “labor” only applied to manual labor and not “professional” services. Not only is this distinction not found in the text of the statute, it also “renders the exceptions for actors, artists, lecturers, and singers utterly inexplicable.” 4Antonin Scalia, Common-Law Courts in a Civil-Law System: The Role of United States Federal Courts in Interpreting the Constitution and Laws, The Tanner Lectures on Human Values 79, 94 (1995). Similarly, the Copyright Act’s specific exceptions for two passive activities would be “utterly inexplicable” under the dissent’s definition of “perform.” If Congress did not mean to include such conduct within the definition of “perform”, it would not have needed to create these exceptions.

In sum, the dissent’s interpretation of “perform” in the Copyright Act does not hold up when we interpret the term within the context of the whole act.

References

References
↑1 The dissent also asserts that “Every Court of Appeals to have considered an automated-service provider’s direct liability for copyright infringement has adopted that rule.” But that’s not entirely the case, at least when it comes to the Ninth Circuit’s decision in Fox Broadcasting Co. v. Dish Network. The court there did not once utter the word “volition”, and district courts in the Circuit apparently don’t believe the test was adopted. See, e.g., Order Granting in Part and Denying in Part Allvoice’s Motion to Dismiss Plaintiff’s First Amended Complaint, Oppenheimer v. Allvoices, Inc., No. C-14-00499 (ND Cali June 10, 2014) (“Although the Netcom requirement of “volitional” conduct for direct liability has been adopted by the Second and Fourth Circuits, the Ninth Circuit has not yet addressed the issue, and courts within this Circuit are split on it”); Order Granting in Part and Denying in Part Defendant’s Motion to Dismiss, National Photo Group, LLC v. Allvoices, Inc., No. C-13-03627 (ND Cali Jan. 24, 2014) (noting volitional conduct “requirement has not been adopted by the Ninth Circuit and Courts within this Circuit are divided on whether the requirement is valid”).
↑2 Green v. Bock Laundry Machine Co., 490 US 504, 528 (1989) (J. Scalia concurrence).
↑3 Bennett v. Spear, 520 US 154, 173 (1997) (quoting US v. Menasche, 348 US 528, 538 (1955).
↑4 Antonin Scalia, Common-Law Courts in a Civil-Law System: The Role of United States Federal Courts in Interpreting the Constitution and Laws, The Tanner Lectures on Human Values 79, 94 (1995).