When I split Copyright Currents into four parts (C&I 5:5) I left an out: “If there’s a set of issues that won’t fit in those subcategories, Copyright Currents remains available.” There should have been one other out: “If new directions and topics don’t leave room for thorough discussion of copyright categories, I may do overall roundups.”
The Free Expression Policy Project has established a Fair Use Network at www.fairusenetwork.org. I heartily recommend it when you’re asked how fair use applies in a given situation. There’s even a blog.
It’s legal for a manufacturer to sell a DVD player that “cleans up” movies as they’re being played, as long as the viewer has explicitly made the choice to use the clean-up feature, there’s an “altered” message on the screen before the movie starts, and there’s no permanent copy of the modified flick. I thought that constituted fair use and the Family Movie Act explicitly legalized it. That’s the ClearPlay model. If you’re hot to watch censored movies, ClearPlay will sell you a DVD player with built-in download features for $69.
CleanFlicks had a different idea: Buy multiple copies of DVDs and sell edited DVD-Rs, one “cleaned-up” copy for each original DVD it buys. In July 2006, the District Court for Colorado granted partial summary judgment in favor of the movie studios: CleanFlicks does infringe copyright. The judge cited the Family Movie Act, noting that Congress explicitly legalized technologies that do not make a permanent copy of the edited movie. He found that censoring was not transformative. He dismissed CleanFlicks’ argument that it wasn’t harming studio revenues and used a standard that’s odd in American copyright law, where moral rights usually aren’t at issue:
The argument…has superficial appeal but it ignores the intrinsic value of the right to control the content of the copyrighted work which is the essence of the law of copyright.
Studios did not claim a DMCA violation, although CleanFlicks had to circumvent DVD encryption to make altered copies. Ed Felten (source for much of this) tends to agree with Tim Lee that studios were nervous about DMCA’s overbreadth. While CleanFlicks’ edited DVD-Rs aren’t encrypted, that wasn’t a primary issue in the ruling. Ed Felten closed his July 10 Freedom to tinker commentary with this note:
In theory CleanFlicks can appeal this decision, but my guess is that they’ll run out of money and fold before any appeal can happen.
As of August 31, the company had shut its doors.
Comments on Felten’s post were wide-ranging and in some cases well argued. I refer you to the post if you’re interested. Seth Finkelstein did a same-day Infothought post suggesting studios may have avoided a DMCA claim because they didn’t want the court to have “the fabled sympathetic DMCA circumvention defendant, one charged with circumvention but making fair use in a socially approved cause.” As he notes, studios could have always come back with a DMCA claim if they lost on copyright infringement—so why bring up DMCA if it’s not necessary?
Just how badly have the four major record companies been hurt by rampant piracy and P2P excesses? Based on the industry’s own statistics, 2005 may have been more profitable than 2004 (as stated by Chris Anderson, quoted in Deep links). CD sales continued to decline (from 767 million in 2004, which was an increase from 2003, to 705 million in 2005), but online and mobile sales appear to have made up the difference—because distribution costs are so low. Total revenue was down slightly (0.8%), but it seems likely that total costs were down more. How rapidly is digital distribution replacing physical sales? That’s tough to say. While the unit count for downloaded music is impressive—385 million downloaded units as compared to 748 million physical units—most of those units are singles. On a revenue basis, downloaded music yielded less than 5% of the revenue of physical music—but mobile and subscription sales equal another 5% or so. EFF concludes that a “veritable pot of gold” awaits the music industry if it drops DRM and vastly expands available catalogs for legal downloading.
You can use the RIAA’s figures to show something very different: “In 2005, music went digital” according to Andrew Raff’s April 4, 2006 post at IPTAblog. Of course, more than 99% of recorded music is already digital, since the only analog music being sold is $11 million worth of cassettes and $27 million worth of LPs and vinyl singles, but Raff means “digital distribution.” How does he support this claim? Simple:
According to the RIAA, physical unit sales dropped by 8% from 2004 and revenue from those sales dropped by 7.9%. In contrast, digital sales increased by 166.2% in terms of unit sales and 174.5% in revenue.
That’s the classic meaningless “percentage over small base” statistic unless it can be sustained over several years. Legal downloaded music wasn’t tracked until 2004. In 2004, total value was $183.4 million. In 2005, $503.6 million. Impressive—but still a tiny piece of the music business.
