On November 19, the International Intellectual Property Alliance (IIPA), released its latest report that shows the value added by copyright industries each year to the US economy. This was the 14th such report IIPA has released since 1990, and for the first time, core copyright industries1 contributed over one trillion dollars.

Among the marquee findings, the report concludes that copyright industries:

  • Employed nearly 5.4 million U.S. workers – nearly 5% of the total private employment sector – with jobs paying an average of 33% more than the rest of the workforce.
  • Grew at an aggregate annual rate of 4.7%, more than twice the rate of growth for the U.S. economy.
  • Accounted for $142 billion in foreign sales and exports, far more than sectors such as aerospace, agriculture, food, and pharmaceuticals and medicines.

The reaction from copyright skeptics about the report’s conclusions that copyright contributes significantly to the US economy was, essentially: “Does not.”

The spin seems to be that, yes, industries that create and disseminate copyrighted works may make substantial contributions to the US economy, but that does not necessarily mean that the success is a result of copyright itself. Jonathan Band, writing at the CCIA’s Project DisCo, says, “The report itself does not in any way attribute the success of these industries to copyright protection.”

It’s an odd argument — that the fundamental building block of a market for expressive works doesn’t play a role in the success of that market. How sound is it?

One way to test the argument would be to take a comparative look at the economic contributions of copyright industries between jurisdictions with different levels of copyright protection. If copyright protection is related to the economic contributions of copyright industries, then we would expect countries with stronger copyright protections to have a higher economic contribution from copyright industries compared to countries with weaker copyright protections.

And that, in fact, is exactly what happens.

Since 2002, WIPO has supported and collected reports on the economic contributions of copyright industries in nearly forty countries around the world. Last year, it released a report, WIPO Studies on the Economic Contribution of the Copyright Industries, that analyzed and compared the data from these reports.

One of the things WIPO looked at was how the economic contributions of copyright industries in countries related to those countries rankings on the International Intellectual Property Index, a study prepared by the Property Rights Alliance (PRA) that looks at data from 129 countries. The study “measures the significance of both physical and intellectual property rights and their protection for economic well-being. The Index focuses on three areas: legal and political environment, physical property rights, intellectual property rights.” Among the metrics the PRA looks at is the strength of IP law and how well it is enforced.

WIPO’s conclusion: “The analysis suggests a strong and positive relationship that exists between the contribution of copyright industries to GDP and the IPR Index.” That is, copyright industries contribute more to a country’s GDP when they are better protected.2

Okay, that’s settled. But the question remains: why is it that copyright skeptics have such a knack for making obvious points like “incentives do more when they work better” sound counterintuitive?

Fundamental economic logic of property systems

Earlier this month, influential and distinguished legal scholar Richard Epstein spoke at a Federalist Society event titled “Intellectual Property, Free Markets, and Competition Policy.” Though his talk focused primarily on patents, his concluding remarks are just as applicable to copyright. Said Epstein:

One of the great tragedies of modern time is we have too much scholarship with respect to intellectual property. And the problem about this scholarship is it becomes deeply introspective, and what it does is it takes a perfectly beautiful structure, puts it under a microscope and sees every pore and deformity in the system at this minor level and then blows them up out of all proportion. What people need to do is take a tranquilizer to relax … That’s because they’re overstating difficulties, and they overstate difficulties because they do not understand the fundamental economic logic of all property systems, and therefore they don’t understand it with respect to intellectual property. So count me as a dissenter from the modern establishment on this area.

Copyright, like any other form of property, is an economic asset. For many creators, it is often the only economic asset they bring to the table, whether they are negotiating with a “traditional” entity like a film studio or record label or a newer distributor like YouTube. It also serves a building block for an entire marketplace for cultural, educational, and scientific works. All the features of a free market are present: property, private ordering, and nondestructive competition. The result is that the value of these works is maximized, and their creation and dissemination are promoted.

Part of the misunderstanding of the logic of copyright may come from the focus of skeptics on only the incentive to create, to the exclusion of the incentive to disseminate.3 The Supreme Court has been clear this is not the case:

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.”4

Copyright’s contribution to the public benefit

Another big reason for misunderstanding the fundamental economic logic of copyright is a myopic look at the public benefit of copyright. All property rights serve the public benefit.5 James Madison, who proposed and drafted the Copyright Clause of the US Constitution explicitly recognized this same principle in copyright law. Writing in the Federalist Papers, Madison said of the Clause, “The utility of this power will scarcely be questioned. The copyright of authors has been solemnly adjudged in Great Britain, to be a right of common law. … The public good fully coincides…with the claims of individuals.” Copyright skeptics often see only the exceptions and limitations on copyright as the parts that benefit the public while ignoring the inherent public benefit of recognizing individual, exclusive rights in creative works.

This leads to the oft-quoted fallacy that copyright law only “makes reward to the owner a secondary consideration.” That this quote is the result of a misreading of case law should be enough to put it to bed. However, one commentator has explained why, accepting it on its face, it is premised on faulty logic:

It would be similarly fallacious to say that in a real estate transaction, the money paid to the seller is only a secondary consideration, with the primary value of the transaction consisting of the conveyance of the parcel to the buyer. Both the money and the land in such a transaction are consideration; neither is more important to the public, although at the time of the transaction the money is more important to the seller and the land is more important to the buyer. The value to society consists merely in the existence of a market for the land so that property may be obtained by those who are likely to put it to better use. Likewise, for intellectual property; the value to society consists in the existence of a market for the authors’ writings. The money paid to the author is by no means secondary. Rather, it is the unavoidable result of the creation of a market because a market cannot exist without the promise of reward to owners of property who choose to place that property on the market.6

More recently, the Supreme Court has explicitly rejected this erroneous secondary consideration reasoning, reiterating the basic economic logic of copyright in Eldred v. Ashcroft:

JUSTICE STEVENS’ characterization of reward to the author as “a secondary consideration” of copyright law understates the relationship between such rewards and the “Progress of Science.” As we have explained, “[t]he economic philosophy behind the [Copyright] [C]lause … is the conviction that encouragement of individual effort by personal gain is the best way to advance public welfare through the talents of authors and inventors. Accordingly, “copyright law celebrates the profit motive, recognizing that the incentive to profit from the exploitation of copyrights will redound to the public benefit by resulting in the proliferation of knowledge…. The profit motive is the engine that ensures the progress of science.” Rewarding authors for their creative labor and “promot[ing] … Progress” are thus complementary; as James Madison observed, in copyright “[t]he public good fully coincides . . . with the claims of individuals.” JUSTICE BREYER’s assertion that “copyright statutes must serve public, not private, ends,” similarly misses the mark. The two ends are not mutually exclusive; copyright law serves public ends by providing individuals with an incentive to pursue private ones.

So, yes, it is accurate to say that meaningful and effective copyright protection plays a critical role in the success of creative industries that produce and disseminate works protected by copyright. And with one trillion dollars in value added to the US GDP and employment of over five million workers at above-average wages, that success is no small feat.

Footnotes

  1. Defined in the report as it is defined by WIPO in its Guide to the copyright and related rights treaties administered by WIPO and glossary of copyright and related rights terms: “The core copyright industries are those industries whose primary purpose is to create, produce, distribute or exhibit copyright materials. These industries include computer software, videogames, books, newspapers, periodicals and journals, motion pictures, recorded music, and radio and television broadcasting.” []
  2. It’s worth noting the other conclusions from the report. WIPO also found the following: “There is a positive relation between the contribution of copyright industries to GDP and the GDP per Capita”; “Contribution to Copyright industries to GDP exhibits strong and positive relationship with the Index of Economic Freedom”, which measures “economic openness, competitiveness and the rule of law, such as business freedom, trade freedom, fiscal freedom, property rights, freedom from corruption, etc.” — WIPO explains, “Countries that score well demonstrate a commitment to individual empowerment, non-discrimination and the promotion of competition. Their economies tend to perform better, and their populations tend to enjoy more prosperity, better health care and more positive measures on a variety of quality-of-life indices”; “Contribution of Copyright industries to GDP exhibits strong and positive relationship with the Freedom from Corruption indicator,” an index prepared by Transparency International; “The analysis suggests that there is a strong and positive relationship between the contribution of copyright industries to GDP and the Global Competitiveness Index,” an index prepared by the World Economic Forum; and INSEAD’s Global Innovation Index “has a positive and highly significant relation with performance of the creative industries.” []
  3. See, e.g., Rob van der Noll & Joost Poort, Assessing the Economic Contribution of the Copyright-Based Industries, CCIA (2011): “From an economic perspective, the incentives for creative production are the main rationale for the existence of copyright.” []
  4. Golan v. Holder, 132 S. Ct. 873, 888-889 (2012); see also Adam Mossoff, How Copyright Drives Innovation in Scholarly Publishing, forthcoming (2013). []
  5. See, e.g., State v. Shack, 58 N.J. 297, 303 (NJ 1971), “Property rights serve human values”; Armen A. Alchian, Property Rights, The Concise Encyclopedia of Economics (Library of Economics and Liberty) “Private property rights do not conflict with human rights. They are human rights.” []
  6. David A. Householder, The Progress of Knowledge: A Reexamination of the Fundamental Principles of American Copyright Law, 14 Loyola L.A. Entertainment Law Review 1, 35-36 (1993). []

Fred von Lohmann, former staff attorney of the EFF and currently Legal Director of Copyright at Google, has been presenting a talk recently on “Revising the Copyright Act for the 21st Century.” While the views Lohmann expresses in the talk may not necessarily reflect the views of Google, it is reasonable to assume that there is close alignment.

The talk is motivated by review efforts that have begun in earnest by various government entities in recent months: the House Judiciary IP Subcommittee, the Copyright Office, and the Internet Policy Task Force in the Department of Commerce. In it, Lohmann makes a range of points about the current state of copyright and its future; while I haven’t been able to find a video or transcript of the talk, the Yale Information Society Project (among others) livetweeted an October 15th presentation, which seems to be fairly comprehensive.

Lohmann calls for an aggressive reshaping of copyright law, not only domestically but internationally as well. Many of the fundamental changes would clearly benefit large online service providers like Lohmann’s employer; very little is said about ensuring that individual creators have meaningful rights that enable them to build sustainable creative careers.

One of Lohmann’s major points is that “Copyright is badly ‘fit for purpose.’” The law “assumes that full rights apply to all works, even given the sheer quantity of creativity enabled by digital tools.” According to Lohmann, “Ninety-nine percent of copyrighted works today are not incentivized by copyright.Lohmann suggests that YouTube and Instagram users, for example, aren’t incentivized by the law’s specific features, such as its duration or reversion rights. He asks, “Is [the] classic copyright incentive story necessary or appropriate for all these categories of works?

Lohmann’s question is premised on the flawed claim that the sole reason for securing copyright is to incentivize creation. That is only part of the reason for copyright. Just as important – if not more so – is the role copyright plays in providing incentives to publish and disseminate the works that authors create.

The Supreme Court made this crystal clear less than two years 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.” The Southern District of New York echoed this idea last summer. “There is a strong public interest in the copyright system’s function of motivating individuals to make available their creative works and increase the store of public knowledge.”1

It may seem odd to suggest to anyone who has spent more than five minutes on social networking sites to suggest that incentives are needed for users to share things publicly. But much more is needed beyond the design of a particular social networking service to make it widely used or widely ignored – and some services, such as Myspace and Digg, have seen just how quickly a service can go from the former to the latter.

There are many factors that individuals and internet uses consider when making the choice of what and when to share something online. Most often, these are noneconomic considerations.

Barely a week goes by without a new privacy or term change that draws outrage. Earlier this month, Google announced that it would be “placing the photos, profiles and comments of some users in advertising endorsements across the Web.” In September, Facebook released a new “Statement of Rights and Responsibilities” policy that caused the FTC to begin an inquiry (Facebook is governed by a 2011 agreement with the FTC that requires it to get explicit consent of its users before making material changes to its privacy policy). As Mashable reported, “Most alarming to users was the understanding that their profile data, including their profile picture, name, and personal information, could show up as part of a Facebook ad their friends may see on the site.” And nearly a year ago, Instagram faced consumer ire over terms that would let it commercialize photos uploaded by users.

Sometimes it’s not even an actual change but the perception of change that will cause users to think twice about disseminating their creative work. This past spring, there were reports that users were fleeing Tumblr once it was announced that the service would be purchased by Yahoo. Some have suggested that the motivation over leaving (or threatening to leave) the free service were concerns that Yahoo would change the characteristic of the community, tighten content standards, or overrun the site with advertisting.

The outcry that accompanies such announcements demonstrates quite clearly that many users factor into their decision to share photos, comments, and other content what will happen once its uploaded. Maintaining some control serves as an incentive to sharing in the first place. And if we want to encourage such dissemination, we need to continue to recognize that individuals have rights to their expression.

A large amount of those who share personal photos, writing, thoughts and other creative expression on social networking sites don’t typically look to commercialize such expression. Likewise, they rarely need incentives to create such expression. But they do have some expectation when disseminating their expression that their work won’t appear in advertising, as stock imagery for political causes they might not agree with, as endorsing some brand or cause. In other words, maintaining some level of choice and control over our stuff gives us an incentive to share our stuff.

Of course, much of these issues are governed by a particular site’s terms of service or privacy policy. But these agreements are not enough. They can mediate the relationship between user and service, and users are able to make their own decisions about where to upload based on what terms are acceptable – though much more could be done to make such terms more transparent and understandable as well as address the issue of how easily services can change terms subsequently.

But contracts only go so far – terms of service and contracts don’t extend to non-contracting third parties. Copyright serves as a backstop to what non-contracting parties can do. It’s not the only mechanism, of course; various torts and statutes may govern what third parties can do with users’ expression. But it certainly plays an important role. Again, copyright doesn’t force anyone into sharing or not sharing their expression. It just prevents corporations and other parties from making that choice for them.

