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March 31, 2004

Canadian Court: Uploading Not Infringement

A Canadian Federal court has ruled that making files available to downloaders via P2P networks is not copyright infringement. The decision is here. This ruling is especially noteworthy because Canada has already legalized P2P downloading. So personal, noncommercial use of P2P networks to share music in Canada is not copyright infringement, for either uploader or downloader — at least until Canada passes legislation implementing the WIPO Performances and Phonograms Treaty, to which they are a signatory. The WPPT requires member countries to grant copyright holders the right of “making available” — a right likely implicated by placing copyrighted files in a publicly-accessible folder.

Justice Konrad von Finckenstein noted:

I cannot see a real difference between a library that places a photocopy machine in a room full of copyrighted material and a computer user that places a personal copy on a shared directory linked to a P2P service.

His point is that, under Canadian law, distribution requires an overt act, like sending out copies or advertising the contents of the folder. The library makes no such distribution. Does the consumer P2P user? So long as uploading is enabled by default in the software, it seems there is no overt act. Perhaps installing and running the software in the first place is an act of distribution, since the user knows or should know that files will be sent to other users. But that’s not an inevitable conclusion, and von Finckenstein found, instead, that there was no overt act at all. It seems that the record company plaintiffs really weren’t expecting this fight to happen in this case. They didn’t introduce evidence on a number of key, arguable questions — like the central question of whether or not there was a “positive act” of distribution by the P2P uploader.

March 29, 2004

Economists: File Sharing Doesn’t Affect Record Sales

This paper by a couple of economists at Harvard Business School and UNC Chapel Hill confirms empirically what many have suspected: “Downloads have an effect on sales which is statistically indistinguishable from zero, despite rather precise estimates.”

They grabbed a few months of logs from a popular OpenNap server and lined them up with SoundScan record sales data. They found zero affect on sales — either positive or negative. When they tweaked their assumptions to be as pessimistic as possible, they found that, at worst, 5,000 downloads were necessary to displace one CD sale.

What are the implications for alternative compensation systems? These data suggest that no ACS is necessary, and the status quo is just fine. The status quo, however, includes the fact that P2P file sharing is illegal and that penalties are possible, though statistically unlikely. Were free P2P downloads legitimized, more CD sales would probably be displaced. Perhaps not many more, but there exists some population at the margin kept from file sharing because of its illegality, rather than its inconvenience or the dismal sound quality of 128kbps MP3s.

I’m getting happier and happier with the status quo, complete with RIAA’s Suits of Damocles. File sharing is happening, the record companies are licensing to legitimate services, records are being sold, music is being made. As long as you aren’t the sucker stuck with the $3k bill from losing the RIAA lottery.

This study makes me think that even a modestly-sized ACS — with, perhaps, 25% of file sharers participating at $1-$5 per month — could replace all of the lost CD sales from P2P sharing. It would be much bigger than the DART royalty pool created by the Audio Home Recording Act for standalone home digital recorders (which is $3-4 million a year), but this paper suggests that we might be able to compensate copyright holders for P2P downloads with a system small enough that it doesn’t give enough incentive to game the system.

Perhaps more importantly, this paper’s methodology means that even small-scale, relatively poorly funded researchers can put together an accurate picture of what’s being traded on P2P networks. It makes the measurement problem look much, much less daunting.

Via BoingBoing

March 27, 2004

RIAA’s Next Step: A $2 Million Gift From Taxpayers

They tried suing the software makers. It didn’t work. They tried suing the users. It didn’t work. What’s next?

Good old rent-seeking.

Senators Hatch and Leahy have introduced a bill that would allow the government to bring civil copyright infringement actions against users of P2P file sharing networks. In other words, it shifts the costs of civil copyright enforcement from copyright holders to taxpayers. The direct cost is $2 million dollars — a quick, easy $2 million wealth transfer to rent-seekers from society at large. Perhaps the larger cost is the further erosion of the public’s belief in the separation between government and big business.

Outrageously, Hatch claims that “public health and safety are put at risk” when you download that Chingy MP3. He claims that, “Public health and safety are also directly threatened by business models that tempt children toward piracy and pornography and then use them as ‘human shields’ against law enforcement.” Note the subject of that sentence: business models. Our children are at risk because of business models. Sending porn to kids is already illegal, as it should be; no further legislation is necessary. So take that out, and you have the claim that public health and safety are directly threatened by inducing children to commit copyright infringement.

