Friday’s Endnotes – 12/06/13

By , December 06, 2013.

Any given Sunday: inside the chaos and spectacle of the NFL on Fox — Read this amazing behind-the-scenes look from the Verge about what goes into a typical TV broadcast of a professional football game: the investment in technology, the employees who can only pull it off after developing their skills and talents. To wit: “Kevin Callahan, Fox’s director of technical operations, estimates Fox credentialed between 150 and 200 people for the weekend, from Troy Aikman and director Rich Russo to runners and microphone holders. The network brings in about $25 million worth of equipment, with thousands of individual parts.”

David Lowery: Silicon Valley must be stopped, or creativity will be destroyed — Love or hate the idea of an artist actually speaking out, David Lowery has provide much food for thought over the past year. He is in top form in this interview with Spin, particularly here where he is talking about resistance to making the internet more ethical: “That would be like in the Industrial Revolution saying, ‘You can’t have a non-polluting factory; you can’t have a factory that doesn’t have child labor; you can’t have a factory that’s safe to work in.’ Of course you can! We’re the fucking masters of our own destiny, we pass the laws for this country, we create this country, we decide what kind of a society we’re going to have — not the Internet.”

Silicon Chasm — How bad is Silicon Valley? The extreme economic inequality present there shocks even Laissez-faire conservatives.

Best photos of the year 2013 — Beauty, tragedy, hope, sorrow: the range of human experience is captured by photographers. I couldn’t get through all these in one setting because of how powerful they are, but it is worth it — not just to see the images but also to read the observations from the photographers themselves.

The Failure of the DMCA Notice and Takedown System — Bruce Boyden has released a new paper with the Center for Protection of Intellectual Property that details the Digital Millennium Copyright Act after fifteen years. “A tool that was originally designed as an emergency stopgap measure, to be used in isolated instances, is now expected to manage infringement on a persistent, ubiquitous, and gargantuan scale.”

Thom Yorke Calls Himself a ‘Luddite and Proud of It’ in Spotify Debate — The only people who think “Luddite” is an insult are people whose exploitative machines are being smashed. As Spin points out, the Luddites “weren’t anti-machine — they were against low-paying bosses, against being put out of a job in the name of efficiency, you name it.”

Fed Circuit hears Oracle v Google arguments

By , December 04, 2013.

This morning, the Federal Circuit dove into the wild and wooly world of software copyright, hearing oral arguments in Oracle v. Google. The case between the two juggernauts could have enormous implications for the software industry, which contributes more than $260 billion to the U.S. GDP each year and employs 2 million U.S. workers.

Oracle licenses the programming language Java.1Which it acquired after purchasing the original creator of Java, Sun Microsystems, in 2010. To keep things simple, I’ll use “Oracle” throughout this article to refer to Oracle or Sun. One of the key features of Java is the Java Virtual Machine, which enables Java programs to run on any platform—a software developer can “write once, run anywhere” using Java.

To facilitate development of Java applications, Oracle also created a set of packages, or APIs. Each package is made up of multiple classes, and each class consists of a set of methods, each of which performs a specific function. Rather than writing a specific function from scratch, a Java developer can simply drop in a reference to the API.

While Google had become dominant in the desktop world by the mid 00’s, it was facing a lot of competition in the quickly growing mobile space. It acquired Android, Inc., in 2005 for the mobile software platform the company was developing, and began discussions with Oracle to license the Java operating system in order to quickly tap into a community of developers to build up a universe of apps.

But after five years, negotiations fell apart. Undeterred, Google created its own virtual machine and packages, but also copied verbatim the declaring code of 37 of the most popular Java packages. Oracle sued for copyright and patent infringement.

The procedural history of the case so far is a bit complicated because of the complexity of the issues. The trial was broken up into phases to address the patent and copyright issues separately. During the copyright phase, the jury was told to assume that the code was copyrightable to determine whether Google infringed the API packages, whether the infringement was fair use, and whether any copying of other snippets of code was de minimis. The trial court would later determine whether, as a legal matter, the code actually was copyrightable—the thinking was that this sequence would avoid a retrial if the judge found the code was not copyrightable and an appeals court reversed; the appeals court could then simply reinstate the jury’s verdict.

