Shaking the money tree June 26, 2008
Posted by Kevin Smith in : Copyright Issues and Legislation, Technologies , add a commentIn a talk given at Cornell University last week, Steve Worona of EDUCAUSE said about business models for distributing intellectual property that “every few years the entertainment industry has to be dragged kicking and screaming to the money tree and have it shaken for them.” His point that the first reaction of entertainment company executives is to “tamp down” new technologies in order to protect out-dated business models is certainly borne out by recent history. Back in the 1980’s, of course, the industry fought hard against the growing use of home video recorders, both in the Supreme Court and in Congress, even as a new business model that would eventually make billions for the studios was being developed in spite of their opposition. No less an advocate for the old ways than Jack Valenti eventually realized that the movie industry lost that battle because they were perceived as anti-consumer. Nevertheless, the recording industry continues to make the same mistaken, even going so far as to sue they very consumers on whom it relies.
Are there alternatives? Worona’s talk is very persuasive in its discussion of why old models (based on counting copies) do not work for new technologies (which replicate bits) and how it is possible to develop new models that really can “compete with free.” I have written about such models before, and also noted in a post last week this article by Tim Lee about an alternative path for copyright law that could support such new ways of profiting from intellectual property without crippling technological innovation. Some of those alternatives deserve further discussion. (and a lively discussion is continuing on the Cato Unbound site).
First, it is worth noting the survey, reported by Ars Technica, that suggests that young people are willing to pay for music if it is offered on terms that seem reasonable to them. Although I can imagine the skepticism this will generate within the content industries, it at least suggests that innovations, rather than lawsuits, are worth a try; both may be risky, but the rewards will be greater from the latter.
Lee’s article briefly catalogs a variety of business models, in several different content industries, that rely on new ways to make a profit. One that caught my eye was the Web service called Imeem, which combines a legal music downloading service with social networking opportunities. Revenue is generated through advertising, and the music is licensed using revenue-sharing agreements with the four major record labels. Users can create and share playlists and download music from those shared lists for free. As Lee says, “It is only a slight exaggeration to say the Imeem deal amounted to a de facto legalization of online file sharing, provided that the labels get a cut of any associated revenues.” Is this the future of the music business? I don’t know for sure, but I do know that I, as a music lover who has never obtained a music file from any online source other than iTunes, will now be looking on Imeem first; legal, ad-supported free music certainly works for me.
In his talk at Cornell, Worona suggested that, when a business learns that it will have to compete with free – with someone offering the same or substitutable product at no cost – the appropriate response is not to call the FBI, as the recording industry has done, but to call its own marketing departments. That is what Imeem has done, and they are giving the money tree yet another shake; let’s hope the music industry is paying attention this time.
Bad strategy and poor reporting June 21, 2008
Posted by Kevin Smith in : Copyright Issues and Legislation, Fair Use, Technologies , 1 comment so farIt is hardly surprising that the recent effort by the Associated Press to stop bloggers from quoting news articles, even when they link to the source on AP’s own web site, has generated lots of comment in the blogging world. AP recently sent takedown notices, using the procedures outlined in the Digital Millennium Copyright Act, to try to have blog posts that quoted as little as 35 words of an AP story removed from the Internet. The has been enough coverage that it seems unnecessary to rehearse all the commentary; there is a story at Ars Technica here, and one from the Electronic Frontier Foundation here. Basically most of the coverage makes the same two, fairly obvious, points; this is a terrible strategy from a public relations point of view (as even AP now admits) and it represents an interpretation of fair use that would entirely eviscerate that vital exception if accepted by the courts.
What does deserve extended comment however, is one of the news stories that repeats a couple of common misconceptions that need to be dispelled. This report on the E-Commerce Times site offers the opportunity to clarify and correct two important errors about the DMCA and fair use.