What’s more, copyright reinforces First Amendment values that may come into play. Not only does it “motivat[e] individuals to make available their creative works and increase the store of public knowledge,” but it also protects the freedom not to speak—a necessary complement to the freedom to speak.2

Copyright aligns with internet users’ free speech rights and their expectations about what should happen with their photos, writing, and other expression once it is made available to the public online. We shouldn’t be in such a rush to declare it a “bad fit” and start thinking of ways to toss it aside or turn it into something that only benefits large internet companies at the expense of the public. That’s not to say that there are specific areas of the law that could be made better, but the basic principles of copyright law are just as applicable and vital today to the 99% of creators today.

Footnotes

  1. ABC v Aereo, No. 12-Civ-1540(AJN), order denying preliminary injunction (SDNY, July 11, 2012). []
  2. Harper & Row, Publishers, Inc. v. Nation Enterprises, 471 US 539, 560 (1985). []

This past summer, the Ninth Circuit released its decision in Fox Broadcasting Company v. Dish Network, holding that the lower court had not abused its discretion when it denied a preliminary injunction against Dish.

Fox had sued Dish after the satellite television provider released a set-top DVR called the “Hopper” along with two features: the first, PrimeTime Anytime (PTAT), automatically records all four broadcast networks’ programming during prime time hours, giving viewers a video on-demand type experience, and the second, AutoHop, allows viewers to automatically skip over commercial breaks while watching shows recorded by PTAT. Fox alleged that these features breached its contract with Dish, which prohibits the recording of Fox programs and requires that any video on demand services disable fast-forward functionality during commercial breaks. Fox also alleged copyright infringement because Dish exceeded the scope of its license.

The district court denied the injunction, unconvinced that Fox had demonstrated a likelihood to succeed on the merits at this stage of the litigation.

After the Ninth Circuit affirmed the district court’s decision, writers at the Fenwick & West blog made the following observation:

the Ninth Circuit left open what causation standard governs copyright actions. Following Cablevision, the district court purported to apply ordinary tort principles to determine whether Dish was directly liable. Despite the role that Dish played in operating PTAT, the district court held, and the Ninth Circuit repeated: “The user, then, and not Dish is the ‘most significant and important cause’ of the copy.” 905 F. Supp. 2d at 1102 (quoting Prosser & Keeton on Torts § 42); Opinion at 12. Oddly, this statement misquotes Prosser & Keeton’s commentary on proximate, or legal, causation. The treatise provides that: “[Legal Causation] is sometimes said to depend on whether the conduct has been so significant and important a cause that the defendant should be legally responsible.” Prosser & Keeton § 42. By substituting “most” for “so,” the opinions suggest that only one actor may be liable for direct infringement. This approach threatens to eliminate the ordinary rule of joint and several liability in favor of a new “primary causation” standard.

Oops. It’s not every day that a Circuit Court reaches a legal conclusion through such a glaringly obvious mistake. Broadcasters have rightfully jumped on this error in their petition for rehearing. Unfortunately, courts outside the Ninth Circuit have gone down the same road without being misled by a misreading of legal authority. The result has been a strand of copyright cases that seemingly stand for the proposition that only one actor can be found directly liable. With multiple actors, it becomes a binary, either/or question of causation, and any other liability can only be found indirectly.

This is a sharp departure from well-established legal rules concerning causation. What’s all the more striking about this departure is how little explanation has accompanied it in court decisions responsible for it. Such a dramatic change at the very least deserves far closer examination then what courts — especially the Ninth Circuit through Dish — have given it.

Joint Causation and Netcom

William Prosser, whose name graces the torts treatise that the Ninth Circuit misquoted, wrote in 1937 on Joint Torts and Several Liability, a guide of sorts to understanding joint tortfeasors. In it, he provides a taxonomy of situations where the law has historically recognized that multiple people can be held directly liable for a single harm. This includes, most relevantly, “Concurrent causation of a single, indivisible result, which neither would have caused alone.”

Where the acts of two defendants combine to produce a single result, which is incapable of being divided or apportioned—such as the death of the plaintiff—each may be the proximate cause of the loss, and each may be held liable for the entire damage. A common case is that of two vehicles which collide and injure a third person. The duties which are owed to the plaintiff by the defendants are separate, and may not be similar in character or scope, but by far the greater number of courts now permit joinder in one action.

Entire liability in these cases rests upon the obvious fact that each defendant is responsible for the loss, and the absence of any logical basis for apportionment. It is not necessary that the misconduct of the defendants be simultaneous, or that it operate simultaneously to produce the result; one defendant may create a situation, harmless in itself, upon which the other may act to cause injury. One may leave combustible material, and the other set it afire; one may leave a hole in the street and the other drive into it. The first defendant remains the proximate cause of the injury, so long as the intervention of the second is a foreseeable, or normal, “not extraordinary” consequence, which fairly may be said to lie within the scope of the risk created.

Relatively straightforward. But when copyright law entered the internet age, the idea that multiple actors could be liable for direct infringement began to erode.1

One of the earliest cases involving copyright and online services, Religious Tech. Center v. Netcom On-line Comm. (Netcom), involved the unauthorized posting of copyrighted materials on a Usenet group. The copyright owner sued the alleged uploader, as well as the BBS service that connected the uploader to the internet and the internet service provider that connected the BBS service to the internet. When the court reached the issue of direct liability for the latter, it paused, noting that strict liability in this circumstance would “create many separate acts of infringement and, carried to its natural extreme, would lead to unreasonable liability.” The court likened Netcom to a machine that makes copies, and concluded that because the copies are made at the initiation of the user and without any further human intervention, Netcom, as owner of the machine, was not directly liable for the copies. It buttressed this conclusion with a nod toward policy, saying, “Where the infringing subscriber is clearly directly liable for the same act, it does not make sense to adopt a rule that could lead to the liability of countless parties whose role in the infringement is nothing more than setting up and operating a system that is necessary for the functioning of the Internet.”

CoStar: Putting the Stamp of Approval on Netcom

Netcom would be directly challenged several years later in CoStar Group v. LoopNet. In that case, which reached the Fourth Circuit, real estate photographer CoStar Group sued ISP LoopNet for directly infringing its photographs, which were posted by LoopNet users on LoopNet’s website. CoStar argued that Netcom’s holding was based on the expedience of preventing the internet from being crippled in its infancy. Now that the internet was more mature, and in light of the DMCA safe harbors that had been established by Congress, the “special exemption” was no longer necessary.

The Fourth Circuit disagreed and said that

While the Copyright Act does not require that the infringer know that he is infringing or that his conduct amount to a willful violation of the copyright owner’s rights, it nonetheless requires conduct by a person who causes in some meaningful way an infringement. … This, of course, does not mean that a manufacturer or owner of machines used for copyright violations could not have some indirect liability, such as contributory or vicarious liability. But such extensions of liability would require a showing of additional elements such as knowledge coupled with inducement or supervision coupled with a financial interest in the illegal copying…

But to establish direct liability … something more must be shown than mere ownership of a machine used by others to make illegal copies. There must be actual infringing conduct with a nexus sufficiently close and causal to the illegal copying that one could conclude that the machine owner himself trespassed on the exclusive domain of the copyright owner. The Netcom court described this nexus as requiring some aspect of volition or causation. CoStar Group 545-50.

You’ll note right off the bat that the Fourth Circuit did not embrace a “primary causation” theory like Dish would. It anticipates that multiple actors may be liable for infringement. But rather than looking for the “most significant and important cause” of a copy, it is looking only for a “nexus sufficiently close and causal” to the copying.

Even so, CoStar determined that an ISP that does not engage in intervening conduct when a subscriber uses its facilities to infringe on copyright is not directly liable for such infringement. Like Netcom, CoStar analogized the ISP to the owner of a copying machine, who at the most could be found indirectly liable for infringement if it, for example, had knowledge of unauthorized copying. CoStar also found that the requirement that there be “some aspect of volition and meaningful causation” was supported by the Copyright Act’s fixation requirement for copies. Said the Fourth Circuit, “When an electronic infrastructure is designed and managed as a conduit of information and data that connects users over the Internet, the owner and manager of the conduit hardly ‘copies’ the information and data in the sense that it fixes a copy in its system of more than transitory duration.

Finally, CoStar notes that its endorsement of Netcom’s volition requirement serves an important public policy.

There are thousands of owners, contractors, servers, and users involved in the Internet whose role involves the storage and transmission of data in the establishment and maintenance of an Internet facility. Yet their conduct is not truly “copying” as understood by the Act; rather, they are conduits from or to would-be copiers and have no interest in the copy itself. To conclude that these persons are copyright infringers simply because they are involved in the ownership, operation, or maintenance of a transmission facility that automatically records material — copyrighted or not — would miss the thrust of the protections afforded by the Copyright Act.

The CoStar decision has not escaped criticism; indeed, it attracted a dissent. Circuit Judge Gregory agreed with the legal reasoning of the majority but disagreed with its characterization of LoopNet, believing instead that the ISP engaged in “non-passive, volitional conduct with respect to the photographs on its website such that the Netcom defense does not apply.”

Gregory notes that once a photograph has been uploaded to LoopNet’s servers, it does not become automatically and immediately accessible to other users. Instead, “one of the company’s employees can review the photo to ensure (1) it is an image of commercial real estate, and (2) it is not an obviously copyrighted image.” To Judge Gregory, this distinguishes LoopNet from a truly passive service provider, one that exercises no control over what is being communicated through its hardware.

LoopNet remains the pivotal volitional actor, “but for” whose action, the images would never appear on the website. Indeed, “volition” is defined as “the act of willing or choosing[;] the act of deciding (as on a course of action or an end to be striven for)[;] the exercise of the will … [or] the termination of an act or exercise of choosing or willing[;] a state of decision or choice.” Under any analytical framework, LoopNet has engaged in active, volitional conduct; its employees make a conscious choice as to whether a given image will appear in its electronic publication, or whether the image will be deleted from the company’s system. Nothing in the brief nature of LoopNet’s review makes the company akin to a copy machine owner or a security guard by the owner’s door. LoopNet is the publisher of LoopNet Magazine in cyberform; a volitional copier of images to whom direct infringement liability applies. Because I believe that the Netcom volitional defense should focus on passivity and the automated nature of the act — not the fact that a user’s initial volition somehow exterminates liability for later volitional acts — I would reverse the district court.

I believe Judge Gregory was correct on this last point. CoStar represents a slight shift from Netcom’s volition or causation requirement for direct liability to more of an “initiation” requirement. However, CoStar‘s conclusions regarding volition were at least still motivated by the same concerns as Netcom over cabining liability in a wide open communications network.

Cablevision and Dish: Extending the Volition Requirement Beyond its Origins

Cablevision represents the next shift away from traditional tort principles. Cable provider Cablevision was found by a district court to be directly liable for copying that occurred through its “Remote Storage DVR” (“RS-DVR”) service that allowed customers to save television programs for later viewing without needing a set-top DVR device.2 The court marshaled a number of reasons why Cablevision was actively involved in the copying of television programs: Cablevision designs, houses, and maintains the necessary equipment used for copying; it is involved in an ongoing relationship with customers, unlike the manufacturer of a copying device; the copying is instrumental rather than incidental to the RS-DVR service; Cablevision selects the programming that is available for recording; and it provides that content to its RS-DVR service [rather than a user providing the content to be copied]. In short, Cablevision’s RS-DVR service was “a far cry from the ISP’s role as a passive conduit in Netcom” and played a sufficiently active role in causing the copies to be made.

The Second Circuit completely rejected the district court’s conclusions on appeal.3 It paid no heed to Netcom‘s original desire to draw a line to keep the number of direct infringers at a limited and reasonable number and seemingly couldn’t get past the superficial similarities between the operation of the RS-DVR system and a set-top VCR. Devlin Hartline has criticized the decision, saying

Cablevision’s actions were far more proximate to the copying of particular materials than Netcom’s or the CoStar defendant’s ever were, and the rule from Netcom has been extended significantly past relieving mere passive conduits of liability for direct infringement. This leads to the potentially nefarious situation where no matter how instrumental a service provider’s actions may be in causing the unauthorized copying of particular materials—such as by Cablevision (1) supplying its customers with the source materials and the tools for the job, (2) making the copying as simple as pressing a virtual button, and (3) maintaining complete control over every aspect of its dedicated copy machine that existed for no purpose other than to make particular copies—that service provider would not be a direct infringer.

The Second Circuit gives little reason why it adamantly refused to recognize joint causation here. Both Cablevision and its customers are necessary, “but for” causes of the copying. There are no concerns that such a holding would render the entire internet liable. Nevertheless, the Circuit narrowed the element of volition even further than Netcom and CoStar to one of “initiation” or, perhaps, a “last deliberate intervention” requirement that results in a less likelihood there can be multiple actors directly liable.

And so we arrive at Dish. On a motion for a preliminary injunction, the district court adopted the novel “causation” requirement developed through Netcom, CoStar, and Cablevision to determine that Dish was not a sufficient cause of the copying on its service.4 This despite the fact that Dish has designed, houses, and maintains the equipment necessary for the copying. It determines what to copy, when to copy it, and how long copies are available for subscribers to watch. Users cannot stop the copying once it starts after the service is enabled. For the court, the only sufficient cause of the copying for purposes of direct liability was the user, when she enables the PTAT service.

The Ninth Circuit affirmed the district court’s holding with little discussion, save for the previously mentioned misquote of Prosser and Keeton.

What Next for Volition

The shift in copyright’s liability standard that has occurred from Netcom to Dish calls out for more attention, as it has been as dramatic as it has been ignored.