The jury found that (assuming the code was copyrightable) Google had infringed the 37 Java API packages but deadlocked on the fair use question. It also found that all snippet copying was de minimis except for one, a snippet named “range-Check.”

However, when the court then looked at copyrightability in the first instance, it held that Google had not copied anything protected by copyright. It based its holding first on the fact that Google had not copied the code that implemented methods from Java. Second, the “structure, sequence and organization” of the 37 packages that Google did copy from Java—amounting to over 7,000 lines of code—was not copyrightable because the court considered it a “system” or “method of operation,” both of which are not copyrightable under Section 102(b) of the Copyright Act.

Oracle appealed the decision to the Federal Circuit, which must determine whether the statutory copyright protection for software extends to source code and the structure, sequence and organization of the Java packages that Google admits to copying and whether that copying qualifies as fair use. Affirmation would endorse the type of free-riding Google engaged in here and erode the ability of software creators to invest in the constant innovation that drives this vibrant sector.

When does copyright protect software?

Software is protected under the Copyright Act as a “literary work.” Figuring out what exactly is protected and is not protected, however, can quickly become complicated, as application of copyright’s doctrines occur at a much more conceptual level than other subject matter. For example, copyright protects form, not function2Mazer v. Stein, 347 US 201 (1954).—but how is that applied to software code, all of which performs some sort of function?

The district court’s holding that Google only copied nonprotected “methods of operation” seems most vulnerable on appeal. The court itself even admitted that “nothing in the rules of the Java language . . . required that Google replicate the same groupings.” Any concerns that protecting Oracle’s expression in its Java packages would prevent other developers from the underlying functional ideas are overstated. Indeed, Google was here able to deliver the same functionality without copying the Java implementations.

It’s difficult also to see how the interoperability argument holds up: Java and Android are not interoperable. Oracle’s appellate brief points out that this, in fact, is one of the primary reasons the two parties failed to reach a licensing agreement: “Google wanted to be the only company ever allowed to use the Java packages commercially without making its implementation compatible with the Java virtual machine and therefore interoperable with other Java programs.” The reason Google copied the 37 packages was to attract app developers more easily, not to create a compatible product. At the very least, the question of interoperability should be addressed as part of the larger fair use inquiry, not under the threshold question of copyrightability.

Last week, IP attorney Lee Gesmer discussed some further legal nuances in the case that are well worth a read.

In the end, a win for Google at the Federal Circuit would not, as some have said, be a win for innovation and interoperability—just the opposite, in fact. A win would create a preference for copying and free-riding over innovation. And, as stated above, the copying here created less interoperability rather than more.

This is especially concerning because of how Google increasingly operates. Some have suggested that Google uses open source as a “Trojan Horse” for locking users into its own closed ecosystem. That is, it creates an open space that is freely available to jump start its marketshare, than slowly creeps toward closed systems as it increases dominance. Last month, Rom Amadeo discussed this in an Ars Technica article, Google’s iron grip on Android: Controlling open source by any means necessary. Amadeo said:

While Android is open, it’s more of a “look but don’t touch” kind of open. You’re allowed to contribute to Android and allowed to use it for little hobbies, but in nearly every area, the deck is stacked against anyone trying to use Android without Google’s blessing. The second you try to take Android and do something that Google doesn’t approve of, it will bring the world crashing down upon you.

Judges seemed skeptical of Google’s argument this morning, but a ruling is not expected for several months.

References

References
↑1 Which it acquired after purchasing the original creator of Java, Sun Microsystems, in 2010. To keep things simple, I’ll use “Oracle” throughout this article to refer to Oracle or Sun.
↑2 Mazer v. Stein, 347 US 201 (1954).

Yes, Copyright Helps Creators

By , November 25, 2013.

On November 19, the International Intellectual Property Alliance (IIPA), released its latest report that shows the value added by copyright industries each year to the US economy. This was the 14th such report IIPA has released since 1990, and for the first time, core copyright industries 1Defined in the report as it is defined by WIPO in its Guide to the copyright and related rights treaties administered by WIPO and glossary of copyright and related rights terms: “The core copyright industries are those industries whose primary purpose is to create, produce, distribute or exhibit copyright materials. These industries include computer software, videogames, books, newspapers, periodicals and journals, motion pictures, recorded music, and radio and television broadcasting.” contributed over one trillion dollars.

