Tag Archive for: Copyright Law

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Considering a new U.S. copyright act

Is it time for Congress to draft a replacement for the 1976 Copyright Law? In point of fact, the law was drafted almost half a decade ago now and its last major amendment came in 1998 with the addition of the DMCA. Many argue that the advent of digital technology, driven of course by the ubiquitous Internet, makes the current iteration of the Progress Clause obsolete.
Recently, in March 2014, the current Register of Copyrights, Maria Pallante, made just such a proposal to Congress, urging them to create “the next great copyright act.” You can read those remarks here. But contrary to that proposal, other advocates of the status quo point out that Congress has amended the current law to keep it up to date. In fact, Pallante acknowledged as much in her remarks when she said “[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”][a]s a general matter, Congress introduces bills, directs studies, conducts hearings and discusses copyright policy on a fairly regular basis and has done so for two centuries.” Her push is a part of a coordinated movement with the House Judiciary Chairman Rep. Bob Goodlatte (R-Va) to leave a mark on copyright law.
While I do not necessarily disagree with the Register of Copyrights that perhaps a consideration of a new consolidated law may be necessary to combine these various amendments, I am bothered by the fact that much of the urgency for a new law is driven by the various interested parties on the Internet who believe that just because a copyright finds its way into digital form, it is no longer protected and should be free for all to use, “mash up” or do whatever the hell they want to with it. These radical thinking individuals, such as The Pirate Bay, Lawrence Lessig, the Electronic Frontier Foundation and others use heated rhetoric and emotional appeals to call for a lessening of the copyright protection that has made America the most idea-rich country in the world. While these illogical and emotional appeals are a good way to drum up support dollars and defeat well-meaning and good legislation such as SOPA, they do very little to advance the philosophical and legal debate and should not be the driving force behind our legislation, good or bad. Good emotional causes make for very bad law.
These dramatic appeals for changing the copyright act are most often done with a lack of understanding as to its philosophical underpinnings, and often demonstrate ignorance of the business realities faced by those who create the arts and sciences, as well as the benefactors who support them.
One of the things that bothered me most about Pallante’s remarks was the total absence of any discussion of these philosophical underpinning of the copyright construct. There was no discussion of Article 1, Section 8, Clause 8 of our Constitution (the Progress Clause) or any reference to some of the chief architects of its current form, James Madison, Thomas Jefferson and Charles Pickney, just to name a few. It also worries me when Pallante suggests that the current term – Life + 75 – “is long and the length has consequences,” thereby questioning the validity of the Supreme Court’s proclamation to the contrary in Eldred v. Ashcroft. The latter, of course, is one of about a half a dozen cases the aforementioned anti-copyright advocates has levied against the law over the years.
Sandra Aistars, executive director of the Copyright Alliance, summed it up well in an opinion piece for The Hill entitled “Protect rights of artist in new copyright law.” She said “Should Congress take on the challenge of updating the Copyright Act, it must do so guided by sound principles, and its deliberations must be based in reality rather than rhetoric.” At least Aistars points out that the principle of copyright law is driven by the fact that “protecting authors in in the public interest” and based on “stable property rights.”
Article 1, Section 8, Clause 8 gives Congress the right “to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.” Madison and Jefferson debated the various components of this clause with some degree of fervor in their massive collection of actual correspondence, with Madison defending the idea that if our society gives up a monopoly (copyright) to creators, the value of that monopoly will generate the creation of widespread ideas that would ultimately reward society. There is no doubt that the equitable component that was bestowed upon authors and inventors the day the Congressional Congress approved the Progress Clause has created the America we know and love today through the wealth of new ideas and expressions that have been created in the form of books, music, films, visual arts, scholarly research and inventions. Without that value in the patent or copyright, there would be no Apple, no Microsoft, no IBM, no Ford, no Chevrolet . . . you get the point. This is the reward that Madison envisioned our society would gain by giving individuals control over their creations, a theory that Locke and others disseminated long before the new nation of America was conceived.
As Aistars summarized in her article, “Ensuring that all creators retain the freedom of choice in determining how their creative work is used, disseminated and monetized is vital to protecting freedom of expression. Consent is at the heart of freedom, thus we must judge any proposed update by whether it prioritizes artists’ rights to have meaningful control over their creative work and livelihood.”
The most important thing for Congress to consider if it picks up the gauntlet laid down by Ms. Pallante is this idea that society benefits by giving a monopoly to creators. Given an individual who has created a work of authorship stable property ownership in that work is the foundation of our great Country and is the primary goal of copyright. To take that away takes away one of our inherent and valuable Constitutional rights, even greater perhaps than our Freedom of Speech and Assembly. Any new proposal much cherish the rights of the creators that the current Copyright Act has created and retain the same privileges and advantages. The future of our Nation in the Internet Age depends on it.
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New Wine in Old Wine Skins

People don’t pour new wine into old wineskins. If they do, the wine will make the skins burst,
and both the wine and the skins will be ruined.   -Mark 2:22

Article 1, Section 8,Clause 8 of the United States Constitution is the starting point for any discussion of intellectual property, and in this specific case copyright.  In it, our Forefathers gave Congress the right to establish a monopoly in favor of authors and inventors for the fruits of their labor.  The merits and justification for granting this monopoly was apparently the subject of considerable debate amongst the likes of Thomas Jefferson, James Madison and Charles Pinckney, not to mention the remaining representatives to the Constitutional Convention, who spent a week long session in August 1787 discussing various proposals enumerating the powers of Congress. 