One brief observation: much of the doctrinal confusion in these cases seems to come from a conflation between factual, or “but for”, causation and legal, or “proximate”, causation. The courts mentioned above appear on the face to be talking about factual causation when they are really talking about legal causation. By doing this, the courts obscure or ignore the policy considerations inherent in defining proximate causation behind a facade of what seems to be factual observations.

But any first year law student halfway through a torts class can see that Netcom, LoopNet, Cablevision, and Dish Networks are factual causes of the copying that has occurred. But for the design and maintenance of their systems and services, the copying could not have occurred. The appropriate inquiry is whether such acts should be considered the legal cause of the copying.

By recognizing that when courts have talked about volition they really mean proximate causation, we can have a more thorough discussion about how to apportion responsibility in copyright law.5 Much preferable to misquoting Prosser.

Footnotes

  1. Indirect liability—contributory infringement, vicarious infringement, or inducement—is a form of joint liability, one long recognized in copyright law. See Arista Records v. Lime Group, 784 F.Supp.2d 313, 315 (SDNY 2011) (Service provider that induced infringement is jointly and severally liable with individual, direct infringers). []
  2. Twentieth Century Fox Film v. Cablevision, 478 F.Supp.2d 607 (SDNY 2007). []
  3. Cartoon Network v. CSC Holdings, 536 F.3d 121 (2nd Cir. 2008). []
  4. Fox Broadcasting Co. v. Dish Network, 905 F.Supp. 2d 1088 (CD Cali 2012). []
  5. For more on causation in tort law, see Honoré, Antony, “Causation in the Law“, The Stanford Encyclopedia of Philosophy (Winter 2010 Edition), Edward N. Zalta (ed.). []

Cross-posted on the Law Theories blog.

In the never-ending copyright debate, one often comes across certain words the usage of which both sides vehemently disagree upon. One such point of contention is the use of the word “theft” to describe copyright infringement. Ars Technica ran an article a few years back where Vice President Joe Biden was quoted as saying that “[p]iracy is flat, unadulterated theft.” Copyhype’s Terry Hart had a post a week later discussing the infringement-as-theft meme, mentioning the fact that even Justice Breyer, a copyright skeptic, had referred to deliberate infringement as “garden-variety theft.”1 The response from the other side of the debate was predictable, with the usual suspects demanding that copyright infringement is not theft—though the skeptics conspicuously neglected to define the word theft or to actually explain why it’s wrong to refer to infringement as theft.

The debate lives on today. Just a couple of weeks ago, Swedish Pirate Party founder Rick Falkvinge had a post on his blog addressing what he called “the most disturbingly false bullshit repeated by pro-copyright-monopoly pundits,” i.e., that “copying is stealing.” He offered several retorts for others to use when this particular issue inevitably arises in future debates. Falkvinge amusingly noted that when it comes to such debates, “it’s not a logic game but a numbers game,” and “[i]t’s about looking like the winning team.” He claimed that anyone referring to infringement as “stealing” is “trying to redefine words in a very dishonest way to frame the debate in a factually incorrect light.” To Falkvinge, stealing is defined as “losing an object,” and anyone who disagrees is “talking of horseless carriages.”

My favorite part of Falkvinge’s post is where he claimed that we “should look in the nearest lawbook” since “in no book of laws on this entire planet are property laws (where stealing is defined) and copyright monopoly laws defined in the same section.” This claim is easily refuted. For example, Section 2319 of the U.S. Code, which defines “Criminal infringement of a copyright,” is found in Chapter 113 of Title 18, which is entitled “Stolen Property.” Section 3931 of the Pennsylvania Crimes Code, which defines “Theft of unpublished dramas and musical compositions,” is found in Chapter 39 of Title 18, which is entitled “Theft and Related Offenses.” And Section 5/16-7 of the Illinois Compiled Statutes, which defines “Unlawful use of recorded sounds or images,” is found in Subdivision 5 of Article 16, which is entitled “General Theft.” It’s trivially easy to find many more examples just like these. Having read many posts by Falkvinge (as well as many law books), I don’t get the impression that he’s actually opened many law books himself.

In this post, I’ll look at the meaning of the word theft, and I’ll explain why it is I think it’s perfectly natural to think of copyright infringement as theft. I think that oftentimes people refer to infringement as theft in the colloquial sense of the word, but it’s the legal meaning of the term that I will focus on. At the outset, I note that theft is a term of art that has many different meanings since each state has its own theft laws that are interpreted differently. For all of the arguments and examples I give below, there certainly are apposite counterarguments and counterexamples. I don’t mean for my view to be taken as the only possible one, nor do I deny that some of what I’m about to say is in fact the minority view. But I’ll leave the opposing arguments for the cynics to make—although it would be nice if they discussed the actual law while making legal arguments for a change.

What is Theft?

Theft did not exist at common law. Instead, theft is an omnibus term of recent origin that subsumes previously distinct property crimes such as larceny, embezzlement, and false pretenses.2 The antecedent to what most people think of as theft is larceny. Larceny can be defined as the “unlawful taking and carrying away of someone else’s personal property with the intent to deprive the possessor of it permanently.”3 Under the common law, larceny required that the thing taken be tangible property.4 This is presumably why the skeptics think it’s wrong to refer to copyright infringement as theft. While copyright is personal property, it’s intangible property that, by its very nature, is nonrivalrous. Thus, if somebody infringes a copyright, they haven’t dispossessed the copyright owner of any tangible property, a necessary element for larceny under the common law.

To the uninitiated, the confusion about why copyright infringement is theft is understandable. But the line of reasoning that focuses on the old, common law definition of larceny neglects to take account of the fact that the modern definition of property for purposes of theft statutes has been broadened to include both tangible and intangible property.5 For example, the paradigmatic Model Penal Code, published first in 1962 by the sages at the American Law Institute, defines property for purposes of theft very broadly: “‘property’ means anything of value, including real estate, tangible and intangible personal property, contract rights, choses-in-action and other interests in or claims to wealth, admission or transportation tickets, captured or domestic animals, food and drink, electric or other power.”6

The Model Penal Code goes on to define theft by unlawful taking or disposition of movable property: “A person is guilty of theft if he unlawfully takes, or exercises unlawful control over, movable property of another with purpose to deprive him thereof.”7 “Property of another” is defined to include “property in which any person other than the actor has an interest which the actor is not privileged to infringe.”8 And “deprive” is defined to mean “to withhold property of another permanently or for so extended a period as to appropriate a major portion of its economic value.”9 Thus, we can break theft of movable property under the Model Penal Code into three elements: (1) unlawful taking or control, (2) of movable property of another, and (3) with intent to deprive. The first two elements comprise the actus reus, while the final element is the mens rea.

Most, if not all, states have theft laws that substantially track the Model Penal Code. For example, in my state of Louisiana, theft is defined broadly as follows:

Theft is the misappropriation or taking of anything of value which belongs to another, either without the consent of the other to the misappropriation or taking, or by means of fraudulent conduct, practices, or representations. An intent to deprive the other permanently of whatever may be the subject of the misappropriation or taking is essential.10

Florida defines theft in similarly broad terms:

A person commits theft if he or she knowingly obtains or uses, or endeavors to obtain or to use, the property of another with intent to, either temporarily or permanently:

(a) Deprive the other person of a right to the property or a benefit from the property.

(b) Appropriate the property to his or her own use or to the use of any person not entitled to the use of the property.11

Copyright opponents such as Falkvinge appear to have a greatly attenuated understanding of what property is and what it means to deprive someone of that property. For example, the Court of Appeals of Kentucky noted seventy years ago that “the word ‘property’ is so all-embracing as to include within its definition every physical object, intangible benefit, and prerogative susceptible of ownership, possession, or disposition.”12 Over a century ago, the Supreme Court of Washington noted that “property . . . consists not in tangible things themselves, but in certain rights in and appurtenant to those things,” and “it follows that when a person is deprived of any of those rights he is to that extent deprived of his property.”13 Or as the Supreme Court of New York, Appellate Division, put it over a century ago, property “is intended to embrace every species of valuable right and interest and whatever tends in any degree, no matter how small, to deprive one of that right, or interest, deprives him of his property.”14

In 1942, the Supreme Court of Iowa explained:

[P]roperty . . . is applied with many different meanings. Sometimes it is taken in the loose and vulgar acceptance to denote not the right of property or dominium, but the subject of such a right; as where a horse or piece of land is called my property. A little reflection, however, will suffice to convince any one that property is not the corporeal thing itself of which it is predicated, but certain rights in or over the thing. . . . These rights are the right of use, the right of exclusion and the right of disposition. . . . The dullest individual among the people knows and understands that his property in anything is a bundle of rights.15

Thus, property is a very broad term that refers not just to the thing itself, as laymen such as Falkvinge seem to think, but also to the rights, benefits, and interests that accompany ownership of the thing. Anyone who exercises dominion over the property of another, interfering with these rights, benefits, or interests, is depriving the property owner of his property. It matters not if the wrongdoer doesn’t prevent the property owner from also exercising dominion over the property. It is the act of doing something with the property that is inconsistent with the property owner’s rights, benefits, or interests that matters. When one understands these broad meanings of these legal terms of art, calling copyright infringement theft doesn’t seem so strange. But to really understand how theft applies to intangibles, I think it’s useful to look at some concrete examples.

Examples of Theft of Intangibles

In Dreiman v. State,16 the defendant had been convicted of burglary, i.e., entering a building with the intent to commit larceny, for breaking into his ex-girlfriend’s house, taking her keys and having copies made, and then returning the keys. At the time, Wyoming’s larceny statute provided: “A person who steals, takes and carries, leads or drives away property of another with intent to deprive the owner or lawful possessor is guilty of larceny.”17 On appeal, the defendant argued that there was no intent to deprive the victim of her keys since he had only borrowed them to make copies. The Supreme Court of Wyoming held that the defendant had deprived the victim of something, though that thing was intangible:

Copying those keys, therefore, was taking something from her and depriving her of her right to have exclusive access to her trailer house and automobile. Unauthorized copies of a person’s keys diminish the value of the original keys—keeping unwanted persons out of the trailer. In other contexts it has been said that property in a thing consists not merely in its ownership and possession, but in the unrestricted right of use, enjoyment, and disposal. Anything which destroys one or more of these elements of property to that extent destroys the property itself. . . . Thus, although the owner may retain possession of the original property, there has been nevertheless a deprivation of property when a copy is made and retained by another. The copies of the car and house keys . . . constituted sufficient evidence from which the jury could infer that appellant had the specific intent to steal when he unlawfully entered [the victim’s] dwelling.18

Thus, it’s theft to borrow someone’s keys and to make copies without their permission. This is so even if the original keys are returned to the owner. What makes it theft, which requires an intentional deprivation of the victim’s property, is the fact that the thief has taken from the owner of the keys the intangible benefits that go with having exclusive control over the set of keys. But this was not all that the defendant had taken. While in his ex-girlfriend’s house, the defendant copied down the victim’s unlisted phone number. The defendant argued that this type of information is not property which can be taken under the applicable larceny statute. The Supreme Court of Wyoming disagreed, finding that information “has been held to be property and a subject of theft in several criminal contexts.”19 Even though the defendant had merely copied down the phone number, he nonetheless had deprived the victim of something—the victim’s property interest in keeping her phone number private.

The same sort of deprivation occurs when someone photocopies or photographs documents that he has no right of access to. For example, in People v. Parker,20 the defendant was convicted of attempting to receive stolen property based on a scheme he had concocted to obtain confidential telephone directory supplements that were not publicly distributed. The defendant arranged to have the supplements delivered to him, which he would then photograph and return about an hour later. The defendant argued that since he was merely photographing the supplements and returning them shortly thereafter, there was no intent to deprive the telephone company of its property. The California Court of Appeal disagreed, and it upheld his conviction: “The supplements herein were property, had value and were the subject of theft within the meaning” of the applicable theft statute.21 Thus, even though the defendant promptly returned the supplements, he had nonetheless intended to deprive the victim of the intangible rights, benefits, and interests associated with the supplements when he photographed them.

In People v. Ellis,22 the defendant had been convicted of burglary for breaking into the home of his estranged wife’s mother for the purpose of locating his wife’s address in the mother’s address book. On appeal, the defendant argued that he could not be convicted of burglary since an address is an intangible thing that is not property that can be stolen. The California Court of Appeal disagreed, noting that “courts have shown no hesitation in broadly defining property in an effort to protect privacy and confidentiality in something that is deserving of being safeguarded from disclosure.”23 The defendant, who had obtained the address without consent, was “in a position to reap the benefits of this information by having unwanted access to the residence,” and it “destroyed” the mother’s “ability to limit those who knew” the wife’s new address.24 Thus, the appellate court held that the address was property that could be stolen by merely copying it down.

