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. 1See 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.

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”) 2Wraxall’s Memoirs, Littell’s Living Age (Boston 1884). 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. 3A Speech Delivered in the House of Commons on the 5th of February 1841, Lord Macaulay’s Speeches, pg 112 (London 1866).

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. 4George Stigler, “Monopoly“, Concise Encyclopedia of Economics, Library of Economics and LIberty. 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.” 5Is the Copyright Monopoly a Best-Selling Fiction?

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. 6See, 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).

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. 7See, 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.”

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. 8See, 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). But it’s important to keep in mind that this isn’t an inherent part of copyright law. Such behavior occurs independently of copyright.

References   [ + ]

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).

Report links Google, Yahoo to Internet piracy sites — Leading off the new year is a new report from the USC’s Annenberg Innovation Lab which finds that Google and Yahoo run the top ad networks which finance commercial piracy sites. This article from the LA Times notes that jeans maker Levi’s was quick to respond when it discovered its brand was discovered on pirate sites, taking steps with its global ad agency to prevent future ads from showing up on such sites. The Hollywood Reporter confirms that Google has reached out to Jon Taplin, director of the Lab, in the wake of the report, and has expressed interest in solving the problem of funding the unauthorized exploitation of creators. Also be sure to check out commentary from the Trichordist, Chris Castle, and Ellen Seidler on this subject.

Most Popular Intellectual Property and Technology Law Blogs — Canadian attorney and blogger Barry Sookman has compiled a comprehensive list of popular blogs for those interested in IP and technology. The list breaks down the blogs by geographic focus and includes sites that concentrate on IP areas beyond copyright, like patents and trademarks. An incredibly useful list for active readers and practitioners of this area.

Warner Bros. Vs. Custom-Built Batmobiles: The Legal Battle Continues — Na na na na na na na na lawsuit. Eriq Gardner reports on an ongoing action by Warner Bros, who, through their subsidiary DC Comics, own the rights to Batman, and a maker of a replica Batmobile. Last year, the court denied a motion to dismiss copyright claims, saying it was possible that certain aspects of the auto could be protected under copyright law. Now, both parties have moved for summary judgment on the copyright issues, as well as trademark and other claims.

Oral Argument in the Second Circuit in Aereo Suggests that a Reversal Is in the Offing — Andrew Berger examines last month’s oral arguments in front of the Second Circuit (with a link to the transcript) in WNET v Aereo, involving internet broadcast retransmitter Aereo. The company argues that copyright liability should be dependent on what technology one uses to reproduce and transmit television programs. Berger concludes that the Second Circuit “is likely to find a way to reverse” the district court’s denial of a preliminary injunction against Aereo.

The ‘Digital Economy’ in 2012: A big noisy hole where money should be — Andrew Orlowski reflects on the past year and developments in technology and communications. “The most interesting development of the year was how the value of the individual is being rediscovered. In Nick Harkaway’s book, he points out that individual privacy rights – the ability to own your own data, or ‘habeas data’ as it’s been called – and individual property rights are one and the same. We need ‘an internet that forgets’ and an internet where value is returned to the creator. Both require the same thing: individual ownership to be defended and asserted.”

What Turned Jaron Lanier Against the Web? — The Smithsonian has a great profile/interview with Jaron Lanier this month. Highly recommended; for readers unfamiliar with Lanier, check out the article, and follow it up with a read of his 2010 book You Are Not a Gadget, a nuanced critique of the technological determinism that influences many strands of copyright skepticism today.

Welcome back! I hope all my readers have had a wonderful holiday season and a happy new year. Now that the holidays are over, Copyhype is back to its regularly scheduled programming. I wanted to start things off with a quick look back at 2012 and a quick look forward at 2013.

The following were the most read Copyhype stories during 2012:

Hey, what happened to Wikipedia? (An intro to SOPA)

Was Hollywood built on piracy?

7 mythbusting copyright law articles

Though not the most popular, I personally enjoyed writing the following posts in 2012 and don’t mind highlighting them once more:

The genius of the Hunger Games

Myths from the birth of US copyright part 1 and part 2

Finally, a special shout out to my guest contributors, and some of their wonderful posts, including:

Devlin Hartline’s Nimmer changes his tune: ‘Making available’ is distribution

And Chris Ruen’s The Net Fail Part 1 and Part 2.

A Preview of 2013

The next year already promises plenty of legal and legislative developments in copyright law, a few of which I want to highlight.

The Supreme Court will release its opinion in first sale case Kirtsaeng v John Wiley. I’ve written about Kirtsaeng before, see also More on Kirtsaeng v John Wiley, What Kirtsaeng Won’t Answer, The United States “Odd” Kirtsaeng Argument, and Overturn Quality King? The Court is likely to release its opinion sometime between February and June.

The popular SCOTUSBlog does not include any other copyright-related petitions on its petitions to watch list (the list has a strong track record of selecting which petitions are granted by the Court), but there are several copyright petitions I’ll be keeping an eye on, including the one in Jammie Thomas-Rasset v Capitol Records, dealing with due process review of statutory damages, and Library of Congress v Intercollegiate Broadcasting System, which involved an Appointments Clause challenge to Copyright Royalty Judges (though a cert petition there has not been filed yet). Check out my most recent posts on these lawsuits: End of the Road for Jammie Thomas-Rasset? and Copyright Royalty Board Unconstitutional.

In the lower courts, a group of cases involving broadcast television retransmission and the impact of the Second Circuit’s 2008 Cablevision decision are wending their way through the judicial system. Leading the pack is Aereo, where oral arguments were heard in front of the Second Circuit late last November for an appeal of the district court’s denial of a preliminary injunction, meaning a decision could come later this year. See Aereo takes its tiny antennas to Opposite Town. And just last week, on the west coast, a federal district court came to the opposite conclusion and granted a preliminary injunction against FilmOn, a similar service.

Meanwhile, a set of cases against Dish Networks relating to its Autohop service are in their early stages. The furthest along involves Fox, which a few weeks ago appealed the denial of a preliminary injunction by a New York district court. I wrote a background on these cases at Skipping commercials isn’t infringement, but copying is.

A lawsuit against YouTube for widespread infringement during its early days is back at the district court level, after the Second Circuit ruled on a number of DMCA issues this past April. Most recently, YouTube moved for summary judgment against the various plaintiffs.

Little has been said about Hotfile so far, but developments should be expected this year in the lawsuit filed by major motion picture studios against the filelocker. A ruling on dispositive motions is currently pending in a Florida district court, and a trial date is tentatively scheduled for March. See Copyright Liability for Filelockers: Disney v Hotfile.

On the criminal side, expect slow movement on the US case against Kim Dotcom and Megaupload. An extradition hearing has recently been pushed back to no earlier than August 2013. My last post on this topic came last July in a Megaupload Megaupdate. Be sure to check out TorrentFreak for breaking coverage of every single thing Dotcom tweets.

In Congress, it would appear that the major issue this next year will be royalty rates for webcasting. The next ratesetting proceeding at the Copyright Royalty Board, to set rates for 2015-2020, is fast approaching. Last fall, Pandora backed the Internet Radio Fairness Act, which, among other things, would have changed the standard used by the Board to set rates. At a hearing in November, the House Judiciary Committee appeared skeptical of the bill’s approach, but also expressed a desire to take a broader look at the issue of digital performance of sound recording royalties, seemingly frustrated that the compulsory licensing scheme has required so much legislative attention over the past decade. Some members of the Committee also hinted that the issue of a broader public performance right for sound recording owners was on the table, something that has eluded such copyright owners for decades. See A Brief History of Webcaster Royalties for more background.

What else can we expect from Congress? There have been rumblings of a renewed push for orphan works legislation, and recent events from several conservative-leaning institutions hint at increased attention toward general copyright reform — aided by current European Commission efforts to modernize copyright law.

Much more is obviously in store for the upcoming year. Don’t forget that you can subscribe to Copyhype’s RSS Feed, sign up for email updates, follow me on Twitter, or Like me on Facebook. Here’s to 2013!

I want to thank all my readers for another great year of Copyhype and wish everyone the best of the holiday season! I will likely not be blogging over the holidays, but I’ll be back afterward. That is, unless the archaeologists who misinterpreted Mayan writings were correct that the world will end today.

2012 Music Memoriam — Paul Lamere has compiled a list of all the musicians the world has lost in 2012. They will be missed.

The Right Decision: A Treaty Spurned — In international news, last week the US withdrew from a proposed global telecommunications treaty being drafted at the UN. Here is a brief statement from the RIAA supporting that move. “Vesting authority in the ITU, however, is not the solution, particularly given the overt interest of some countries to regulate the Internet in order to censor political speech or to otherwise limit the legitimate expression of views.”

Down by Law: The Year Downloading Took a Dive — SPIN Magazine notes that 2012 continued the recent declining trend of unauthorized downloading, due to a combination of more effective legal enforcement and the development of legitimate online outlets. The article does note, however, that authorized downloading seems to be in decline as well, as streaming sites grow increasingly popular.