Jefferson was, perhaps, one of the staunchest proponents of limiting governmental monopolies in all respects, but in particular with regard to restricting the use of original thought.  In his indubitably prosaic way, Jefferson said "If nature has made any one thing less susceptible than all others of exclusive property, it is the action of the thinking power called an idea. . . .  [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]he made them . . . incapable of confinement or exclusive appropriation.”  In conclusion, Jefferson opined that “Inventions then cannot, in nature, be a subject of property. 

These concerns about granting rights of property to intellectual property, as expressed by Jefferson, were actually addressed by Charles Pinckney in his proposal.  His proposed clause, “to secure to authors exclusive rights for a limited time, added the infamous phrase to other proposals drafted by Madison.  It was combination of their drafts that were used by the Committee of Detail to draft the final clause, which included the “for a limited time” phraseology that has been the subject of debate in recent years. 

Under this authority, Congress has, through the years, established certain limitations on the monopoly of copyright.  Beginning with the first U.S. copyright law of 1790, wherein authors were given a 14 year monopoly, plus the option to extend the monopoly for a second 14 year term, to the present construct wherein authors are given a monopoly for the duration of their life, plus an additional seventy years in which their families and/or heirs can exercise the monopoly.

In addition to the time limitation, and in the spirit of Thomas Jefferson, Congress also imposes other limitations on the monopoly of copyright.  For example, originally the copyright monopoly on applied to “useful knowledge” produced by society, that is primarily writings.  This limitation evolved of the years into what we now understand as the definition of a copyright, i.e., an original idea expressed in a tangible format for more than a transitory duration.  Other limitations such as the first sale doctrine and fair use are not pertinent to the point here, but also serve as limitations on creators’ rights.

Throughout history, these limitations on the monopoly of copyright have, for the most part, served to create a very delicate balance between the need, perceived by our Forefathers, to incentivize authors and inventors to populate the marketplace of ideas on the one hand, against the utilitarian goal of providing a free exchange of those ideas for the good of society.  This creates the public domain concept of copyright law.

So it is, then, that the proprietary nature of an original idea is based on expression of that idea in a manner than can be controlled, i.e., a tangible format, again addressing the concern of Jefferson that an idea may be exclusively possessed as long as a person keeps it in their head, but “the moment it is divulged, it forces itself into the possession of everyone. . . every other possesses the whole of it.”  The resulting corollary of this is that the ideas themselves, absent expression, as well as the facts about the phenomena of the world, are considered to be the collective knowledge, or property, of humanity.  Therefore, so far in history, what I call the continuum of knowledge has been made up of these unexpressed ideas together with the works that have fallen into the public domain. 

This continuum of knowledge was envisioned by our Forefathers for the greater good of society and is the reason that, for example, tangible expressions of one of Claude Monet’s favorite subjects, the Saint-George cathedral in Venice, are theoretically entitled to copyright protection at the same time as the later paintings of François Salvat conveying expressions of the same subject.  Once the painters’ expression of the idea that is the Saint George cathedral is transformed onto canvas, he is entitled to enforce the monopoly of copyright.  Conversely, the mere idea or fact that is the cathedral is never the subject of individual property protection by the painter. 

Stated another way, the law by necessity is focused on the embodiment of the idea, as opposed to the idea itself or, to use a biblical reference, it focuses on the wine skins more than the wine as a means of control.  This conflation of the expressed idea – described by the Supreme Court as “evanescent” – and the physical embodiment creates more misunderstanding regarding the concept of copyright than perhaps any other.  In our advanced age of digitization, it is now more important than ever for us to remember the distinction between the two elements.

The best illustration of this conflation is perhaps the area of musical works.  For purposes of this discussion, we will ignore, for the moment, that there is a separate copyright for sound recordings of musical compositions and focus primarily on the latter.  In the early 1900’s, vinyl records became the embodiment of choice for musical compositions.  In the 60’s, it was the 8-track tape and in the 70’s it was the analog cassette.  In the 80’s, as digital technology advanced, we used the compact disc and digital audio tape, which ultimately led to the mp3 format in the 90’s and afterward.  Once digitization became possible, all tangible expressions we subjected to the process and it became possible to make flawless copies of the “wine” that was paintings, photographs, text, music, graphics, video, sound recordings, and cartoons. 