Lastly, in People v. Kwok,25 the defendant was convicted of burglary after he broke into his girlfriend’s house, removed the lock from one of her doors, and took it to a locksmith to get a key made. The defendant thereafter returned to her house and replaced the lock. On appeal, the defendant argued that he couldn’t be convicted of burglary since he had not taken the lock with the intent to permanently deprive the victim of it. The defendant claimed that making an unauthorized copy of someone’s house key is not theft, but the California Court of Appeal did not agree:

[P]roperty is something that one has the exclusive right to possess and use. A key to one’s residence is clearly one’s property. . . . [A] homeowner’s or tenant’s property interest in his or her house key is not just the right to maintain possession of a tangible object—the key—but also the right to control the intangible benefit conferred by ownership of the key, i.e., the ability to control access to one’s residence. Courts have said that the word property is all-embracing so as to include every intangible benefit and prerogative susceptible of possession or disposition. . . . Making an unauthorized copy of a “borrowed” key . . . destroys the intangible benefit and prerogative of being able to control access to one’s residence just as thoroughly as outright theft of the key itself.26

The appellate court held that the defendant’s “acquisition of the key was theft” since he had “obtained a key in which he had no legitimate property interest.”27 Moreover, in the court’s opinion, the victim “was the rightful owner of the key, even though the key, as a tangible object, did not exist until appellant had it made.”28

As you may have guessed, I chose the foregoing examples because they involve theft of intangibles based on unauthorized copying by the defendant. Whether the thief returns the original property after copying it is irrelevant since the intangible rights, benefits, and interests in the property nevertheless have been stolen. Copyright opponents such as Falkvinge, however, hold a very narrow view of what it means to steal something. For example, Falkvinge claims that when it comes to copyright infringement, “[n]obody is stealing anything” since “[t]hey are manufacturing their own copies using their own property.” The examples above refute this claim. Not only are the rights, benefits, and interests in a copyright intangibles that can be stolen, but copyright itself is intangible property that consists only in those rights, benefits, and interests—that’s all that can be stolen.

Dowling and Copyright Preemption

The darling of the copyright opponents is Dowling, and no discussion of infringement-as-theft would be complete without discussing this Supreme Court opinion from 1985.29 Dowling was a 6-3 decision that looked at whether the National Stolen Property Act (“NSPA”), as codified at Section 2314 of Title 18, applied to bootleg recordings. The NSPA prohibits the transportation in interstate commerce of “any goods, wares, merchandise, securities or money” that are known “to have been stolen, converted or taken by fraud.”30 Dowling was accused of trafficking in illicit recordings of Elvis Presley for which no license had been obtained nor royalties paid. On appeal, Dowling did not dispute his conviction for copyright infringement, instead challenging whether the bootleg recordings he dealt in were stolen property under the NSPA.

The Supreme Court took the case to address the “apparent conflict among the Circuits concerning the application of the statute to interstate shipments of bootleg and pirated sound recordings and motion pictures whose unauthorized distribution infringed valid copyrights.”31 The Court started its analysis with recognizing that its job, consistent with the rule of lenity, is to interpret criminal statutes narrowly and strictly. Dowling argued that the goods he shipped were not stolen within the meaning of the NSPA since the phonorecords themselves had not been stolen—while the copies shipped were certainly infringing, the physical phonorecords themselves were not stolen property. The Court agreed with Dowling, holding that the phonorecords at issue were not “stolen, converted or taken by fraud” as required by the NSPA.

In the Court’s opinion, prosecutions under the NSPA required that the physical goods shipped be themselves tangible goods that have been stolen: “[T]he provision seems clearly to contemplate a physical identity between the items unlawfully obtained and those eventually transported.”32 This meant, in the Court’s view, that “some prior physical taking of the subject goods” was necessary.33 The Court rejected the government’s view that shipping illicit copies of copyrighted materials would fit the bill if the materials those copies were embodied in had not themselves been stolen:

[T]he Government’s theory here would make theft, conversion, or fraud equivalent to wrongful appropriation of statutorily protected rights in copyright. The copyright owner, however, holds no ordinary chattel. A copyright, like other intellectual property, comprises a series of carefully defined and carefully delimited interests to which the law affords correspondingly exact protections. *** It follows that interference with copyright does not easily equate with theft, conversion, or fraud. ***

There is no dispute in this case that Dowling’s unauthorized inclusion on his bootleg albums of performances of copyrighted compositions constituted infringement of those copyrights. It is less clear, however, that the taking that occurs when an infringer arrogates the use of another’s protected work comfortably fits the terms associated with physical removal employed by § 2314. The infringer invades a statutorily defined province guaranteed to the copyright holder alone. But he does not assume physical control over the copyright; nor does he wholly deprive its owner of its use.34

It’s no wonder that copyright skeptics love this language, coming with the imprimatur of a majority of the Supreme Court, no less. In order to be convicted of transporting stolen goods under the NSPA, the Court held, the defendant had to have in his possession something tangible that was stolen. As the dissent pointed out, citing case law from multiple circuits, this holding was “contrary to the clear weight of authority.”35 You can read the dissent yourself to get other counterarguments, but for better or for worse, the Court read into the NSPA a distinction between tangible and intangible property. Only the former can be physically possessed as is required by the NSPA. A copyright, which is intangible and has no physical substance, simply can’t be carried across state lines.

But this doesn’t mean that copyright infringement is not theft. As the Second Circuit noted just last year, Dowling only stands for “the proposition that the theft and subsequent interstate transmission of purely intangible property is beyond the scope of the NSPA.”36 In other words, intangible property can still be the subject of theft, but the NSPA just doesn’t reach it. The First Circuit has noted that the NSPA simply “does not apply to purely intangible information, the theft of which is punishable under copyright law and other intellectual property statutes.”37 While the NSPA doesn’t apply to intangible property, the Economic Espionage Act still proscribes the “theft of trade secrets” in Section 1832 of Title 18, and the Identity Theft Penalty Enhancement Act still proscribes “aggravated identity theft” in Section 1028A of Title 18. Intangibles can be the subject of theft, there is no doubt; whether the NSPA reaches that theft is beside the point.

Moreover, the Dowling majority’s claim that “interference with copyright does not easily equate with theft” can be easily rebutted by looking at theft statutes that have been preempted by the Copyright Act. Congress made clear in Section 301 that it intended to expressly preempt the entire field of state law where the Copyright Act applies. Generally speaking, a state law is preempted by the Copyright Act if (1) the work at issue comes within the subject matter of copyright as defined by Section 102, and (2) the rights granted under the state law are equivalent to any of the exclusive rights granted by Section 106.38 To survive preemption, the state law must protect rights that are qualitatively different than the rights granted by copyright. In other words, the state law claim must be based on some extra element which changes its nature.39 If “the right defined by state law may be abridged by an act which, in and of itself, would infringe one of the exclusive rights,” then it is preempted.40

There are many examples in the case law of state theft statutes being preempted by the Copyright Act, but I’ll focus on just one—the Eleventh Circuit’s opinion in Crow v. Wainwright.41 Crow was a bootlegger who had been convicted by a Florida state court for violating Section 812.019 of the Florida Statutes Annotated, which prohibits “[d]ealing in stolen property.” The stolen property Crow was convicted of trafficking in was not the underlying copyright or the bootleg eight-track tapes themselves, but rather it was the private contractual rights that a certain performer held to collect royalties from a certain copyright owner. The Florida Court of Appeal and the Supreme Court of Florida upheld Crow’s conviction, finding that the state theft statute at issue was not preempted by the Copyright Act.

Crow then turned to the federal courts for relief. The Eleventh Circuit ran through the Section 301 preemption analysis, finding that the sound recording at issue clearly fell within the subject matter of copyright under Section 102. The state had justified its conviction of Crow “by attempting to characterize the stolen property rights as contract rights not within the exclusive scope of section 106.”42 The Eleventh Circuit rejected this argument, noting that since Crow was not a party to the contract between the performer and the copyright owner, the action could not be maintained under state contract law. Instead, the “stolen property rights sold by Crow,” said the federal appellate court, were the exclusive rights to distribute and to reproduce the work—i.e., rights granted exclusively under Section 106 of the Copyright Act.43 As such, the Eleventh Circuit held that Florida’s theft statute was preempted by the Copyright Act:

Despite the name given the offense, the elements essential to establish a violation of the Florida statute in this case correspond almost exactly to those of the tort of copyright infringement. The state criminal statute differs only in that it requires the prosecution to establish scienter [i.e., intent], which is not an element of an infringement claim, on the part of the defendant. This distinction alone does not render the elements of the crime different in a meaningful way.

Section 506 of the Copyright Act, which sets forth criminal penalties for copyright infringement, also requires the prosecution to prove scienter as an element of the case. The additional element of scienter traditionally necessary to establish a criminal case merely narrows the applicability of the statute. The prohibited act—wrongfully distributing a copyrighted work—remains the same. Section 301 clearly prohibits Florida from prosecuting Crow in this case, and we conclude that Crow’s conviction is null and void.44

Thus, the Eleventh Circuit did not accept the state’s argument that its theft laws could be applied to Crow’s copyright infringement. If anything disproves the statement in Dowling that “interference with copyright does not easily equate with theft,” it’s the fact that courts do easily equate copyright infringement with state theft laws when doing a preemption analysis under Section 301.

Copyright Infringement as Theft

The word “theft” without any qualification usually refers to the criminal variety of theft, but it should be noted that there exists both criminal theft and civil theft. Whereas criminal theft claims are brought by the government, civil theft claims are instituted by private parties. A civil theft proceeding can be initiated by the victim against not only the original taker of his stolen property, but also against any subsequent person having possession of it. The civil theft action typically permits the victim to recover his stolen property and to collect three-times his damages. Colorado’s civil theft statute is representative of such statutes:

All property obtained by theft, robbery, or burglary shall be restored to the owner, and no sale, whether in good faith on the part of the purchaser or not, shall divest the owner of his right to such property. The owner may maintain an action not only against the taker thereof but also against any person in whose possession he finds the property. In any such action, the owner may recover two hundred dollars or three times the amount of the actual damages sustained by him, whichever is greater . . . .45

Like theft, copyright infringement also comes in two varieties: civil infringement and criminal infringement. Civil infringement actions are brought by private parties under Section 501(b) of the Copyright Act, which permits “[t]he legal or beneficial owner of an exclusive right under a copyright . . . to institute an action for any infringement of that particular right committed while he or she is the owner of it.”46 Criminal infringement actions, on the other hand, are instituted by the government under Section 506(a) of the Copyright Act against “[a]ny person who willfully infringes a copyright . . . .”47 It might be tempting to equate civil theft with civil infringement and criminal theft with criminal infringement, but it’s not that simple. A civil theft statute creates a private right of action, but it still requires the property at issue to have been the subject of criminal theft. In other words, to succeed in a civil theft claim, the plaintiff still has to show that his property was stolen under the state’s criminal theft statutes.48

The civil theft analysis thus collapses into an analysis of the criminal theft statutes, and there can be no civil theft unless there is an underlying criminal theft. But the civil and criminal varieties of copyright infringement do not work the same way. All criminal infringements are also civil infringements, but not all civil infringements constitute criminal infringements. The primary difference between civil and criminal infringement lies in the mens rea element. Civil infringement is an intentional tort such that the defendant must have intended to do the copying, but it is also a strict liability tort such that there is no need to prove an intent to infringe in order to establish the defendant’s liability.49 Since civil infringement is a strict liability tort, whether the defendant acted innocently or willfully goes to the issue of damages, not liability. An innocent infringer is just as liable as a willful one, but the latter faces the possibility of being on the hook for more damages than the former.50

Criminal infringement, on the other hand, requires that the defendant must have willfully infringed in order to be guilty, that is, that he not only intended to copy but also that he intended to violate the law by copying.51 In other words, a defendant cannot be found guilty of criminal infringement unless it is proved that he had the specific intent to commit copyright infringement. Thus, this intent to infringe element distinguishes criminal from civil infringement. Besides the necessity of willfulness, criminal infringement also differs from civil infringement by requiring that it be done in one of three ways: (1) “for purposes of commercial advantage or private financial gain,” (2) by reproducing or distributing “during any 180-day period” one or more copies of one of more copyrighted works “which have a total retail value of more than $1,000,” or (3) “by the distribution of a work being prepared for commercial distribution . . . if such person knew or should have known that the work was intended for commercial distribution.”52

Turning back to the Model Penal Code’s definition of theft, “[a] person is guilty of theft if he unlawfully takes, or exercises unlawful control over, movable property of another with purpose to deprive him thereof.”53 I mentioned above that this can be broken down into three elements: (1) unlawful taking or control, (2) of movable property of another, and (3) with intent to deprive. While it may be tempting to compare only criminal infringement with criminal theft since civil infringement doesn’t have a specific intent element, i.e., civil infringement doesn’t require an intent to infringe, we must not forget that there is such thing as willful civil infringement. Section 504(c)(2) provides for increased damages awards when civil infringement is done willfully, that is, when the defendant intends to infringe.54 In other words, just because liability for civil infringement doesn’t require there to be an intent to infringe, that doesn’t preclude the possibility that there was such an intent element present when the defendant infringed.

To see why intentional copyright infringement, whether civil or criminal, is theft, we simply have to run through the Model Penal Code’s elements of theft. The first element, unlawful taking or control, is straightforward. Copyright infringement involves both an unlawful taking and unlawful control. As demonstrated in the examples of theft of intangibles mentioned above, this element doesn’t require the defendant to physically dispossess the victim of something tangible. Rather, the thing taken can be intangible. With copyright infringement, the infringer takes the intangible rights, benefits, and interests that go with copyright ownership, including the right to exclude the infringer from copying. Moreover, if you unlawfully copy my work, you’ve taken from me some part of the economic value of my copyright. And by making that illicit copy, you have exerted unlawful control over my property—you’ve taken it upon yourself to exert dominion over my property in a way that conflicts directly with my exclusive rights.

The second element, that copyright constitutes movable property of another, seems exceedingly obvious to me, but I know that skeptics such as Falkvinge define property so narrowly that intangibles such as copyright aren’t property under their definition. But as noted above, the modern definition of property, especially in the context of theft statutes, is extremely expansive. As the Supreme Court of Nevada has noted, “property is a broad concept encompassing every intangible benefit and prerogative susceptible of possession or disposition.”55 For a more rigorous definition of property, the Ninth Circuit has formulated the following three-part test:

[T]hree criteria must be met before the law will recognize a property right: First, there must be an interest capable of precise definition; second, it must be capable of exclusive possession or control; and third, the putative owner must have established a legitimate claim to exclusivity.56

Copyright easily meets this definition of property. A copyright is capable of precise definition as Section 106 delineates the specific exclusive rights that a copyright owner may do or authorize. Similarly, a copyright is capable of exclusive possession or control since the Copyright Act provides that a copyright owner has certain exclusive controls over his copyrighted work. That the work is not naturally excludable doesn’t take away from the fact that it is de jure excludable. Lastly, a copyright owner’s exclusivity is legitimate as it is specifically granted under the Copyright Act, which Congress enacts pursuant to its enumerated Article I power.