First, the E-Commerce story quotes a source who refers repeatedly, and defiantly, to “this ruling.” This is probably just careless language, but it also re-enforces the mistaken notion that receipt of a DMCA takedown notice means that infringement definitely has taken place. In fact, a rights-holder sends a takedown notice, using very specific provisions that the DMCA added to chapter 5 of the copyright act (17 U.S.C. 512), because they merely believe that their copyright is being infringed. There is no required quantum of evidence beyond a “good faith belief that use of the material… is not authorized,” nor must a rights holder consider possible defenses to the claimed infringement. These provisions were never intended to substitute for a judicial determination on the question of infringement; they are intended, instead, to help the ISP avoid liability for any possible infringement by users of the service. The ISP does have to remove the material or block the user upon receipt of a take down notice, but they also must notify the user of the action and restore the material if the user sends a counter notice stating their own good faith belief that the removal was wrongful. Thus the notice and takedown process helps establish if there really is a conflict and gives the ISP a protected role when there is, but it leaves the resolution of the issue of infringement up to a court. The mere fact that the AP sent these initial notices is in no way any sort of “ruling” or definitive decision.
The second error in the E-Commerce story is its reference to “the fair use provisions of the Digital Millennium Copyright Act,” which, we are told, the AP hopes to clarify. There is, of course, no fair use provision in the DMCA; fair use is much older than that piece of relatively recent legislation. Indeed, fair use is a doctrine initially created by judges in the early 19th century (in the US) to mitigate the harmful effects of the copyright monopoly. The DMCA, which took effect only in 2000, does not add anything to the fair use analysis, nor does it, in theory, narrow its scope; where fair use is mentioned in the DMCA it is only to emphasis that Congress did not intend the provisions of the DMCA, which attempt to deal with some of the new issues arising in a digital environment, to alter the applicability of fair use.
This last point is important, because it reminds us that we are not dealing with any new provision about what uses are acceptable in the digital realm. Instead, the same old provision about fair use (17 U.S.C. 107), which emphasizes the privileged status of news reporting and has traditionally been held to protect short quotations, would be applied in deciding whether or not these passages from AP news stories were used by bloggers in a manner authorized by law. The assertions by AP that these uses are not fair use seem difficult to credit, but the point is that a court would have to decide the issue (if the AP decided to push that far; it is a much more costly and serious step than merely sending a takedown notice), and the standard used to make that decision would be the familiar four factors of fair use, just as they were outlined by Justice Story in 1841.
Everything old is new again? June 18, 2008
Posted by Kevin Smith in : Copyright Issues and Legislation, Technologies , 1 comment so farSome intellectual property issues are hardy perennials; they bloom anew with great regularity. One such issue is the doctrine of first sale, which in other countries and other contexts is sometimes called the doctrine of exhaustion. However it is named, it refers to the nearly universal practice of holding that the “first sale” of a particular embodiment of intellectual property – a copy of a book or a CD – “exhausts” the exclusive right of the copyright holder to control further distribution of that embodiment. It is the right of first sale that allows used book stores, video rentals and lending libraries to flourish.
First sale has never been popular with the content industry; both licensing arrangements and DRM can be seen as modern attempts to exercise control over the downstream use and distribution of IP beyond what is allowed by copyright law. Back at the beginning of the 20th century, in fact, the Supreme Court had to deal with a case involving what I like to call the first “end user licensing agreement.” In Bobbs Merrill Co. v. Straus (1908), the Court found that an attempt by a publisher to mandate the retail price at which stores could sell the book “The Castaway” by Hallie Rives failed because of the doctrine we now call first sale. The publisher of this obscure novel inserted a “requirement” underneath the copyright notice that the retail price of the book must not be less than one dollar, and sued the store owned by Isidor Straus – Macy’s – when it sold copies for less.
In the past few weeks, two cases have been decided, one in the copyright arena and one dealing with patents, that again remind us of the continuing importance of first sale/exhaustion in a balanced system of IP protection.
In Universal Music v. Augusto the facts sounded strangely similar to Bobbs Merrill; a music company tried to distribute free promotional CDs of its music and prevent the resale of those CDs by simply placing a notice on the face of the disc. In granting summary judgment for the E-Bay vendor who resold some of this CDs, Judge Otero of the Central District of California noted that this kind of restraint on subsequent transfer had been rejected over 100 years ago. Also implicated rejected in this decision is the attempt to create a license transaction merely by a one-sided statement that that was what was occurring. The court rightly found that the CDs were transferred to the recipients (by gift, in this case) and were therefore subject to the exhaustion of the distribution right.