Fox Appeals Dish Network Decision; Asks for Restraining Order Against AutoHop Service — As expected, Fox has appealed a California court’s decision to deny a preliminary injunction against Dish Network for its AutoHop service, one which Fox argues infringes on its copyright. The Hollywood Reporter has the full story, as well as a copy of Fox’s opening brief on appeal.

IP and Instagram–a Teaching Moment Perhaps? — The internet was abuzz earlier this week when popular photo sharing site Instagram implemented changes in its terms of service that raised concerns about what it would be able to do with users’ photos. Instagram has since backed off in response to the outcry, but the reaction has led Ellen Seidler to wonder if this would lead to increased recognition of the importance of copyright. Seidler notes that one comment, saying “My photos will not sell without my knowledge and compensation.  I spend time on my pictures” is “essentially what content creators have been saying for a long time in rebuttal to claims that online piracy is OK.”

High Volume Of Google’s Copyright Removal Requests Reveals Magnitude Of Piracy Problem, Onerous Burden On Creators — CreativeAmerica on Google’s latest stats, showing it removes over 2.5 million links to infringing content a week: “Google clearly recognizes how onerous the processing of removal requests is for them, but what about the content creators and owners who now spend significant resources and countless hours monitoring Google search results for illegal links to their stolen creative works – only to have another one pop up again? What about independent or up-and-coming filmmakers who don’t have the means to make sure stolen copies of their work are promptly removed?”

It’s Time for Artists to Fight Piracy as Vigorously as They’ve Challenged Pandora — “This is why it’s time for artists to band together to set the story straight. Don’t leave it to the few brave enough to speak strongly on the matter. There needs to be a large, coordinated effort by bands big and small to tell their story–to sign a letter to fans explaining how devastating piracy is to their ability to make music for a living (or at all).”

Piracy turned my genuine love for music into just another fidgety online addiction. It was an exercise in hyper-consumption: quantity over quality, breadth over depth, entitlement over ownership.

Freeloading: How Our Insatiable Hunger for Free Content Starves Creativity, by Chris Ruen

In Freeloading: How Our Insatiable Hunger for Free Content Starves Creativity, Chris Ruen — who previously offered a two part excerpt on this site — recounts his conversion experience from filesharing. While others writing on the subject have approached it from a legal or business perspective, Ruen takes a moral approach, critically examining the effects that everything for free without consequence has had on creativity and culture. But this should not be confused with moralizing, lest you think the book is 255 pages about how unauthorized downloading “is bad, mmkay.” Instead, Ruen explores the nuances of “freeloading” — his term for unauthorized downloading — in the broader context of an age where our real lives increasingly merge with our online selves in the same vein as media critics like Marshall McLuhan and Jaron Lanier.

In particular, Ruen turns to those most affected by the effects of the digital age — the musicians and those in the music industry themselves. The middle third of Freeloading is devoted to interviews with these individuals, and, in my opinion, is what should put the book on the must-read list of anyone in the copyright sphere. The interviews are presented in the subjects’ own words, unfiltered, unedited, and at length. Ruen presents an impressive lineup: Andy Falkous, frontman for Future of the Left. John Beeler, an employee at Asthmatic Kitty Records. James Bradley, owner of Brooklyn record store Sound Fix Records. Matt Wishnow, founder of indie distributor Insound. Ira Wolf Tuton, bassist for Yeasayer. Chris Swanson, co-founder and head of the Secretly Canadian record label. Joe Gaer, co-owner of the Social Registry record label. Todd Patrick, DIY concert promoter. Craig Finn, lead singer of the Hold Steady. Adam Farrell, VP of marketing at the Beggars Group. Kyp Malone, TV on the Radio.

The anarchic idea that, “Oh you take away the monetary system and everything will be, like, groovy”—it’s just not true! There’s always gonna be a hierarchy, no matter what. Okay, no money for music, no money to artists, painters, sculptors…. The idea that all of a sudden there’d be all this new art? No, there wouldn’t be! People are doing as much as they can already.
Joe Gaer

Ruen begins with a look back at the last ten or so years, dubbing it the “Decade of Dysfunction.” It begins with Metallica taking on Napster in 2000, where drummer Lars Ulrich, though correct, struck the wrong tone to many, resulting in a PR disaster that created the narrative that this was about cool, freedom loving digital natives versus out-of-touch, greedy dinosaurs. This narrative would be solidified a few years later when major record labels began to sue individual filesharers. As Ruen explains, academics like Lawrence Lessig were first to capitalize on this narrative. They were followed by “digital determinists” like Cory Doctorow, who argued, basically, that the internet made morality obsolete. Finally, the web hype-men like Chris Andersen and Mike Masnick came, building on the narrative and promising a new way forward for artists and creators. The “Decade of Dysfunction” culminates, for Ruen, at SOPA. He writes, “Years of haphazard debates, misunderstanding of the issues and demonization of rights holders had left a population of Internet users who were vulnerable to propaganda from a technology industry that was (in the form of search engines and social media) facilitating what felt like their lives.”

The wisdom of copyright is to focus the incentives, like a laser, upon the creative work itself. If our shared interest is the creation of more and better art, then why take away the fundamental legal right that incentivizes it, while setting artists off on a wild goose chase to find the best marketing scheme rather than to write the best song? The only true way of “adding value” to art is to make better art of higher quality.

The latter third of Freeloading is devoted to where we go from here. Unlike some, Ruen is optimistic that the ship can be righted and that it is both worthwhile and necessary to include the ethical and moral implications in any such discussion. And though Ruen argues for the continuing vitality of copyright law, he by no means believes “more copyright is better” (which, based on my experiences, seems more strawman than an actually held view). One of his recommendations toward the end is to limit the term of copyright to fifty years — an idea I personally disagree with on utilitarian and other grounds. But, as with any book like this, the idea is not to aim for one-hundred percent agreement but to provoke thought, and at this, Ruen succeeds.

Highly recommended.

As we approach the meat of this century—so exciting yet equally uncertain—the best chance we have for avoiding the declinist tendencies of Digital Determinism is to hold on, with passionate fury, to the principle that human creativity is valuable and sacred. When we devalue creativity, when we trample upon the rights of artists to distribute their work as they please, we devalue ourselves and trample upon our own right to a better future.

The Creative Commons organization is celebrating its 10th anniversary this week.

Founded in late 2001 by Lawrence Lessig, Hal Abelson, and Eric Eldred (of Eldred v Ashcroft fame), the organization sought a techno-utopian “legal insurrection” that would “provide an alternative to traditional copyrights by establishing a useful middle ground between full copyright control and the unprotected public domain. Today, the organization struggles for relevance as interest in the principles it embraces continue to decline. 1See, for example, Anil Dash, The Web We Lost (Dec. 13, 2012); Brian Proffitt, GPL, copyleft use declining faster than ever, ITWorld (Dec. 16, 2011).

Perhaps the most visible output of the Creative Commons organization are its various licenses. These licenses are drafted by, but not administered by, the Creative Commons organization. All the licenses require attribution, or credit, of the original author by licensees. The six licenses offer some combination of whether or not the creator allows commercial usage of her works, derivative uses, and a “share alike” provision (where downstream uses must be licensed under the same terms as the original license). Creative Commons also provides marks to indicate that a creator waives all rights to her work, or that a work is in the public domain.

The Creative Commons licenses are just one of many public copyright licenses. Such licenses owe their origins to, and are most often used for, free and open source software. Though there are distinctions between “free”, “open source” and “public”, it is likely that the majority of such licenses are public. 2See Jordan Hatcher, Open Licenses vs Public Licenses, Open Knowledge Foundation Blog (Oct. 15, 2010), “I haven’t done a full survey, but the majority of open licenses (in terms of popularity) probably also fit the definition of public licenses”. The distinctive feature of public copyright licenses — what sets them apart from negotiated or private licenses — is that permission to use the work under the terms of the license is given ex ante to anyone in the public. In this fashion, public copyright licenses are similar to “clickwrap” or “browsewrap” license agreements.

But the organization, which has raised around $30 million over the past decade, 3Tax returns from 2002-2010 show total contributions and grants of $25,994,142. Though I was unable to find more recent returns, adding the average yearly contributions and grants for two years to this total would put the estimated total through 2012 at $31,770,618. does more than just draft these licenses. Creative Commons is involved with a number of initiatives to provide greater public access to scientific research, educational tools, and government data.

But today I want to focus on the licenses and how they have been handled in courts.

Creative Commons in Courts

The Creative Commons wiki includes a page devoted to case law from all over the world involving Creative Commons licenses. Several of these cases only involved Creative Commons licenses collaterally. 4These include SGAE v. Luis and SGAE v. Fernandez. One would note the small number of cases across the globe in the past 10 years. The dearth of litigation over Creative Commons licenses should not be surprising, as their very nature suggests that the majority of licensors are uninterested in pursuing legal remedies for uses of their works.

Commentary on cases involving Creative Commons licenses seem to indicate a concern over whether courts would have trouble enforcing the terms of the licenses, but as the cases below indicate, courts have had no such trouble, treating the licenses the same as any other copyright license.