The final element of the Model Penal Code’s formulation of theft looks at whether there is an intent to deprive. As demonstrated in the examples above concerning the theft of intangibles, this element is not as simple as intentionally depriving the victim of his tangible property. Instead, the issue is whether the thief has intended to deprive the victim of any of the rights, benefits, or interests that the victim has an exclusive claim to. When someone intentionally infringes, whether that infringement is civil or criminal, the infringer has purposefully deprived the victim of something—the intangible prerogatives appurtenant to the exclusive ownership of his property. It doesn’t matter that the copyright owner can still exert some control over his copyright. Any act that is inconsistent with the copyright owner’s exclusive rights deprives the owner of his property.

Thus, not only is all criminal infringement the same thing as criminal theft since there is the specific intent to infringe, but all willful civil infringement is criminal theft as well since there is also that same specific intent. This is presumably why Justice Breyer in Grokster said that “deliberate unlawful copying is no less an unlawful taking of property than garden-variety theft.”57 Intentional infringement, whether the civil or the criminal variety, does in fact fulfill the traditional elements of theft. This is so not only because property for purposes of theft statutes is defined broadly so as to include intangibles, but it’s also because intentional infringement involves an unlawful taking or control of another’s personal property with the intent to deprive the victim of his property. In many ways, copyright law has been ahead of its time. Long before the modern notion that theft can be applied to intangibles came into fashion, copyright law had recognized that interference with the rights, benefits, and interests in an intangible was a wrong.

Special thanks to Terry Hart for his valuable feedback in drafting this post.

Follow me on Twitter: @devlinhartline

Footnotes

  1. Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913, 961 (2005) (Breyer, J., concurring). []
  2. See, e.g., Editors’ Notes, Model Penal Code § 223.1 (“The offenses heretofore known as larceny, embezzlement, false pretense, extortion, blackmail, fraudulent conversion, receiving stolen property, and the like, as well as the technical distinctions among them, are thereby replaced with a unitary offense [i.e., theft]”). []
  3. Black’s Law Dictionary (9th ed. 2009). []
  4. See, e.g. Bell v. United States, 462 U.S. 356, 360 (1983) (“[C]ommon-law larceny was limited to thefts of tangible personal property.”); People v. Zakarian, 121 Ill. App. 3d 968, 972 (1984) (“At common law, only tangible personal property could be the subject of larceny.”); People v. Ashworth, 222 N.Y.S. 24, 28-29 (1927) (“That which may be the subject of larceny is well comprehended in the following statement: It ‘should have corporeal existence, that is, be something the physical presence, quantity, or quality of which is detectable or measurable by the senses or by some mechanical contrivance; for a naked right existing merely in contemplation of law, although it may be very valuable to the person who is entitled to exercise it, is not a subject of larceny.’”) (internal citations omitted); 3 Subst. Crim. L. § 19.4 (2d ed.) (“At common law, larceny was limited to misappropriations of goods and chattels—i.e., tangible personal property.”). []
  5. See, e.g., N.Y. Penal Law § 155.00 (McKinney 2013) (“‘Property’ means any money, personal property, real property, computer data, computer program, thing in action, evidence of debt or contract, or any article, substance or thing of value, including any gas, steam, water or electricity, which is provided for a charge or compensation.”) (defining “property” under state larceny law); 3 Subst. Crim. L. § 19.4 (2d ed.) (“Modern statutes in all jurisdictions have broadened the scope of larceny to include such intangible personal property as written instruments embodying choses in action or other intangible rights.”). []
  6. Model Penal Code § 223.0 (emphasis added). []
  7. Id. at § 223.2; “movable” property is another name for personal property. []
  8. Id. at § 223.0. []
  9. Id. []
  10. La. Rev. Stat. Ann. § 14:67(A) (West 2013) (emphasis added); “Anything of value,” in turn, is defined to include “any conceivable thing of the slightest value, movable or immovable, corporeal or incorporeal, public or private.” Id. at § 14:2. []
  11. Fla. Stat. Ann. § 812.014(1) (West 2013); “Obtains or uses” is defined to mean “any manner of . . . [t]aking or exercising control over property” or “[m]aking unauthorized use, disposition, or transfer of property.” Id. at § 812.012(3); “Property,” in turn, is defined to mean “anything of value,” which “includes . . . [t]angible or intangible personal property, including rights, privileges, interests, and claims.” Id. at § 812.012(4). []
  12. Button v. Hikes, 296 Ky. 163, 168 (1943). []
  13. State v. Superior Court of King Cnty., 26 Wash. 278, 287 (1901) (internal quotations and citations omitted). []
  14. People ex rel. Short v. Warden of City Prison, 145 A.D. 861, 863 (1911). []
  15. Liddick v. City of Council Bluffs, 232 Iowa 197, 217 (1942) (internal quotations omitted). []
  16. Dreiman v. State, 825 P.2d 758 (Wyo. 1992). []
  17. Id. at 760 (internal quotations and citations omitted). []
  18. Id. at 761 (internal quotations and brackets omitted). []
  19. Id. []
  20. People v. Parker, 217 Cal. App. 2d 422 (1963). []
  21. Id. at 426. []
  22. People v. Ellis, A099357, 2003 WL 21513612 (Cal. Ct. App. July 3, 2003) (unpublished opinion). []
  23. Id. at *6. []
  24. Id. []
  25. People v. Kwok, 63 Cal. App. 4th 1236 (1998). []
  26. Id. at 1250-51 (internal quotations and citations omitted). []
  27. Id. at 1251. []
  28. Id. []
  29. See Dowling v. United States, 473 U.S. 207 (1985). []
  30. Id. at 208 (internal quotations and citations omitted). []
  31. Id. at 213. []
  32. Id. at 216. []
  33. Id. []
  34. Id. at 216-18 (internal quotations and citations omitted; paragraph breaks altered). []
  35. Id. at 230 (Powell, J., dissenting). []
  36. United States v. Aleynikov, 676 F.3d 71, 77 (2d Cir. 2012) (emphasis added). []
  37. United States v. Martin, 228 F.3d 1, 14 (1st Cir. 2000) (internal quotations omitted; emphasis added). []
  38. See, e.g., United States ex rel. Berge v. Bd. of Trustees of the Univ. of Alabama, 104 F.3d 1453, 1463 (4th Cir. 1997). []
  39. See, e.g., Rosciszewski v. Arete Associates, Inc., 1 F.3d 225, 229 (4th Cir. 1993). []
  40. Id. (internal quotations omitted). []
  41. Crow v. Wainwright, 720 F.2d 1224 (11th Cir. 1983). []
  42. Id. at 1226. []
  43. Id. []
  44. Id. at 1226-27 (internal quotations and footnotes omitted; paragraph breaks altered; bracketed text added). []
  45. Colo. Rev. Stat. Ann. § 18-4-405 (West 2013). []
  46. 17 U.S.C.A. § 501(b) (West 2013). []
  47. 17 U.S.C.A. § 506(a) (West 2013). []
  48. See, e.g., Sullivan v. Delisa, 101 Conn. App. 605, 619-20 (2007); Steward Software Co., LLC v. Kopcho, 275 P.3d 702, 706-07 (Colo. Ct. App. 2010), rev’d on other grounds, 266 P.3d 1085 (Colo. 2011). []
  49. See, e.g., Bucklew v. Hawkins, Ash, Baptie & Co., LLP., 329 F.3d 923, 931 (7th Cir. 2003) (“Copyright infringement . . . is an intentional tort.”); Gnossos Music v. Mitken, Inc., 653 F.2d 117, 120 (4th Cir. 1981); Illustro Sys. Int’l, LLC v. Int’l Bus. Machines Corp., Case No. 06-cv-01969, 2007 WL 1321825 (N.D. Tex. May 4, 2007) (“[C]opyright infringement is an intentional tort.”); Buck v. Jewell-La Salle Realty Co., 283 U.S. 191, 198 (1931) (“Intention to infringe is not essential under the act.”); United States v. Bily, 406 F.Supp. 726, 733 (E.D. Pa. 1975) (“Under the civil law, there is strict liability for infringement.”); Shapiro, Bernstein & Co. v. H. L. Green Co., 316 F.2d 304, 308 (2d Cir. 1963) (“While there have been some complaints concerning the harshness of the principle of strict liability in copyright law, . . . courts have consistently refused to honor the defense of absence of knowledge or intention.”). []
  50. See 17 U.S.C. § 504(c). []
  51. See, e.g., United States v. Wise, 550 F.2d 1180, 1194 (9th Cir. 1977); Bily, 406 F.Supp. at 733 (“One cannot be convicted [of criminal infringement] unless he has willfully infringed.”); United States v. Moran, 757 F.Supp. 1046, 1049 (D. Neb. 1991) (“[U]nder 17 U.S.C. § 506(a) ‘willfully’ means that in order to be criminal the infringement must have been a voluntary, intentional violation of a known legal duty.”) (internal quotations omitted). []
  52. 17 U.S.C.A. § 506(a)(1) (West 2013). []
  53. Model Penal Code § 223.2. []
  54. See, e.g., Moran, 757 F.Supp. at 1050 (collecting cases). []
  55. M.C. Multi-Family Dev., LLC. v. Crestdale Associates, Ltd., 124 Nev. 901, 911 (2008) (internal quotations and citations omitted). []
  56. G.S. Rasmussen & Assoc., Inc. v. Kalitta Flying Service, Inc., 958 F.2d 896, 903 (9th Cir. 1992). []
  57. Grokster, 545 U.S. at 961 (Breyer, J., concurring). []

Jonathan Swift once wrote that satire is a mirror “wherein beholders do generally discern everybody’s face but their own.” To be successful, satire must be subtle.

So it’s disappointing to see Techdirt, the long-running satire of copyright skepticism, forget this lesson.

Yesterday, the site ran a story on HBO’s Latest DMCA Abuse: Issues Takedown To Google Over Popular VLC Media Player. The joke here is that copyright skeptics ignore the vast scale of legitimate copyright claims to focus on the handful of errors and outliers in order to make a blunt “copyright bad” argument. That this sort of thing is the problem with the DMCA, not the tens of thousands of bad faith sites that use the law as a shield to profit off the works of others. But in trying to lampoon this viewpoint, Techdirt overplays its hand.

The story here involves a DMCA notice sent to Google on behalf of HBO. Included in the notice is one link to a page ostensibly offering a legitimate copy of the open source video program VLC rather than an infringing copy of an HBO work. But a quick look at the notice reveals hundreds of other links that do lead to infringing HBO works — nearly 1,600 in total. Assuming the VLC link accurately describes the files content, that’s an accuracy rate of over 99.9% in the entire notice. Yet Techdirt claims it shows the DMCA agent “isn’t being very careful.” 99.9% accuracy, described by Techdirt as “incredibly sloppy.”

Anyone with half a mind would quickly recognize that no one who was serious would make such a claim. Even those in on the joke would have a hard time maintaining a willful suspension of disbelief.

It’s a shame too, because ordinarily, Techdirt’s satire is very effective. Its construction of an entirely incoherent First Amendment doctrine is masterful. The running gag where minor points are consistently contradicted — for example, “the Librarian of Congress, which you might notice is a part of the legislative branch, not the executive branch” vs. “the Librarian of Congress (who technically is a part of the executive branch, working for the President)” — rewards close readers. Here’s hoping Techdirt finds its groove again.

The EFF is a non-profit group dedicated to advocating for electronic freedom, though at times that seems to entail supporting for-profit corporations that don’t want to pay license fees.1 The logic of connecting freedom to not paying suppliers escapes me, but it is not out of line with other arguments made by the group.

Case in point: one of the arguments made by the EFF in an amicus brief it filed last week in the Fox v. Aereokiller case currently in front of the 9th Circuit. Among other points, the EFF argues that Aerokiller should not be enjoined because of something Jack Valenti said 30 years ago.

Aereokiller, like any cable TV provider, retransmits broadcast television to subscribers for a fee. However, unlike cable TV providers that license television programming from copyright owners, Aereokiller has taken the position that it does not need a license. Aereokiller was sued in the Central District Court of California last year by several broadcasters. In December, the court granted a preliminary injunction against Aereokiller, holding that the service was functionally indistinguishable from cable television services. The decision was appealed to the 9th Circuit.

If all of this sounds vaguely familiar, it should. The facts and issues in Aereokiller (as well as the names of the defendants) are very similar to litigation on the other side of the U.S. involving similar service Aereo. There, the district court denied a preliminary injunction against Aereo, citing Second Circuit precedent in Cablevision, and that decision has been appealed and argued in front of the Second Circuit with a decision pending.2

In both Aereo and Aereokiller,3 the defendants argued that copyright law should not be technologically neutral. A cable service may need to license broadcast television to perform it for its subscribers, but if the cable service keeps adding antennas, it eventually reaches a point where it is exempt from copyright liability — and Aereo and Aereokiller both have tons of tiny antennas.4 Because of the similarities between the two cases, different outcomes in each of the Circuit courts could mean we’ll see the issue eventually end up in front of the Supreme Court.

But until then, the 9th Circuit has Aereokiller to review. And it is here that the EFF makes its case.