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

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

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

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

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

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

And that, in fact, is exactly what happens.

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

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

WIPO’s conclusion: “The analysis suggests a strong and positive relationship that exists between the contribution of copyright industries to GDP and the IPR Index.” That is, copyright industries contribute more to a country’s GDP when they are better protected. 2It’s worth noting the other conclusions from the report. WIPO also found the following: “There is a positive relation between the contribution of copyright industries to GDP and the GDP per Capita”; “Contribution to Copyright industries to GDP exhibits strong and positive relationship with the Index of Economic Freedom”, which measures “economic openness, competitiveness and the rule of law, such as business freedom, trade freedom, fiscal freedom, property rights, freedom from corruption, etc.” — WIPO explains, “Countries that score well demonstrate a commitment to individual empowerment, non-discrimination and the promotion of competition. Their economies tend to perform better, and their populations tend to enjoy more prosperity, better health care and more positive measures on a variety of quality-of-life indices”; “Contribution of Copyright industries to GDP exhibits strong and positive relationship with the Freedom from Corruption indicator,” an index prepared by Transparency International; “The analysis suggests that there is a strong and positive relationship between the contribution of copyright industries to GDP and the Global Competitiveness Index,” an index prepared by the World Economic Forum; and INSEAD’s Global Innovation Index “has a positive and highly significant relation with performance of the creative industries.”

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

Fundamental economic logic of property systems

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

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

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

Part of the misunderstanding of the logic of copyright may come from the focus of skeptics on only the incentive to create, to the exclusion of the incentive to disseminate. 3See, e.g., Rob van der Noll & Joost Poort, Assessing the Economic Contribution of the Copyright-Based Industries, CCIA (2011): “From an economic perspective, the incentives for creative production are the main rationale for the existence of copyright.” The Supreme Court has been clear this is not the case:

Nothing in the text of the Copyright Clause confines the “Progress of Science” exclusively to “incentives for creation.” Evidence from the founding, moreover, suggests that inducing dissemination—as opposed to creation—was viewed as an appropriate means to promote science. Until 1976, in fact, Congress made “federal copyright contingent on publication[,] [thereby] providing incentives not primarily for creation,” but for dissemination. Our decisions correspondingly recognize that “copyright supplies the economic incentive to create and disseminate ideas.” 4Golan v. Holder, 132 S. Ct. 873, 888-889 (2012); see also Adam Mossoff, How Copyright Drives Innovation in Scholarly Publishing, forthcoming (2013).

Copyright’s contribution to the public benefit

Another big reason for misunderstanding the fundamental economic logic of copyright is a myopic look at the public benefit of copyright. All property rights serve the public benefit. 5See, e.g., State v. Shack, 58 N.J. 297, 303 (NJ 1971), “Property rights serve human values”; Armen A. Alchian, Property Rights, The Concise Encyclopedia of Economics (Library of Economics and Liberty) “Private property rights do not conflict with human rights. They are human rights.” James Madison, who proposed and drafted the Copyright Clause of the US Constitution explicitly recognized this same principle in copyright law. Writing in the Federalist Papers, Madison said of the Clause, “The utility of this power will scarcely be questioned. The copyright of authors has been solemnly adjudged in Great Britain, to be a right of common law. … The public good fully coincides…with the claims of individuals.” Copyright skeptics often see only the exceptions and limitations on copyright as the parts that benefit the public while ignoring the inherent public benefit of recognizing individual, exclusive rights in creative works.

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

It would be similarly fallacious to say that in a real estate transaction, the money paid to the seller is only a secondary consideration, with the primary value of the transaction consisting of the conveyance of the parcel to the buyer. Both the money and the land in such a transaction are consideration; neither is more important to the public, although at the time of the transaction the money is more important to the seller and the land is more important to the buyer. The value to society consists merely in the existence of a market for the land so that property may be obtained by those who are likely to put it to better use. Likewise, for intellectual property; the value to society consists in the existence of a market for the authors’ writings. The money paid to the author is by no means secondary. Rather, it is the unavoidable result of the creation of a market because a market cannot exist without the promise of reward to owners of property who choose to place that property on the market. 6David A. Householder, The Progress of Knowledge: A Reexamination of the Fundamental Principles of American Copyright Law, 14 Loyola L.A. Entertainment Law Review 1, 35-36 (1993).

