In 2009 the Recording Industry Association of America (RIAA) estimated 95% of all digitally downloaded music was obtained illegally. This leaves only 5% of potential revenue to be image distributed between all those who play a part in today’s music culture, including the most affected group, songwriters and music publishers.

While some opponents dispute that number, few serious observers would dispute that piracy has cost the industry billions of dollars. The outcome of this piracy is more harmful than most people truly understand.  There are currently over 70,000 U. S. jobs affected and 2.7 billion dollars in earnings lost in music and related manufacturing and retail industries, according to a recent independent report. More precisely, it has been estimated that the total impact of illegal downloading and piracy equates to 12 billion dollars of direct and indirect revenue lost annually in the U.S. economy. Something must be done to protect the art, industry, and creators of music from this threat.

Because of this dilemma, my client, Save the Music America, was formed and plays a increasingly influential role in spreading the word of the harm that is caused when people download music illegally. STMA is a new non-profit organization whose mission is to educate the public and create awareness of intellectual property protection and copyright laws. The goal of STMA is to produce future generations with a conscience, preserving the arts and the constitutional rights of people within the creative industries, as well as the history of American music. On their website, STMA states its purpose as:

“…[fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][to] raise money through celebrity endorsed events and media platforms and to educate the public to the impact of illegal downloading, creating public support for the cause. STMA will use PSA’s (public service announcements), print and online media, social networks, and educational media to raise awareness and demonstrate the repercussions of illegal file sharing. STMA also plans to create short documentary dramas to illustrate the very real tragedies which have struck those once who were supported by the music industry. These stories will help give faces and personal testimonies to the loss of income and career for the ‘everyday’ people who make up much of the infrastructure, such as audio technicians and marketing personnel.”

Starting next week, a series of PSAs entitled “Please Share and Download Music Responsibly” will begin airing on GAC and CMT. More than forty artists, producers, managers, songwriters, and other music industry professionals gave their time to help with these PSAs and include names like Jerod Neimann, Billy Dean, Wayne Mills Band, Julie Ingram, and Joe Bonsall just to name a few.  Here is one example of the PSA’s that will be airing:

[youtube https://www.youtube.com/watch?v=Hf7_lA-KyWE]

Mark Dryer, co-founder and head of productions for STMA, stated: “I am thrilled at the momentum we have gained this year, after talking with over 200 people about piracy everyone agrees it is a huge problem and willing to help in some way .I believe the right company will align with us to help fund our efforts very soon.  We are looking forward to the bright future to make a difference”.

Check out their website at savethemusicamerica.org and be sure to have your channel set to either CMT or GAC next week to catch the first series of PSAs released by Save the Music America!!!

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By Amber Rose and Barry Shrum

If you’ve cruised the net or checked out your local news any time within the last few months, chances are you’ve heard rumors currently sweeping the United States about two pieces of proposed legislation : H.R. 3261 entitled the Stop Online Piracy Act (“SOPA”) and S. 968 entitled the Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property Act (“Protect IP”).

Senator Patrick Leahy sponsored the Protect IP Act, proposing it to the full Senate on May 12, 2011.  SOPA is the House of Representatives’ equivalent. The government is promoting these acts as a way to decrease online piracy, something that is costs the creative industries millions of dollars each year.  The Record Industry Association of America, representing the music sector, has estimated that global music piracy causes $12.5 billion of economic losses every year, 71,000+ lost U.S. jobs, $2.7 billion in wage earnings, $422 million in lost tax revenues, $291 million in personal income tax and $131 million in lost corporate income and production taxes.  Even these calculations create volumes of debate among the Internet blogosphere as to their methodology and accuracy.  Most every credible source, however, agrees that piracy causes imagesignificant economic loss to the creative community.

After years of fighting the piracy in courts, most website that make infringing materials available have moved their operations offshore in jurisdictions where the long arm of the law does not reach.  The Protect IP Act addresses this jurisdictional problem by giving the government the ability to established a list of “rogue websites dedicated to infringing or counterfeit goods ” and then proceed to curb access to these websites by literally squeezing their revenue streams: VISA, MASTERCARD and various ISPs.  Protect IP has a heavy focus on those websites located outside the United States. 

Leahy based the Protect IP Act on a bill he previously proposed called Combating Online Infringement and Counterfeits Act (COICA). This bill failed to receive a full vote in the Senator mainly due to Democratic Senator Ron Wyden who put a hold on the legislation, claiming using COICA was “…almost like using a bunker-busting cluster bomb when what you really need is a precision-guided missile.”  Wyden felt the damage done by COICA would cost “…American innovation, American jobs, and a secure Internet.”

SOPA goes further than Protect IP by also providing a private right of action on the part of copyright owners, giving individuals and corporation with a stake the ability to appeal to the government for relief.  If enacted, SOPA would lead individuals being able to barring online advertising networks, PayPal, and other payment companies from doing business with the infringing or “rogue” website.  It would also prohibit search engines such as Google and Yahoo from linking to these sites while also requiring Internet service providers to block access to such websites.    This legislation would make “unauthorized streaming of copyrighted media” a felony. 

Opponents, such as the Electronic Frontier Foundation, argue that this would create situations where websites such as YouTube and Tumblr might be deemed “illegal,” in direct violation of Federal law.  There is no end to the drama that has been created, including use of such words as “censorship” and such “Chicken Little” mantras as “the Internet as we know it may come to an end.”

While these bills certainly have many who oppose them, including Google, there are some powerful supporters of the bill, including the United States Chamber of Commerce, as well as large online retailers such as L’Oreal and the NBA.  David Israelite, President and CEO of the National Music Publishers’ Association believes that SOPA is just what America needs.  According to Israelite “…[fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][d]igital revenue streams are key components of our industry’s future” and though we are making progress it is threatened by “criminal activity” that takes place on websites based outside of the United States.  Infringing sites typically experience enormous traffic and thus are making millions off of ad revenues.  Israelite feels U.S. manufacturers are struggling to compete, as does the U.S. Chamber. 

While SOPA and the Protect IP Act are a bit different from COICA, they are still built around the same concept of restricting revenue flow.  At first glance the bills seems to be a source of relief for the industry, but upon closer examination, it appears that such relief may come at a high cost.  These are difficult issues that are not easy to decide.  On the one hand, copyright, trademark and patent owners indeed deserve the right to be able to monetize their intellectual properties, a right established by our Forefathers in the U.S. Constitution at Article 1, Section 8 Clause 8.  Jefferson and Madison had many debates about balancing that government-granted monopoly against the free exchange of information they desired to establish in a “marketplace of ideas.”  This leads to the other hand, which is that censorship of ideas was what our Forefathers were trying to guard against by establishing the “for limited times” language of the Constitution, which thrust a work into the public domain for all to use.  Now that the U.S. duration of copyright exceeds four generations (Life +70), the idea of potential government censorship of website should cause us greater concern.