The patent case, Quanta Computer v. LG Electronics, also involved an attempt to control subsequent uses of a product embodying a patented process after the initial sale of that product. LG sued to collect a licensing fee from Quanta because Quanta used chips containing a process patented by LG, even though those chips were manufactured by an intermediary company (Intel) that had itself licensed the process from LG. In essence, LG wanted a cut on every downstream product that contained the already-authorized chips, but the Supreme Court said no: “The authorized sale of an article that substantially embodies a patent exhausts the patent holder’s rights and prevents the patent holder from invoking patent law to control postsale use of the article.”
As sturdy as these recurring issues are, however, we should not conclude that copyright law is ticking along without difficult, adequately resolving conflicts in the 21st century with its arsenal of 20th century doctrines. The current Issue of “Cato Unbound,” on “the future of copyright,” does a superb job of alerting us, if we didn’t already see it, that copyright law is struggling to keep up in the digital age. The lead essay by Rasmus Fleischer, begins with the fascinating point that in the 21st century we have moved to trying to regulate tools with our copyright law rather than content. In a digital age, he points out, many of the distinctions our law relies upon, like the difference between copying and distribution, no longer make any sense. As Fleischer says, “the distinction is ultimately artificial, since the same data transfer takes place in each.” This point undermines the comforting thought, expressed above, that first sale, for example, is still doing its job in copyright law, since the move to a digital environment makes application of an exception to the distribution right, but not the right of reproduction, highly problematic.
Fleischer’s article goes on to paint a fairly gloomy picture about a “copyright utopia” being advocated by the content industries, especially big entertainment companies, that could seriously undermine both technological innovation and civil liberties. He ends with the “urgent question regard[ing] what price we will have to pay for upholding the phantasm of universal copyright.”
In a reply essay, “Two Paths for Copyright Law,” Timothy B Lee suggests that things may not be as bleak as Fleischer suggests. He reminds us that it is only a very recent development that anyone has even considered question the legality of private, non-commercial copying for home use, and he opines that the effort to now assert control over such copying has already proved a failure. The alternative — the second path for copyright — is, as has been suggested before in this space, the development on new business models, which will largely be funded by advertising, to meet the non-commercial demand for content. The role of copyright law, in this scenario, is to protect content creators from unfair and unauthorized commercial exploitation of the works by competitors. It is commercial competition that copyright is intended to regulate, he suggests, not use by consumers. And he catalogs a wide variety of business models already being adopted by the major content industries, even as the pursue lawsuits against customers and strict laws from Congress, that seem to recognize the inevitable move towards a market solution, rather than a legal one, to the challenges posed by new technologies.
Some copyright doctrine remains unchanged over a hundred years, yet we have to adapt to rapid innovation even as we preserve what works in our law. The essays by Fleischer and Lee paint two different pictures of the future of copyright; the attraction of Lee’s vision, for me, is that it looks at what copyright has traditionally been designed to accomplish, the control of commercial competition, and offers hope that if we stay focused on that role for the law, the market will adjust to the technological innovations for users that currently frighten the content industries so.
A”twitter” about contracts June 13, 2008
Posted by Kevin Smith in : Copyright Issues and Legislation, Technologies , 1 comment so farAlthough I had heard of Twitter for a while now, I did not really know what it was until prompted to learn more by two recent articles. One is this piece in the Chronicle of Higher Education about potential library uses for the “microblogging” or social messaging service. It recalls the discussions I heard recently about the different level of involvement folks from my institution felt at an academic conference when the audience for various talks was using Twitter during the programs to share comments, examples and the like. Rather than being distracting, as I suspected it would be, the reports were that this added a welcome dimension to the conference experience.
What caught my professional attention, however, was this report of an ongoing controversy between Twitter and some of its customers about the terms of service to which every user agrees when they sign up for the service. The specific argument concerns the degree to which Twitter was obligated to pursue complaints of harassment directed against another user. On that issue, Twitter seems to be caught between a rock and a hard place — if they do not take steps to stop harassment they seem to condone a clear violation of a condition of use that they imposed, but if they do take action they may put in jeopardy the “safe harbor” protection from liability based on user postings that they gain under section 230 of the Communications Decency Act.
The broader issue, in my opinion, is the role of these terms of use statements in governing the relationship between users and the providers of Internet services. For one thing, it seems that such contractual agreements can be changed at the will of the provider. As the article cited above tells it, rather than address the harassment issue, Twitter indicated that it would wash its hands of the issues and simply “update” its terms of service. More amazing yet is the statement that Twitter borrowed its TOS from Flickr, apparently without much attention to what they contained. A Twitter executive is quoted as saying that, as a start-up, Twitter just “threw something up early on and didn’t give it a lot of thought.”