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

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

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

References

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

Friday’s Endnotes – 11/22/13

By , November 22, 2013.

… And we’re back. Unfortunately, the site has been suffering some technical difficulties over the past couple of weeks, preventing any updates. But things seem to be running smoothly once again.

That there is property in the ideas which pass in a man’s mind is consistent with all the authorities in English law. Incidental to that right is the right of deciding when and how they shall first be made known to the public. Privacy is a part, and an essential part, of this species of property.

— Prince Albert v. Strange, 1 McN. & G. (1849).

The Internet Does Not Reset the Copyright-Free Speech Balance — Law prof Sean O’Connor takes on the meme that “free speech trumps all other legal rights in cyberspace — including copyright.” Says O’Connor, “Commercial websites that play on this invalid meme are doing a disservice to their users and to copyright owners. In their rush to attract ever more users, and pump ever more commoditized content through their sites, these firms are inducing or contributing to widespread infringement under the guise of ‘free speech.'”

Should Wikipedia be allowed to ban paid advocacy editors? — Over at the Copyright Alliance blog, I write about the news this week that the non-profit that runs Wikipedia has taken a strong stance against a firm alleged to write positive articles on behalf of paying clients, sending a cease and desist letter that warns of future legal action. It’s not a copyright issue per se, but it shares similar underlying principles. “Wikimedia wants to maintain some right and ability to control its content, even as it makes it freely and publicly accessible. That control serves as a basis for the innovative service they provide and the community that has been built up around it. We as a society should recognize that ability to control.”

Spin This: Copyright Industries Grow at Twice the Rate of US Economy — David Newhoff looks at a report from the International Intellectual Property Alliance that shows the tremendous contribution of copyright industries to the US economy, industries that directly employ over 5.6 million workers, with above-average wages. Newhoff says, “here’s the bottom line I think we should take away from this report and any pollyanna attempts to rebut or redirect its relevance: copyright works, don’t break it.”

Copyright is still essential to a free market in creative works — Just in time for this week’s IIPA report revealing that core copyright industries’ contribution the US economy have for the first time topped $1 trillion comes this article from Matt Barblan, who writes, “even in today’s digital age, strong property-based copyright protection remains an essential component of our creative economy. It is the bedrock supporting the free market for creative works, and it is vital to maintaining the market mechanisms that promote the creation, commercialization, and distribution of creative works. Repeated calls to weaken copyright (and accompanying suggestions of alternative legal or business models) routinely ignore copyright’s fundamental economic importance.”

Internet myths, part 1 — Some great background and information on the genesis and development of the internet from tech expert Richard Bennett.

Film Industry In Developing Countries Needs To Implement Copyright, Speakers Say — A reminder of the fact that, among other things, copyright plays an important role as an economic asset — sometimes the only economic asset — that creators have to enter into negotiations in the marketplace. “An event held today alongside the World Intellectual Property Organization committee on development gathered several cinema professionals working in emerging or developing countries and said that film makers in those countries need to better understand the functioning of the intellectual property system to be able to be part of the global film industry.”

Friday’s Endnotes – 11/01/13

By , November 01, 2013.

Notes on the Revolutionary Expansion in Digital Content Availability — This week the ITIF hosted a panel discussion on the evolution of digital content, with panelists from Google, the NMPA, DiMA, and MPAA. John McCoskey of the MPAA shares some post-panel thoughts here. “One thing that’s clear is that quality content has never been more influential to the growth of the Internet than it is today.  If you want to attract visitors to your website, subscribers to your service, or eyeballs to your advertisements, your content needs to be compelling. That’s why players like Amazon and Netflix have begun producing their own original programming, and that is just as true for Hollywood studios who continue to be on the cutting-edge of the digital content revolution.”