The one thing I haven’t seen from either side is a solution that protects the interests of the copyright owners as well as the interests of the public in accessing information.  Perhaps if the definition of “rogue websites” were more specifically defined, and there was some form of judicial oversight involved, where due process could enter the equation, the legislation would be more palatable.  Either way, if you are in the creative industries, this is legislation you should examine and about which you should talk to your representatives.  It is important to exercise your right to be a part of this process.  Neither the Senate nor the house has taken a vote on the legislation. 

Your House representatives can be found at the House’s Directory and the Senates Directory.  Texts of both bills can be found at the Library of Congress’ website, at http://thomas.loc.gov, or click below:

S. 968: Protect IP

HR 3261:  SOPAimage

Additional References:
http://www.billboard.biz/bbbiz/industry/legal-and-management/protect-ip-sopa-bills-seek-to-protect-digital-1005621352.story

http://www.forbes.com/sites/garyshapiro/2011/12/07/save-the-internet-take-action-against-sopa/

http://www.billboard.biz/bbbiz/industry/legal-and-management/sopa-protect-ip-acts-fuels-the-fire-of-disgruntled-1005633152.story

 

Amber Rose is enrolled as a student at Belmont University’s Mike Curb School of Music Business in Nashville, Tennessee.  She is currently studying copyright under Professor Shrum.[/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

By Rachel Galloway

IMPORTANT NOTICE:  The views expressed in this article are solely those of Ms. Galloway and may not necessarily reflect the views of Law on the Row or Barry Neil Shrum, Esquire.

The last time I watched a Happy Tree Friends video was when I was around 13 years old in the company of my 10-year-old cousins. The videos typically consisted of the characters getting into situations where they lost limbs or impaled themselves with blood squirting everywhere. Needless to say, when I watched YouTube’s Copyright School, I was shocked to see those same characters teaching me about copyright infringement and piracy.

[youtube https://www.youtube.com/watch?v=InzDjH1-9Ns?rel=0&hd=1]

YouTube’s Copyright School video has been on the site for roughly a month now with 248,734 views, 1,142 likes, and 5,914 dislikes (as of April 25, 2011 when I viewed it). I have heard and read many mixed feelings on this video and personally find it to be unsuccessful. Judging from the dislikes, I am not the only one.

I understand where YouTube is coming from in trying to educate children and teenagers on copyright issues using characters that they would normally watch such as Happy Tree Friends. However, I am not sure that they will get the effect they are hoping for. In my opinion (and experience with today’s generation), teenagers and children will continue to copy and use copyrighted work regardless of whether they understand that it is illegal.

In my two years at Belmont University as a Music Business major (where students are required to take a Copyright Law course), I have come to find out that teenagers do not care whether downloading music illegally is wrong or not. They simply do not care as long as they do not get caught. I find it ironic and hypocritical to go to a school where artists are encouraged to create original works and where copyrighted works are taught to be protected to find out that mosBioPic1t of the students (including the artists) still continue to download illegally. This infringement mainly takes the form of pirating music just like with the majority of American teenagers. In my opinion, if we can’t get college students who have a substantial knowledge on copyright infringement and it’s consequences to stop pirating music, then how can we get teenagers across America to do so with a 4 minute and 39 second YouTube video?

Pirating music is an issue that will always be a problem for the music industry. There have been many suggestions made that attempt to fix or at least ease this issue. Personally, I believe that the best way to go about this is to cut the cost of digital downloads (from $9.99 an album to around $1-$2 an album), so that consumers will not feel like they are forking out a ton of money towards entertainment that they believe should be free.  Personally, I would rather pay a low price for an album of superior quality than go through the trouble to find the pirated version for free that has a bad quality.

YouTube’s Copyright School had the right idea and motivation. Will it make a difference in the music industry? I personally doubt it. I applaud them for making an attempt to educate kids across America on the issue, but I believe that this is probably a losing battle.

Rachel Galloway is a Sophomore Marketing major with a minor in music business at Belmont University in Nashville, Tennessee.  Born and raised in Atlanta, Rachel graduated from Providence Christian Academy in Lawrenceville, Georgia in May 2009.  She came to Belmont University the following year with an interest in marketing and event planning in the music world.  There, Ms. Galloway studied copyright under the tutelage of Professor Shrum.  Upon graduation, she hopes to open her own event planning company.

A decade’s worth of music file-sharing and swiping has made clear that the people it hurts are the creators… and the people this reverse Robin Hooding benefits are rich service providers, whose swollen profits perfectly mirror the lost receipts of the music business.  –Bono (New York Times, January 2010)