The big four record labels (RIAA’s members) have sued XM Radio because some new XM receivers record broadcast music in a way that’s convenient for the user. Wait—isn’t home recording of broadcast music explicitly legal or at least well-established fair use? More to the point, doesn’t the Audio Home Recording Act explicitly provide for home taping of digital signals? A snarky response is that RIAA and MPAA don’t believe in fair use—and maybe that’s right. In a filing as part of DMCA rulemaking, RIAA seems to assert that your ability to rip your own CDs to MP3 or an iPod is not fair use but represents “authorization” from the copyright owner. (See Deep links for February 15, 2006) As for AHRA, the RIAA pretends that the law doesn’t exist or that it applies only to taping, that is, recording on tape as a medium.
What do the new receivers do? Buffer XM’s stream so you can store up to 50 hours of recordings—and so that when you hear a track you like, you can click to save that track. You probably thought you could do that now when recording off the air—but the RIAA disagrees, or at least says it’s illegal to make it convenient.
RIAA’s suit against XM includes nine counts. Deep links for May 17, 2006 lists the counts and links to the complaint. At the very least, the idea that a permanent home recording of a broadcast signal represents infringement seems counter to established law and practice. The EFF post says the lawsuit touches on seven larger issues: an attack on home taping/recording; forgetting AHRA; claiming that transmission+recording=distribution; broadening “inducement” to shut down as much innovation as possible; holding design against innovators; and using statutory damages to chill innovation. Statutory damages get interesting: RIAA seeks $150,000 in damages for each song recorded by any XM subscriber—and claims that every song represents an infringement, since one of the receivers maintains a buffer.
I recommend “The customer is always wrong: A user’s guide to DRM in online music,” an EFF white paper available at www.eff.org/IP/ DRM/guide/. When I picked it up—more than a year ago—it printed out at eight pages; it hasn’t changed much since then, except to add DRM-free legal download alternatives (emusic probably the best-known of the lot). The guide discusses DRM briefly, then shows portions of four advertising pitches followed by the facts about each situation. First there’s iTunes, which says “Own it forever and a day”; the headline on the discussion: “The facts: You bought it, but they still own it”—since they can change your use rights for already-“purchased” items (and have done so) and since you can’t really give away or sell the downloads you “own.” Then comes Microsoft WMA and”playsforsure”: “The facts: With DRM, nothing truly ‘plays for sure.’” Protected WMA can’t be ported to other players—and you could wind up with useless content. RealNetwork’s “freedom of music choice” is exposed: “RealNetworks doesn’t offer real freedom of choice” because Real also uses proprietary DRM. Finally, there’s the legal Napster 2.0, “All the music you want. Any way you want it.” EFF adds to that second phrase: “So long as you pay for it over and over again.” Napster 2.0 charges extra to use a portable player. Napster 2.0 charges extra if you want to burn a song to CD. Napster 2.0 charges extra if you want to use more than three computers. Napster never allows the sorts of rights you’d expect if you actually bought something—not even the “ownership” service. It’s a striking guide.
The Cato Institute, neither socialist nor left wing, released “Circumventing competition: The perverse consequences of the Digital Millennium Copyright Act” by Timothy Lee on March 21, 2006 (#564 in Cato’s Policy Analysis Series). The 27-page analysis begins with a questionable statement: “The courts have a proven track record of fashioning balanced remedies for the copyright challenges created by new technologies.” I’ll agree that the courts have done better in this area than Congress has, but balanced?
Lee immediately proceeds to take DMCA to task. It’s anti-competitive. It “reduces options and competition in how consumers enjoy media and entertainment.” “Worst of all, DRM technologies are clumsy and ineffective; they inconvenience legitimate users but do little to stop pirates.” Pretty much what some of us have been saying ever since DMCA was passed—and getting called anti-copyright and pro-piracy for our views. Lee doesn’t believe repealing DMCA would lead to intellectual property anarchy; as he points out, courts have been developing a body of law that doesn’t ignore copyright holders.
That’s in the one-page summary. The analysis itself provides considerable detail and doesn’t mince words. “The DMCA puts its thumb on the scales of justice on the side of copyright holders.” Lee agrees that the 2000 decision in UMG Records v. MP3.com, the decision that shut down MP3.com, “illustrates that, if anything, the scales of justice were already tilted in favor of copyright holders.”