John Perry Barlow, ex-Grateful Dead lyricist turned founder of the Electronic Frontier Foundation, describes this phenomenon:

    Now, as information enters cyberspace . . . these [wine] bottles are vanishing.  With the advent of digitization, it is now possible to replace all previous information storage forms with one metabottle: complex and highly liquid patterns of ones and zeros.

From the moment of digitization forward, the fusion of the expressed idea and the embodiment was “rent asunder,” changing forever more how we perceived copyright.  Tangible expressions, once embodied in pigments, paper, strips of celluloid, discs of vinyl or plastic, and tape, now existed as glowing impulses of voltage conveyed in zeros and ones, flitting around the Internet at the speed of light.  The expressions, in other words, are now closer to pure thought than our Forefathers, perhaps, ever dreamed possible.  Digital technology thus threatens to disturb the delicate balance they intended to establish in their creation of a copyright monopoly.  The truly “evanescent” nature of a digital copyright monopoly makes it extremely difficult to fit into the “old skin” that is “an original idea expressed in a tangible format for more than transitory duration.”

The “RAM Fixation” cases that arose in the late 90’s – the seminal case being MAI Systems Corp. v. Peak Computer, illustrate the imbalance precisely, as the courts struggled to determine whether a cached copy of a copyrighted work that existed in the random access memory of a computer for no more than a second was sufficient “fixed in a tangible format” for more than a “transitory time,” thus warranting protection under copyright law.  The 9th Circuit in MAI Systems ruled that it was sufficient, but other courts, like the 2nd Circuit in Cartoon Network v. CSC Holdings, found otherwise, ruling that the copy was “fleeting” and therefore not “embodied . . . for a period of more than a transitory duration. . . .”  The Supreme Court has yet to rule on this issue.

Once the veil was rent asunder, trying to enforce a copyright monopoly was somewhat akin to trying to sweep back the ocean with a broom.  Beginning with its efforts against Diamond Multimedia in the late 90’s and its efforts against Napster and Grokster, and continuing through to the present through it efforts against more than 17,000 individual downloaders, the track record of the Record Industry Association of America in its fight against illegal downloading is the perfect example of this fruitless effort.  Rather than adapt and transform our concepts of copyright – the wine skin – to conform with the new wine – digitization of art – the music industry continued to cling to the status quo, a hand forced in part by decades of doing business under the old model.

What does this conundrum mean for copyright law and the efficacy of a monopoly in the fruits of our creative labor?  Before answering that question, and lest we forget, new technologies have always created challenges to Constitutional law.  If we view our founding document as a living, breathing document that was created to adapt to such challenges, it may help address the current challenge. 

This is not the first time in history that a new technology has challenged an existing way of thinking.  Even in the music industry, the introduction of the “talking machine,” a/k/a the phonorecord player, created such a stir that John Philip Sousa testified before Congress that the invention would “ruin the artistic development of music in this country” because our vocal chords would no longer be used and therefore vanish as a result of evolution!  What seems like an extreme position now is only perceived as such through the lenses of hindsight.  Congress responded to Sousa’s and the industry’s concerns, as it often does, by revising the copyright law to address new technologies.

In responding to the new technologies of our generation, we must keep in mind the primary objectives of Jefferson and others in the creation of a copyright monopoly in order to adequately address the issues – they wanted to assure the widespread distribution of ideas for the benefit of society by giving the creators of ideas a monopoly.   They were dedicated to encouraging the dissemination of mental creations throughout the New World where they could be used, entering the mind of others – the continuum of knowledge – by assuring their creators that they would be compensated for the value of such dissemination.  Once certain limits had been reached, the protected ideas would enter the market place of ideas, the continuum of knowledge, and become freely available to the public for use in the creation of new ideas.

The problem with many solutions being proposed by advocates of copyright, as well as those who would have us do away with the concept, is that they ignore the delicate balance by focusing on one aspect of that principal while ignoring the other.   Just because we can now “unclothe” the idea, stripping away its tangible, physical embodiment, does not eliminate the system of confinement, i.e. the copyright monopoly, envisioned by the Forefathers.  Jefferson clearly grabbled with the concept that an idea was “incapable of confinement,” but nevertheless clearly chose to participate in the creation of a system that would, in fact, confine the very thing that was incapable of confinement.  So, even though the creations of authors and inventors now, more than ever, more closely resemble a mere idea, using the tools given to us by our Forefathers, our society can still adapt our system that offers incentives to those authors and inventors for the dissemination of the fruits of their labors. 

Through new technologies and interpretations, we can develop “virtual bottles” to store our new wine, bottles which replace the old physical, less evanescent wine skins of embodiment.  Since laws on meant to reflect public opinion, perhaps in the end the future of the copyright monopoly may depend more on perceptions than it does on restrictive regulations.