The passage of the Digital Economy Act in England last year has resulted in a surge of articles that claim that the negative impact of illegal downloading of MP3’s on the record industry has been “debunked” and that, in fact, studies confirm the opposite, that there is no significant impact.  I recently addressed one such claim on my blog in the article entitled 90% of All Statistics are Made Up on the Spot:  Fact is, copyright infringement DOES kill jobs, which addressed an article by Rick Falkvinge.  Matther Lasar of Ars Technica recently posted another article essentially making the same claim, entitled Did file-sharing cause recording industry collapse? Economists say no.  Lasar’s article is based in large part on a research paper by Bart Cammaerts and Bingchun Meng of the London School of Economics and Political Science entitled Creative Destruction and Copyright Protection: Regulatory Responses to File-sharing..
In response to the DEA, one of the “key messages” of Cammaerts’ and Meng’s study is that common refrain that the decline in sales of CD’s cannot be attributed solely to illegal downloads of their digital equivalents.  To be precise, here is their key finding:
Decline in the sales of physical copies of recorded music cannot be attributed solely to file-sharing, but should be explained by a combination of factors such as changing patterns in music consumption, decreimageasing disposable household incomes for leisure products and increasing sales of digital content through online platforms.
Does this not seem like a circular argument to anyone else that the conclusion that a decline in sales cannot be attributed by file-sharing, a significant change in how music is consumed, is supported by the assertion that it is better explained by a “combination of factors such as changing patterns in music consumption”?   This conclusion by the “researchers” is based in significant measure, as are most of the conclusions in the report, on reports and studies done by others, including the long-since refuted study by Oberholzer-Gee and Stumpf conducted in 2004, entitled The Effect of File Sharing on Record Sales: An Empirical Analysis.    Oberholzer-Gee and Stumpf erroneously concluded that the impact of illegal file-sharing on the music industry was, in their words, “null” but have since revised their conclusions and now argue that illegal file sharing is responsible for about 20% of the decline in the decline of revenue in the music industry.  See File Sharing & Copyright 2010. It seems on the surface that the study is nothing more than rehash of old information.  Based on review of these reports, Cammaerts and Meng concluded that “the claims by the music industry regarding the detrimental impact of infringing file-sharing on sales are flawed.”
The fact is all but a handful of the surveys related to the subject confirm illegal file-sharing reduces consumer spending on legitimate music, and confirm that the dramatic decrease in the sales of recorded music is caused by illegal file-sharing.  See, e.g., Norbert Michael (The Impact of Digital File-Sharing on the Music Industry: An Empirical Analysis, 2006), Rob & Waldfogel (Piracy on the High C’s, 2006) and Alejandro Zenter (Measuring the Effect of File Sharing on Music Purchases, 2003).  A 2006 study by Professor Stan Liebowitz, File-Sharing: Creative Destruction or Just Plain Destruction? concludes that all  “. . . papers that have examined the impact of file-sharing . . . find some degree of relationship between file-sharing and sales of sound recordings.”  Oddly, the only study that finds zero correlation is the Oberholzer and Strumpf study, which it has been frequently discredited.
The International Federation of the Phonographic Industry (“IFPI”) recently released the IFPI Digital Music Report 2010:  Music how, when, where you want it reports what most economists and others who have studied the effect agree on:  “Overall music sales fell by around 30 per cent between 2004 and 2009.” p. 6.   The good news to be gained from the IFPI report is that overall sales of digital music increased to 27% of the industry’s revenue in 2010, a significant jump from almost zero in 2004.
All of this I say not really to fuel the flames of the the debate related to the cause of the decline in the music industry, but to point out that in the midst of all the studies, all the reports, and all of the conversation, there is one group of people whose voice is often not heard:  the songwriter.  I began this post with a quote from the incomparable singer-songwriter, Bono, who states flatly what is often overlooked:  the people it hurts are the creators.  If you read closely through the reports I have linked to in this article, you’ll find very little, if anything, about the impact of illegal file sharing on the songwriter.  Yes, there a some vague references to “authors” and sometimes “creators,” but for the most part the researchers focus their impact on the more broad category of impact on the overall sales of recorded music.  Very little attention is given to the trickle-down impact, i.e., how it affects the songwriter and the small music publishing companies that line the streets of Music Row here in Nashville.  The only report of which I am aware which includes a significant sampling of songwriters is the one conducted by Mary Madden for the PEW Internet & American Life Project in 2004 entitled Artist, Musicians & the Internet.  I won’t rehash all of the argument I made in 90% of All Statistics are Made Up on the Spot: Fact is, copyright infringement DOES kill jobs, except to say that most of these studies ignore the songwriter, on which the illegal downloading of songs has arguably made the greatest impact.  Even back in 2004, when the study was conducted, 75% of the respondents (which included a pool of artists and musicians in addition to solely songwriters) stated that they held down a second non-songwriting-related job which was their primary source of income.  I know for a fact that almost all of my songwriting clients hold second jobs, which prevents them from creating music.  The decline in these songwriter’s revenue is a direct result of the loss of mechanical royalties resulting from the massive decline in sales of physical product, not to mention a decline in performance royalties as a result of fewer artist being played on the radio, which is a result of fewer record labels investing in the career of new and developing artists.
This brings me to my last, and perhaps the most disturbing, observation raised by the new IFPI report.  The report states that
Illegal file-sharing has also had a very significant, and sometimes disastrous, impact on investment in artists and local repertoire. With their revenues eroded by piracy, music companies have far less to plough back into local artist development. . . .
The impact of declining revenues and illegal file-sharing on the availability of venture capital is another factor that is rarely if ever considered by many of the so-called reports on the decline in this “lost decade” of the music industry.  Why would any entity risk investing hundreds of thousands of dollars in a new artist when there is no perceivable source of revenue from which to gain a return on investment?  The answer is that they do not.  The impact of the Internet on the creative industry does not stop at the music industry.  Other industries that are starting to feel the impact of lost revenues are the movie industry, the television industry, the print publishing industry and the fashion industry.  Anywhere that creative endeavors are conducted for profit, the profits are being diminished in one form or another by the impact of P2P file-sharing.  My wife has a saying about people who live together when they are not married:  “Why buy the cow when you can get the milk for free?”  This also applies in the creative industries:  people do not generally pay for that which they can get for free.
The chief executive of Kudos, Stephen Garrett, said it best perhaps:
We are in danger of creating a world where nothing appears to have any value at all, and the things that we make…will become scarce or disappearing commodities.
I hope that danger does not become a reality.  Being deprived of the talents of, say, a Don Henley or a Bono, simply because we are unwilling to shell out a buck for a mp3, would, in my humble opinion be a real shame.

By Barry Neil Shrum & Nathan Drake

In November 2010, the Federal Immigration and Counterfeit Enforcement agency (“ICE”) recently seized 82 websites and shut them down on the grounds that they were committing criminal copyright infringement. One of these websites has recently become the spotlight of attention:. Brain McCarthy, the owner and operator of channelsurfing.net, has been arrested by ICE and charged with providing free streaming content to NFL, NHL and NBA sporting events. According to the ICE, McCarthy accumulated approximately $90,000 from advertisers on his website, and has received over 1.3 million hits since being obtained last month, depicting the significance of the website.

IICECE acts as the principle investigative arm of the United States Department of Homeland Security and is currently the second largest investigative arm of the federal government. What makes ICE’s action unusual is that McCarthy is charged with criminal copyright infringement, since most other cases involving copyright infringements are brought against defendants in civil court in search of damages. If charged as a criminal, McCarthy could serve up to five years in prison and pay substantial monetary fines.

These actions by ICE create a certain level of perplexity in the eyes of the public. In the eyes of many, including the editors of TechDirt, ICE’s actions are not justificed since, at the time of the channelsurfing.net seizure, the website ostensibly did not “possess” any copyrighted material, but rather only provided links to other website/servers where the infringing material resides. Is the criminal charge levied against McCarthy warranted if he was merely acting as a conduit of infringing information?

Perhaps the answer lies in the criteria constituting criminal copyright infringement in United States Code Title 17 U.S.C. § 506(a) and 18 U.S.C. § 2319. The code states that the prosecutor must show the following elements to prove criminal infringement:

(1) that a valid copyright; (2) was infringed by the defendant; (3) willfully; and (4) for purposes of commercial advantage or private financial gain.

To apply the analysis, it’s necessary to understand, on a technical level, what is happening on the McCarthy’s website. He is providing a “link,” i.e., a form of hypertext markup language, or HTML, that, when clicks, directly a stream of video to the user within the structure of McCarthy’s website. So the question become whether the criteria has been met. Let’s examine it:

Is there a valid copyright? Yes. This is easy. The NFL, NHL, NBA, etc. all possess valid copyrights in their broadcasts.