Curry v. Audax — In one of the first cases confronting the enforceability of a Creative Commons license, a Dutch court enjoined a tabloid in 2006 from future reproduction of photos taken by Adam Curry, a former MTV VJ, which had been uploaded to his Flickr account. The BY-NC-SA license was accepted as valid by the court without discussion, and despite the tabloid’s argument that it was misled by the notice “This photo is public” accompanying the images. However, the court denied monetary damages to Curry. It found that the tabloid had failed to disclose a copy of the Creative Commons license with the photo, but since it had included a traditional copyright notice (“Photos © Adam Curry”), there was no evidence of harm arising from the failure of disclosure. The court also did not find harm arising from the commercial use of the photos in part because the photos are freely available online.

Jacobsen v. Katzer — Though this 2008 US case did not involve a Creative Commons license — it instead dealt with the free and open source Artistic License — the Federal Circuit’s decision is likely applicable to Creative Commons licenses. Indeed, the court referred to CC licenses at several points in its opinion. What’s notable about this decision is that it is one of the few court decisions involving public licenses that includes substantive discussion of their enforceability. Here, Jacobsen had written software that allowed model train enthusiasts to control their trains via computer and released the software under the Artistic License. Katzer was alleged to have copied portions of this software for his own non-free software program in violation of the terms of the License. Jacobsen moved for a preliminary injunction against Katzer, which was denied by the District Court after it held the violation was a breach of contract rather than copyright infringement, which creates no presumption of the irreparable harm necessary for a a preliminary injunction. The Federal Circuit reversed the District Court’s ruling, finding that violating the terms of the Artistic License was copyright infringement, not breach of contract. Broadly speaking, this holding is better for creators, as the remedies for copyright infringement better align with their goals.

Chang v. Virgin Mobile — The black eye of the Creative Commons organization, this litigation began when mobile phone company Virgin Australia used a photograph taken from Flickr in an advertising campaign. The photo was of a minor girl and uploaded by her church counselor, who published it under a CC BY license. Creative Commons itself was named in the complaint for negligence regarding its license, but they were voluntarily dismissed from the action. The District Court ultimately dismissed the suit for lack of personal jurisdiction. Nevertheless, the suit raises significant questions. Chang alleged invasion of privacy alongside copyright infringement; had the suit gone forward, Virgin may have faced liability under this cause of action even if it had complied with the CC license. I say “black eye” because this case highlights the ease one may find one’s works being used contrary to one’s wishes under a CC license. In addition, it showcases the pitfalls of the license, namely, the absence of any help from the Creative Commons organization and the lack of a forum selection clause.

Gerlach vs. DVU — A German court granted a preliminary injunction in October 2010 against a “German far-right” political party for copyright infringement. 5See German court enforces Creative Commons license for more background. The copyright owner had uploaded a photo to Wikipedia under a CC BY-SA license. The political party copied the photo onto its own website but did not include attribution or a copy or link to the license deed. The court accepted the enforceability of the Creative Commons license without comment. The Creative Commons wiki notes that presumably, had the political party complied with the license terms, the use would have been legal.

Lichôdmapwa v. L’asbl Festival de Theatre de Spa — In October 2010, a Belgian court held a theater company liable for infringing the copyright of a musical work licensed under Creative Commons. As in the above case, the Judge upheld the validity of the CC BY-NC-ND license without discussion, noting only that Dutch, Spanish and American courts have upheld their validity. It found that the theater had violated three of the license’s terms: the use was commercial since the company used the work in an advertisement, the company had modified the work contrary to the prohibition on derivative works, and the company had failed to provide attribution.

Avi Re’uveni v. Mapa inc. — An Israeli court, in 2011, found a book publisher liable for copyright infringement of photographs uploaded to Flickr and released under a CC BY-NC-ND license. However, it appears (I’m unable to locate an English version of the opinion) that there was no discussion of the license’s text; according to one report, the court concluded “It was simply an infringement of copyright. Period.” What’s more, the court noted that failure to attribute was a violation of moral rights, making any fair use defense inapplicable.

No. 71036 N. v. Newspaper — This little discussed case originates from a Rabbinical court in Israel in 2011. I’m not familiar with Rabbinical law, and no English translation of the court decision seems to be available, so I’m relying solely on the Creative Commons wiki for the facts. The dispute here was between a photographer who had posted photos online under a CC BY-SA license and a newspaper which had reprinted them without attribution. The court treated the CC license as any other copyright agreement and found that the newspaper was liable because of a religious/moral obligation to adhere to the license’s terms and the copyright laws of Israel.

Using Creative Commons licenses

Should creators use Creative Commons licenses? The idea behind the licenses is a good one: copyright gives creators the choice of how and when to exploit the products of their labor. But unfortunately, despite the ease in using the licenses — or perhaps because of this ease — creators and users should take note of some concerns raised about them that urge caution.

Noted copyright scholar Jane Ginsburg raises some of these concerns in her 2009 article Public Licenses: The Gift That Keeps on Giving. In 2007, ASCAP addressed some of the defects in the licenses in its article 10 Things Every Music Creator Should Know About Creative Commons Licensing. Others who have examined these licenses include the Copyright Alliance in What is a Creative Commons License? and attorney Chris Castle, who has written on specific concerns for musicians and co-writers.

Chief among the concerns raised in these articles is the fact that Creative Commons licenses are irrevocable, that the licenses allowing derivative works remove the ability of copyright owners to prevent objectionable derivative works (for example, modification of works by political parties or interest groups that a creator disagrees with), and the fact that the Creative Commons organization merely provides licenses and does not help in any way with enforcement or administration of the licenses. Other licensing entities and collecting societies do indeed monitor uses of specific licenses they administer to ensure compliance and administer royalties.

There are concerns for users of Creative Commons licenses as well. As noted above, the licenses have a number of terms, like the requirement that the license language itself is copied or linked to, that many currently do not comply with. And several of the cases dealing with CC licenses have involved situations where these conditions have not been met. Second, the onus is on the user to ensure that the work is indeed licenseable. Though the terms of the CC licenses include a warranty that the licensor is authorized to release the work under the license, the organization itself does not verify this. There is nothing stopping someone from slapping a CC license on a work without authority, or ensuring that any underlying works can be licensed in such a manner. Finally, a CC license only covers copyright. Works may require other permissions — for example, photographs or videos that include people may implicate rights of publicity or privacy that are not covered by the license.

In the end, creators should approach Creative Commons licenses with the same amount of diligence as any other deal offered to them. Whether or not the license is appropriate is a decision for the individual creator.

References   [ + ]

1. See, for example, Anil Dash, The Web We Lost (Dec. 13, 2012); Brian Proffitt, GPL, copyleft use declining faster than ever, ITWorld (Dec. 16, 2011).
2. See Jordan Hatcher, Open Licenses vs Public Licenses, Open Knowledge Foundation Blog (Oct. 15, 2010), “I haven’t done a full survey, but the majority of open licenses (in terms of popularity) probably also fit the definition of public licenses”.
3. Tax returns from 2002-2010 show total contributions and grants of $25,994,142. Though I was unable to find more recent returns, adding the average yearly contributions and grants for two years to this total would put the estimated total through 2012 at $31,770,618.
4. These include SGAE v. Luis and SGAE v. Fernandez.
5. See German court enforces Creative Commons license for more background.

The Constitutional and Historical Foundations of Copyright Protection — Debates over copyright have been in vogue recently in DC. This week, the Center for Individual Freedom released a paper from legal heavyweights Paul Clement, Viet Dinh and Jeffrey Harris exploring the origins of copyright in the US, which unfortunately have often been obscured in these debates. As the paper explains, “copyright was seen not merely as a matter of legislative grace designed to incentivize productive activity, but as a broader recognition of individuals’ inherent property right in the fruits of their own labor.”

Music and Copyright in the Digital Era: DAVID BYRNE in conversation with CHRIS RUEN — Last week, the New York Public Library presented a conversation between Talking Heads frontman and author David Byrne and Chris Ruen (whose new book, Freeloading, is out now and who contributed guest posts this week here). Audio of the fascinating discussion is currently available, with video expected soon.

The “Common Law Property” Myth in the Libertarian Critique of IP Rights (Part 1) — Legal scholar Adam Mossoff responds to a certain critique of copyright that claims copyright is somehow different from other forms of property because copyright was established by statute while other property arose organically through the “common law”. On the contrary, many of our most fundamental forms of property were created through statute, like the Statute Quai Empotores of 1290, which hastened the end of feudalism by creating freely alienable title to land. Mossoff follows up with a Part 2.

How music recommendation works — and doesn’t work — Brian Whitman, co-founder of music data company the Echo Nest, presents an excellent overview of music recommendation, the current state of the art, and what lies ahead.

Attorney Don Passman on the Future of Digital Music  — ASCAP’s Etan Rosenbloom sits down to chat with Don Passman, author of the widely popular and useful All You Need to Know About the Music Business, which was recently updated to its eighth edition.