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SOPA and PROTECT IP: Is the Sky Falling on the Internet?

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]

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YouTube Uses Happy Tree Friends to Educate on Copyright

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.

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Solutions for the Orphaned Works of Copyright: Google Books Decision Highlights Need for Action

The recent decision presented by the honorable Judge Chin on the matter of copyright infringement in the case The Authors Guild v. Google Inc. raised numerous issues in the arena of Intellectual Property. In addition to opposing the “opt-out” stipulation written into the settlement, Judge Chin also contested the way Google Inc. approached and viewed “orphan works” in relation to digitizing books where no copyright owner or recipient could be located or reached. In Judge Chin’s opinion, the matter of orphan works should not to be decided by private enterprise, but is rather a matter for Congress to decide. In so deciding, Judge Chin refers to certain opinions issued by the Copyright Office, as well as legislation that was originally proposed back in 2008.

"Orphaned works" are defined as copyrighted works for wSAVEORPHANShich the owner cannot be identified, but which someone wants to use. In other words, works for which the potential user cannot locate or identify the actual owner of the work in order to seek proper permission. Under the current legal structure, even if a potential user makes a diligent effort to find the owner in order to seek permission, the user’s risk of copyright liability for such use is not eliminated because there is always a possibility, however remote, that a copyright owner could bring an infringement action after that use has begun. Although it is difficult to know precisely how many orphaned works are around, one 2009 study conducted by the JISC (Strategic Content Alliance) in the United Kingdom calculated that as many as 25 million such works existed in the libraries, museums and archives of that country. In such situations, productive and beneficial use of the work – something the concept of copyright is designed to encourage – is impeded.  It is such a real problem that many organizations, like the Society of American Archivists, have issued statements of best practices to assist their members in dealing with orphaned works.  But many potential creators are not members of such an organization and don’t know how to approach clearing an orphaned work for use.

Based on a report on orphaned works prepared by the Copyright Office in 2006 at the requests of Senators Orrin Hatch and Patrick Leahy, the “Shawn Bentley Orphan Works Act of 2008” (S. 2913) was ultimately introduced by Senator Leahy on April 24, 2008. It quickly passed by a unanimous vote on September 26, 2008. The act was referred to the House Judiciary Committee, where it unfortunately lies dormant or, more likely, has stalled or died in committee chambers, suffering the fate of many good laws. Several earlier actions which served the same purpose, such as Copyright Modernization Act of 2006 (H.R. 6052) suffered similar fates.  The proposed 2008 act outlined specific guidelines for individuals pursuing and currently using orphan works. The following is a brief overview of the proposed bill and its major provisions.

Under the proposed legislation, in order to use an orphan work, a person would be required to follow very specific steps in order to avoid financial and legal liability for infringement. These rules fall under the section entitled “Conditions for Eligibility,” which outlines the following as steps the person utilizing the orphaned works would need to takes in order to limit liability:

  1. provide extensive evidence that the infringer performed a detailed search in “good faith” to locate and identify the copyright holder and was unable to locate the copyright holder;
  2. acknowledge the copyright holder in an appropriate manner, assuming the copyright holder was known with a reasonable amount of confidence (a form of "moral rights");
  3. provide a mark or symbol in some regard indicating the work is used under this section;
  4. assert in an initial pleading the eligibility for such limitations; and
  5. provides documentation for the search undertaken to locate and identify the copyright holder.

The exceptions to the above guidelines for limited remedy collection do not apply to an "infringer" if: 1) the infringer receives notice of infringement and fails to negotiate in good faith with the claimant or 2) fails to provide payment for the use of the infringed material in a reasonable time period after reaching an agreement with the copyright holder.

Additionally, the individual must search with what the legislation described as "diligent effort” to locate the copyright holder. The phrase "diligent effort" requires, at a minimum: 1) a search of the records at the Copyright Office through the medium of the Internet 2) a search of “reasonably available sources of copyright authorship and ownership information” 3) use of intangible and tangible tools and publications, and where necessary, assistance of others and 4) use of databases available to the public, including those accessible by the Internet.

If someone utilizing an orphaned work follows these guidelines, any award for monetary relief “may not be made other than an order requiring the infringer to pay reasonable compensation to the owner of the exclusive right under the infringed copyright for the use of the infringed work.” Injunctive relief remains an additional remedy offered to the owner in order to prevent or restrain any further infringement action.

The act apparently died its quiet death because of opposition from many copyright groups and, in particular, notable expert Lawrence Lessig, who opposed the bill because of its vague definition of the "diligent efforts" required to avoid liability. Some of these opposition groups even referred to the proposed legislation as a “license to steal.”  The Register of Copyrights at the time, Marybeth Peters, believes to the contrary that the orphans works situation is a problem that is "overdue" and that the "pending legislation is both fair and responsible (See Marybeth Peter’s open letter).