Why Buy the Cow? — Writer Alex Epstein reflects on last Sunday’s article by Tim Krieder in the NY Times, Slaves of the Internet, Unite! He offers the observation that the internet has decimated the middle-class of creative professionals. “But it does feel like what used to be a pyramid has shrunk its middle, so its base is impossibly wide, and the top quite pointy. The middle seems to be disappearing. There’s room for star journalists, and free Huffington post contributors, but no room for journeymen…Before recorded music, if you were semi-good, you could become a traveling musician. You could make a living, of a sorts, playing to crowds of 40. Or, at least, you could eat. That living hasn’t existed for a long time. Instead you play to crowds of 40 to get exposure (and learn your chops) so you can play to crowds of 10,000 for money.”

The Echo Nest And Getty Images Upgrade Stale Album Art — Photo licensing service Getty Images has partnered with innovative music service Echo Nest to make thousands of high quality images available to developers through the Echo Nest API. Pretty cool.

Is this really what Congress had in mind when it created the DMCA? — Ellen Seidler presents evidence that suggests the answer to that question should be “no.” “Not only does sending out DMCA notices required a great deal of time–time that most indie content creators do not have–but often times it’s ignored entirely by pirate sites that feign compliance.”

Woody Allen Pens Rare Open Letter to Hollywood (Guest Column) — A lot of people in the creative industries work behind the scenes. They are just as creative and essential to the success of a work, but too often don’t get recognized for their contributions. In this open letter, filmmaker Woody Allen calls attention to the contributions of casting directors to the success of films. “In my case certainly, the casting director plays a vital part in the making of the movie. My history shows that my films are full of wonderful performances by actors and actresses I had never heard of and were not only introduced to me by my casting director, Juliet Taylor, but, in any number of cases, pushed on me against my own resistance.”

I’ve Spent Two Years Making a Documentary About What Really Happened to Musicians… — Producer Count debuted this extended trailer of the in-progress doc “Unsound” at the Future of Music Coalition Summit this week. Essential viewing, and currently raising funds on Indiegogo to get it ready for film festivals.

The $4 Billion Secret: Don’t Bother Making Any Money — Tech startups can raise millions without even having a plan to make money in place. Perhaps that’s why so many think creators can just give their work away for free and be successful?

Incentives to share: why copyright continues to play a role online

By , October 28, 2013.

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

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

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

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

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

The Supreme Court made this crystal clear less than two years ago in Golan v. Holder. “Nothing in the text of the Copyright Clause confines the ‘Progress of Science’ exclusively to ‘incentives for creation.’ Evidence from the founding, moreover, suggests that inducing dissemination—as opposed to creation—was viewed as an appropriate means to promote science.” The Southern District of New York echoed this idea last summer. “There is a strong public interest in the copyright system’s function of motivating individuals to make available their creative works and increase the store of public knowledge.” 1ABC v Aereo, No. 12-Civ-1540(AJN), order denying preliminary injunction (SDNY, July 11, 2012).

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

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

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

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

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

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

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

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

What’s more, copyright reinforces First Amendment values that may come into play. Not only does it “motivat[e] individuals to make available their creative works and increase the store of public knowledge,” but it also protects the freedom not to speak—a necessary complement to the freedom to speak. 2Harper & Row, Publishers, Inc. v. Nation Enterprises, 471 US 539, 560 (1985).

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

References

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

Friday’s Endnotes – 10/25/13

By , October 25, 2013.

Challenge to streaming TV — Lyle Denniston of SCOTUSBlog reports on the cert petition filed by TV broadcasters asking the Supreme Court to review the Second Circuit’s decision in WNET v. Aereo. A good background of the issues is provided, as well as some thoughts on how likely the Court is to agree to hear the case.

Real Censorship — This week in the U.S. was National Free Speech Week. Author Chris Ruen had these thoughts to share: “Giant tech companies are happy to avoid the pains of regulation and reduced profits that would come with rules-of-the-road that treat creators with more decency. It’s much easier and more effective to say they believe in ‘free expression’ or are ‘against censorship’ than to admit that artists, once again in history, have little negotiating power and can therefore be rolled over by the powers that be.”

