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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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Music Industry, Music Row News, Nashville

Law on the Row Goes “Old Skool”

written by Jeff Scheese

Law on the Row is making the jump from digital to “old skool” hardcover. Barry Neil Shrum’s article The Magical Ring of Gyges: Why Illegal Downloading is So Rampant in the Age of Cyberspace was selected by author and editor Thomas J. Hickey, responsible for the Taking Sides book series published by McGraw-Hill. Mr Shrum’s article is set to appear in the next edition of his Taking Sides: Clashing Views in Crime and Criminology . This will be the third edition of Mr. Hickey’s book. The books are set up in a “point/counterpoint” debate structure, and Mr. Shrum’s article will go toe to toe with an article from famed singer Janice Ian on the issue of illegal downloading of intellectual material from the internet.

As we all know, Piracy is becoming more and more of a problem in recent years due to many advances in technology. Shrum’s article takes the side that it is human nature to steal and take the plunder if they know they can get away with it and cites the famous mythological story “The Ring of Gyges” written by Plato. However there are those that know right from wrong and will remain from engaging in the piracy. It is his hope that if people choose to respect others intellectual property by not stealing it then it will encourage others to be creative without the worries of their own works being stolen. It is a very well written article that brings a lot of truth to the issue and really digs down into people’s motivations and discouragements of music piracy. Ian’s article The Internet Debacle – An Alternative View takes the opposing view that all music should be free to download from the internet. The books thus establishes both positions, allowing the reader to “take sides,” i.e., see both sides of the argument and can then make their own judgment about the issue at hand for themselves.

The publication date is set for October 12, 2012. You can purchase either the hardcover edition or, for those of you with a Kindle, the Kindle edition. Both will be available on Amazon.

Jeff Scheese, a senior at Belmont University which an emphasis in music business, is currently interning with Shrum & Associates.

Digital Downloads, Music Publishing, RIAA

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, decreasing 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.

Copyright: it’s the end of the world as we know it.

Abraham Maslow’s famous “hierarchy of needs” places self-actualization as the pinnacle of human behavior. To illustrate what the phrase “self-actualization” meant , Maslow said:

“a musician must make music, an artist must paint, a poet must write, if they are to be ultimately at peace with themselves.”

Of course, the thing that is important to note about Maslow’s hierarchy is that physiological needs are at its base, i.e., a person’s basic needs must be met before that person can reach self-actualization. In other words, “a guy’s gotta eat”!

Maslow’s theories shed some light on the ongoing social debate on the Internet regarding whether musicians would continue to produce quality music if copyright as we know it were to be abolished. A different argument, though very related, is whether money motivates one to be creative.

One movement advocating such ideas is the “Free Culture Movement.” Another less extremist movement is Stanford professor, Lawrence Lessig’s “Creative Commons” group, which advocates modified forms of traditional license agreements as a social compromise to “reconcile creative freedom with marketplace competition.” Watch Lessig’s video, released today on TED, entitled “How creativity is being strangled by the law.” For another this interesting discussion, see the site Against Monopoly.

The underlying assumption of some of the parties involved in the debate, which is ostensibly grounded in the record and movie industry’s recent campaigns against infringers, is that all intellectual property should be free for the public to use without payment and that the antiquated copyright laws should be modified or abolished. In my opinion, this extremism ignores the foundation principle of Maslow’s hierarchy of needs, that in order to achieve self-actualization, an artist’s or musician’s base needs must be satisfied.

Proponents of the free culture movement observe that creativity survived many years without the structural form which copyright superimposed upon it. Indeed, it is often observed that the great works of Mozart were created without the existence of copyright laws. Don’t forget, however, that Mozart wrote many of his works while being employed by benefactors such as the Prince Archbishop of Salzburg, Heironymus Colloredo and Emperor Joseph II of Vienna, names that are certainly not as prominent as Mozart’s. In fact, where would the world of the arts be without the billions of dollars that have been donated by benefactors such as J.P. Morgan, James Smithson, Bill & Melinda Gates, Andrew Carnegie, Henry Ford, John D. Rockefellar, just to name a select, if not elite, few. So, while it is true that “a musician must create music,” it is also true that a musician has to eat.

Long before the existence of copyright laws, there was a strong relationship between money and the creation of arts and music, and it will be that way until we abolish our system of currency as we now know it. Walk around any great city and witness the existence of hundreds of pieces of commissioned artwork. Listen to the commissioned works of Mozart, Beethoven and other great composers, who existed at the hand of benefactors. Walk through the Museum of Modern Art and look at the works of art generously donated by J. P. Morgan and other benefactors. Whether it be a king or a record label, money benefits art. Creativity, like it or not, is often inspired by the almighty dollar, whether that is represented by paper currency or some other bartered for compensation which meets our base needs as human beings.

That’s not to say that people would not continue to make music or art if they were not compensated for it – they would. That is an entirely different question in my mind. People’s hobbies and past time activities are in a slightly different class than, say, the copyrighted works of Don Henley. If great singer-songwriters such as Henley could not make a living at playing music and writing songs, I would venture to bet that most of us would never had heard of The Eagles. Again, even a great musician has to eat. If the musician cannot meet his base needs doing what he loves to do, a musician will meet those needs some other way and, therefore, there would be less time to do what he loves to do. So don’t confuse the musings of the masses with the creations of the geniuses.