For purposes of financial gain. No doubt. Here, McCarthy obviously profits from the availability of the infringing material on his website, regardless of where the material is stored.

Wilfully infringed by the Defendant. Here is perhaps where some debate might occur as to McCarthy. Was his intention in placing the links on the site to infringe the copyright owner’s rights? If so, was it wilful?

One case that has examined the issue of whether embedded HTML code can serve as the basis for copyright infringement is Perfect 10 v. Google decided by the 9th Circuit. In that case,, Google was accused of civil copyright infringement for using a database of “borrowed” photographic images and making them available on their website when a user performs a search. The Citizen Media Law Project at Harvard University explained the ruling on this case as follows:

“The court went on to conclude that HTML instructions do not themselves cause infringing images to appear on a user’s computer screen because the HTML instructions merely convey an address to the user’s browser, which itself must then interact with the server that stores the infringing image. Accordingly, the mere provision of HTML instructions, in the view of the 9th Circuit, does not create a basis for direct copyright infringement liability.”

Several things should be noted about the 9th Circuit’s opinion. First, this case involved civil liability for copyright infringement, not criminal. The elements for civil copyright infringement are very different than those for criminal infringement. Secondly, the 9th circuit court is known as a radical circuit and many of its decisions are on the fringe. It’s rulings certainly do not hold the clout of the U.S. Supreme Court. Nonetheless, the decision, though it will likely be challenged, provides a new and thought provoking perspective.

So, bottom line, what do we think about McCarthy? In my opinion, the 9th Circuit is off base in regard to providing HTML code that “merely convey[fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][s] an address to the user’s browser” which it must then “interact” with to obtain the infringing image, which is stored on a different story. What the court complete overlooks is that this is the very essence of vicarious joint & several liability! It’s a well-established principle of copyright law that everyone in the chain of distribution is jointly and severally liable for the actions of the primary infringer. Taking this theory out of the physical realm and putting it into the digital realm should not change its application. In my humble opinion, Mr. McCarthy likely knew what he was doing. He is providing users with access to multiple portals that provide them with streams of illegally obtained intellectual property, much as a vendor on the streets of New York city provides pedestrians access to counterfeited Rolexes! The fact that he does not “warehouse” the goods, in either case, does not change the fact that he is facilitating the infringement.

Arguably no other circumstances in the history of law has caused so many problems of application as the invention and development of the Internet. This virtual world as wonderful a resource as it is, allows for greater efficiency and anonymity for infringers than ever thought possible, serving as a double-edged sword for this generation. While some may view the efforts of those pursuing copyright infringement via the Internet futile – in fact many consider copyright itself unnecessary as a result of the Internet – these enforcement efforts are nonetheless important and essential in maintaining the rights set forth by our forefathers over a century ago: rights of monopoly balanced with limitations and public access. If we as a society do not honor these goals, it is probable that we will be faced with a less creative society.

http://www.techdirt.com/articles/20110104/12324012513/did-homeland-security-make-up-non-existent-criminal-contributory-infringement-rule-seizing-domain-names.shtml

http://paidcontent.org/article/419-feds-campaign-against-pirate-websites-leads-to-an-arrest/

http://www.techdirt.com/articles/20110303/16584013356/ice-arrests-operator-seized-domain-charges-him-with-criminal-copyright-infringement.shtml

http://www.ice.gov/about/overview/

http://www.justice.gov/usao/eousa/foia_reading_room/usam/title9/crm01847.htm[/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

Mark Twain had a lot to say about statistics, ranking them as the highest of all lies:  “There are three kinds of lies:  lies, damned lies, and statistics.  Twain is also attributed with the more insinuated saying that “statistics are like ladies of the evening, once you get them down, you do anything with them!”   It’s been quite awhile since I’ve seen a manipulation of statistics that illustrates Twain’s philosophy about them more than what is found in the article posted by self-styled “political evangelist” and anti-copyright activist, Rick Falkvinge, this week entitled Kill Copyright, Create Jobs. Absent three very slick and attractive graphics, the only “facts” that Falkvimark_twain_pic_440_1_nge offers in support of this conclusion is statistics which, as far as I can tell, are made up!
 