Mythbusting Part 2: How Important is Income from Live Performance? — The Future of Music Coalition presents data from its study on artist revenue streams to dispel a common myth. Many assume that touring and live performances make up the bulk of musician income, but the FOMC has found that, on average, this revenue stream only accounts for about 28% of income. According to the FOMC, while some artists reported higher percentages, touring is rarely the sole source of income for any musician. The non-profit group adds, “Touring itself has its own caveats; touring costs money, it’s not very scalable, and it requires constant output. And, for some musicians, playing live is simply not part of their career structure.”

Invasion of the cyber hustlers — “Disruption”, “openness”, “crowdsourcing”, “sharing”, “social”. Author Steven Poole, writing at the New Statesman, critiques the “cybertheorists” who endlessly spout these buzzwords. “What sells, to the cyber-fanatic’s intended audience, is ludicrous utopian fantasy, silicon Panglossianism.”

The following is a guest post from author Chris Ruen, who you can follow on Twitter @fakeChrisRuen. It is is an excerpt from his new book, Freeloading: How our insatiable hunger for free content starves creativity, available from Amazon (they have a nice long sample for your perusal) or direct from his US Publisher, OR Books. The book will also be released in Australia this March.

Read Part 1

The $300,000 grant was reported in a little read article by the Boston Globe which revealed other interesting facts of the SOPA blackout. Elizabeth Stark, a Stanford University Internet activist, is paraphrased in the article as noting that Fight for the Future “was a key participant” in the January 18th blackout and that the group built “much of the technology that made it possible.” But Fight for the Future’s “most significant contribution to the effort,” according to the Globe, “may have come during a Nov. 9 meeting about the antipiracy legislation that was held at the Mountain View, Calif., headquarters of Mozilla. Taking part that day were tech companies, advocacy groups, and academics about the antipiracy legislation. Cheng and the group’s other cofounder, Holmes Wilson, 32, said they called in to the session to pitch the idea of a Nov. 16 protest, which also called for companies and organizations to close down their websites.” 1Michael B. Farrell, Small Worcester Group Plays Large Role in Online Protest, Boston Globe (Jan. 27, 2012).

This early November meeting, facilitated by Mozilla, one of Silicon Valley’s most visible businesses, never made it into the popular history of the SOPA blackout. Nor was it widely known that both Silicon Valley industry and their complements from the nonprofit world were strategizing so early. It is unclear which organizations were or were not involved, but Elizabeth Stark admitted on a 2012 panel on Internet activism that Google and Reddit joined Fight for the Future in the meeting at Mozilla. 2“Defending the Internet Panel 2/4 – ROFLCon 2012” at 14:30 (YouTube). So what really happened at this meeting and who was there? Was it true that, far from organically originating from Reddit in January or Wikipedia in mid-December, the idea of a blackout really came from a month-old nonprofit with a questionable source for its hundreds of thousands of dollars in funding?

The obscure website JammerDirect interviewed Fight for the Future co-founder Holmes Wilson for their podcast, The Dose, on January 25th 2012, one week after the conclusive SOPA blackout. Wilson was forthcoming on where the idea for a blackout came from and how that idea was brought to the strategy meeting on November 9th. 3Holmes Wilson, One of the Creators of the SOPA Strike Movement, is this week’s special guest on The Dose, Jammer Direct (Jan. 25, 2012).

“The strike movement itself started in late October—early November, right after SOPA came out,” Wilson said. “When SOPA came out it was just way worse than anyone expected” and Fight for the Future started speaking by phone to the Electronic Frontier Foundation and Public Knowledge. Wilson described his reaction to SOPA and what he feared it would mean:

I thought about it like, ‘We were going to wake up and go to the same sites we use every day and see some stupid message from the government telling us we can’t visit those sites anymore because we were Americans. Whatever we do for the campaign has to be based off of that feeling’… The idea for the protest was for sites to run one pop-up simulating the site being blocked… We started shopping it around to sites we were close to and organizations saying, ‘We think this is the best way to respond to SOPA and are you in?’ One of the key moments was—when working with a close friend of ours, Elizabeth Stark who is at Stanford, and has been into the free culture and remix culture movement for ages now—she worked with us to organize a meeting and call at Mozilla, the folks who make Firefox, at their headquarters in Mountain View a week before the protest. And that was really pivotal in getting the attention of Mozilla and a few other large Silicon Valley organizations… The meeting was basically all these groups in DC being like, ‘This is worse than anything we’ve ever seen and there is nothing we can do to stop it. This thing will pass unless we all band together and do something crazy.’ And the folks in Silicon Valley were like, ‘This wasn’t even on our radar.’… Nobody knew about it. And on that call we said, ‘Here’s a proposal. We should block out our sites and direct people to email Congress.’ Then one of the folks at Mozilla came up with the idea of blacking out your logo as a secondary ask to sites that can’t throw a pop-up on their page the whole day…And we were like, ‘That’s an awesome idea, we’re gonna run with that too.’ We put up a page the next day or that Friday,, and included instructions on how to participate.

Yes, the blackout idea came directly from the MDF-funded organization and was presented to the inside players of Silicon Valley over one month before Jimmy Wales mentioned the blackout idea on Wikipedia. The day after the meeting organized by Mozilla, the veneer of populism was already being applied to the initiative of a handful of dedicated interest groups which derive their funding from Silicon Valley companies. Fight for the Future tweeted: “Internet fights back! PK, EFF, FFTF, FSF, OC to stop #protectip #sopa Join us 11/16 to help to stop worst bill,” linking to Fight the Future’s website, “PK” stood for the group Public Knowledge; “EFF” for Electronic Frontier Foundation; “FFTF” for Fight for the Future; “FSF” for Free Software Foundation; and “OC” for Open Congress, an organization also run by the founders of Fight for the Future.

According to Fight for the Future, these five groups were “the Internet”—and “the Internet” was “fighting back.”

As for Reddit, though involved in the Mozilla meeting according to Elizabeth Stark, they couldn’t so easily begin advocating for SOPA protests, as they were a bottom-up community of users, predicated on a belief in the wisdom of crowds. As some have suspected, Fight for the Future actively posted articles trying to get the Reddit community involved. Holmes Wilson admitted to placing links on the site. He did so under the username “holmesworcester.” 4Overview for holmesworcester, Reddit.

And we got on Reddit that Friday. And it was tricky to get on Reddit even—Reddit is just this beehive of anti-SOPA sentiment but at that point really wasn’t woken up to it. I remember sitting down at the keyboard and thinking, ‘Okay what will get people’s attention?’ The post I wrote was something like, ‘The MPAA will soon have the power to block American’s access to any website unless we fight back’—comma—‘hard!’ And that was the post—that post got to the top. And that linked directly to the protest site (Fight for the Future’s So it started going viral. It started going viral on Tumblr at that point with people using the code (provided by Fight for the Future) to black out their titles and a lot of big Tumblr sites doing it. We started to see a lot of sites sign on. I think in the end five thousand sites signed on. And early in the next week we started to get some big sites. I forget exactly what happened with Reddit but at some point they said they would do it. We reached out to the folks at 4chan—4chan is awesome. And Mozilla, the folks who were on the call at Mozilla hustled all weekend—you know, Mozilla is a big organization and for them to take a step that pointed their millions of visitors to their start page to a political action, that’s something they never had done before. That was unprecedented and the folks at Mozilla, they took that on and took it up the chain and made it happen… Then BoingBoing and Cory Doctorow there who is kind of an old friend of ours and has worked with us a lot on different stuff and has always been a supporter of projects we have worked on. I mean, he, he—they went above and beyond for us. The Reddit folks did. The conversation started with Wikipedia at that point, too. We said, ‘Can Wikipedia do this?’ and Wikipedia said, ‘We don’t control that.’

So, just as they had done to garner viral attention on Reddit, Fight for the Future posted on a Wikipedia forum asking about the site participating in the November 16th anti-censorship protest. “And we did that,” Wilson said, “and it didn’t go anywhere immediately but then Jimmy Wales restarted that conversation and it started to move forward. That was in mid-December.” Some who questioned how grassroots the SOPA protest on January 18th really was point to reports in late December that NetCoalition was considering the “nuclear option” of a blackout. But it is clear that planning between opaquely-funded nonprofit organizations and the very companies represented by NetCoalition were in cahoots long before that date and, more than anyone, Fight for the Future engineered the strategy and organized the blackout. As Holmes Wilson described on The Dose, “The big surprise of that November protest—which was awesome—was that Tumblr called us in the middle of the day to warn us that they were either about to or already sending tons of traffic our way.” According to Wilson, Tumblr alone directed 87,000 calls to congress on November 16th and posted an information page on the protest with “perfect talking points.” With the success of the November 16th protest, Fight for the Future recognized the need for a follow-up protest:

And the Round Two will let us go from all the people who participated to an even wider network and say, ‘Okay guys, now is the time.’ And in the end what really ended up happening was once the idea got out there, the idea itself, sort of took on a life of its own, where the seed we planted at Wikipedia—that started to go—into a real discussion that was engaging the whole community moving forward. There must have been a similar discussion going on at Google, internally. And everybody started talking about, ‘When this really gets close to happening, what are we gonna do?’ And Reddit called for it. They said, ‘We’re going dark on the 18th’ and Wikipedia was at the point at which they would almost decide—I think they made the final call the night before. And all the pieces were in place. And we were just like, ‘Okay this thing is happening. We’re just going to make a website to coordinate, that we can use to list all the sites that are participating and all the tools you can use to participate.’ Basically just get out of people’s way and give them the tools they need to do this… So yeah, that’s the story.