Lee understands the importance of fair use: “Our culture would be impoverished without fair use.” He also understands how the growing “culture of permission” is hamstringing fair use and impairing creativity, and offers excellent examples. Later, he makes a good comparison of what book publishers can and can’t do with the excess force afforded digital publishers. A book publisher can’t use copyright law to limit photocopying for personal use, “where the book can be read, or what brand of reading glasses the user may use”—but digital publishers are making entirely comparable limitations backed up by DMCA. Try using your legal iPod to play your legal WMA downloads—or, at least until recently, your legal Linux PC to view your legally-purchased DVD. Digital publishers can (and do) negate first-sale rights, preventing users from lending or giving items away. All of this is because fair use is not a defense against DMCA, which effectively eliminates fair use for fully-digital media.
Lee points out that VCRs would almost certainly not have gotten industry approval under a DMCA scheme (the MPAA violently opposed them), and would thus not have reached the market. Lee recounts some of the most blatant abuses of DMCA, including some you may have missed (HP threatening to sue security researchers for publicizing vulnerabilities in its Tru64 OS; Blackboard successfully enjoining university students from presenting research on security flaws). As for piracy, Lee properly calls DMCA the “Maginot Line of the war on piracy”—useless against true pirates or determined downloaders, but hard on people who want to do the right thing.
What puts Cato on the same side as EFF? Cato is a libertarian thinktank, strongly in favor of competition and opposed to excessive government regulation. Cato also appears to be consistent: Applying its principles even when they appear to conflict with the interests of big business. In the case of DMCA, that leads to a strong, well-argued denunciation of the act.
Cato held a half-day conference in April. An April 27, 2006 post on the USACM technology policy weblog noted that there was little common ground, leading to a battle over “whether or not copyright policy generally and DMCA specifically have met the challenges of the digital age.” You have one pro-DMCA congressperson (the report is ambiguous as to whether it’s Lamar Alexander or someone named “Smith”) saying “DMCA is the foundation for the nation’s digital economy” and “DMCA makes capitalism work in the digital economy.” Rep. Zoë Lofgren, who has sponsored balancing acts, said Congress “overreached” with DMCA and the act hampered innovation. If you’ve paid attention to misleadingly named foundations, you won’t be surprised that Solveig Singleton of the Progress & Freedom Foundation defended the DMCA and dismissed Timothy Lee’s arguments against it. Amazingly, she cited the Ed Felten incident as a success story for DMCA because the suit was eventually dropped. Some participants were at the other extreme, questioning whether we need copyright at all.
I downloaded Solveig Singleton’s “The DMCA dialectic: Towards constructive criticism” (May 11, 2006) from the Progress & Freedom Foundation, fully intending to do a normal commentary. I have loads of red marks throughout the five-page commentary, but I see little point in mentioning them. Much of it strikes me as incoherent or argument by assertion, ignoring evidence that doesn’t fit a preconceived outcome.
Singleton says critics understate the difficulty and mistake the nature of the problem DMCA helps solve and calls it “everyone’s problem.” The problem? How to “exclude free riders.” Singleton calls it an “error” in Lee’s paper when he says the Blackboard injunction involved “citing” the DMCA, “although a letter to the students mentioned the DMCA.” I’m sure there’s some subtle distinction between “citing” and “mentioning,” but it’s a distinction likely to be lost on university students threatened with a felony. Singleton says a fair use exception “would not work well and is not needed” and that “few significant fair uses” are affected by DRM, although as far as I can see those “few” represent 100% of fair use. “Consumer demand is the best protection for convenient access to new works, whether that ultimately takes the same form of past ‘fair uses’ or new ones.” In other words, fair use is irrelevant if we can think of citizens as “consumers.” In the end, Singleton is saying (badly) that all commentary “needs” to be pro-DMCA.
EFF’s Deep links properly takes the document to task, as does Ed Felten, who refutes some of the discussion by citing facts. PFF is a market-oriented think tank; looking at other items on PFF’s site, it’s consistently in favor of the most extreme copyright protection. One item calls TiVo “parasitic.” “Progress & Freedom” would seem to be a fitting name for this group in Orwell’s 1984, but perhaps not in our 2006.
Another group issued another pro-DMCA piece in June 2006: “A bad trade: Will Congress unwittingly repeal the [DMCA] and violate our trade treaties?” from the Institute for Policy Innovation, written by Lee Hollaar. It’s firmly pro-DMCA and uses the WIPO copyright treaty (heavily influenced by U.S. desires) as a pro-DMCA cudgel.