This issue is particularly of concern for musicians and artists, since a large number of old recordings are no longer commercially available because of an uncertainty as to who owns them. In addition, creators of new recordings must often abandon projects if a work is "orphaned," for fear of liability. This is a loss not only for the artists, but for the public and our collective culture, i.e., the continuum.

Officially, legislator still deem the legislation to be "pending."  In his speech in 2009 in from of the World Copyright Summit, Senator Orrin Hatch state he “continue’s to be very active on passing orphan works legislation.”  He continued to say:

For years, I have been working with industry stakeholders and copyright experts, including Marybeth Peters, Register of Copyrights, to pass orphan works legislation. The bill seeks to unite users and copyright owners, and to ensure that copyright owners are compensated for the use of their works. I couldn’t agree more with Register Peters when she said, “A solution to the orphan works problem is overdue and the pending legislation is both fair and responsible.

Judge Chin felt that the Google settlement would have given Google an effective monopoly over orphan works, and that was one of his primary rationales in deciding the way he did.  His rejection of the Google settlement highlights this important issue and brings it to the light of public awareness again.  Anyone with an interest in intellectual property should contact their senators and representatives and ask why a more diligent effort, no pun intended, has not been made to address a problem that still exists, despite the fact that there has been no movement on the bill in three years.  With President Obama’s pro-intellectual property agenda, the time may right to solve this incredible hole in U.S. Copyright law.

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Judge Chin rejects settlement agreement in Authors Guild v. Google

Under Rule 23(e) of the Federal Rules of Civil Procedure, a settlement of a class action requires approval of the court. Fed. R. Civ. P. 23(e). The court may approve a settlement that is binding on the class only if it determines that the settlement is “fair, adequate, and reasonable, and not a product of collusion.” This week, with regard to the much ballyhooed amended settlement arrangement (the “ASA”) in The Authors Guild v. Google, Inc. the honorable Denny Chin of the U.S. District Court in Manhattan said flatly “I conclude that it is not.”  See full decision.

google-book-search-3The ASA would have allowed Google to digitize millions of copyrighted works in an effort to create the largest digital library, a process Google began in 2004 when the company entered into agreements with certain academic libraries to digitize their holdings. Since that inaugural agreement, over 12 million books have been scanned and made available online through Google Books. The ASA would have allowed Google to “(1) continue to digitize books and inserts, (2) sell subscriptions to an electronic books database, (3) sell online access to individual books, (4) sell advertising on pages from books, and (5) make certain other prescribed uses. (ASA §§ 3.1, 4.1-4.8; see also ASA § 1.149).” Google’s rights to the copyrighted work would be on a non-exclusive basis, permitting the copyright holder to exploit the work to other companies, including competitors, while simultaneously allowing Google to display the work, for which Google would have been required to compensate the class plaintiffs 63% of the revenue from all uses of the work to the copyright holder.

Judge Chin recognized the many benefits of an online library with virtually every work ever created are great in number. First, the sheer number of books that students, schools and researchers could access would greatly benefit the public. Those in disadvantaged economies and cultures could access knowledge otherwise not available, and persons with disabilities could learn through the implementation of Braille and audio books. Moreover, publishers and authors would benefit due to the number of books made accessible to the public, especially those works that have been forgotten in the dark and hidden corners of libraries. But as Judge Chin further pointed out,

While the digitization of books and the creation of a universal digital library would benefit many, the ASA would simply go too far.

At least 500 additional parties filed amicus briefs on the subject commenting, mostly from a negative point of view, on the amended settlement, including such notables and Microsoft and Amazon. In addition, 6800 members of the plaintiff class “opted out” of the settlement. The bulk of the briefs focused on the inadequacies in the settlement relating to class notice and class representation, and on concerns regarding copyright, antitrust, privacy and international issues. Some also argued that the settlement would go beyond the authority of the court under Rule 23 of the Civil Rules of Procedure.

This procedural issue turned out to be one of the more compelling arguments presented to the court. In as much as the settlement would have released certain claims not before court such as, for example, so-called “orphaned works,” the court felt that the ASA was “an attempt to use the class action mechanism to implement forward-looking business arrangements that go far beyond the dispute before the Court in this litigation.”

Orphan works are books that have copyright protection, but the copyright owner identified in the registration certificate cannot be located or reached. Under the ASA, Google was required to “strive” to locate the copyright holder, but if unsuccessful could digitize the book without consent. In this case, and in the case of “absent class member who failed to opt out,” pursuant to terms of the settlement agreement, the copyright owner would lose the right to object to future infringing conduct by Google. The court was “troubled” by this aspect of the agreement. The judge stated:

The questions of who should be entrusted with guardianship over orphan books, under what terms, and with what safeguards are matters more appropriately decided by Congress than through an agreement among private, self-interested parties. Indeed, the Supreme Court has held that “it is generally for Congress, not the courts, to decide how best to pursue the Copyright Clause’s objectives.