How the Creative Industries Defend Free Speech — Also marking the week, the Copyright Alliance has a white paper, written by Evan Sheres and myself, looking at some of the many cases over past decades where members of the creative community have done the actual legwork of defending free speech and fair use in courts.

Randolph May & Seth Cooper: The Constitution’s Approach to Copyright — The Originalism Blog features May and Cooper’s article exploring the property rights approach to copyright and patent enshrined in the U.S. Constitution. “Copyright and patent are rooted in an individual’s basic right to the fruits of his or her own labor. Intellectual property (IP) protections are extensions of that basic right. Such protections secure to authors and inventors the financial rewards of their creative works and innovations for limited times, thereby promoting the public good.”

Making Money from Movie Streaming Sites, an Insider’s Story — Torrentfreak interviews “John”, a successful uploader. “John was soon adding more than a thousand links a day to several streaming websites. He now has 30,000 different movies and TV shows stored online, across 12 different file-hosting sites, each carrying between 10,000 and 30,000 items from John’s collection. ‘Amongst the different streaming websites I have added over 200,000 links. And yes, I am making a nice living at it,’ John concludes.”

Google’s iron grip on Android: Controlling open source by any means necessary — Google’s adoption of an open source mobile OS wasn’t an embrace of a new paradigm, or a endorsement of “open” as morally and fiscally superior to “closed.” It was, as Ars Technica reports, a shrewd business move to quickly gain marketshare against Apple in the mobile space, followed by a slow enclosure that would lock in users to Google properties.

Mercatus’s Unhelpful Business Advice to the Creative Industries — The Center for the Protection of Intellectual Property’s Mark Schultz thoroughly debunks the results of the piracydata.org project released last week. Very much worth reading in full. Schultz concludes with these parting thoughts: “If you love the free market, then perhaps it’s time to respect the people with the best information about their property and the greatest motivation to engage in mutually beneficial voluntary exchanges. Or you can just contribute to the mountain of lame excuses for piracy that have piled up over the last decade.”

Dubious news hook lets me confirm and blog my pre-existing views — How bad is anti-copyright research getting? So bad that even copyright skeptics are quick to point out the flaws. Here, the Volokh Conspiracy’s Stewart Baker notes some questionable methodology in a study that purports that Girl Talk’s 2010 album All Day — created primarily using hundreds of samples of existing sound recordings without permission — led to a massive increase in sales of the songs that were sampled. Says Baker, “Schuster says he’s just correcting for noise in the data, and it isn’t appropriate to charge Girl Talk with the natural rhythm of pop music sales. Maybe so, but once you start making big after-the-fact adjustments to a sample of 200, you can prove pretty much anything.”

Friday’s Endnotes – 10/18/13

By , October 18, 2013.

Here’s why isoHunt deserved to die — “Critics warned that the vagueness of [the Grokster] rule would open the floodgates to frivolous lawsuits against technology innovators. But that hasn’t happened for a simple reason: It’s easy to avoid running afoul of the inducement standard. If an entrepreneur is sincerely not trying to profit from infringement, then she won’t encourage her customers to infringe, and so plaintiffs won’t be able to find evidence of her doing so. In contrast, the court found clear evidence that isoHunt was trying to profit from infringement. For example, the 9th Circuit Court of Appeals wrote that for a time, ‘isoHunt prominently featured a list of ‘Box Office Movies,’ containing the 20 highest-grossing movies then playing in U.S. theaters. When a user clicked on a listed title, she would be invited to ‘upload [a] torrent’ file for that movie.’ Since the top-grossing movies are almost always copyrighted, this feature shows clear evidence of infringing intent.”

My Art Was Stolen for Profit (and How You Can Help) — Independent artist Lisa Congdon writes of her discovery that wholesaler Cody Foster appears to have “blatant[ly]” copied her artwork. Says Congdon, “In the world of art & illustration, you can use the artwork of artists on your products as long as you ask permission, sign a licensing agreement with the artist, and agree to compensate them. I sell my images to companies all the time, companies who ask my permission and compensate me for my intellectual property. In this case, I was never contacted, asked permission or paid. That is called copying. It’s also called stealing.”