There are some reasons to be hopeful about the future of Internet activism after the SOPA protests. They proved that it was possible to mobilize millions of people thanks to the radical efficiency of digital communication. And though the blackouts would never have happened or had their effects without the dedicated work and organization of Fight for the Future, there were also smaller protests that were more grassroots in nature. But Fight for the Future’s deft strategy was to quickly co-opt any genuinely grassroots protest against or criticism of SOPA and then use it for their own advantage. When a long-time user on Reddit wrote to the community saying they were going to transfer dozens of their domains away from GoDaddy, in protest of the company’s support of SOPA, the community of users rapidly joined in the boycott, which quickly led to GoDaddy reversing its position.

On December 22nd, the day of the boycott post, Fight for the Future tweeted: “Not an ad, but if u switch from @godaddy to another registrar / host, some companies will give u anti-#SOPA discounts.” By December 23rd, they posted a new webpage, which facilitated that protest. That Fight for the Future webpage soon made its way to the original Reddit post, left at the bottom of the post for anyone who wanted to participate.

But the sad truth of the SOPA protests, led for months by Fight for the Future (and enabled by whoever the hell was funding them), was that the actions of millions were fueled by lies and propaganda. As Holmes Wilson said on The Dose, recounting when he was trying to get the Reddit community to run with American Censorship Day:

‘Okay what will get people’s attention?’ The post I wrote was something like, ‘The MPAA will soon have the power to block American’s access to any website unless we fight back’—comma—‘hard!’ And that was the post—that post got to the top.

We should take note of Wilson’s acknowledgement that he was struggling to get people’s attention. The more desperate one is to get attention, rather than to accurately communicate what one believes a problem is, the more one ventures into the realm of sensationalist propaganda. While it is possible to find attention-getters that are nonetheless truthful, that is not what Wilson did and it is not what Fight for the Future has done or continues to do. Characterizing SOPA as the MPAA (and only the MPAA) having the unequivocal power to block access to “any” website was a misrepresentation (or an outright lie) that Wilson ought to be embarrassed about. Through the Private Right to Action (a provision I did not support), SOPA gave all creators the right to bring forth evidence that a site was “dedicated” to infringement and had reasonable knowledge of the infringement happening on their networks. That isn’t “any site,” that is a site that may be guilty of illegally exploiting the legal rights of artists or businesses. But such distinctions did not suit the goals of Fight for the Future, so they went on spreading baseless propaganda that frightened well-meaning Internet users into participating in a blackout under false notions.

As Wilson admitted, Fight for the Future was interested in results, not the truth, and they were willing to do whatever it took to sufficiently scare people into actions that benefitted their interests, and perhaps those of whomever was funding them. The slick video produced by Fight for the Future, called “SOPA/PIPA will Break the Internet,” a fiction in itself, relied upon conflating the past mistakes of the entertainment industry with a bill that sought to protect all creators’ rights. The video presented an entirely false choice between copyright enforcement and popular social networking sites continuing to exist. They presented “Internet freedom” as an inalienable right that the RIAA was trying to strip away, concealing the truth, that the imperfect bill’s very aim was to protect human rights and legal rights of artists not be exploited by unsanctioned business. They deceived the public that SOPA was a “censorship” bill, clearly a talking point they had settled on early in the planning of the protest. The SOPA/PIPA video, filled with deception and fear-mongering, was eventually watched by over four million people.

Fight for the Future produced an infographic, also filled with propaganda. 5SOPA: The Internet Blacklist Bill, (Infographic). It said that “a few infringing links are enough to block a site full of legal material”—an outright lie which provided no support for the claim. The cartoonish digital flyer said that, as a result of SOPA, “Sites’ self-censorship increases dramatically,” next to a circle-shaped graphic labeled, “self-censorhip on websites.” A small, bright red circle labeled, “Today’s self-censorship” is overwhelmed by a large, ruddy circle labeled “Self censorship if the bill passes.” They provided zero reasoning or evidence for their baseless claim and of course made no effort to draw the distinction between censorship that occurs because someone is breaking the law and censorship that occurs on account of the content of their speech. Nor did they bother to justify a linear chart that purported to show “new startups being launched.” A happy, blue upward reaching line represented “before SOPA,” with bright red line sinking down “after SOPA.” Again, Fight the Future passed a baseless claim off to unsuspecting Internet users as certain fact.

“What sites are at greatest risk?” another text box asked. The answer? “Anywhere people are expressing themselves or finding content: social networks, hosting sites, personal pages.” Next to this quote, which didn’t even mention piracy or copyright, logos for Vimeo, Facebook, Myspace, Aol Instant Messenger, Twitter and Reddit appeared—even though each and every one of those sites was already liable for “dedicated” infringement under US law. There was no mention of the many sites that, Internet users well understand, exist for no significant purpose other than to facilitate unlicensed downloading or streaming of legally protected works. That’s because Fight for the Future had no interest in exploring the nuanced truth of the piracy debate. Their aim was to frighten and mislead and enter themselves into the long tradition of cynical propagandists like Edward Bernays and Ivy Lee.

“Our basic Internet freedoms are on the chopping block,” the infographic finished. Sure, if “Internet freedom” means the freedom to exploit people.

SOPA was not a perfect bill by any means, but it could have been fixed and helped us along the path of reconciling the regulation of the Internet with creators’ rights. In fact, that’s precisely what the threat of the blackout accomplished. The weekend before the blackout, the DNS-blocking provisions were reportedly stripped from SOPA. But Fight for the Future didn’t want some watered down version of SOPA to pass. Their irrational and defensive philosophy is based upon the idea that any regulation of the Internet is an attack on the Internet and its “freedom,” so any proposed regulation needed to die.

Perhaps the philosophy of “Internet freedom” was truly that of Fight for the Future’s donors. Whoever funded the group was apparently pleased after the blackout. As quoted in the same January 26th Boston Globe story that revealed the $300,000 grant which seeded Fight for the Future, “[Media Democracy Fund] director, Helen Brunner, said the fund is finalizing another $759,000 grant for Fight for the Future.” 6Farrell, supra. That’s the reward, I suppose, for making a concerted propaganda campaign appear to be a grassroots uprising and duping millions of well-meaning Internet users to suit one’s own devices. This was no example of Thomas Jefferson’s ideal of an educated public ensuring liberty, but the story of a poorly educated public manipulated by well-funded factions.

As Holmes Wilson admitted to Talking Points Memo, Fight for the Future is a 501(c)4 nonprofit. 501(c)4 groups are also called “dark money” groups. Many of them legally launder unlimited amounts of political donations to America’s super-PACs.” 7Sarah Lai Stirland, Geeks Gear Up To Fight Online IP Bills, PIPA, SOPA, TechPresident (Jan. 11, 2012). Groups with 501(c)4 status are lobbying and political advocacy groups with no spending limits on their own campaigns and—more relevant to an Internet community that pats itself on the back for their commitment to “transparency”—under no obligation to disclose their donors. Ironically, the Sunlight Foundation itself has publicly campaigned against 501(c)4 groups for their lack of transparency and corrupting influence of the public interest. Fight for the Future could be funded by anyone, but will never have to disclose a thing. Who is behind them and how much are they truly receiving? Your guess is as good as mine, and the flip side to hiding sources of one’s funding is that any guess become fair.

So much for the grassroots, transparency, openness… and so much for the “planetary soul.”


References   [ + ]

1. Michael B. Farrell, Small Worcester Group Plays Large Role in Online Protest, Boston Globe (Jan. 27, 2012).
2. “Defending the Internet Panel 2/4 – ROFLCon 2012” at 14:30 (YouTube).
3. Holmes Wilson, One of the Creators of the SOPA Strike Movement, is this week’s special guest on The Dose, Jammer Direct (Jan. 25, 2012).
4. Overview for holmesworcester, Reddit.
5. SOPA: The Internet Blacklist Bill, (Infographic).
6. Farrell, supra.
7. Sarah Lai Stirland, Geeks Gear Up To Fight Online IP Bills, PIPA, SOPA, TechPresident (Jan. 11, 2012).

[The following is a guest post from author Chris Ruen, who you can follow on Twitter @fakeChrisRuen.]

This is an excerpt from my new book, Freeloading: How our insatiable hunger for free content starves creativity, available from Amazon (they have a nice long sample for your perusal) or direct from my US Publisher, OR Books. The book will also be released in Australia this March.

At this time last year, the Internet community didn’t know that it was in for a historic and definitive techno-political moment: the anti-SOPA blackout. One nonprofit group, founded the same month (October) SOPA was introduced in Congress, had been hoping for the blackout since at least early-November. They conceived of, organized, and facilitated the protest. Have you heard of them?

I’m glad SOPA—as it was originally written—didn’t pass. But that legislation’s real flaws don’t make the shady dishonesty and ignorance of the SOPA blackout any less embarrassing. Like the socialized acceptance of freeloading (mass digital piracy), the protests are a black eye for the digital revolution’s starry-eyed notions of progress.