Sure.

March 25, 2004

Virtual Orchestras

I was a theatre sound designer in a previous life, so the current battle over virtual orchestras on and off-Broadway is close to home. A so-called “vitrual orchestra” is a computer and a rack of samplers, together with some custom sequencer software that allows the musician operating it a great degree of control over tempo, dynamics, and phrasing. Predictably, this has musicians’ unions up in arms. Today’s New York Times has an article on one composer’s decision to use a Sinfonia virtual orchestra system. He says it’s not a labor issue, but an artistic one; the virtual orchestra allows him more flexibility than a keyboardist playing a synthesizer. Portions of the score are, he says, written to be played by a virtual orchestra. A musicians’ union representative responds:

“Claiming to have composed for the virtual orchestra is about as valid as claiming to have composed for a tape recorder,” he said.

Nobody tell Steve Reich. Not to mention Karlheinz Stockhausen or Pierre Schaeffer or any of the other practitioners of musique concrète, the avant-garde progenitor of much of today’s popular music. What a dumb comment.

Newdow

The Supreme Court oral agrument in the Newdow Pledge of Allegiance case was held yesterday. From Linda Greenhouse’s report, it sounds like Newdow, a doctor with a law degree who argued the case pro se, made an astonishingly good rhetorical showing. I can’t wait until the tape is released in a year or so.

Amanda Butler at Crescat Sententia (who, incidentally, I played quiz bowl against pretty regularly in undergrad) went to the argument and has a great report.

March 24, 2004

Formalities

I wrote yesterday about Kahle v. Ashcroft, a case challenging one removal of formalities in copyright law. Coincidentally, today Kahle’s organization, the Internet Archive, posted a full copy of the 1968 B-movie classic Night of the Living Dead, which is in the public domain.

Wait — 1968? That’s only 36 years ago. Copyright wouldn’t expire for another 59 years or so, at minimum. Why is it in the public domain?

The answer: formalities. Until 1976, works published without a notice of copyright (e.g., “(c) 1968 George A. Romero”) fell immediately into the public domain. Copyright notice was inadvertently left off the released print of Night of the Living Dead, so it’s not protected by copyright. It’s been in the public domiain since its release, and the filmmakers made very little money, since anyone who could get their hands on a print could show the movie, make copies, or (more recently) release it on video.

This story is a pretty good argument for the elimination of formalities — precisely the opposite of the argument made in Kahle’s constitutional challenge to the BCIA. However, such loss-of-copyright horror stories are far less common than the millions of works, worthless to their owners but valuable to the public, which would be in the public domain but for the elimination of formalities.

March 22, 2004

New Constitutional Challenge to Copyright Law Revisions

A case was filed today putting together two of my favorite things: copyright reform and the Prelinger Archives of ephemeral films hosted by Brewster Kahle’s Internet Archive. Kahle and Prelinger filed this complaint today seeking a declaratory judgment that the 1992 Berne Convention Implementation Act violates the First Amendment and that the BCIA, along with the 1998 Copyright Term Extension Act, violate the Progress Clause because they create an effectively infinite copyright term. The case is being handled by the Stanford Center for Internet and Society; their page on the case is here.

The BCIA automatically renewed the copyrights on all works published between 1964 and 1978. In 1978, the Copyright Act of 1976 came into force, extending the copyright term and eliminating the requirement that the copyright holder affirmatively renew his copyright after a specified period to keep his work from entering the public domain.

The real villain here is the elimination of formalities (registration, deposit, renewal, and notice) in the 1976 Copyright Act and the subsequent elimination of the requirement of renewal wrought by the BCIA. Formalities are efficient. Only the copyright holder knows how much the copyright is worth to him; it would be costly for anyone else to find out, but he already knows. He’s the least cost information provider. Nobody knows how much it’s worth to society for the work to enter the public domain. If the public value of the copyright is greater than the private value of the copyright, the work should — in an efficient system — enter the public domain. So we impose a very small cost on the copyright holder, to test whether the copyright is worth anything to him. If he pays the very small cost, we’ve figured out that the copyright is still worth something to him, and he gets to keep it. If he doesn’t pay the small cost, he’s told us that the copyright isn’t worth anything to him, and the work enters the public domain. The renewal requirement was a very simple, very effective solution to an information problem.