In an effort to defeat the claims of the United Kingdom’s “copyright industry” that 1.2 million jobs will be lost by 2015 if stricter enforcement of copyright laws is not enacted, Falkvinge begins with the exaggerated conclusion that “for every job lost (or killed) in the copyright industry due to nonenforcement of copyright, 11.8 jobs are created in electronics wholesale, electronics manufacturing, IT, or telecom industries — or even the copyright-inhibited part of the creative industries.”
Falkvinge reaches this absurd conclusion through a somersault of logic involving segregating the “creative industries” into various categories of groups subdivided into “copyright-dependent” and “copyright-inhibited” sectors.  Of course, these phrases are never precisely defined but, reading between the lines, the reader can gather that the latter sector includes industries “fueled by a lack of copyright monopoly enforcement,” while the former we must assume includes some form of enforcement.  Once he groups the various creative industries according to this loosely defined structure, he asserts that “the contribution of the copyright-inhibited industries outweigh the copyright-dependent industries by a factor of 11.8,” and then draws the leap of faith that when a copyright-dependent job is lost, a copyright-inhibited job is created.  He then forms this general conclusion: “Prevent copyright enforcement, or weaken or kill copyright, and create jobs. Lots more of them.”  Wow!  Please, Obama, take note of this staggering feat of intellectual prowess!
There are so many errors in this article, it’s hard to begin, and I don’t intend to address each one.  But as you start to examine the sectors of industry that Falkvinge places into these divisions, you can easily see where his analysis falls apart.  Seriously, I don’t think it’s intended so much as analysis as it is rhetoric.  Nonetheless, let’s look at some examples.
In the first instance, Falkvinge erroneously relies on the conclusions of Peter Higgs in Beyond the Creative Industries for his foundational argument that the “creative industries” of the U.K. only account for 7% of its GDP, which he divides into three categories:  copyright-dependent, copyright-inhibited and copyright-agnostic.  I say he relies on this statistic “erroneously” because the 7% figure contained in Higgs’ report is based on what Higgs calls the “creative core” of the industry, not the entire industry.  Higgs’ defines the creative core as the “pre-creative and creative stages of the value chain” (p. 27).   This approach, Higgs establishes, only focuses on those involved in the initial stages of creation, i.e., the musicians, the dancers, the producers, etc (p. 28).  Thus, by default, the analysis does not factor in the post-creation employment of the creative industry and, thus, cannot be used in support of Falkvinge’s overall asssertion that on 7% of the GDP of the United Kingdom is based on the creative industries.
Second, in one sweeping yet unexplained fell swoop, Falkvinge places the entire advertising and marketing industry in the “copyright-inhibited” category.  Last time I checked, the advertising and marketing industry relied in large part on the creation of intellectual property, much of which is copyrighted work which relies on enforcement.   In another breathe, again without laying any factual foundation, he states that only 25% of the software, electronic publishing, games, film, television, radio and photography industries are “copyright-dependent.”  Twenty five percent?  Seriously?  Then he “estimates” than only 50% of the music and performing arts sectors of the creative industry are dependent on copyright protection.  Again, really?
With regard to his category of “architecture, visual arts and design,” Falkvinge’s “analysis” is totally off the mark.  First, again, he simply asserts that 100% of the architecture industry is copyright-inhibited, meaning it does not rely on copyright protection for enforcement.  He doesn’t define whether he is referring to architecture as a visual art or whether he is referring to the more intellectual and abstract protection of the actual structure which the U.S. Congress protected in 1996 with the Architectural Works Copyright Protection Act.   One can only assume that Falkvinge is unaware that the U.S. and most other Berne Convention signatory countries protect such works, since he groups architecture with the visual arts.
Secondly, Falkvinge lumps all of the “visual arts and design” industry into “fashion design” and then asserts that it is “copyright agnostic,” since fashion design is not entitled to copyright protection.  Ignoring the fact that there are many other arts to be considered in the visual arts and design sector of a country’s industries, let me just address the last assertion about fashion design.  There are several nations that actual do offer copyright protection for fashion design, namely the European Union, and France individually, and Japan, just to point out a few.  The U.S. currently has legislation pending that would follow in the footsteps of these country and protect U.S. fashion designers whose designs are pirated as soon as they are released.  (See this post on Law on the Row regarding the pending legislation).
As Falkvinge draws to a long and painful conclusion, he states that U.K’s “monopolized entertainment [fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][industries’]” claim that they will lose 1.2 million in jobs by the year 2015 is “deceptive, dishonest and bordering on fraudulent,” which he uses to link to another self-aggrandizing article in which he claims that we as a culture are creating now more than ever, that copyright monopolies are an obstacle, and the copyright abolishment would only intensify this effect.  All I can say to Falkvinge’s claim is bull$^!+.  Isn’t that something akin to the pot calling the kettle black?  Is it really deceptive to say that most of my songwriting clients, the people who write the music, are struggling to feed themselves and have to take full time retail employment to make ends meet?  Is is dishonest to say that those same songwriters do not create as much music as they did before they were forced to work 10-12 hours a day to support their families?  And how can you deny the decline in sales of recorded music?  How can you deny the falling profits of the world’s entertainment conglomerates?  I certainly don’t pretend to know about the music industry of the U.K., but I do know that the local economy in Music City U.S.A., Nashville, Tennessee has suffered dramatically as a direct result of illegal downloading of copyrighted works.  I certainly know that this has a trickle down effect on all sectors of the music industry here, including my own practice!  If any of these claims are fradulent, then call me a fraud.
Long before Falkvinge began spinning his  illogical analyses, a company of men including Jefferson, Madison and Pinkney and other great thinkers of their day dealt with the issue we are dealing with – should creative ideas be entitled to protection as individual property?   These men debate natural law versus utilitarianism, and ultimately derived what is arguably a very workable system of protecting intellectual properties.  The U.S. system is based on theories like those of Thomas Hobbes and John Locke, who believed that we should “give to every man his own,” and that man acquired the ownership of property by exerting labor and converting nature – in this case ideas – into something that benefits society.  In fact, Locke believed that because a work created by an individual enriched society in general, and would theoretically continue to do so in the future, the author should have the right to be compensated as long as that benefit to society continued.  But, our Forefathers also wisely saw that in order to create, it is helpful to have a thriving public domain, so they placed certain limitations on these rights, namely granting the monopoly for “limited time.”  The “monopoly” of copyright protection – Falkvinge derisively refers to it as the “copyright monopoly” as if it’s a bad thing – is merely a reflection of these ideas.  If we believe that one should benefit from his or her own creation, his or her own expression of an original idea, then laws and rules are the only way to enforce that in a developed society.  Because of the wisdom of our Forefathers, we have that in Article I, Section 8, Clause 8 of the U.S. Constitution.  For my money, the logic of Locke, Hobbes, Jefferson and Madison surpasses the diatribe of Falkvinge at least by a factor of 11.8 to 1!
So, in summary, I am quite certain that Falkvinge, if he even takes note of my existence, would categorize me as just another one of the “lawyer who advocate maximization of the copyright monopoly.”  He would likely also allege that my claims are misleading if not bordering on fraudulent.  Regardless, I think that it is evident that Falkvinge’s assertion that for every 1 job lost to copyright infringement, 12 more will pop up to replace them is unfounded and, frankly, completely manufactured.

 


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NBC Universal recently hired a company called Envisional to study counterfeiting activity over the Internet. The results of this study – despite the fact that it is industry funded – are literally astonishing: 24% of all global Internet traffic involves digital theft!  Stated another way, one in every four people surfing the Internet are stealing intellectual property, i.e., illegally downloading either copyrighted or trademarked materials.  According to the International Federation of the Phonographic Industry, 95% of the music downloaded from the Internet is downloaded illegally!  Imagine how our society would react if one out of every four people in retail malls were carrying out stolen merchandise on a daily basis, or if 95% of the product leaving the mall was stolen.  It would be chaos.

Ring of FrodoNow consider whether these people who so quickly download a song or a movie on the Internet without paying for it would also walk up to an artist selling their painting in the park and steal one of their painting.  I firmly believe the answer to that question is a resounding no!  But why? What is different about the world wide web, i.e. cyberspace, that gives these consumers the feeling that they are entitled to download music and movies through mechanisms like BitTorrent without compensating those who created such product?  What are these people thinking?

I think the answer can be found in the writings of Plato.  In the second book of his Republic, Plato’s student, Glaucon, poses the illustration of the “Ring of Gyges.”  In the story, Gyges is a shepherd who finds a magical ring in a chasm created by a lightning storm.  The ring gives him a cloak of invisibility.  Using his newfound power, Gyges seduces the Queen of Lydia, murders the King, and takes the throne, gaining power, wealth and fame.  In the Republic, Glaucon argues that given a similar opportunity, any person, whether or not they were previously just or unjust, would use the power to commit as many crimes as necessary to get what they want [fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][Book II, 359d].    Glaucon was responding to Socrates’ refutation of arguments put forth by Thrasymachus in Book I of the Repbulic, i.e., that “justice is nothing but the advantage of the stronger”  [Book I, 338c].