The only legitimate question remaining, then, is how should a musician get paid for the music he or she creates? How should the songwriter get paid for the songs he or she writes? The answer, in the United States, is by virtue of the rights created in the Constitution, Article 1, Section 8, Clause 8, which gives Congress the right:

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

The portion of this Clause dealing with the arts is further codified in the various Copyright Acts and amendments thereto. In a nutshell, the Copyright Act creates a legal fiction, called intellectual property rights, which gives creators certain exclusive rights in their works, including the rights to produce copies, create derivative works, perform or display the work, and to sell and assign the works, among other things.

The laws in the U.S. are based loosely on English concepts and laws that date back to the 17th and 18th century, which were a direct result of the invention of the printing press. The first actual copyright law was the Statute of Anne, or the Copyright Act 1709. Thus, the concept of “copyright” is a three-hundred-year-old concept that has survived the evolution from printing press to piano rolls to digital media, and I have little doubt that it will continue to survive through the technological age, despite the rumblings of these groups.

As the law often does, it must evolve, albeit it ever so slowly, to encompass these new technologies. The good news is that the debate that is ongoing in the new virtual marketplace of idea will help us formulate new and improved amendments to the laws that will hopefully address the perceived dichotomy between the rights of free speech and free culture and those of the creators and owners of intellectual properties to receive just compensation for their efforts and investments.

In the end, this blog is my response to viewing Larry Lessig’s video, as I said, posted today on the TED website, entitled How creativity is being strangled by the law (See the link above). In it, Lessig harkens back to the days of Sousa when children sat on the porch and sang the songs of the day. Lessig told of how Sousa decried the advent of the phonorecord machine as the demise of creativity. He points out that in our current state ot technological advance, copyrights should be “democratized” because the new generation of children use copyrights to create something uniquely different, that is to say they use the copyrights of others as “tools of creativity” and “tools of speech.” Since every such usage requires a copy, the arguement continues, every such usage is presummed by the establishment to be an infringement of someone’s copyright. Lessig’s solution is that the creator should simply license the use of their creation for free in the instance of “non-commercial” usages, and retain the rights to exploit it commercially. He refers to this as the “Sousa Revival.”

My question to Professor Lessig is this: why does the fact that an entire generation of Internet downloaders who are using copyrighted material to create derivative works mean that the rights of copyright holders have to be abolished or even diminished? Why do the creative whims and urges of those who utilize other people’s copyrights to create different, derivative works supercede those of the people who created the original works? Why should they? Are the audiovisual images of a actor portraying Jesus Christ lipsyncing to an infringed copy of “I Will Survive” so creatively valuable as to supercede to the rights of Gloria Gaynor to distribute the original? (This creation is one of the examples in Lessig’s video presentation). Consider this carefully before you answer, as it is a slippery slope.

This brings me to another relevant observation: people would generally not want pay money to hear most children sitting on the porch singing their songs, unless that child happens to be a Don Henley protegee. That is the difference between most of the music ony MySpace, for example, and the music that is generally downloaded on iTunes. There is a tremendous difference in the value of the spontaneous, albeit creative, songs of a child and the intricate lyrics and melodies which are the product of a genius the likes of Don Henley. That is precisely why almost 100% of the product downloaded from Napster in the early days was product that had been recorded and marketed by major record labels. It had intrinsic value.

Let me illustrate these principles with an example from the world of physical property. Person A has a piece of property populated with a lot of trees. Person B, owns the lot next door, which is flat and has a nice stream of water running around its perimeter. Person C comes along, see this situation and, overwhelmed with creativity, cuts down Person A’s trees and builds himself a house on Person B’s lot and claims it as his own. When Persons A and B confront him, stating that the law says he cannot do what he did, Person C responds that his creativity is being strangled by the law and, therefore, the law should be abolished. Is Person C making a good argument? Is Person C likely to prevail in court? No. Yet, this is the argument of the Free Culture Movement and, in some ways, of the Creative Commons.

Just as the law creates real and enforceable property rights for a person who owns a plot of real estate, the law creates intellectual property rights so that person can own an intellectual creation and enforce his rights to the exclusion of those who usurp it. Abolishing the one makes no more sense than abolishing the other. Abolishing the intellectual property right a person has in a copyright, therefore, devalues the creation.

Now, imagine that Person A’s lot was, instead, full of reeds and twigs and Person B’s lot was full of ravines, rocks and arid soil. Person C would never stop to take a second look! The barron options now before Person C would NOT inspire creativity in most people.

As further illustration of this principle of intrinsic value, ask yourself whether the Jesus video referred to earlier would be nearly as popular, nearly as creative, if the actor’s own singing voice had been used in place of Gloria Gaynor. The answer is probably no, because the reason that the video of Jesus Christ singing Gloria Gaynor’s “I Will Survive” is so popular is because it incorporates a copyright that already has intrinsic value and, therefore, adds additonal value to the video. The arguments of the free culture movements omit or overlook this concept of intrinsic value.

What I do like about Lawrence Lessig’s movement, Creative Commons, is that it is, in the final analysis, based on the principles of the Copyright Act, i.e., that the copyright has value and that its owner has certain exclusive rights, which he can assign to others. Lessig’s solution is essentially using existing copyright laws to create a unique license that attempts to strike a balance between fair use and full copyright reservation. In the end, however, the license are based on the rights already granted in The Copyright Act, proving that the copyright laws as they currently exist allow for the very thing that these groups seek. I cannot agree with him more in that respect.

Technorati Tags: Copyright Law , Digital Downloads , Free Culture Movement , Creative Commons , Lawrence Lessig , Mozart , Beethoven , Maslow

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