Hollaar attacks Rick Boucher’s DMCRA and pushes the notion that “coming up with” any legitimate use would avoid DMCA liability. Oddly, Hollaar offers convincing evidence for DMCRA: “For almost every copyrighted work of any commercial value there is some fair use.” Since DMCA prevents such fair use, DMCA is bad law. DMCRA would add the following to DMCA: “It is not a violation…to circumvent a technological measure in order to obtain access to the work for purposes of making noninfringing use of the work.” What could be more legitimate, more straightforward, more in keeping with the Constitutional basis for copyright? Hollaar:
With that change, you would only violate the circumvention by access section…if you also infringe. But infringement is already prohibited by the copyright statutes, and so Section 1201(a) becomes redundant.
You would only be guilty of violating a copyright-protection law if you infringed copyright. What a concept! Naturally, Hollaar goes on to assure us that DMCA isn’t “causing real problems.” The “handful of cases” doesn’t matter. Opponents of DMCA engage in “overheated rhetoric.” Besides, now that the U.S. has gotten anti-circumvention language into WIPO agreements, we’re bound by the international law we helped to create. Isn’t that cute?
Tim Lee (author of the anti-DMCA Cato analysis) commented on Hollaar’s article in a Technology liberation front post on June 22, 2006. He says the treaty-obligation argument isn’t persuasive, “given the amount of weight the United States carries in the international arena,” and that “the anti-circumvention provisions of WIPO were inserted largely at the urging of the Clinton administration.” [Reminder: When it comes to unbalanced copyright law, political party labels are meaningless. Democrats are as likely as Republicans to push for excessive “protection” of Hollywood interests.] Lee also disagrees with Hollaar’s remarkable claim that Ed Felten’s speech was not chilled by RIAA’s DMCA-related letter. “The fact that the RIAA ‘backed off’ after their threat succeeded in preventing the publication of the paper at the Information Hiding Workshop hardly proves that Felten had nothing to worry about.”
The comment stream on this post gets interesting. Ed Felten is upset about repeated claims by pro-DMCA writers that his speech was not chilled:
DMCA boosters can repeat the speech-was-not-chilled claim as often as they like, but it’s still false. There are two big examples of the chill. First, WE ACTUALLY DID WITHDRAW THE PAPER FROM PUBLICATION at the Information Hiding Workshop. Second, ONE OF MY COLLEAGUES LOST HIS JOB BECAUSE OF THE PAPER. Sorry for yelling, but I’m sick of having this lie repeated.
Lee Hollaar commented, calling the second “yelled” statement “extraordinary, since such a dramatic claim does not appear to be made in the litigation.” Ed Felten took offense:
I’m not sure what you’re trying to imply when you call my statement “extraordinary.” If you’re trying to imply that the statement is false, then all I can say is that you should have talked to some of the people involved before making assertions about what did or didn’t happen…. Your statement that the RIAA withdrew their threat before we filed the suit is also false. What evidence do you have to support it?
Hollaar, says he wasn’t trying to imply anything. He repeats that he would have expected to see a job loss in the pleadings and quotes some of the judge’s findings. Felten came back, noting that the letter disclaiming RIAA litigation (mentioned by the judge) was sent after Felten and associates filed suit. Hollaar uses a press release as his proof of the order of events—to which Felten responds “A release which they did not affirm to us in a signed letter, or even verbally?”—and once again looks for “the record” over a colleague losing a job. Felten’s response: “If you’ve ever had a friend or colleague forced out of a job under difficult circumstances, perhaps you can understand why that person might not want to announce the details of what happened to the whole world (including prospective employers) right away.” Hollaar appears to be saying that, if it isn’t in the judicial record, it didn’t happen, even if an eyewitness affirms that it did.
Bill Herman posted a rebuttal to Hollaar’s article at shouting loudly. “I have to be honest here: Hollaar’s ‘bad trade’ is a bad article.” Herman makes the case that treaty anti-circumvention language is “obviously there because US negotiators insisted.” He rebuts Hollaar’s favorable comments on DRM in the marketplace, notes the ready availability of circumvention measures, and asks: “If we’re not stopping piracy, why strip these rights from regular consumers?”
He rebuts a paragraph I didn’t bother to mention, one in which Hollaar claims there was generally no opposition to the anticircumvention provisions when DMCA was being considered. Herman cites the record, including testimony from library associations. Herman does a fine job of dealing with the notion that DMCA must be fine, since there haven’t been all that many DMCA-based lawsuits.