I believe Glaucon’s experiment in thought informs us as to why someone who would not normally steal a tangible object in the physical world is nonetheless more than willing to download music or movies, intangible objects, on the Internet for free: because the fear of being punished or getting caught is eliminated in the evanescent world of Cyberspace.  The Internet, like Gyge’s ring, confers upon its users a seeming cloak of indivisibility as it were.  As one astute commentator surmised in response to an interview with Alice in Chain’s lead singer, Sean Kinney, “The real reason people steal music is that they CAN and very easily.”  That this is a truth is evident from the plethora of “how to” guides on the Internet, teaching people “How not to get caught.” There you have it in a nutshell.   All of the commentary about how the record industry has been thieves and how the RIAA unjustly goes after the defenseless people, these are mere justifications for actions people otherwise know in their hearts are wrong.

It’s important to read Plato’s response to his student to understand fully, as Plato did not agree with Glaucon.  Plato’s argument in the remaining portion of the Republic is that the just man would not be tempted by this cloak of invisibility to commit crimes.  Rather, the just man understands that crime itself makes a person unhappy and that he is better off to remain just.   I frequently discuss this issue with my college students at Belmont University when teaching a course on Copyright Law.  One of my students made the following observation, which confirms Plato’s conclusion.  She said:

I do not follow the rules because I am scared of the RIAA busting me for illegal downloading. I follow the rules because I have respect for the people who wrote and recorded the songs, and even more, because I want to work in the music industry.

Another relevant opinion is offered in the excellent blog article found on arbiteronline entitled Illegal downloading: The real cost of ‘free’ music.” In that article, a student at Boise state, Ammon Roberts, is quoted as saying:

“I don’t do it because I don’t feel it’s right.  If I were making the music, I’d be upset if people were downloading it for free.”

For these two students, following the rules is not about whether or not they’ll be caught, it’s about doing the right thing.  It’s about honoring, i.e. compensating, the people who created the music. 03-20-invisible_full_600 This illustrates Plato’s point precisely:  a just person understands that even with a cloak of invisibility, doing the right thing makes a person happy or, in the words of Roberts, makes the person “feel right.”

The Internet is also very much the Land of Oz.  In addition to this cloak of invisibility endowed on us by the Internet, it also deceives us with illusions of anonymity – not so much that the user is anonymous, as that’s merely another form of invisibility – but in the sense that it’s difficult to know who’s behind the curtain.   As Trent Reznor said in an interview, “there is a perception that you don’t pay for music when your hear it . . . on MySpace.”  Because of its sheer vastness and its mysteriousness, Cyberspace gives people false perceptions that their actions on the Internet do not affect real people.   This, in turn, creates an illusion that “resistance is futile.”  Everyone is doing it, so I can too.  In other words, Cyberspace alters our reality in that it makes the real people behind the music an amorphous, anonymous entity.  The result is that it’s much easier to steal from an amorphous, anonymous entity – the man behind the curtain – than it is from a struggling songwriter, particularly when all your friends are doing it.

I truly believe that most of the people who are illegally downloading music from the Internet have no idea who they are affecting or how widespread the effect is.  Most of these people would not even think about walking up on stage after a singer/songwriter in a nightclub takes a break and stealing his guitar, but that very same person doesn’t think twice of taking that same singer/songwriter’s song from the Internet.  They wouldn’t steal the filmmaker’s camera, but downloading the movie doesn’t phase their consciousness.  In fact, many who contribute to the  dialog would argue that these two thefts are not analogous.  But one analysis conducted by the Institute for Policy Innovation states otherwise.  The report indicated that music piracy causes $12.5 billion of economic losses every year.  It further concluded that 71,060 U.S. jobs are lost, with a total loss of $2.7 billion in workers’ earnings.  Such reports abound throughout the industry, yet many of the people guilty of illegal download continue to view these reports as industry-driven and, therefore, skewed.  Take this comment by blogger Michael Arrington as an example:

Eventually the reality of the Internet will force the laws to change, too. One way or another the music labels will eventually surrender, and recorded music will be free.  Until it is, I refuse to feel guilty for downloading and sharing music. Every time I listen to a song, or share it with a friend, I’m doing the labels a favor. One that eventually I should be paid for. Until that day comes, don’t even think about trying to tell me that I’m doing something ethically wrong when it’s considered quite legal, with the labels’ blessing, in China.

resistanceBut what this illusion of anonymity, and such misguided opinions, miss is the fact that very real people – not amorphous masses – are being affected.  And the effect is devastating.  I have clients who are songwriters who are no longer creating art because they are forced to take odd jobs to support their families.  The performance royalties they used to receive from ASCAP, BMI or SESAC are down by half or more from a few years ago.  Their mechanical royalty checks are virtually non-existent.  They simply cannot afford to create simply for the sake of creation.  And now, working sometimes two jobs, they don’t have the time to create.  What will become of the art of songwriting if Mr. Arrington has his way and all recorded music is free?  I believe we will not have the quality of music in this country that we have enjoyed throughout the last millennium.  In this instance, I do not believe that resistance is futile.

Now, getting back to Plato and the Ring of Gyges, in answer to Glaucon, Plato would say that the root of all trouble is unlimited desire.   How true is that in this world of Cyberspace, in this world of rampant illegal downloading.  The wheels really fell off the wagon when the RIAA sued Diamond Multimedia, bringing the MP3 into society’s field of view.  Then, Napster exploded and almost everyone found that almost every song they ever loved was available for free.  It’s as if they were Harrison Ford and discovered the treasure room in an unknown, ancient tomb: everything your heart desires is within your grasp.  It’s yours for the taking.  With its cloak of invisibility and its illusion of anonymity, what the Internet has done, in short, is to return the power – i.e., the control – back to the people.  Everyone is now a creater, a publisher, and distributor.  No one needs the conglomerates anymore – the people have the power.  But, as Lord Acton said, beware:  “Power tends to corrupt, and absolute power corrupts absolutely.”  With power, therefore, comes responsibility.   Unfortunately for the music industry, the power is currently being abused and will, ultimately, mean the end of the recording industry as it existed through the 20th century unless the creators regain that power.

So what does this mean for those of us who have chosen to make our living in the world of creation?  Does it mean the end of our industry?  Does it mean an end to copyright law as it exists?  If we examine the origins of copyright – i.e., the protection of an original idea expressed in a tangible format – as passed down to us from our forefathers, we find a concept on which we can continue to build.  In the now famous Radiohead experiment in which Reznor and crew allowed consumers to pay what and only if they wanted to, 18% of the consumers chose to do so!  That to me, is an encouraging statistic, and one that confirms a believe in the viability of creating art.  At least one in five people, even with the cloak of anonymity provided by the Ring of Gyges of this era, i.e., Cyberspace, chose to pay the creators for their creation.  Take that Glaucon!  Take that Arrington!  What does that say for our society?  It says that there are people who still chose to do the right thing, even when the tide of conformity rises above their heads.