-Chris Ruen

In Part One, I acknowledged the dreams of Kevin Kelly, that the Internet was destined to merge us into a great and bountiful “planetary soul.” That appealing vision has gone on to inspire many activists in their quest to “protect” the Internet from threats to its “openness.” The rights of creators (aka the rights of individuals) have been seen as the primary threat to this “open source” digital utopia which will eventually give us more prosperity, democracy and more freedom. In short, this is a belief in the power of networks and the collaboration they allow for. New Media academics like Clay Shirky and Jeff Jarvis have evangelized for this future. For them the future of the Internet should not include paywalls or respect for rights holders because it adds friction to their great wheel of digital life. We will not need professional journalists because the wise crowd knows more collectively than any individual journalist ever could. The wisdom of crowds, through the network effect, is the righteous salvation offered by the Internet.

The incredible effectiveness of the SOPA blackout was seen as the single greatest example of the potential of networks to improve our lives. How could the rights of a few measly artists or old-time corporations justify hamstringing the innovation of the single greatest advance in human history!

The technology companies who fought SOPA and participated in the blackout were seen as responding to heartening, grassroots efforts that organically originated from web communities like Reddit. The SOPA blackout was an American Tahrir Square or an offshoot of Occupy Wall Street—normal citizens standing up to defend the freedom of online expression in the face of draconian attempts at censorship that were merely an effort to put money in the pockets of the corrupt entertainment industry.

That’s what it was…right?


When the SOPA blackout was gearing up in January of 2012, a distinct tone of paranoia emerged in the arguments being advanced by critics of the bill. SOPA didn’t merely need reform; it needed to be killed. Why? Because it would actually break the Internet. If you posted a single infringing link to your blog, even unknowingly, you could face five years in jail. Were politicians so stupid and in the pockets of the entertainment industry that they would risk passing a bill that would break the Internet and send innocent people to jail for years and result in the mass violation of First Amendment rights? Yes, absolutely they would.

You don’t trust politicians and the RIAA, do you?

What’s more, SOPA wouldn’t even make a difference for rights holders being hurt by piracy. And what would we, the public, be saddled with? Censorship! It was not a copyright bill. It was a censorship bill.

Do you support SOPA? Do you support (clears throat) INTERNET CENSORSHIP?

Due to these talking points, the public was placed in a position where they felt they had to be against the law even if they had never heard of the bill before, read about it or read the legislation itself. The tone and substance of the SOPA backlash harkened back to the heated debate over health care reform in the United States in the summer of 2008, in which ideological lobbying groups pumped an anxious public full of lies that fed their pre-existing biases. The claim that SOPA would break the Internet, I predicted, would go down in history as an infamous piece of propaganda, like the fear mongering warning that President Obama’s health reform plan included “death panels” that would “kill Granny.”

I took it for granted that the technology industry was viewing SOPA as major new government regulation upon their industry that, all things being equal, they would rather not have to deal with. But why talk about the reasons for or against regulation when you can just as easily scare the bejeezus out of people who weren’t terribly well schooled on the issues? Though I suspected the technology industry’s influence, I accepted the idea that Reddit had genuinely corralled their digital brethren in the fight against the legislation. With so many eyes on SOPA coming from an established Internet culture that prided itself on openness, transparency and sincere collective actions, it was hard to believe that technology companies like Google would be so daring as to risk being exposed for misleading the public. After following the Decade of Dysfunction and engaging with a host of bizarre arguments that arose from a need to justify immoral actions, I knew false notions could easily rise up all on their own.

Even if I was appalled by the misinformation being dangerously bandied about, the success of the SOPA blackout was really something to behold. Perhaps it was the genuinely new paradigm of political action that SOPA critics made it out to be, a digital revolution by the consent of the networked. As Tech Crunch declared after SOPA was defeated, “A well-organized, well-funded, well-connected, well-experienced lobbying effort on Capitol Hill was outflanked by an ad-hoc group of rank amateurs, most of whom were operating independent of one another and on their spare time. Regardless of where you stand on the issue—and effective copyright enforcement is an important issue—this is very good news for the future of civic engagement.” 1David Binetti, SOPA Scorecard: Internet 1, Lobbyists 0, TechCrunch (Jan. 19, 2012).

On January 26th, PPC Associates CEO David Rodnitzky posted a blog entry that questioned how “grassroots” the SOPA protests really were. 2David Rodnitzky, Lobbyists 1, Internet 0: An Alternative Take on SOPA, PPC Associates (Jan. 26, 2012). He noted, “Google’s, Facebook, Twitter, AOL, eBay and many other companies have been aggressively lobbying Congress for months regarding SOPA.” The companies had proposed an alternative bill to SOPA and taken out full-page ads in national newspapers on November 16th to express their opposition. Google’s spending on lobbying had tripled from the previous year to $3.74 million in the fourth quarter of 2011 as the SOPA battle raged into the winter. Robert Levine, author of the book Free Ride, reported that Google’s lobbying expenditures jumped once again in the first quarter of 2012, up to over $5 million, covering the run-up to the blackout on January 18th. 3Robert Levine, Why No Web Blackout For CISPA? Google It, Fast Company (May 8, 2012). That was a 240 percent increase from the same period in 2011. Levine wrote, of Google’s sudden $5 million lobbying tab:

That’s more than the official lobbying budget of the MPAA ($570,000 for the same time period), the RIAA ($1.67 million), or media companies like Disney ($1.3 million) or News Corp. ($1.57 million). It’s more than Microsoft ($1.79 million), Facebook ($650,000), Amazon ($650,000), and Apple ($500,000) combined.

The Board of the Sunlight Foundation, which funded some groups who participated in the SOPA protests, included one former lobbyist for Google. Robert Levine has reported on the financial and personal ties between Google and “open” Internet advocacy groups like the Electronic Frontier Foundation (EFF) and Public Knowledge before. No one could say just how much Google did or did not affect the eventual blackout, but clearly the entertainment industry wasn’t the only group flooding Congress with cash. Markham Erickson, who leads the NetCoalition—an advocacy group for tech companies such as Google, Facebook, eBay, Yahoo, Mozilla, Twitter and others—dusted off notions that his group had driven the blackout, telling the New York Times that, “The Internet responded the way only the Internet could.” 4Jonathan Weisman, In Fight Over Piracy Bills, New Economy Rises Against Old, NY Times (Jan. 18, 2012). In the same Times article, Representative Zoe Lofgren said, “Too often, legislation is about competing business interests. This goes way beyond that. This is individual citizens rising up.”

David Rodnitzky at PPC Associates was skeptical. He tracked the first big bump in traffic for SOPA searches on November 16th—which happened to coincide with American Censorship Day, a sort of blackout-lite campaign run by the non-profit group Fight for the Future, and also the day of the full-page ads taken out by Google, Twitter, Facebook, et al. The second bump in traffic he saw occurred on December 13th, “when the Washington Post ran a story about a ‘visual petition’ on the website” 5Rodnitzky. IWorkForTheInternet was also run by Fight for the Future. When Rodnitzky looked further into the websites run by Fight for the Future, he noticed that the names of whomever had registered their domain names were kept private on the online domain registry. And he found the lack of information provided on the groups themselves, mixed with the obvious professionalism of the websites, suspicious:

The only names listed on the FightForTheFuture site are “Tiffiniy Cheng” and “Holmes Wilson.” I looked up Tiffiniy online and she apparently works for “DownhillBattle,” which as best I could tell is a blog that is mad about record labels. But she also lists herself as the “Founder, Executive Director, PPF, Open Congress.” PPF is the “Participatory Politics Foundation,” a 501-c-3 non-profit that was founded and funded by The Sunlight Foundation, which is also a non- profit… Anyways, I’m not an investigative journalist, but all of this strikes me as quite odd; the sudden launch of some very nicely designed, privately registered, anti-SOPA Websites without any contact info other than a woman who once founded a non-profit that gets money from another non-profit that gets money from technology companies? Methinks something is rotten in Denmark.

For most of the millions who signed petitions on January 18th, the day of the blackout, the controversy over SOPA was over nearly as soon as it began. They groggily logged online in the morning only to see Google, Wikipedia, Twitter and a host of other sites they trusted offering alarming information about SOPA. Users were linked to simple websites with petition forms and easy ways to send form letters to representatives in Congress. A couple of days later, users heard that SOPA was dead. These users, we were told, had participated in a revolutionary grassroots movement.

In the days and weeks after the defeat of SOPA, the protest of which had moved very quickly, journalists tried to understand how, exactly, it had happened. Of course, the technology companies and advocacy groups of Silicon Valley were thrilled, and trumpeted the rise of people power. As mentioned above, there were a few voices that questioned how grassroots the protests actually were and whether large companies like Google were truly driving the protests from behind the scenes. Sen. Chris Dodd, the former Senator who was president of the MPAA during the SOPA fight, accused technology companies of using their customers as “corporate pawns.”