The court illustrated the concern with a quote from a Texas woman who grandfather self-published his memoirs, Dust and Snow, she says,

From Google’s point of view, Dust and Snow is an “orphaned” book. If and when Google scans it, the company is likely to be unsuccessful in trying to locate the publisher, since the book was self-published and my grandfather is now deceased. In essence, the way the settlement is written, such “orphaned” titles are automatically handed to Google free of charge to do with, as it will. From my family’s point of view, Dust and Snow is not orphaned at all. It is very clear who owns the copyright. So why is Google being granted the automatic right to take over the copyright of books like my grandfather’s?

As noted earlier, Chin stated that such matters as “orphaned works” are best left to Congress rather than private entities to delineate and enforce through such an agreement.

As the literary agents Stuart Bernstein and Susan Bergholz expressed to the court so eloquently:

By accepting this settlement, the court will be setting a highly questionable precedent, usurping the role of the legislature by creating a legal loophole for one corporation and reversing the very foundation of copyright protection. We who have devoted our lives to assisting the work of creative individuals are left with a sense of moral indignation. We have pledged, in our contracts with clients, to sell or license their rights to ethically and financially sound purchasers and licensees. And for many years we have toiled over agreements and contracts to accomplish this, aided by the protections of the law. The situation we find ourselves in now is one of dismay and powerlessness, with only the weak ability to “object” or opt out. We beseech you to give authors back their rights. Force Google to negotiate like any other.

With regard to the fact that the ASA would give Google permission to digitize any work unless the copyright owner “opted-out,” the court also found this to be unpalatable, as it places an unnecessary and unwarranted strain on the copyright owner to initiate an action to prevent copyright infringement, when in fact; the responsibility should be placed on the entity wanting to use the copyright work.

As the Copyright Act explains,

When an individual author’s ownership of a copyright, or any of the exclusive rights under a copyright, has not previously been transferred voluntarily by that individual author, no action by any governmental body or other official or organization purporting to seize, expropriate, transfer, or exercise rights of ownership with respect to the copyright, or any of the exclusive rights under the copyright, shall be given effect under this title, except as provided under title 11.” (17 U.S.C. § 201(e).)

As David Nimmer, author of Nimmer on Copyright explains, “By its terms, Section 201(e) is not limited to acts by governmental bodies and officials. It includes acts

of seizure, etc., by any ‘organization’ as well.” However, under the ASA, any copyright owner who fails to notify Google and “opt-out” will lose their right to the copyright and deem Google competent to do with their copyright as they please.

In light of the previous lawsuits brought against Google by publishers and the current settlement recently rejected, Judge Chin says,

It is incongruous with the purpose of the copyright laws to place the onus on copyright owners to come forward to protect their rights when Google copied their works without first seeking their permission.

The Court was also sympathetic to concerns raised by Microsoft and Amazon that approval of this settlement would, in effect, give Google de facto monopolies over the digital book industry as well as the online search industry. This, of course, raises a number of antitrust concerns by effectively foreclosing competition.

In Google’s pursuit to provide the first digital library encompassing the estimated “174 million unique books,” the information giant has displayed the unequivocal lengths it is willing to take in order to bring more information to more people. As one individual put it, “Google pursued its copyright project in calculated disregard of authors’ rights. Its business plan was: ‘So, sue me.'” Google’s thirst for providing perpetual information to the consumer caused the company to overlook, whether intentionally or accidently, major copyright issues.

In rejecting the settlement, Judge Chin made one very keen observation in his conclusion: ” many of the concerns raised in the objections would be ameliorated if the ASA were converted from an “opt-out” settlement to an “opt-in” settlement.” He strongly urged the parties to consider such an option.

http://www.nysd.uscourts.gov/cases/show.php?db=special&id=115

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Illegal file-sharing has the greatest impact on the lowly songwriter

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.
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The Utilitarian Idea of a Monopolistic Right in Intangible Property

By Barry Neil Shrum, Esquire and Nathan Drake

The classical libertarian, Frédéric Bastiat, is quoted as saying:

In the full sense of the word, man is born a proprietor. . . . Faculties are only an extension of the person; and property is nothing but an extension of the faculties. To separate a man from his faculties is to cause him to die; to separate a man from the product of his faculties is likewise to cause him to die.

According to a recent article, entitled The Copyright Monopoly is a Limitation of Property Rights, the author, Rick Falkvinge, writing for TorrentFreak.com, argues that copyright is merely “a limitation of property rights” and is “not a property right.” This conclusion is incorrect and totally without any basis in U.S. history, not to mention world philosophy. Article 1, Section 8, Clause 8 of the United States Constitution directly refutes that by granting Congress the power

To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.