Without a renewal requirement (or with automatic renewals under the BCIA), a large cost is imposed on the public in order to eliminate a small cost to copyright holders. Works that have no commercial value stay locked up for decades. Worse yet, since the elimination of the requirement of registration, there’s no way for a prospective user of such a work to find out who owns the copyright, so that they can go ask permission. The only options are to refrain from transforming the old work into a new one or to go ahead and risk a lawsuit.

This is basically the plaintiffs’ argument — that this change is so unnecessarily restrictive of speech that it violates the First Amendment, and that these long terms don’t really promote progress, as the Constitution requires. The Eldred decision implied that some level of heightened scrutiny was required when the “traditional contours” of copyright law are modified by Congress. The plaintiffs argue that because renewal is part of the traditional American copyright regime, the automatic renewal provision of the BCIA is subject to heightened scrutiny.

I hope that the plaintiffs prevail; Brewster Kahle and Rick Prelinger are doing important work to preserve works that would otherwise be forgotten. However, even in the best case, if the Court finds that the BCIA is a content-neutral regulation of speech subject to intermediate scrutiny, it’s pretty likely that they’ll decide that harmonization with other Berne Convention countries with regard to existing works is an important government interest and that the automatic renewal provision is substantially related to that objective, especially given the deference shown to Congress in Eldred.

But, it would be nice if they won. The BCIA is unnecessary, inefficient, and unwise.

March 16, 2004

Good News For Golan

Golan v. Ashcroft is a challenge to certain copyright legislation resulting from the Uruguay Round agreements which removes some foreign works from the public domain, known as the URAA. A District Court judge in Denver today issued an order denying the government’s motion to dismiss claims that the URAA violates the Progress Clause (U.S. Const. art. 8, sec. 8, cl. 8) and the First Amendment, and that its retroactivity amounts to a denial of substantive due process, violating the Fifth Amendment. He granted the government’s motion to dismiss Golan’s challenge to the 1998 Sonny Bono Copyright Term Extension Act, ruling that the Supreme Court’s decision in Eldred v. Ashcroft completely foreclosed constitutional challenges to the CTEA based on Progress Clause and First Amendment arguments.

Golan is far from victory, however. All this means is that Golan’s claims are not obviously foreclosed by existing law, not that they will ultimately prevail. I hope they do; the URAA is a bad law, and pulling works out of the Public Domain is always bad policy.

March 13, 2004

Korn: “Y’all Want A Single?”

Korn’s new video supporting their single “Y’all Want A Single? Fuck That” is an unexpected gem. I’m not usually a Korn fan (Kornhusker? Korn-pone?), but check this out. It’s a rant against the structure and homogeneity of the music industry, attacking the big record labels and radio chains. The video shows the band wrecking a sanitized, corporate CD store as facts about the industry flash on the screen.

It includes two good jokes, one probably intended, one probably unintended. One of the facts flashed on the screen deals with how quickly most singles get to the “hook”, and how formulaic that convention is. This song is nearly nothing but hook, from the first second onward. The second joke — the unintentional one — comes after the end of the video. At the bottom of the screen, a brief notice reads:

“Copyright 2004 Sony Music Entertainment, Inc.”

March 4, 2004

Memo: Microsoft Funneling Money To SCO

This doesn’t come as much of a surprise, but I didn’t expect to have proof this quickly. A whistleblower inside SCO has leaked this internal memo revealing that the recent round of investment in SCO — particularly the investment by BayStar Capital — was “lined up” by Microsoft. Whether or not it’s actually Microsoft money is not clear. BayStar might be merely a sycophant, not a money launderer. But, one way or another, the memo makes clear that Microsoft is responsible for nearly every dollar recently invested in SCO.

I don’t know enough about antitrust law yet to speculate about whether this might be a violation, but I hope the DOJ and state AGs take a good look at Microsoft’s sub rosa funding of SCO.

The bad news is that SCO won’t, as we’d hoped, run out of money any time soon. Microsoft will give them any money they need to continue the FUD campaign against Linux.

Disclaimer Haiku:
West wind seems to say,
"This is not legal advice;
I'm not your lawyer."

(And if you're a client with whom I have a preexisting attorney-client relationship, this still isn't legal advice.)

In case you're wondering, this blog is also not intended as advertising, as a representation of anything but my personal opinion, or as an offer of representation.

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