Mark Stanley, new media coordinator at the Center for Democracy and Technology, told Macworld that the notion that the SOPA protests were a top-down affair was wrong. He should have known, seeing as his group had “helped organize” the protest. “That’s just such a mischaracterization of what happened. This was definitely the Internet community at large,” he said. 6Grant Gross, Who really was behind the SOPA protests?, Macworld (Feb. 6, 2012).

The Macworld article hewed closely to the conventional wisdom on how the blackout had developed—primarily through “open Internet” luminaries like Reddit and Wikipedia. Wikipedia’s Jimmy Wales had mentioned the idea of a SOPA blackout in mid-December and Reddit, an online community in which users can post links or messages and the community has the power to vote them up or down, was the first site to publicly confirm their own blackout on January 18th. They made their announcement on January 10th.

At the time of the blackout, I was so busy trying to understand SOPA that the exact nature of the blackout’s run-up eluded me. I accepted the widely-held assumptions about Reddit and Wikipedia. The fact that the “crowd” was so involved explained the poor arguments and misunderstandings emerging as fact in the controversy. Were technology companies and other non-profits involved? Well, of course they were. But without those collaborative online communities and the public rallying around them, the SOPA blackout never would have been possible.

The Macworld article cited only “very informal” organizing between outside “open Internet” advocacy groups and Reddit, according to Erik Martin, Reddit’s general manager. Martin claimed that it was only after Jimmy Wales came up with the blackout idea that Reddit, and other websites, began to seriously consider a blackout. 7Gross. The truth of the SOPA blackout is quite different from the myth of some wholesome demonstration of mass democracy. To understand how the protest came about, we must look more closely at Fight for the Future—the non-profit group David Rodnitzky called “a bit odd.”

“Those guys were amazing,” Mike Masnick said of Fight for the Future after the blackout. “They had ideas. Those were two people in Western Massachusetts who came out of nowhere.” 8Sarah Lai Stirland, Mike Masnick: Accidental Activist to Some, “Demagogue” to Others, TechPresident (May 10, 2012). In fact, Fight for the Future was founded in October of 2011—the same month SOPA was introduced in the House of Representatives—and the group’s founders had been running “open Internet” projects like OpenCongress and the Participatory Politics Foundation for years. Founders Tiffiniy Cheng and Holmes Wilson had existed within the framework of non-profit websites and organizations like the Electronic Frontier Foundation and Public Knowledge—groups set against the enforcement of copyright online (because they believe enforcement violates “Internet freedom”) and evangelists for “openness” and transparency. This non-profit network has deep personal ties to and funding from Silicon Valley, as shown in the work of Robert Levine.

For their part, Fight for the Future began in October 2011 with a $300,000 grant from the Media Democracy Fund, a foundation that dedicates itself to “free expression on the web.” 9Michael B. Farrell, Small Worcester group plays large role in online protest, Boston Globe (Jan. 27, 2012). In fact, Fight for the Future is a project of the Media Democracy Fund’s Center for Rights. 10Sarah Lai Stirland, Geeks Gear Up To Fight Online IP Bills, PIPA, SOPA, TechPresident (Jan. 11, 2012). The Center for Rights is described as “a nonprofit working to expand the Internet’s power for good” on the Fight for the Future website.

Far from a grassroots organization, Fight for the Future was a well- connected and well-funded arm of the Media Democracy Fund. In the “about” section of the MDF website, they say the Fund:

… partners with funders to make grants that protect and promote the public’s rights in this new era. We help grant makers of all sizes and issue areas amplify their impact…More and more, economic opportunity, education, creativity, freedom of expression and democracy are intertwined with access to and openness of our new information and communication technology. These connections mean that ignoring this area is no longer an option. But this emerging field can be confusing and complicated. MDF can help you simplify and focus. We understand the connections, the policy environment and the landmines. We help our partners cut through the noise and make an impact. 11Media Democracy Fund, “About”.

The description sounds like MDF is an organization that filters money from outside contributors, who have specific goals in mind, to groups and projects that can ostensibly achieve those goals. Was the $300,000 grant to Fight to the Future the result of one of MDF’s “partners” wanting to “cut through the noise and make an impact”? If MDF was more or less a middle-man for its donors, then who was the source of Fight for the Future’s considerable funding?

Read Part 2.

References   [ + ]

1. David Binetti, SOPA Scorecard: Internet 1, Lobbyists 0, TechCrunch (Jan. 19, 2012).
2. David Rodnitzky, Lobbyists 1, Internet 0: An Alternative Take on SOPA, PPC Associates (Jan. 26, 2012).
3. Robert Levine, Why No Web Blackout For CISPA? Google It, Fast Company (May 8, 2012).
4. Jonathan Weisman, In Fight Over Piracy Bills, New Economy Rises Against Old, NY Times (Jan. 18, 2012).
5. Rodnitzky.
6. Grant Gross, Who really was behind the SOPA protests?, Macworld (Feb. 6, 2012).
7. Gross.
8. Sarah Lai Stirland, Mike Masnick: Accidental Activist to Some, “Demagogue” to Others, TechPresident (May 10, 2012).
9. Michael B. Farrell, Small Worcester group plays large role in online protest, Boston Globe (Jan. 27, 2012).
10. Sarah Lai Stirland, Geeks Gear Up To Fight Online IP Bills, PIPA, SOPA, TechPresident (Jan. 11, 2012).
11. Media Democracy Fund, “About”.

This past Thursday, the Cato Institute held a forum called Copyright Unbalanced: From Incentive to Excess to discuss the current state of copyright law and issues raised by the Institute’s recently released book with the same title. The panel discussion featured the book’s editor, Jerry Brito of the Mercatus Center, Mitch Glazier of the RIAA, and one of the book’s contributors, law professor Tom Bell.

Much could be said concerning the event and book. I’d like to focus in on one specific point.

Tom Bell says in the book that “to change the way that people think about copyright, we have to change the way they talk about it.” To do so, he proposes banishing the conception of copyright as “property” and instead consider it a “mere privilege”, capable of all sorts of capricious intervention by the government. Bell argues that copyrights do not “deserve” to be called property. What accounts for all this property-talk throughout history? 1For just one example, see Myths from the Birth of US Copyright for evidence that the Founding Fathers primarily conceived copyright as a property right. According to Bell, “bad philosophy.”

He next provides several examples that purport to distinguish a copyright from other forms of property. Today I want to focus on one specific example Bell provides to distinguish copyright from more deserving forms of property: that “copyright does not qualify for just compensation under the Fifth Amendment’s takings clause.” Bell is correct in noting that “the exact question remains as yet unlitigated,” but how does the rest of his analysis stack up?

Does the Takings Clause Apply to Copyright?

The “Takings Clause” of the Fifth Amendment prohibits Congress (and the States through the Fourteenth Amendment) 2Chicago B & QR v Chicago, 166 US 226 (1897). from taking private property for public use, without just compensation. Literally, the government cannot take private property, unless it is for public use, and the government provides just compensation. The clause has been broadened over time: today, it applies not only to an actual taking of legal title to property, but also to regulations that impact the economic use of property in such a way that they can be characterized as a “taking.” 3See Penn Central Transport v New York City, 438 US 104, 124 (1978). But, on its face, the clause requires some interest in “property.” It is here Bell makes his argument: if copyright is, indeed, “property”, then the government should be limited by the Fifth Amendment in what it could do.

One could look toward the Supreme Court to see if it is. Indeed, in 1998, four Supreme Court Justices stated that “The ‘private property’ upon which the [Takings] Clause traditionally has focused is a specific interest in physical or intellectual property.” [Emphasis added.] 4Eastern Enterprises v Apfel, 524 US 498, 554 (Dissent, J. Stevens, J. Souter, J. Ginsburg, and J. Breyer).

That may not be satisfactory enough, since it, though a descriptive statement, is not binding precedent.

We can look instead to another case, where a majority held that trade secrets are property and subject to the Takings Clause (citing, among others, William Blackstone and John Locke):

This general perception of trade secrets as property is consonant with a notion of “property” that extends beyond land and tangible goods and includes the products of an individual’s “labour and invention.”

Although this Court never has squarely addressed the question whether a person can have a property interest in a trade secret, which is admittedly intangible, the Court has found other kinds of intangible interests to be property for purposes of the Fifth Amendment’s Taking Clause. That intangible property rights protected by state law are deserving of the protection of the Taking Clause has long been implicit in the thinking of this Court:

“It is conceivable that [the term `property’ in the Taking Clause] was used in its vulgar and untechnical sense of the physical thing with respect to which the citizen exercises rights recognized by law. On the other hand, it may have been employed in a more accurate sense to denote the group of rights inhering in the citizen’s relation to the physical thing, as the right to possess, use and dispose of it. In point of fact, the construction given the phrase has been the latter.” 5Ruckelshaus v Monsanto, 467 US 986, 1002-03 (1984).