As noted above, the appeal arises from the grant of a preliminary injunction by the district court. To be awarded a preliminary injunction, the plaintiff in a lawsuit must demonstrate “(1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.”5

In its response to the first factor, the EFF makes the claim that “The history of litigation against video and audio technologies counsels skepticism of plaintiffs’ irreparable harm claims.” Included in this history: “In 1982, the president of the Motion Picture Association of America famously compared the videocassette recorder to a serial killer.”6 Next, the EFF cites litigation by the RIAA (not a plaintiff here) and Paramount Pictures (also not a plaintiff). It points to statements made in amicus briefs in other cases by ASCAP (not a plaintiff), the American Society of Media Photographers (again, not a plaintiff), and the Progress and Freedom Foundation (not even a company involved in music or films). To support its contention that these statements are wrong, all the EFF can muster up is a report that digital music sales increased in 2011 and a 2009 article from the Economist about DVRs. The EFF concludes that “Given this history, the district court should have treated Appellees’ claims of irreparable harm with greater skepticism.”

Remarkable.

None of this actually speaks to the demonstration of irreparable harm that plaintiffs in this case made and the district court accepted. As the court had noted, Aereokiller’s infringement would cause harms not “easily calculable, nor easily compensable” by threatening “to damage Plaintiffs’ ability to negotiate favorable retransmission consent agreements with cable, satellite and telecommunications providers”, damaging Plaintiffs’ goodwill with their other licensees, competing “with Plaintiffs’ ability to develop their own internet distribution channels”, and harming “Plaintiffs’ position in their negotiations with advertisers.” Textbook irreparable harm.

On a broader note, the EFF’s argument is merely a variation on a common argument that has taken hold among the copyright skeptic set in the past 10-15 years. The idea is to mine past decades (and even centuries) for quotes from disparate sources about different issues and distill them down to a simplistic slogan: copyright owners hate innovation.7 The fallacy of this argument is facially evident, and it is more at home in propaganda than policy (or the court room).

Worse, it ignores the fact that, more often than not, copyright owners have presented legitimate concerns about new technologies exploiting their work without compensation, the law has adapted to address these concerns, and all involved have benefited. In 1906, John Philip Sousa testified to Congress about the need for record manufacturers to compensate songwriters when they recorded and sold their music. Congress responded by including mechanical reproduction among the exclusive rights in the 1909 Copyright Act.8 Record labels have done okay since then. When radio broadcasting was getting off the ground, songwriters sought compensation for the public performance of their works over the airwaves. Case law eventually settled the issue in favor of songwriters;9 AM/FM radio is still going strong nearly a century later. Television producers made the same argument about cable television when it appeared in the middle of the century. Congress provided that retransmission of broadcast television over cable is a public performance in the 1976 Copyright Act. Did cable television die? No, and in fact, today it is involved in the creation of some of the most exciting shows.10

Hopefully, the 9th Circuit recognizes the EFF’s argument for the silliness it is.

Footnotes

  1. See, for example, the EFF/PK amicus brief in AP v. Meltwater and the EFF/PK amicus brief in WNET v. Aereo. []
  2. ABC v. Aereo, 874 F.Supp. 2d 373 (SDNY 2012; see Aereo takes its tiny antennas to Opposite Town. []
  3. Both companies have since sued each other for trademark infringement, adding to the drama. []
  4. Aereo made use of 16 circuit boards with 80 antennas on each, Aereo at 379. The Aereokiller decision suggests that Aereokiller’s system is closely similar to Aereo’s. []
  5. eBay v. MercExchange, 547 US 388, 391 (2006). []
  6. It’s astounding the amount of play this single quote has gotten from copyright skeptics. And it’s telling that citing a 30 year old quote is the strongest argument the EFF can raise here. []
  7. I’ve previously discussed this in A Story of John and Jack and 100 Years of Copyright and Disruptive Technology. []
  8. Sec. 1(e). []
  9. See Jerome H. Remick & Co. v. American Automobile Accessories Co., 5 F. 2d 411 (6th Cir. 1925); M. Witmark & Sons v. L. Bamberger & Co., 291 F. 776 (D. NJ 1923). []
  10. See, for example, Breaking Bad, Mad Men, Louie, the Walking Dead, etc. []

The criticism that copyright is a “monopoly” is often bandied about. Most recently, we’ve seen it pop up in certain conservative critiques of copyright law, like Derek Khanna’s memo last November, but it is undoubtedly a recurring argument that stretches back centuries.1

The purpose of this argument is apparent; “monopoly” has historically carried a negative connotation. At times, however, the debate seems to devolve to mere semantics. It may be more helpful to look at exactly what negative effects a monopoly has on society and see how prevalent these effects are in markets for copyrighted works to see how accurate this label is. This is especially helpful because the legal and colloquial definitions of monopoly differ throughout history — the term means something different under the current Sherman Antitrust Act, to someone during the era of trust-busting in early 20th century United States, and to a jurist in 18th century England.

While certainly not the earliest expression of this argument, Thomas Babington Macaulay provides an oft-cited iteration of this critique. The following quote from the 19th century British politician (once called “the most brilliant writer of his time, but not the most correct”)2 comes from a speech made in front of the House of Commons during 1841. The House was currently considering a bill to extend the term of copyright duration. Macaulay made the following remarks:

Copyright is monopoly, and produces all the effects which the general voice of mankind attributes to monopoly. … I believe, Sir, that I may with safety take it for granted that the effect of monopoly generally is to make articles scarce, to make them dear, and to make them bad. And I may with equal safety challenge my honourable friend to find out any distinction between copyright and other privileges of the same kind; any reason why a monopoly of books should produce an effect directly the reverse of that which was produced by the East India Company’s monopoly of tea, or by Lord Essex’s monopoly of sweet wines.3

Given the concerns raised by Macaulay and others throughout copyright’s history, we might say that there are three chief effects of monopoly that are particularly relevant: that it raises prices, that it prohibits others from engaging in behavior they otherwise could engage in, or that it serves as a barrier to entry in the specified market. By examining each of these in turn, we can test whether it is valid to consider copyright a monopoly, beyond the more common definitional arguments.

Does Copyright Raise Prices

In a purely competitive market, the price of a good tends toward the marginal cost of producing the good. When a firm operates under a monopoly, it can set prices above the marginal cost since it is free from competitive pressures. The result is a diversion from the optimal supply/demand curve: less consumers pay more for a good, while a firm sees higher profits, leading to less aggregate economic welfare.4 So, if copyright is a form of monopoly, we should expect that copyrighted works on average are priced higher than non-copyrighted works.

This, however, is not necessarily the case. In a 2008 paper, economist Stan Liebowitz set out to test whether copyright is like a monopoly by endeavoring “to infer the extent of monopoly power by measuring the price increase, if any, caused by copyright,” a question that had apparently not been tested before. Liebowitz came to two conclusions.

The first, treating all observations equally, found “that copyright does not raise price and that there is no monopoly deadweight loss. Increases in copyright unambiguously enhance economic efficiency.” [Emphasis added.] The second observation weighted books by their sales and found “that copyright increases price but by a modest level which is generally about the same as typical royalty payments”, implying “that any economic rents go to authors.”5

These conclusions should not be as surprising as they seem to the ordinary observer. Most people would note that copyrighted works show a remarkable consistency in pricing: iTunes, for example, has a very narrow range of prices for digital song downloads. This would suggest that while a single copyright owner has exclusive control over her work, this control is not monopolistic; there are such a wide range of close substitutes in the market to prevent any individual copyright owner from raising the price too far above the marginal cost.

Does Copyright Take Away Anyone Else’s Rights

Nowadays, a monopoly most often arises organically, when a firm becomes so dominant in its market that it has the ability to engage in anti-competitive behavior unless the law steps in. But in the past, monopolies were likely the result of actual government grants. It is in this sense that copyright has historically been labelled a monopoly, since prior to modern copyright laws, printers and publishers were given exclusive rights through such grants.6

The primary effect of grants like this was that they excluded others from engaging in conduct they were otherwise able to do, as this portion of a 1901 treatise attests:

§ 1. Definition of monopoly.— A monopoly is a license or privilege allowed by the sovereign for the sole buying and selling, making, working, or using of anything whatsoever; whereby the subject in general is restrained from that liberty of manufacturing or trading which he had before.

§ 2. Lord Coke’s definition is, “an institution by the king, by his grant, commission, or otherwise, to any persons or corporations, of or for the sole buying, selling, making, working or using of every thing, whereby any persons or corporations are sought to be restrained of any freedom or liberty they had before, or hindered in their lawful trade.”

§ 3. In Hawkins’ Pleas of the Crown the following definition is found: “A monopoly is an allowance by the king to a particular person or persons of the sole buying, selling, making, working, or using of any thing, whereby the subject in general is restrained from the freedom of manufacturing or trading which he had before. Monopoly differs from ingrossing only in this, that monopoly is by patent from the king, and ingrossing by the act of the subject between party and party.”‘

Under this definition, pre-copyright printing patents surely constituted monopolies.

The Stationers’ Company, operating initially under a 1557 royal charter, were granted privileges to Greek and Roman classics, not based on any privity with the original authors, but only through the caprice of the Crown. Similarly, some printers were granted privileges to entire categories of books, such as law books.

It is this monopoly that political philosopher John Locke wrote of, prior to England’s Statue of Anne, in his 1694 Memorandum Concerning Renewal of the Licensing Act:

By this clause, the Company of Stationers have a monopoly of all the classical authors; and scholars cannot, but at excessive rates, have the fair and correct edition of these books printed beyond seas. … That any person or company should have patents for the sole printing of ancient authors is very unreasonable and injurious to learning; and for those who purchase copies from authors that now live and write, it may be reasonable to limit their property to a certain number of years after the death of the author, or the first printing of the book, as, suppose, fifty or seventy years. This I am sure, it is very absurd and ridiculous that any one now living should pretend to have a propriety in, or a power to dispose of the propriety of any copy or writings of authors who lied before printing was known or used in Europe.

The Statute of Anne rectified this in 1710 by vesting exclusive rights only in the original author of a work, and originality has been the sine qua non of copyright protection in every copyright law that has followed, including the US in 1790 and France in 1793. Protection only extends to that which an author has created anew, and does not extend to anything already in existence, which would presumably be available to all to use.

Yet some continue to make the argument that copyright is a monopoly on the grounds that it restrains someone from doing something they were able to do before.

Stephen Kinsella, for example, makes the following claim in his book, Against Intellectual Property:

Let us recall that IP rights give to pattern-creators partial rights of control—ownership—over the tangible property of everyone else. The pattern-creator has partial ownership of others’ property, by virtue of his IP right, because he can prohibit them from performing certain actions with their own property. Author X, for example, can prohibit a third party, Y, from inscribing a certain pattern of words on Y’s own blank pages with Y’s own ink.

That is, by merely authoring an original expression of ideas, by merely thinking of and recording some original pattern of information, or by finding a new way to use his own property (recipe), the IP creator instantly, magically becomes a partial owner of others’ property. He has some say over how third parties can use their property. IP rights change the status quo by redistributing property from individuals of one class (tangible-property owners) to individuals of another (authors and inventors). Prima facie, therefore, IP law trespasses against or “takes” the property of tangible property owners, by transferring partial ownership to authors and inventors. It is this invasion and redistribution of property that must be justified in order for IP rights to be valid.

The claim is superficially attractive but falls apart on closer glance. Remember, copyright only prohibits copying of original expression. One is not restrained from independently creating existing expression, no matter how closely it resembles another’s work.7

So to say copyright “takes” some sort of right away from third parties is only correct under the most theoretical of physics. It might be easy to conceive of copyright as a restraint on one’s ability to reproduce, say, Suzanne Collins Hunger Games series of books. But it is more difficult to see how copyright “takes away” one’s ability to reproduce Collins’ next book, one she hasn’t written yet. Once she completes it, copyright vests in her the exclusive right to reproduce it, but that exclusive right is not at the expense of anyone else, unless they have a functioning time machine. It is the same as saying a law prohibiting an individual from flying by flapping his arms, or travelling faster than the speed of light, takes away a right. Copyright creates a right in the author without taking away any other’s rights.

Does Copyright Create Barriers of Entry to Potential Competitors

One final negative effect of monopoly is that it allows a monopolist to erect barriers to entry to other potential competitors, keeping the incumbent firm’s dominant position secure. The question would be, does copyright act as such a barrier to entry?

This is probably easiest to answer of all three: of course not. If Jack writes a song, that in no way affects Jill’s ability to write a song.

That’s not to say that firms producing copyrighted works have never engaged in monopolistic behavior — as with any other industry, this will occassionally happen.8 But it’s important to keep in mind that this isn’t an inherent part of copyright law. Such behavior occurs independently of copyright.

Footnotes

  1. See previous posts Myths from the Birth of US Copyright: Part 2, The Purposes of Copyright Law and “Anti-Copyright” Arguments, and 7 Mythbusting Copyright Law Articles for more on these arguments and their history. []
  2. Wraxall’s Memoirs, Littell’s Living Age (Boston 1884). []
  3. A Speech Delivered in the House of Commons on the 5th of February 1841, Lord Macaulay’s Speeches, pg 112 (London 1866). []
  4. George Stigler, “Monopoly“, Concise Encyclopedia of Economics, Library of Economics and LIberty. []
  5. Is the Copyright Monopoly a Best-Selling Fiction? []
  6. See, generally, Tyler Ochoa & Mark Rose, The Anti-Monopoly Origins of the Patent and Copyright Clause, 49 Journal Copyright Society of the USA 675, 677-79 (2002). []
  7. See, for example, Sheldon v Metro-Goldwyn Pictures, 81 F.2d 49, 54 (2nd Cir. 1936), “Borrowed the work must indeed not be, for a plagiarist is not himself pro tanto an “author”; but if by some magic a man who had never known it were to compose anew Keats’s Ode on a Grecian Urn, he would be an “author,” and, if he copyrighted it, others might not copy that poem, though they might of course copy Keats’s.” []
  8. See, for example, US v Paramount Pictures, 334 US 131 (1948); US v Lowe’s, 371 US 38 (1962); Starr v Sony BMG Music Entertainment, 592 F.3d 314 (2nd Cir. 2010). []

Among the arguments against copyright law is the argument that copyright is not a property right. The “robust history” of describing copyright in terms of property1 is simply wrong, say proponents of this argument. One line of such arguments claims that property rights are only justified to resolve conflicts over scarce goods. Because expressive works protected by copyright are not scarce — that is, one person’s use of a book, song, or film does not diminish another person’s ability to use that same work — the necessary condition for legitimate property rights is not met.