Our Forefathers, in this case James Madison and Charles Pinckney, based the idea of intellectual property rights on John Stuart Mill’s utilitarian philosophy. In other words, they were quite willing to violate the property of tcode-of-hammurabi-3he few – i.e., the "rights" of individuals to use someone else’s intellectual property however they choose – if doing so would serve to advance the greater good of society as a whole. So, the original drafters of the Constitution did. They did not intend to grant partial ownership to the creator, but rather “exclusive rights” for a work derived from their intellect and creativity. That is to say, the idea that copyright is a monopoly is not the "carefully chosen" "rhetoric from the copyright lobby" of recent vintage as put forth by Falkvinge is completely false: rather, it is an idea that our Forefathers debated and discussed, and carefully chose to bestow upon Authors and Inventors.

Many fail to grasp the idea that the ownership of an intellectual property such as copyright is no different than ownership of real property, such a person owning their own house or piece of land. Both forms of ownership are based on societal laws and give the owner inherent rights to do with the property as they please. Just as the government prohibits individuals from reproducing and distributing copyrighted works, so does the government prohibits individuals from trespassing onto another person’s personal property or stealing their possessions. Are the latter "government-sanctioned private monopolies" that impose "limitations of property rights" on individuals other than the owner? You bettcha! That is, in fact, what a monopoly is: allowing an individual to control something to the exclusion of other competitors.

The significant different between real property (i.e. the chair in Mr. Falkvinge’s analysis), and a copyright (i.e. the DVD in aforesaid analysis), is that the chair is a tangible object, and its essence is easily grasped by our senses. A DVD, on the other hand, is a physical object which embodies, for example,  a movie, or intellectual property, that is intangible and more difficult to conceptualize. When purchasing a copyrighted work such as a movie, one has to realize the two forms of property contained within that physical object that is the DVD. Falkvinge draws his analogy between the chair and the DVD as follows:

When I buy a movie, I hand over money and I get the DVD and a receipt…after the money has changed hands, this particular movie in mine.

This statement is factually and legally incorrect. Although the purchaser owns the physical embodiment of the DVD – and in fact may dispose of it any way he or she chooses – the purchaser does not own the intellectual property embodied within the DVD, and may not exercise dominion, or monopoly, over that property. The creator of the work, in fact, owns the intangible property encoded in the DVD, and the creator is within his/her rights, according to section 106 of the United Sates Copyright Code, to reproduce and distribute the work as they please due to the time, creativity and money that produced the work. The owner of the physical object containing the movie has no such rights. Our Constitution is what controls this fact, not just the copyright laws Congress has passed under its authority.

The umbrella of intellectual property, and more specifically Article I, Section 8, Clause 8 of the Constitution, also include the concept of patents. In the article, when Falkvinge compares the limitations copyright places on the purchaser of a DVD to the endless opportunities an ostensibly-expired patent gives the purchaser, he erroneously concludes that " patents are not relevant for this discussion." Oh, but they are. First, one cannot legitimately compare a patent with limitations that have expired to a copyright that currently retains its exclusive rights and limitations. In fact, one author has asserted that it is patents¸not copyrights, that place a greater restriction, or monopoly, on property rights. In Man, Economy, and State, Murray Rothbard concluded:

The patent is incompatible with the free market precisely to the extent that it goes beyond the copyright.… The crucial distinction between patents and copyrights, then, is not that one is mechanical and the other literary. The act that they have been applied that way is an historical accident and does not reveal the critical difference between them. The crucial difference is that copyright is a logical attribute of property right on the free market, while patent is a monopoly invasion of that right. Rothbard’s point is that businesses should not be restricted from independently designing and creating a product using natural laws and principles, even if it turns out to be similar to a patented product, even though our legal structure often operates in that manner.

But the greater point to made here is this: accepting the validity of a patent monopoly requires the acceptance of a copyright monopoly. Both rights are granted by the same Constitutional clause and, a priori, both are relevant to any discussion of government-granted monopolies. Second, simply because an individual purchases the physical embodiment of a chair design does not imply that they acquire full rights to disassemble, analyze, reengineer and distribute the chair commercially. To play with Falkvinge’s analogy, imagine that instead of chair, we are discussion the purchase of a new automobile, let’s say a Ford Mustang. Does one who purchases an automobile by virtue of that sales transaction, gain the right to deconstruct and reverse engineer the product, and start his or her own manufacturing facility to churn out duplicate cars in order to compete with Ford? Why, because there is intellectual property that is embodied in the automobile, just as there exists intellectual property embodied in a DVD, a CD and, yes, even an MP3 or an MP4. Based on the utilitarian teachings of John Stuart Mill, our society believes in rewarding an individual for the “fruits of their labor.” When labor is applied to raw goods by an individual in order to create an original expression of an idea, our society has agreed that this product is the property of the individual that created it. Our Constitution grants the creator of such product a limited monopoly in the exploitation of that creation. This brings me to my final point:

The copyright is, in fact, a “government-sanctioned private monopoly.” The ideology behind the monopolization of intellectual property is to “promote” and incentivize people to create works with the understanding and confidence that the time, energy and financial hardship involved will be fairly compensated. Without any supreme authority protecting the interests and livelihood of creators, the motivation to develop such a work arguably decreases dramatically. The implementation of the monopoly grants the property rights in the creator. As with all property rights, that grant places limitations on the persons who do not own the property.