The Court later adds:

The right to exclude others is generally “one of the most essential sticks in the bundle of rights that are commonly characterized as property.” With respect to a trade secret, the right to exclude others is central to the very definition of the property interest. Once the data that constitute a trade secret are disclosed to others, or others are allowed to use those data, the holder of the trade secret has lost his property interest in the data. That the data retain usefulness for Monsanto even after they are disclosed — for example, as bases from which to develop new products or refine old products, as marketing and advertising tools, or as information necessary to obtain registration in foreign countries — is irrelevant to the determination of the economic impact of the EPA action on Monsanto’s property right. The economic value of that property right lies in the competitive advantage over others that Monsanto enjoys by virtue of its exclusive access to the data, and disclosure or use by others of the data would destroy that competitive edge.

Patents and copyrights would also be included in this analysis since they enjoy at least as much status (if not more) as property than trade secrets. 6In Kewanee Oil v Bicron Corp., 416 US 470, 497 (1974) (J. Douglas & J. Brennan dissenting)., two Supreme Court Justices stated off-hand that, contrary to this case, “A trade secret, unlike a patent, has no property dimension.” So it would follow that a subsequent decision saying trade secrets do in fact have a property dimension for Fifth Amendment purposes implies patents and copyrights certainly fall within the Clause’s scope.

Zoltek v US

Bell, however, relies on Zoltek v US, a 2006 Federal Circuit Court decision, as his sole support for the claim that “copyright does not qualify for just compensation under the Fifth Amendment’s takings clause.” 7442 F.3d 1335.

But I don’t think the case suggests what Bell says it suggests. In Zoltek, the Federal Circuit rejected the Takings Clause claim of a patent owner whose patent was infringed by the US Government. Not because patents are not Fifth Amendment “property”, but because patent owners already have a remedy against the United States for infringement (the same holds true for copyright infringement). 8See 28 USC § 1498(a), (b).

The court did not expand its holding past the issue of infringement by the federal government — that is, one cannot draw from the court’s decision the general case, that any interference in a patent or copyright is not subject to the Takings Clause, from the specific case, that infringement by the United States involves a “taking.” (It’s also worth noting that the court’s decision drew a vigorous dissent both in its original decision and in its denial for rehearing.) 9464 F.3d 1335 (2006).

Contrary Case Law

Much more fatal to Bell’s claim that a solitary Circuit Court decision “strongly suggests” copyright is not subject to the Takings Clause is the existence of decisions from five other Circuit Courts that suggest otherwise.

In a 1989 case, the First Circuit was confronted with a situation similar to the one in Zoltek, except here the alleged infringement was done by the state of Massachusetts rather than the federal government, raising the issue of sovereign immunity under the Eleventh Amendment. 10Lane v First National Bank of Boston, 871 F.2d 166 (1st Cir. 1989). Ultimately, the court held that the Copyright Act did not abrogate sovereign immunity for copyright infringement, but noted that not all was lost for the copyright owner. Massachusetts had separate statutes that allowed tort claims against the state and claims for compensation when private property is confiscated. Said the court:

The statutory scheme manifests a recognition that where private property is taken for public use, a constitutional right to just compensation attaches. Since a copyright is property, [the plaintiff] may very well be able to sue in state court on a state-law claim for essentially the harm that she contends the Commonwealth has perpetrated. And if she exhausts State remedies and establishes that the Massachusetts legal system affords her no just compensation for the wrongful confiscation of her property, the Takings Clause of the federal Constitution might at that point enable her to pursue a damage remedy in federal court. 11Id. at 174.

A few years prior, the Second Circuit was confronted with a dispute over the validity of a work-for-hire contract. 12Roth v Pritikin, 710 F.3d 934 (2nd Cir. 1983). The agreement was entered into right before the Copyright Act of 1976 went into effect, while the work at issue, and the subsequent dispute, did not arise until shortly after the Act became law. The Copyright Act of 1976 changed the rules governing the work-for-hire doctrine, and under the circumstances of this case, the difference between the old rule and the new rule would result in a different outcome.

Said the court:

Although the language of the Act, its legislative history and rules of statutory interpretation are sufficient answers to Roth’s claim, we note, en passant, adoption of her interpretation of § 301 would, in addition, raise a serious issue concerning the Act’s constitutionality. An interest in a copyright is a property right protected by the due process and just compensation clauses of the Constitution. The agreement between Roth and the appellees, pursuant to which Roth surrendered any rights she might otherwise have obtained in the copyright, was valid when it was entered into, and a subsequently enacted statute which purported to divest Pritikin and McGrady of their interest in the copyright by invalidating the 1977 agreement could be viewed as an unconstitutional taking. Resolution of this issue is not required for our holding, and will have to wait for an appropriate case.

Moreover, the district court failed to make any findings relevant to this question, and accordingly, we do not decide whether retroactive application would, in fact, violate constitutional restrictions. Even the spectre of a constitutional issue concerning the proper application of the “takings clause”, however, is sufficient cause to construe the statute to provide for exclusively prospective relief, particularly in the absence of any clear congressional mandate to the contrary. 13Id. at 939.

The Second Circuit again noted the possibility that the Takings Clause applies to copyright in CCC Information Serv. v Maclean Hunter Mkt. Rep. 1444 F.3d 61 (2nd Cir. 1994). There, the creator of a database of used car valuations (CCC) sought a declaration that its copying and republishing of used car values from a competitor was not copyright infringement. It argued, in part, that since the competitor’s used car valuations were incorporated by reference into several state insurance regulations, the compilation of values had “passed into the public domain.” The Second Circuit disagreed, saying:

We are not prepared to hold that a state’s reference to a copyrighted work as a legal standard for valuation results in loss of the copyright. While there are indeed policy considerations that support CCC’s argument, they are opposed by countervailing considerations. For example, a rule that the adoption of such a reference by a state legislature or administrative body deprived the copyright owner of its property would raise very substantial problems under the Takings Clause of the Constitution. 15Id. at 74.

The Ninth Circuit relied in part on CCC Information to uphold the validity of a copyright in Practice Management Info. v American Medical Ass’n, quoting approvingly the Second Circuit’s Takings Clause discussion. 161212 F.3d 516, 520 (9th Cir. 1997).

The Fifth Circuit has had occasion to weigh in on this issue of copyright and the Takings Clause. Like several of the cases already discussed, Chavez v Arte Publico Press concerned tensions between the Copyright Act and the Eleventh Amendment’s protection of state sovereign immunity. 17157 F.3d 282 (5th Cir. 1998). Here, an author alleged copyright infringement and breach of contract against the University of Houston, a state institution. During its discussion, the Circuit Court stated, “Copyrights are indeed a species of property, but the extent to which they are protectable against the states raises troubling issues.” Citing to the Supreme Court’s holding in Ruckelshaus that trade secrets are property protected by the Takings Clause, the court said, “By analogy, copyrights constitute intangible property that, for some purposes at least, receives constitutional protection.” The court ultimately held, however, that one of those purposes does not include copyright infringement by a State.

Finally, the Sixth Circuit also appears to have taken the view that copyrights may be subject to the Takings Clause. In a non-precedential opinion, it affirmed the dismissal of a copyright infringement claim against the National Science Foundation because the plaintiff had failed to register his work with the Copyright Office before bringing suit. 18Cawley v Sw’earer, 936 F.2d 572 (6th Cir. 1991). But not without expressing “some doubt as to the grounds for dismissal.” The source of this doubt stemmed from constitutional concerns; as the court noted, “the Copyright Act does not preempt the Fifth Amendment’s Takings Clause.”

In short, it’s reasonable to conclude that the Takings Clause would apply to copyrights — the opposite of what Bell claims. This is obviously but one point in the larger work of Copyright Unbalanced. I may look at other points raised in the book at a later date, but for now would suggest to anyone reading it to approach it with a skeptical eye.

References   [ + ]

1. For just one example, see Myths from the Birth of US Copyright for evidence that the Founding Fathers primarily conceived copyright as a property right.
2. Chicago B & QR v Chicago, 166 US 226 (1897).
3. See Penn Central Transport v New York City, 438 US 104, 124 (1978).
4. Eastern Enterprises v Apfel, 524 US 498, 554 (Dissent, J. Stevens, J. Souter, J. Ginsburg, and J. Breyer).
5. Ruckelshaus v Monsanto, 467 US 986, 1002-03 (1984).
6. In Kewanee Oil v Bicron Corp., 416 US 470, 497 (1974) (J. Douglas & J. Brennan dissenting)., two Supreme Court Justices stated off-hand that, contrary to this case, “A trade secret, unlike a patent, has no property dimension.” So it would follow that a subsequent decision saying trade secrets do in fact have a property dimension for Fifth Amendment purposes implies patents and copyrights certainly fall within the Clause’s scope.
7. 442 F.3d 1335.
8. See 28 USC § 1498(a), (b).
9. 464 F.3d 1335 (2006).
10. Lane v First National Bank of Boston, 871 F.2d 166 (1st Cir. 1989).
11. Id. at 174.
12. Roth v Pritikin, 710 F.3d 934 (2nd Cir. 1983).
13. Id. at 939.
14. 44 F.3d 61 (2nd Cir. 1994).
15. Id. at 74.
16. 1212 F.3d 516, 520 (9th Cir. 1997).
17. 157 F.3d 282 (5th Cir. 1998).
18. Cawley v Sw’earer, 936 F.2d 572 (6th Cir. 1991).