It is this view of copyright that seems to have informed the recently retracted Republican Study Committee policy brief on copyright law. The brief rejected the characterization of copyright as property right and instead characterized it as a monopoly privilege antithetical to free market principles.

I want to suggest an argument today that counters this conception of copyright. It is, in fact, concerned with scarcity. The error comes from mistaking the actual right at issue — the right to copy (hence, “copy right”) — with the actual right at issue with tangible goods, typically a right to possess.

Property is, at its heart, the set of rules concerning the relationship between individuals and things, and is one of the foundational legal doctrines, along with contract and tort law. Because property is conceptual, it, by definition, is not barred from being applied to intangible goods.

But some have made the argument, explored in more detail below, that property rights are only legitimate when they apply to scarce goods, ie, goods where one person’s use prevents its use by someone else. Property rules originated to resolve conflict over such rivalrous goods, so if a certain good is not rivalrous, then recognizing a property right in it is not justified.

What is Property?

In his 1990 article What is Property?,2 libertarian scholar Boudewijn Bouckaert provides an account of scarcity, saying it both explains and justifies property rights. While the concept of scarcity is discussed by earlier philosophers and legal theorists, the modern “law and economics” view places scarcity front and center as a rationale for these rights.

Scarcity is defined by Bouckaert as arising “when two or more persons consider one good as a means for the satisfaction of their wants and when the use they intend to make of it is incompatible.” But he prefaces this by noting that scarcity likely involves a “dimension beyond mere allocation” — solving allocative scarcity would require a “super-individual authority” to divvy up how and when competing individuals could use a certain good. So, we’re concerned primarily with distributive scarcity, which is unavoidable and leads to three possible outcomes, according to Bouckaert: “(1) permanent conflict–the assignments of scarce means are the result of the use of violence, ruse, and tactical games; (2) resignation–a resource becomes the object of competition, both parties withdraw, and such withdrawal means isolation and a massive drop in world population; (3) rules–assignments of power over scarce resources to individuals, groups, families, the government, and so forth.”

Bouckaert distinguishes between natural scarcity, which occurs prior to any social or political institutions, and artificial scarcity, which is the result of arrangements by such institutions. In the “law and economics” view, the first justifies property rights, but the second requires its own justification.

For purposes of this article, I will assume this argument is valid. But I do want to point out that the argument that property rights require scarcity is a minority view, one that has not escaped its share of criticism. Philosopher David Faraci, for example, has asked Do Property Rights Presuppose Scarcity? and concludes that the argument has thus far been under-motivated. Faraci notes that many dominant theoretical views of property appeal to values beyond the conflict-resolution inherent in the scarcity view of property rights. IP scholar Robert Merges rejects this “historical-essentialist” concept of property outright, in favor of a more “broad and roomy” conception whose “origins do not imply constraints of limits.” Merges sees a “powerful logic” in property, and its “restless capacity” to morph and adapt throughout its history to different arenas provides a robustness that makes as much sense to apply to intangibles as to physical property.3

Though whether or not copyright is considered “property” may seem like a matter of semantics, it does have implications for the proper role and scope of copyright law. If copyright is redefined as being something other than property — a “mere privilege” or an economic monopoly, for example — it is easier to argue that it is inconsistent with free market principles rather than being the mechanism for establishing a functioning market that fosters investment and dissemination of creative and expressive works.

Property in the Copy Right

Property is sometimes defined as including the right “to possess, use, enjoy, and dispose of a thing.” Possession is often considered one of the most basic of rights held by property owners. It is this right that is typically discussed when dealing with scarcity: only one person can possess a good at any given time.

Copyright, however, is not concerned with possession. Indeed, things get pretty metaphysical real fast if you start talking about how one can have possession over the intangible expression of an idea. Copyright instead is concerned with copying, which can be considered a specific form of using the property.4

Copying, the act, should be distinguished from the copy, which is the material object that includes the expressive work in fixed form. These copies are treated as any other form of personal property. In fact, the US Copyright Act expressly distinguishes between copies and copying and notes that the right to copy is not the same as ownership in the resulting copies.5

The act of copying an expressive work, like the act of possessing a physical item, is rivalrous. Your copying of an expressive work diminishes my ability to copy an expressive work.

Odds and Ends

Now, in order to support this argument, one would need to include several additional claims.

First, we need to assume that we are dealing with a finite limit on the amount of copying that can occur. Expressive works are, after all, potentially infinitely reproducible — and, when they exist digitally, those copies can be made at near-zero cost.

But I think this focuses on the wrong thing. We could, in theory, reproduce any given work infinitely. But in practice, we don’t. A few weeks ago, Psy’s “Gangnam Style” music video became the most viewed video ever on YouTube, with over 800 million views and counting. Eight hundred million is a big number, but it’s still far less than infinity. Even the Bible itself, one of the most widely printed books for hundreds of years, has been printed an estimated six billion times.

So even given the fact that if we had an infinite amount of storage space and an infinite amount of time, we could infinitely reproduce any given work, I don’t think that is relevant. As a practical matter, we are always dealing with a naturally (and economically) scarce ability to copy an expressive work.

Second, we could assume that productive use of resources is inherent to any property system. This is apparent from the very term “law and economics”, where the law prong is concerned with resolution of conflict over scarce resources but the economics prong deals with creating value. Generally, we’re not driven to conflict merely because we are all Gollums, obsessing over our precious things. We seek them because of the value they can provide in producing wealth. Historically, copying has been one of the primary methods (though certainly not the only method) of extracting value from expressive works.

Finally, a caveat.

By saying that copying is rivalrous, I don’t mean to suggest that this rivalry exists anywhere near a 1:1 relationship. That is, I’m definitely not suggesting that “every download is a lost sale” or anything like that. It is simply an act that can be incompatible between two or more people. This is similar to possession: scarcity in this sense doesn’t imply a requirement that the use of a scarce good by two or more people has to occur at the same time or wholly deprive one of the use of the good. For example, if I use your hammer while you’re asleep, you haven’t “lost” anything. There simply has to be that potential for incompatible uses prior to any application of property rules.

Footnotes

  1. See Justin Hughes, Copyright and Incomplete Historiographies: Of Piracy, Propertization, and Thomas Jefferson79 Southern California Law Review 993, 1004 (2006); Myths from the Birth of US Copyright. []
  2. 13 Harvard Journal of Law & Public Policy 775 (1990). []
  3. Robert P. Merges, Justifying Intellectual Property, pp. 4-5 (Harvard University Press 2011). []
  4. Public performance and public display could similarly be mentioned here, though I leave them out for readability sake. []
  5. 17 USC § 202, “Ownership of a copyright, or of any of the exclusive rights under a copyright, is distinct from ownership of any material object in which the work is embodied. Transfer of ownership of any material object, including the copy or phonorecord in which the work is first fixed, does not of itself convey any rights in the copyrighted work embodied in the object; nor, in the absence of an agreement, does transfer of ownership of a copyright or of any exclusive rights under a copyright convey property rights in any material object.” []

Debate over the role and scope of copyright law in a digital age was reignited last week after the brief appearance of a policy brief by a Republican Study Committee staffer, Derek Khanna. The brief was officially pulled from the RSC website, but copies are easily found online.

Copyright skeptics were quick to dub the brief a “watershed” moment and seem unable to confine the hyperbole of their remarks. One Twitterer compared the policy brief to the 95 Theses, which catalyzed the Protestant Reformation. One might chalk up the reaction to a form of confirmation bias — or, “brilliant people agree with me“.

But as I mentioned last Wednesday in the first part of my examination of the policy brief, any debate should begin with sound premises. And the RSC policy brief, which first lays out three “myths” about current copyright law, does not do this. If copyright skeptics can’t advance arguments without rewriting history, perhaps their arguments are not as solid as they think.

Today, I want to continue my in-depth look at the RSC policy brief, focusing on the final “myth” and sections on the current status of copyright law.

Myth 3. The current copyright legal regime leads to the greatest innovation and productivity

First, this myth begs the question that the purpose of copyright under the Constitution is to provide the greatest amount of the ill-defined concepts such as “innovation” and “productivity.” Too often “innovation” is used as a code word for increasing the bottom line of venture capital firms and the consumer electronics sector. As I noted in my first part, this interpretation of the purpose behind the Copyright Clause does not comport well with history.

Second, and more importantly, is the suggestion that there are those who would say the current copyright legal regime is ideal. I doubt you will find many from any side of the copyright debate who will declare this. In fact, the perceived shortcomings of the law do much to explain its expansion over the past two centuries.

There were four major revisions to the Copyright Act since the first Act in 1790: 1831, 1870, 1909, and 1976.1 During each of these, you can find those who expressed the need for reform precisely because the existing copyright law was inadequate in some fashion.

You can see this in the work of Noah Webster, writer of what would become the seminal American dictionary. Webster actively lobbied for copyright legislation under the Articles of Confederation.2 But before the end of his life, he would return to Congress in the 1820’s to argue on behalf of the “justice of a more liberal law” that would cure some of the “defects” in the 1790 Copyright Act. His efforts in part resulted in the first major revision of US copyright law in 1831.3

Librarian of Congress Ainsworth Spofford remarked upon these shortcomings as motivation for the progression of copyright law during the third major revision to the Copyright Act in 1870. “It is a very notable fact that the United States of America was the first nation that ever embodied the principle of protection to the rights of authors in its fundamental law. Thus anchored in the Constitution itself, this principle has been further recognized by repeated acts of Congress, aimed in all cases at giving it practical effect.”4

Within forty years, Congress would again seek to revise the copyright law. During this period, the first US Register of Copyrights Thorvald Solberg said in 1904: “The laws as they stand fail to give the protection required, are difficult of interpretation, application, and administration, leading to misapprehension and misunderstanding, and in some directions are open to abuses.”

In the decades following, Congress engaged in perhaps the most thorough and comprehensive revision of copyright law. During this time, former Register of Copyrights Barbara Ringer said in a 1975 Congressional Hearing:

The Constitution speaks of the desirability of promoting the progress of science and useful arts, science in the broad sense of learning or knowledge, by offering protection for limited times to authors and inventors.

It seems to me that it is this protection, the exclusive rights that are supposed to be granted to authors, that is the ultimate public interest that the Constitution and its drafters were thinking about. I do not think that this has ever been fully or even partly realized in any copyright law we have had in our entire history.

If anything else, the past two decades have borne witness to many arguments that copyright law is not ideally fit to accomplishing its purpose of establishing a functional marketplace for the creation and dissemination of expressive works. This “myth” is little more than a strawman.

Current status of Copyright Law?

Khanna begins the next section of his brief by remarking:

Under the Copyright Act of 1790, the first federal copyright act, it stated that the purpose of the act was the “encouragement of learning” and that it achieved this by securing authors the “sole right and liberty of printing, reprinting, publishing and vending” their works for a term of 14 years, with the right to renew for one additional 14 year term should the copyright holder still be alive. This is likely what our Founding Fathers meant when they wrote in the Constitution for a “limited time.” Gradually this period began to expand, but today’s copyright law bears almost no resemblance to the constitutional provision that enabled it and the conception of this right by our Founding Fathers.

But is this “likely what our Founding Fathers meant”?

The US Copyright Act of 1790 borrowed the UK’s 1710 Statute of Anne Statute of Anne (1710) almost in its entirety, including the fourteen year term of protection.5 It’s worth noting that the adoption of the fourteen year term is entirely arbitrary, and reminds me of the old story about the Easter Ham.6

The US Congress chose a fourteen year term because that’s how long England protected copyright under the Statute of Anne. And England settled on a fourteen year term in the Statute of Anne because that is how long the Statute of Monopolies (1624), passed nearly a century prior, had protected letter patents.7 And that term, according to one scholar, was “based on the idea that 2 sets of apprentices should, in 7 years each, be trained in the new techniques.”8

Thus, the original fourteen year term was not “likely what our Founding Fathers meant when they wrote in the Constitution for a ‘limited time'” as Khanna claims. Instead, the 14 year term was a “quirk of history”, borrowed from tradition without much thought by a Congress that at the dawn of a new nation had more pressing matters to attend to.9 The argument that the length of copyright protection should be based on how long it took apprentices to master a craft 500 years ago is not so compelling.

Khanna next states:

Critics of current law point out that the terms of copyright continue to be extended perpetually, ensuring that works never actually enter the public domain – particularly Walt Disney’s production of Steamboat Willey, the first Mickey Mouse film. If this is true, if copyright is to be indefinitely extended, then that would effectively nullify Article I, Section 8, Clause 8 of the Constitution which provides protection only for “limited times.”

While this meme seems to begin to appear in early 2000, it was really Lawrence Lessig who popularized this alternative reality. Here is Lessig in a 2002 speech:

Eleven times in the last 40 years it has been extended for existing works–not just for new works that are going to be created, but existing works. The most recent is the Sonny Bono copyright term extension act. Those of us who love it know it as the Mickey Mouse protection act, which of course [means] every time Mickey is about to pass through the public domain, copyright terms are extended.