So, the idea that "monopoly" is an evil concept which the lobbyist have attempted to associate with a "positive word such as ‘property,’" as Falkvinge argues, is historically, philosophically, and logically false. It is rather a concept that has been with us since the Code of Hammurabi first described laws regarding property; it was passed down to us by our Merry Old Ancestors from England; it is a right the participants of the Oklahoma Land Rush had to fight to exercise; and it is these rights – the right to exercise control over one’s intellectual creations – that assure a society in which ownership of property is exercised by the appropriate party by wielding their monopoly against those that would steal it away.

So yes, Mr. Falkvinge, a copyright monopoly is a limitation of property rights. But it is also a means by which the owner can exercise his or her property rights. The limitation is, in fact, on those who would steal their rights. So if this is a limitation on your rights to freely distributed copyrighted product, I’m ok with that and I think the majority of our society is as well.

As the French economist François Quesnay succinctly said: “Without that sense of security which property gives, the land would still be uncultivated.” In other words, if we don’t grant a monopoly to our "cultivators" of ideas, the landscape will be baron.

See also, Cleveland, Paul A., Controversy: Would the Absence of Copyright Laws Significantly Affect the Quality and Quantity of Literary Output? A Response to Julio H. Cole, Journal of Markets & Morality 4, no. 1 (Spring 2001), 120-126

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French Court Finds Google Liable and Refused to Apply Safe Harbor Provisions of The Law of Confidence in the Digital Economy

The search engine giant Google, known for its colorful name and creative endeavors, has been convicted in French Court of infringing the copyrights of four artistic works and now faces fines upwards of $600,000, not including legal costs and attorneys fees. The plaintiffs in the case was made up of four entities who owned the allegedly infringed copyrights: a photographer, the producers of the movie Mondovino, and two other documentary filmmakers responsible for the films Armenian Genocide and the Clearstream GoogleControversy.

According to the plaintiff, "take-down" notices were sent to Google demanding that the copyrighted works be taken off their search engine and its "Google Video" component citing the alleged infringement. Although Google agreed to remove the content from their website, the works remained available, initiating further legal action by the plaintiff and involving the Court of Appeals in Paris. Google argued that monitoring individual internet posts to verify whether specific material appearing in a search result infringing copyright is a tedious, if not impossible, task. More importantly, it argued that such activity is ultimately not their responsibility. Google defended its position by citing Article 6 of the 2004 French act entitled Law of Confidence in the Digital Economy, which

“[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”][e]xclude[s] civil and criminal liability on the part of hosts in two cases ­ no knowledge of the disputed content or of its unlawful nature, and withdrawal of such ccourcassationontent…these provisions could not impose liability on the host merely because it had not withdrawn information reported by a third party as being unlawful…”

The French protections are very similar to the safe harbor provisions of the U.S. Digital Millennium Copyright Act of 1998. But the Court of Appeals in Paris refused to give Google safe harbor under the law. Instead, in four separate decisions (three rendered on January 14, 2011 and one on February 4), the Court assessed approximately $600,000 in damages for what it called “préjudice moral” and infringement.

Google has appealed the decision with the highest court in France, Cour de Cassation, which acts strictly as an appellate court, and the prospects for Google on appeal look more promising as they begin process. In 2009, the Cour de Cassation ruled that the video hosting website, Dailymotion, was not liable for providing the film “Joyeux Noël” because the provider did not have "explicit knowledge" of the infringed material being on their website, basing its decision on Article 6 of the Law of Confidence in the Digital Economy. According to Article 6, three criteria must be met to invoke knowledge of infringed material, including specifically that “notifications should indicate precisely which content is alleged to be unlawful, its precise location on the website and the reasons why it is unlawful.” Google intends to use this ruling to their favor as they embark on a case that will likely become the first of many.

http://www.ipbrief.net/2011/03/13/the-unimaginable-happened-google-sued-for-copyright-infringement/

http://www.twobirds.com/English/News/Articles/Pages/Paris_CourtofAppeal_Dailymotion_host.Aspx

http://www.juriscom.net/actu/visu.php?ID=949

http://merlin.obs.coe.int/iris/2004/7/article18.en.html

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Immigration and Counterfeit Enforcement Agency Brings Criminal Charges against Owner of ChannelSurfing.Net

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]

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