The bottom line is that it really doesn’t matter what laws are passed by society, there will always be a certain percentage of people who will chose to steal, take and plunder, whether it be because they are more powerful or because they are cloaked with invisibility or shielded by anonymity.  But – and here is the important thing – there will also always be a segment of society that recognizes the idea that Thomas Hobbes first advanced hundreds of years ago, i.e., the idea of “giving to every man his own.”    If a man bakes a loaf of bread, is it not his right to trade that to the artist for whose painting he wishes to barter?  This idea was later incorporated by our Forefathers into Article I, Section 8, Clause 8 of the U.S. Constitution, which gives Congress the authority “[to] promote the progress of science and useful arts, by securing for limited times to Authors and Inventors the exclusive rights to their respective Writings and Discoveries.”  Without this Constitutional right, a creator has no hope of protecting his or her property against plunder.  And as long as a segment of society believes this proposition to be beneficial to society as a whole, it will hopefully continue to motivate creators to create, and so profit from their creations, despite the efforts of those who choose to destroy it under a cloak of invisibility and unjustly take for themselves the kingdom of Lydia.

Quotations from Republic are taken from the W.H.D. Rouse translation, Great Dialogues of Plato, Mentor Books, 1956, a quoted in this fine article on the topic.

 


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Origins of an Idea–Nothing New Under the Sun?

It was allegedly King Solomon who declared “there is nothing new under the sun!” Now a recent strain of thought seeks to recast King Solomon’s casual observation in order to challenge the basis of U.S. copyright laws, i.e., original ideas. This line of reasoning is perhaps best exemplified in the popular cult film by Brett Gaylor entitled RIP, A Remix Manfesto, inspired by his need to defend the work of his favorite mash up artist, Girltalk. Gaylor makes no bones about his attack on ideas, explaining to his audience near the beginning of the film that this is “a film about the war of ideas, where the Internet is the battleground.” So be it. Let’s debate the film’s primary cornerstone, the first and foundational clause of the Remix Manifesto, which is that “Culture always borrows from the past.” Is that true? Let’s look at what Jefferson said about ideas:

That ideas should freely spread from one to another over the globe, for the moral and mutual instruction of man, and improvement of his condition, seems to have been peculiarly and benevolently designed by nature, when she made them, like fire, expansible over all space, without lessening their density in any point, and like the air in which we breathe, move, and have our physical being, incapable of confinement or exclusive appropriation. – Thomas Jefferson

To be fair to Gaylor, let me initially point out that the entire ReMix Manifesto, and certainly the ideology that undergirds it, is actually borrowed from Dr. Lawrence Lessig, who is a professor at Stanford Law School. Lessig develops the thesis in his book, Remix: Making Art & Commerce Thrive in the Hybrid Economy. Lessig is prominently featured in the film and Gaylor does not shy away from his support of Lessig’s thesis.

Now back to the premise that “culture always borrows from the past.” Without getting too far down the path towards the logical fallacy of drawing a universal conclusion from purely inductive reasoning (as Gaylor does in the film), such a conclusion is, at best, probable, and not definitive. Further, it is only probable if one can assume the truth of the premises used to support the conclusion, for the instant a person can find but one example of an contradicting premise – i.e., in this case an example of something that does not borrow from the past – then the conclusion must be flawed.

Can we find such an example, or are King Solomon and Dr. Lessig correct? Is there no original thought? I personally have a hard time accepting this premise. Spawning original ideas or creating an original thought is, in my humble opinion, what separates us and truly defines us as a species. Sure, the human species uses words, notes, colors, shapes, etc. as the building blocks of its ideas. In that sense, yes, we are using “the past” to create, at least in some fundamental sense. But if you think about it, you’ve heard the old postulation that if you put 50 monkeys in a room filled with typewriters they are statistically incapable of creating a work of Shakespeare simply by striking out random characters on the page and even, perhaps, hitting upon a string of a few words every so often! This illustrates the proposition that the mere existence of the building blocks does not negate original nor creative thought.

King_SolomonEvery now and again, albeit perhaps rare, a human being has a spark of an idea: something is invented or created – something original and unique – that changes, even if only in a small senses, the very nature of life for all humans that follow. It is these original thoughts that propel us forward toward the destiny that is mankind’s, affected forever by the new idea. What it must have been like to be around in the days when the first human species began to formulate language. Creating symbols, be it words or drawings, that communicated their thoughts to another human being. To have been present when the first rudimentary tools were developed to perform the tasks necessary to sustain one’s life in a hostile environment. In the film, Gaylor makes the point that Gutenberg’s invention of the printing press occurred during a time when the “public domain” flourished. His use of this example is, in this case, ironic, since the printing press can truly be defined as one of those creative bursts of unique ideas that only come along one is a few millennia. Since that invention, perhaps only the creation of the Internet has affected the world as much as Gutenberg’s original thought.

So, with these examples, I ask what part of the past did they build on? One might argue that language “borrowed” from the idea of communicating through gestures. Another will say that Gutenberg incorporated language and writing and therefore borrowed from the past. But only in the most general of senses can one seriously maintain that these remarkably useful and unique ideas sustain the principle that “culture always borrows from the past.” I maintain that these are examples of those brilliant moments in human history when someone has that flash of an original idea – whether inspired by God, by his or her muse, by hallucinogenic means, or by heartburn – and creates something that is uniquely and totally new, something that does not, in any substantive sense, borrow from the past. In that moment, we witness the origins of an idea. Perhaps more importantly, when that original idea is expressed in a tangible format, we see the origins of a copyright in the U.S., a copyright that is protectable as a limited monopoly for the life of the author plus seventy years.

In that last conclusion lies the crux of the problem. Lessig and Gaylor make their proposition in the context of trying to solve a perceived problem with current copyright laws: because the length of protection has been extended, there are fewer works going into to public domain and therefore fewer ideas from which to borrow. As a result, “artists” like Girltalk who use pre-existing copyright sound recordings to “mash” together and “create” new songs have fewer popular songs to work with.

In Remix, Lessig says that this results in the criminalization of copying ideas and that, therefore, we should deregulate amateur creativity and decriminalize file sharing. In his words, “chill the ‘control freaks.’” This is where Lessig jumps in to save the day with his “creative commons” license, which uses existing copyright concepts to allow an author to “issue” a license allowing anyone to freely use his or her work, with the only requirement being that of attribution. Ironically enough, Lessig has copyrighted his own books and has, to date at least, not issued a creative commons license for Remix! Now who’s the control freak?