Thanks to 1201 [DMCA], librarians are less able to archive our digital heritage. Teachers, students, and garden-variety end users are less able to help themselves to reclaim their legal rights to fair use. Encryption researchers are less able to innovate (or to help us solve problems like Sony’s rootkit). All because of the mere threat of litigation—regardless of the admittedly low number of cases that actually go to trial or result in cease-and-desist notices. We wouldn’t say that a society that only occasionally beats and jails journalists has no problems respecting a free press. Make a few “examples” and most of the others will behave. Likewise, the mere threat of litigation backed by occasional lawsuits is a clear suppression of the right to make noninfringing uses of materials that are under digital lockdown.
Herman offers more notes—then takes “one parting swipe” at the publisher, the Institute for Policy Innovation. Hermann notes their motto: “Advocating lower taxes, fewer regulations, and a smaller, less-intrusive government.” Herman’s comment: “When will the so-called ‘laissez-faire’ groups just come out and admit that they’re pro-regulation or anti-regulation depending on whichever is in the best interests of the biggest corporations?”
A few updates on items previously covered.
Rep. Lamar Smith introduced the Orphan Works Act of 2006 (HR 5439) on May 22, 2006. Gigi B. Sohn of Public Knowledge called it a significant improvement over the Copyright Office draft legislation, but argued for additional changes (specifically a cap on potential damages rather than “reasonable compensation”).
In September, “to the dismay of many supporters” (American Libraries), the bill was folded into a more complicated and controversial bill, HR 6052, the Copyright Modernization Act of 2006. The House abandoned it altogether on September 27, 2006. For now, orphan works legislation is dead. Miriam Nisbet said, “Libraries will absolutely renew their efforts on an orphan work solution in the next Congress.”
The ARL Bimonthly Report 244 (February 2006) begins with “The Grokster decision: The basics & key talking points,” by Peggy Hoon (NCSU). Hoon makes seven key points. Summarizing and combining:
Ø The Grokster case is about uses of Grokster technology, not P2P technology in general.
Ø The Supreme Court’s finding on liability involves “clear expression or other affirmative steps taken to foster infringement,” not merely capability.
Ø Companies that do not take such active steps aren’t inherently guilty of infringement; knowledge of infringing potential does not imply liability, as long as you haven’t encouraged infringement.
Ø Policing use is not required in the absence of evidence of intent to induce infringement.
Ø Grokster is a pro-consumer decision “that strikes a careful balance between encouraging innovation and protecting copyright.”
Ø Universities probably don’t need to do anything new; they surely don’t actively induce copyright infringement now (and in fact have substantial copyright education activities).
Tomas A. Lipinski wrote “The legal landscape after MGM v. Grokster, part 2: Understanding the impact on innovation” in the February 2006 ASIS&T Bulletin. He notes that the new form of copyright liability is “applicable in limited standards” and that the Sony rule is still law. The court rejected MGM’s request to provide a quantifiable test of ”substantial” noninfringing use: It’s not good enough to say “We claim that 90% of this technology’s use is infringing, therefore the makers of the technology are liable for infringement, even though they never encouraged such infringement.”
As part of an excellent discussion (worth reading in full), Lipinski offers three lessons (paraphrased):
Ø Entrepreneurs should not make any statements suggesting illegitimate use of a technology, directly or indirectly. “Deliberate acts of good faith should be the rule of the day.”
Ø “Network protocols should be designed where feasible to respond to blatant abuses through system flags” (such as excessive downloading).
Ø If there are fees, they must not be designed so that more infringement means more revenue.
Perhaps the most appalling betrayal of past agreements and compromises is big media’s push to close the “analog hole”—the possibility of making fair use of digital media by recording them while in analog form, as they must be for use. After years of promising that consumers could always use the analog hole if they really needed to sample or record or whatever, big media asked for a bill to regulate and essentially outlaw the analog hole.
The good news—and the latest news I’ve seen—came in a June 21, 2006 item at Public Knowledge: “Senators skeptical of need to fill analog hole.” It recounts Gigi Sohn’s testimony as to why the bill would be a terrible idea—and why it’s an attempt to solve a problem that hasn’t been established as a problem. In the process, the bill would appear to restrict or eliminate the making of fair use excerpts of digital media and restrict legal uses of media. Sohn’s full testimony is available at Public Knowledge’s website.
I suspect that this year’s overall “good news” will turn out to be the same as last year’s: While no legislation was passed to redress some of the imbalance in copyright law, at least no legislation made things even worse. That’s a victory of sorts.
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