Who knew that these Internet companies had such a cavalier attitude to the non-negotiable contracts they are imposing on Internet users? Actually, the terms Twitter uses, and says they borrowed from Flickr, are much less lengthy and burdensome than those now used by Flickr itself; since acquisition by Yahoo! the terms of use that a new Flickr user agrees to (standard Yahoo! terms) prints out to seven type-filled pages, where the Twitter TOS amounts to only two pages. These click-through terms are being enforced by courts as binding contracts, even when the Internet service provider doesn’t “give them a lot of thought.” In the case about the plagiarism detection site Turnitin, high-school student users were held to the terms of service they clicked through even though they made valiant efforts to modify those terms.
As more and more communication on campus happens over these kinds of proprietary sites and networks, and as commercial Internet tools become more common for student and faculty worker, these contracts will increasingly control what we can do. Often they give the owner of the site or tools an exploitable interest in the work created or stored there. Yet very few people even realize that they are binding themselves to detailed and enforceable terms whenever they click “I agree.” It is therefore becoming ever more important that courts find ways to introduce some nuance into their enforcement of these click – through agreements, rather than simply enforcing them blindly as the Virginia court did in Turnitin. At least one proposal for such a nuanced approached, that considers when a contract, especially a non-negotiable online contract, should be preempted by federal copyright law and the policy that law is aimed at enacting, is found in this complex but compelling article on “Copyright Preemption of Contracts” by Christina Bohannan. We can but hope that courts will develop a more sophisticated approach to these contracts, whether they use Bohannan’s proposed approach or some other, as they become more aware that such contracts may undermine both the policy behind copyright law and the traditional rules of contract formation, and they may do so, if left unchecked, based on very little thought or reflection by the party that is imposing the terms.
Use case on NIH Public Access June 10, 2008
Posted by Kevin Smith in : Copyright Information Notes , 2commentsAnother question that is becoming common is about how to comply with the National Institute of Health Public Access Policy. The answer presented here was to an inquiry about an article accepted for publication in the journal “Nature,” whose policy about compliance is fairly well-publicized and easy to find. The specific steps that an author must taken to be sure they have the rights necessary to authorized deposit (or to be sure the journal will deposit for them) will vary with each publisher; where there is uncertainty about the policy or negotiations required, the answer will be much longer that this one.
Dear Professor _____________,
Congratulations on the paper! The first step in complying with the NIH public access policy is to be sure you retained the right to deposit the article when you signed a publication agreement. If you signed Nature’s usual author’s license, a copy of which is available here — http://www.nature.com/nature/authors/submissions/final/authorlicense .pdf — there will not be any problem. That license allows the author(s) to retain copyright, although it gives Nature an exclusive right to publish, and it specifies that the author can place the article in a funder’s open access database subject to a six-month embargo.
Assuming that this is the license you signed, your next step is to actually deposit the article in PubMed Central. You do this using the NIHMS system; there are instructions and links here — http://publicaccess.nih.gov/submit_process.htm . We are being told by those who have used it that the submission process is fairly easy and straightforward. Nevertheless, if you have any difficulties, just let me know and I or one of the librarians will be glad to come to your office and help you with it.
Once you have submitted the article, along with any supplemental material, all you have to do is wait. NIH will send you, or the principle investigator named on the appropriate grant if that is someone other than you, a final copy of the article as it will appear in PubMed Central for verification. It is important to review the article at that time to be sure everything is correct, just as you would do with the page proofs for the journal, and respond to that e-mail.
At some point in the process you will be asked to verify that you have the right to authorize PMC availability and to tell PMC about any embargo. As I said, if you signed the usual Nature license you do have the right to authorize availability and you should indicate a six month embargo. Even though you should submit your article immediately, it will not appear in the PMC database until six months after publication in Nature, in accordance with your license obligation.
For future reference in any paperwork submitted to the NIH, you will need to obtain the PMC ID number for your article. This helps NIH track compliance with the policy and is now required on renewal applications, progress reports and the like. Again, library staff can help you find this number if you have any difficulty.