In regard to this issue of works no longer falling into the public domain, while it may be true that extending the period of protection has the effect of slowing down the process, the fact is that our forefathers, primarily Thomas Jefferson, James Madison and Charles Pinckney, clearly anticipated and struggled with the concept that “ideas should spread freely” – as Jefferson says in the quote above – but nonetheless built appropriate safeguards into the copyright provision of the Constitution (Article I, Section 8, Clause 8), providing that Congress may protect the works of “authors and inventors” for “a limited time.” While one can argue, perhaps, that the period of a “limited time” has been grossly exaggerated, one cannot argue that the public domain concept has been abolished.

Frankly, as I see it, giving up on the concept of original thought is not the foundation upon which we as a society should build a debate against the current construct. We should cling to that concept, for it is in that moment – that origin of an original idea – that persons can distinguish themselves from the past, not borrow from it. It is at that moment that our culture is propelled into the future. It is at that moment, I believe, that we are truly alive.

The U. S. District Court for the Southern District of New York ruled against LimeWire and its parent company, Lime Group, finding them liable for inducement of copyright infringement based on the use of their service by subscribers.

U.S. District Judge Kimba Wood issued the 59-page decision Wednesday, siding with the 13 record companies that sued Lime Wire LLC and founder and Chairman Mark Gorton through the RIAA claiming copyright infringement and unfair competition.lime_220x147

In finding the company liable, Wood opined that LimeWire had optimized its application to “ensure that users can download digital recordings, the majority of which are protected by copyright,” and that the company actively “assists users in committing infringement.”  Wood also found that the defendants knew their technology was being used to download copyrighted tunes and took no “meaningful steps” to prevent the infringement. In addition, Lime Wire marketed its software to people “predisposed to committing infringement” and assisted those people, the judge ruled.

Major labels, as represented by the RIAA, were predictably thrilled with the outcome.  “This definitive ruling is an extraordinary victory for the entire creative community.  The court made clear that LimeWire was liable for inducing widespread copyright theft,” RIAA chairman and CEO Mitch Bainwol relayed.

Lime Wire Chief Executive George Searle issued a statement saying the company “strongly opposed the court’s recent decision.”  The statement continued:

“Lime Wire remains committed to developing innovative products and services for the end-user and to working with the entire music industry, including the major labels, to achieve this mission,” Searle said.

Searle did not say whether Limewire would appeal the ruling.

The Recording Industry Association of America proclaimed the decision was “an important milestone” in the battle against online copyright infringement, because Gorton was found personally liable, in addition to the company of which mitch-bainwol-riaa he was the chairman.  Personal liability against a corporate director is rare.

“The court has sent a clear signal to those who think they can devise and profit from a piracy scheme that will escape accountability,” Mitch Bainwol, chairman and chief executive of the RIAA, said in a statement.

LimeWire, launched in 2000, is one of the largest remaining commercial peer-to-peer services left on the Web. The company claims to have more than 50 million monthly users.  The company has managed to defend itself against major label legal action for years.

In issuing her opinion, Wood relied heavily on the 2005 Grokster ruling, in which the Supreme Court said that a file-sharing service was liable when customers were induced to use it for swapping songs and movies illegally.  The test established by the Supreme Court in MGM v. Grokster for provider liability is whether the company actively induced users to commit infringing activities.  While LimeWire argued that it did not, Judge Wood noted that the company actively  “markets LimeWire to users predisposed to committing infringement.”

The record companies that sued Lime Wire included Arista, Atlantic, BMG Music, Capital, Elektra, Interscope, LaFace, Motown, Priority, Sony BMG, UMG, Virgin and Warner Brothers.

Kris Kristofferson and Fred Foster once penned one of my favorite lyrics in the song Me and Bobby McGee, i.e., “freedom’s just another word for nothing left to lose.”  The sentiment is perhaps appropriate for the ongoing war that is being waged against copyright laws as we know them.  The latest battle in this war was fired by the esteemed Lawrence Lessig, famous lawyer and copyright scholar, in his new book Remix: Making Art & Commerce Thrive in the Hybrid Economy.  If Lessig has his way, the songwriter and music publisher will, indeed, have nothing left to lose.

Remix Lawrence Lessig The main goal of the book is the demolishment of existing copyright laws, which Lessig has described as Byzantine.  He believes our current copyright laws are futile, costly and culturally stifling. The “hybrid economy” is described by Lessig as one in which a “sharing economy” coexists with a “commercial economy.”  See this very humorous interview by Stephen Colbert.  He gives examples such as YouTube, Flikr and Wikipedia, which rely on user-generated “remixes” of information, images and sound to illustrate his point.  This “hybrid economy,” in Lessig-speak, is identical to what he calls a “Read/Write (RW)” culture — as opposed to “Read/Only (RO)” — i.e., a culture in which consumers are allowed to “create art as readily as they consume it.”  Thus, the “remix” to which he refers is the concept of taking another persons copyrighted work and “making something new” or “building on top of it.”  This is what us less-published copyright lawyers like to refer to as a derivative work!  And that is the crux of Lessig’s problem:  the copyright law DOES in fact make provision for this type of creative endeavor, provided that the creator of the derivative work gains the permission of the copyright owner.  This is that with which Lessig seeks to do away.

In the Colbert interview, Lessig drolly points out that 70% of our kids are sharing files illegally and that the “outdated” copyright laws are “turning them in to criminals.”  This reminds me just a bit of what my Daddy used to tell me: just because everybody’s doing it doesn’t make it right!   Or, as Colbert blithely responded, “isn’t that like saying arson laws are turning our kids into arsonists?”  The obvious conclusion is that perhaps the law is simply not the problem.

Colbert then comically crosses out Lessig’s name on the cover of his his advance copy of Lessig’s book, draws a picture of Snoopy inside, and then questions Lessig as to whether the book was now his (Colber’t’s) work of art, to which Lessig says “that’s great,” we “jointly” own the copyright.  That’s a point to which Lessig’s publisher, Penguin Press, would surely not acquiesce.  In the final retort to Lessig, Colbert makes the point that he likes the current system, and I quote, “the system works for me.”  I might add that the system seems to be working extremely well for Lawrence Lessig as well.  Lessig is making a fortune exploiting the very system he criticizes as antiquated – the very essence of free speech, I suppose, but in the final analysis, a bit disingenuous.

While I do admire Professor Lessig for working toward a solution to a perceived problem, it’s very difficult to believe that tearing down the entire system of copyright laws in order to accommodate a large percentage of prepubescent teenagers who are too cheap to pay for their music is the appropriately measured response we need in this instance.   Call me crazy.

Here are several good critiques of Lessig’s work and ideas here for further exploration of this issue:

The Future of Copyright, by Lawrence B. Solum (download PDF from this page)

Lessig’s call for a “simple blanket license” in Remix, by Adam Thierer

Copyright in the Digital Age, by Mark A. Fischer

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