Lessig’s revisionist statements quickly became gospel among copyright skeptics. You can easily find these ideas — that copyright was extended 11 times in the past 40 years10 and that these copyright extensions amount to “perpetual copyright on the installment plan” and/or have occurred everytime Mickey Mouse or Steamboat Willie is set to enter the public domain.11

To put it bluntly, this idea is hogwash.

In a 2002 law review article, Scott Martin thoroughly debunks this idea.12 Says Martin:

According to myth, Congress relentlessly extended the term of copyright eleven times in just forty years, and, unless the courts intercede, the “copyright dictators” will continue to successfully pressure Congress into extending the term countless times in the future.

In fact, Congress revised its view of the appropriate duration of copyright protection only twice in the past forty years: once in the 1976 Copyright Act-which changed the term from an initial term of twenty-eight years plus a renewal term to a term of life of the author plus fifty years (with a commensurate increase in the term of protection for existing works); and then again in the 1998 CTEA-which added twenty years of additional protection to all existing terms of copyright. The other nine extensions were short interim extensions passed during the deliberation over the 1976 Act in order to ensure that authors of works on the cusp of falling into the public domain would not be penalized by Congress’s glacial pace in enacting the new Copyright Act.

The 1909 Act provided for an original and a renewal term of statutory copyright totaling fifty-six years. Congress changed this in the 1976 Act, effective January 1, 1978, to a term of life plus fifty years for new works. Congress did not apply the new term to existing works, but it did add nineteen years to the term of protection for existing works which were not yet in the public domain. Congress began actively working on the new Copyright Act in 1962, but it took fourteen years to reach agreement on all the details of the new Act. Ironically, the term of protection to be applied by the new Act was one of the least contentious provisions of the new law. Since the provisions of the new Act did not apply to works which entered the public domain prior to the effective date of the Act, Congress provided for a series of nine short interim extensions of copyright pending final enactment of the new law.

The congressional intent behind the interim extensions was clear: Congress felt that it would be inequitable to deny the benefit of the extended copyright term to works on the cusp of entering the public domain solely because of the long delays in the legislative process.

The need for nine successive short-term extensions can be traced directly to the fact that no one expected the process of enacting the new Act would take years to complete.

 

And while the statement that copyright duration was extended eleven times in the past forty years might be forgiven because it is technically correct though meaningless, the notion that the impetus for these extensions was to circumvent the Constitution’s “limited times” mandate and keep Steamboat Willie out of the public domain is simply wrong.

As Martin says later:

Characterizations of these short-term interim extensions, all of which were a part of the single congressional effort to enact a revised Copyright Act, as unrelated extensions of the term of protection, or as a recidivist congressional pattern of endlessly extending the duration of copyright are either uninformed or intellectually dishonest.

Martin is not alone. Law professor Edward Samuels has also remarked that “these statements are misleading, if not downright disingenuous.”13

Even the Supreme Court has weighed in. In Eldred v Ashcroft, where the constitutionality of the 1997 Copyright Term Extension Act was challenged, the Court declared that “a regime of perpetual copyrights ‘clearly is not the situation before us.'”14

So far, Khanna’s policy brief is not holding up.

Footnotes

  1. William Patry, Copyright Law and Practice, Chap. 1 (2000). []
  2. Noah Webster, A Collection of Papers on Political, Literary, and Moral Subjects, pp 173-75 (Webster & Clark, 1843). []
  3. Id. 175-78. []
  4. The Copyright System of the United States—Its Origin and Growth. []
  5. 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). []
  6. “As a little girl watches her mom prepare the Easter ham, she wonders why her mother cuts off both ends of the ham before putting it in the pot. So, she asks why, and her mom realizes that she doesn’t know. That’s the way her mother prepared the Easter ham.

    So they call grandmother and pose the question about cutting off the ends of the Easter ham. Grandmother admits to not knowing either. She just prepared the ham the way her mom did it.

    Their next call is to great-grandmother. When they ask her about her method of preparing the Easter ham, she laughs. Then she says, ‘It was the only way I could get the Easter ham to fit the small pot I had!'” []

  7. Ronan Deazley, ‘Commentary on the Statute of Monopolies 1624‘, in Primary Sources on Copyright (1450-1900) (eds L. Bently & M. Kretschmer, 2008). []
  8. 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. []
  9. See Oren Bracha, Commentary on the U.S. Copyright Act 1790, in Primary Sources on Copyright (1450-1900) (eds L. Bently & M. Kretschme 2008). []
  10. Ian McClure, Be Careful What You Wish For, 10 Chapman Law Review 1, 11 (2007), “The copyright term has been lengthened eleven times in the past forty years”; Gary Shapiro, President, Consumer Electronics Association, Remarks at the Cato Institute Conference: Copyright Controversies: Freedom, Property, Content Creation, and the DMCA, Copyrights and Property Rights, CATO Policy Report, July-August 2006, “Congress has acted 13 times to expand the length of the copyright terms; 11 of those expansions were passed during the last 40 years”; Larry Downes, ‘Free the Mouse’ for creativity’s sake, USAToday (Oct 7, 2002), ” In the past 40 years, entertainment industry lobbyists have persuaded Congress 11 times to extend copyrights on their vast treasure troves of books, films and music”; Kendra Mayfield, Setting Boundaries on Copyrights, Wired (Feb. 20, 2002); See also Lawrence Lessig, Free Culture, Ch. 10 (2004), “Eleven times in the last forty years, Congress has extended the terms of existing copyrights”; Jesse Walker, Copy Catfight, Reason (March 2000), “This period has been gradually extended, especially lately: It has been lengthened 11 times in the last 40 years, most recently by the Sonny Bono Copyright Term Extension Act of 1998.” []
  11. “In the United States, we have perpetual copyright on the installment plan,” said Peter Jaszi in 2003; Jane Hamsher, GOP Tries to Overthrow the Tyranny of Mickey Mouse…Then Sadly Backs Down, bytegeist, Nov. 19, 2012, “Disney keeps bribing congress to extend copyright laws and keep Mickey Mouse under copyright”; Mike Masnick, Do Bad Things Happen When Works Enter The Public Domain? The Data Says… No, TechDirt, Sept. 28, 2012, “As you know, whenever Mickey is getting close to the public domain, Congress swoops in, at the behest of Disney, and extends copyright”; Matt Asay, Copyright extension of 45 years to net just $40 for most performers, CNet, Sept. 9, 2008, “Every few years the US extends copyright terms because Disney lobbies the heck out of Congress’ weak-kneed legislators to prevent Mickey Mouse from becoming public domain”; Kevin Goldman, Limited Times: Rethinking the Bounds of Copyright Protection, 154 University of Pennsylvania Law Review 705 (2006), “Each time the term of copyright protection has been due to expire, Congress has passed another extension.” []
  12. Scott M. Martin, The Mythology of the Public Domain: Exploring the Myths Behind Attacks on the Duration of Copyright Protection, 36 Loy. L.A. L. Rev. 253 (2002). []
  13. The Public Domain Revisited, 36 Loyola LA Law Review 389, 423 (2002). []
  14. 537 US 186, 209 (2003), quoting Eldred v Reno, 239 F.3d 372 (DC Cir. 2001). []

Like many couples, Brian Edwards and Thomas Privitere of New York celebrated their engagement by taking engagement photos. They hired photographer Kristina Hill in March 2010 and shared the photos on a blog that documented their upcoming wedding for friends and family.

This past summer, the now-married couple learned that an anti-gay organization known as “Public Advocate of the United States” (“PAUS”) had misappropriated one of the photos, showing the two kissing, to use as the background for, in the words of the Denver Post, “ugly campaign fliers” in Colorado, advocating against a candidate who had supported civil unions in that state. A second mailing, directed at another candidate, was also mailed out by the group.

Last week, Hill, Edwards, and Privitere filed a lawsuit against PAUS, alleging copyright infringement and appropriation of personality and likeness. The photograph, they argued, was not only exploited without permission, it was done to advocate for a position they are diametrically opposed to.

Mike Masnick recently wrote about the case — Why it’s tempting, but troubling, to use copyright as a stand in for moral rights — admitting that the use is likely infringing, but like with any enforcement of creator’s rights, found reason to criticize the lawsuit. Said Masnick:

 I’m worried about the implications here. Copyright in the US is an economic right, not a moral one. Other countries may have “moral rights” or “droit moral” on photographs, but we don’t in the US. And it is clear that the copyright complaint is really entirely about the moral rights issue as it relates to copyright. There is no economic impact at issue here, because there is no economic interest in this image. There does not appear to be any plan or intent to license the image or exploit it economically in any way.

And, so, I worry when we start using moral rights arguments to defend a copyright claim, no matter how strongly I support the moral argument being advanced by the plaintiff.

This is reminiscent of his reaction decrying the Ninth Circuit’s decision in Monge v. Maya Magazines a few weeks ago, where the court held that fair use didn’t protect a tabloid that had published, without permission, private wedding photos that had been stolen from a couple.

Masnick is correct insofar as US Copyright law doesn’t protect “moral rights.” In copyright law, “moral rights” is a term of art, with a specific meaning. Also referred to as “droits moraux”, the term encompasses certain noneconomic rights, such as the right to attribution and a right of integrity.1 Generally speaking, these rights are not recognized in the US.2

But in a broader context, Masnick is incorrect. Copyright does recognize noneconomic interests — and the economic interests it recognizes go beyond a simple economic interest in commercial exploitation. Copyright, after all, gives creators the right to control a work, or “the right to say no“, and this right can often serve as a proxy to broader moral rights. In a sense, moral rights are “baked into” US copyright law.

We can turn to the courts to see what I mean.

The Copyright Act gives copyright owners the exclusive right “to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending.”3 This right of distribution, among other things, gives authors the right of first publication.

The right of first publication, long an absolute in the common law (though that has been tempered in recent decades), is anything but an economic right. Rather, as the Supreme Court noted in Harper & Row v Nation Enterprises, “The right of first publication implicates a threshold decision by the author whether and in what form to release his work.”4 The Court noted earlier that “Publication of an author’s expression before he has authorized its dissemination seriously infringes the author’s right to decide when and whether it will be made public.”

This example shows that author’s right to control her work through copyright is just as vital as her right to remuneration. This right extends beyond just first publication. The Second Circuit wrote in Castle Rock Entertainment v Carol Publishing Group:

Although Castle Rock has evidenced little if any interest in exploiting this market for derivative works … the copyright law must respect that creative and economic choice. “It would … not serve the ends of the Copyright Act — i.e., to advance the arts — if artists were denied their monopoly over derivative versions of their creative works merely because they made the artistic decision not to saturate those markets with variations of their original.”5

Courts have also been clear that this right to control only applies as protection against commercial exploitation. In Sony Corp v Universal City Studios (the “Betamax” case), the Supreme Court stated, “Even copying for noncommercial purposes may impair the copyright holder’s ability to obtain the rewards that Congress intended him to have.”6 It goes on to point out that these rewards are not limited to monetary payments:

The copyright law does not require a copyright owner to charge a fee for the use of his works, and as this record clearly demonstrates, the owner of a copyright may well have economic or noneconomic reasons for permitting certain kinds of copying to occur without receiving direct compensation from the copier. It is not the role of the courts to tell copyright holders the best way for them to exploit their copyrights.

Other courts have endorsed this characterization of the rewards due authors.

In a 2000 case, the Ninth Circuit noted that the defendant’s distribution or an unauthorized version of plaintiff’s work harmed plaintiff’s “goodwill by diverting potential members and contributions.” It disagreed with defendant’s argument that plaintiff’s failure to exploit the work showed that the work had no economic value that unauthorized dissemination would adversely affect. Said the court, “Even an author who had disavowed any intention to publish his work during his lifetime was entitled to protection of his copyright, first, because the relevant consideration was the ‘potential market’ and, second, because he has the right to change his mind.”7

This is obviously a very brief survey of how copyright law is not limited to purely economic rights. It isn’t “troubling”, as Masnick puts it, nor is it in any way novel, to use copyright to protect an image even though there is no “plan or intent to license the image or exploit it economically in any way.” What’s more troubling, in my opinion, is to strip the law of its humanity, place a dollar sign on everything, and view harm through the lens of a financial ledger. Copyright is more than just a right to remuneration; it “is deeply rooted in our conception of ourselves as individuals with at least a modest grade of singularity, some degree of personality.”8 “It is also a source of human liberties.”9

Footnotes

  1. The Berne Convention, for example, provides for protection of moral rights in Article 6bis: “Independently of the author’s economic rights, and even after the transfer of the said rights, the author shall have the right to claim authorship of the work and to object to any distortion, mutilation or other modification of, or other derogatory action in relation to, the said work, which would be prejudicial to his honor or reputation.” []
  2. The Visual Artists Rights Act of 1990 (VARA), codified under 17 USC § 106A, grants some moral rights to visual artists under certain circumstances; see also Gilliam v American Broadcasting Companies, 538 F.2d 14 (2nd Cir. 1976). []
  3. 17 USC § 106(3). []
  4. 471 US 539, 553 (1985). []
  5. 150 F.3d 132, 145-46 (2nd Cir. 1998). []
  6. 464 US 417, 450 (1984). []
  7. Worldwide Church of God v Philadelphia Church of God, 227 F.3d 1110, 1119 (9th Cir. 2000). []
  8. Mark Rose, Authors and Owners: The Invention of Copyright,  pg. 142 (Harvard University Press 1993). []
  9. Ralph Oman, Going Back to First Principles: the Exclusive Rights of Authors Reborn, 8 J. HIGH TECH. L. 169, 182 (2008). []
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