Is unauthorized online copying theft and does it hurt creators? — Canadian attorney Barry Sookman points to an interesting case that addresses a subject that is vigorously debated online. It’s an interesting case: essentially, Party A engages in copying a database compiled by Party B without permission. Party B posts angry messages about Party A online, accusing Party A of being a “thief” and of stealing the database. A sues B for defamation. Truth is a defense to defamation. So the court had to consider whether the characterization of unauthorized copying as theft is true or false. it concluded that it was true. “To a lay person such as Henry, ‘theft’ can also mean the wrongful act of taking the property of another person without permission. The data Henry had collected could be reasonably understood as her property—she had collected it, and it was her work in compiling it that gave it value. She did not give Tamburo permission to copy it and sell access to it. Although Henry might not be able to successfully sue Tamburo for using her data in this way, the gist of her statements was true: he took the data without her permission.”

Musicians: Don’t Let Google Hijack Your Brand With “Shared Endorsements” — The announcement this week that Google will start using user photos and likenesses in advertising raised a stir. Fortunately, at the moment, it appears that Google users can opt out of becoming unpaid shills (though how long Google will allow that is unclear). Probably a good idea for not just musicians, but any creators and small businesses who use Google to promote their work.

You are a soldier in Google’s Cold War with Facebook for social dominance — Web.Tech.Law takes a closer look at why Google has made the above-mentioned move.

The Walking Dead: Season 4 Begins — If, like me, you were excited to see the return of AMC’s zombie drama last Sunday, you might enjoy this look at the creation of the music for the season premiere from Bear McCreary, who regularly blogs, in depth, about his creative process. Fascinating stuff.

Tollbooths and Newsstands on the Information Superhighway — Brad Greenberg has posted a draft of an interesting forthcoming essay. “The Internet has made it easier than ever before to stay informed on current events — and without ever needing to pick up, let alone pay for, a newspaper. But recent litigation and legislation in the United States and Europe have challenged the cost-free flow of such information. The opposition to these recent legal developments is rooted in a belief that stronger intellectual property protections result in higher tolls, which, in turn, price many consumers out of accessing and using the information. But overlooked has been an existential consideration: information-gathering is expensive, and absent efficient tolls there will be far less information to access at all, regardless of cost. The United States Supreme Court recognized this principle in Harper & Row Publishers, Inc. v. Nation Enterprises as it applies more narrowly to whether copyright law inhibits free expression. Identifying the particular importance of incentives for newsgatherers, this Essay extends the Harper & Row rationale beyond its copyright mooring. In light of the continued withering corps of professional newsgatherers, these legal developments actually could enhance the exchange of information and ideas to the extent they preserve incentives for news publishers. This Essay proffers that copyright expansions actually can increase access and thereby serve important copyright and First Amendment values.”

 

Misquoting Prosser: Volition and Fox Broadcasting v. Dish Network

By , October 16, 2013.

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

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

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

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

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

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

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

Joint Causation and Netcom

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

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

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

Relatively straightforward. But when copyright law entered the internet age, the idea that multiple actors could be liable for direct infringement began to erode. 1Indirect liability—contributory infringement, vicarious infringement, or inducement—is a form of joint liability, one long recognized in copyright law. See Arista Records v. Lime Group, 784 F.Supp.2d 313, 315 (SDNY 2011) (Service provider that induced infringement is jointly and severally liable with individual, direct infringers).

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

CoStar: Putting the Stamp of Approval on Netcom

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

The Fourth Circuit disagreed and said that

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

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

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

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

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

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

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

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

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

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

Cablevision and Dish: Extending the Volition Requirement Beyond its Origins

Cablevision represents the next shift away from traditional tort principles. Cable provider Cablevision was found by a district court to be directly liable for copying that occurred through its “Remote Storage DVR” (“RS-DVR”) service that allowed customers to save television programs for later viewing without needing a set-top DVR device. 2Twentieth Century Fox Film v. Cablevision, 478 F.Supp.2d 607 (SDNY 2007). The court marshaled a number of reasons why Cablevision was actively involved in the copying of television programs: Cablevision designs, houses, and maintains the necessary equipment used for copying; it is involved in an ongoing relationship with customers, unlike the manufacturer of a copying device; the copying is instrumental rather than incidental to the RS-DVR service; Cablevision selects the programming that is available for recording; and it provides that content to its RS-DVR service [rather than a user providing the content to be copied]. In short, Cablevision’s RS-DVR service was “a far cry from the ISP’s role as a passive conduit in Netcom” and played a sufficiently active role in causing the copies to be made.

The Second Circuit completely rejected the district court’s conclusions on appeal. 3Cartoon Network v. CSC Holdings, 536 F.3d 121 (2nd Cir. 2008). It paid no heed to Netcom‘s original desire to draw a line to keep the number of direct infringers at a limited and reasonable number and seemingly couldn’t get past the superficial similarities between the operation of the RS-DVR system and a set-top VCR. Devlin Hartline has criticized the decision, saying

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

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

And so we arrive at Dish. On a motion for a preliminary injunction, the district court adopted the novel “causation” requirement developed through Netcom, CoStar, and Cablevision to determine that Dish was not a sufficient cause of the copying on its service. 4Fox Broadcasting Co. v. Dish Network, 905 F.Supp. 2d 1088 (CD Cali 2012). This despite the fact that Dish has designed, houses, and maintains the equipment necessary for the copying. It determines what to copy, when to copy it, and how long copies are available for subscribers to watch. Users cannot stop the copying once it starts after the service is enabled. For the court, the only sufficient cause of the copying for purposes of direct liability was the user, when she enables the PTAT service.

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

What’s Next for Volition

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

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

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

By recognizing that when courts have talked about volition they really mean proximate causation, we can have a more thorough discussion about how to apportion responsibility in copyright law. 5For more on causation in tort law, see Honoré, Antony, “Causation in the Law“, The Stanford Encyclopedia of Philosophy (Winter 2010 Edition), Edward N. Zalta (ed.). Much preferable to misquoting Prosser.

References

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

Friday’s Endnotes – 10/11/13

By , October 11, 2013.

Hood hits Google on guarding intellectual property — Mississippi State Attorney General Jim Hood continues to work on behalf of creators. His latest efforts concern gaining support from other state attorneys general to solicit greater cooperation from internet giant Google in helping curb infringement.

Samsung Exposed as Top Advertiser on Pirate Sites — Similar to some efforts in the U.S., a group of media companies in Ukraine have started a “Clear Sky” initiative that aims to find solutions to online infringement. One of their first campaigns has been to measure major brand advertising on several popular filesharing sites, and the resulting list has consumer electronics manufacturer Samsung firmly at the top.

The Supreme Court’s New Copyright Case Is Not a Copyright Case — Though arising out of a copyright infringement action, the issue in front of the Supreme Court in Petrella v. Metro-Goldwyn-Mayer (granted cert last week) actually concerns the equitable doctrine of laches, sort of a common law version of a statute of limitations.

Internet Exploitation, Not Just a Problem For Artists — This post from UK mastering engineer Nick Lewis looks at some of the fallout that an non-sustainable creative ecosystem has beyond the “front-line” creators. “The free market theory is that competition will drive price down, which is good for the consumer. Adam Smith couldn’t possibly have predicted what would happen in the face of intangible, easily copyable assets and hyper-globalisation. The trend towards zero is not good for the consumer in the long-term as the quality of product degrades or disappears altogether along with the skills and supportive infrastructure that go into it.”

The soul of a new machine: Gawker struggles with the slippery slope between viral and true — “If you tell the truth, people might not share it.” If freedom of speech is valued so highly because of it’s truth-seeking function, then should stories like this raise concern?

Copyright’s Role in a Free Press — Speaking of free expression, last week I discussed at the Copyright Alliance Idea/Expression blog a recent story that looked at how resource intensive high-quality investigative journalism continues to be. I argue that it’s important to keep copyright functioning as a mechanism for funding such efforts.

Photofocus Podcast Interview with Terry Hart — I’d also be remiss if I didn’t link to this Photofocus Podcast where I was invited as a guest last month. The topic was recent changes to Facebook’s terms of service that raised concerns among photographers and other creators regarding what Facebook could do with their images once uploaded.

« Older articles
Newer articles »