Capitol Records Prevails in ReDigi Case April 1, 2013
Posted by Bill Rosenblatt in Law, Music, United States.16 comments
A federal court in New York City handed down summary judgment against ReDigi over the weekend in its legal fight with Capitol Records. In his ruling , Judge Richard Sullivan found the digital resale service liable for primary and secondary copyright infringement. He rejected ReDigi’s arguments that its service, which enables users to resell music tracks purchased on iTunes, is legal under the doctrines of fair use and first sale.
The decision is a surprising blow to the Boston-based startup, especially given that Judge Sullivan refused Capitol’s request for a preliminary injuction early on in the case.
The central holding in Judge Sullivan’s opinion was that in order to resell a digital file, a user has to make another copy of it — even if the original copy disappears, and even if two copies never coexist simultaneously. He based this holding on a literal interpretation of the phrase “copies are material objects” from Section 101 of the Copyright Act.
Once Judge Sullivan established that the ReDigi system causes another copy to be made as part of the resale process, the rest of his opinion flowed from there:
- The user didn’t have a right to make that new copy, therefore it’s infringement — specifically of Capitol’s reproduction and distribution rights under copyright law.
- ReDigi knowingly aided and abetted, and benefited from, users’ acts of infringement, therefore it’s secondary as well as primary infringement.
- The user resold the new copy, not the original one, therefore it’s not protected under first sale (which says that a consumer can do whatever she wants with a copy of a copyrighted work that she lawfully obtains).
- The “new” copies made in the ReDigi process don’t qualify as fair use: they are identical to the originals and thus aren’t “transformative”; they are made for commercial purposes; they undercut the originals and thus diminish the market for them.
In sum, as Judge Sullivan put it bluntly, “ReDigi, by virtue of its design, is incapable of compliance with the law.” At the same time, he was quick to point out that his was a narrow ruling based on a literal interpretation of the law, saying that “this is a court of law and not a congressional subcommittee or technology blog[.]” He investigated Congress’s intent regarding digital first sale and found that it hadn’t advanced since the U.S. Copyright Office — the copyright advisors to Congress — had counseled against allowing digital resale back in 2001.
I’ve always assumed that any district court decision in this case would be minimally relevant, as it would be appealed. ReDigi has already stated that it will appeal. And the opinion does contain patches of daylight through which an appeal could possibly be launched.
Most important is the opinion’s focus on the making of a “new copy” during the resale process. It’s hard to see how this gibes with the many “new copies” of digital files made during normal content distribution processes, including streaming as well as downloads.
In other words, if ReDigi is making “new copies” without authorization, then so are countless other technologies. Some such copies might be covered under fair use or the DMCA safe harbors. Other “new copies” are considered “incidental” (not requiring permission from the copyright holder); the judge didn’t explain why copies made by the ReDigi system don’t qualify as incidental. ReDigi did make a similar argument; the judge didn’t buy it because it didn’t involve the issues in this case, but a higher court, looking at the broader picture of digital first sale, might see things differently.
Judge Sullivan’s reliance on the Copyright Office’s 2001 report on digital first sale is also somewhat problematic. The Copyright Office believed that a “forward-and-delete” mechanism — not unlike what ReDigi has built — could actually support digital first sale. The Copyright Office simply concluded that such a mechanism would not be practical to implement. This does not comport with Judge Sullivan’s assertion that “forward-and-delete” requires a new copy to be made and thus cannot qualify as first sale in the first place.
Another notable feature of Judge Sullivan’s opinion is his assertion that “a ReDigi user owns the phonorecord that was created when she purchased and downloaded a song from iTunes to her hard disk.” The assertion that a user “owns” a digital download is itself controversial and not based on legal precedent. Judge Sullivan found no legal precedent for digital first sale, but somehow he did find a basis for asserting that digital downloads are “owned.”
Retailers of digital goods believe that they don’t actually sell them in the way that books, CDs, or DVDs are sold; instead they license them to users under terms that may resemble sale. The question of sale vs. licensing of copyrighted digital content is a gray area in the law, and it wasn’t up for examination here: Apple, for example, wasn’t a party to the case and remained silent throughout. But if Apple (or another digital content retailer) ever objects to its content being “resold” through a third-party service, it will have to deal with Judge Sullivan’s language; and once again, it may be harder for a higher court to ignore this aspect of digital resale when determining its legality.
It remains to be seen whether the above issues can be forged into a legal theory that can convince the Second Circuit appeals court to reverse Judge Sullivan’s ruling. Yet even if ReDigi throws in the towel and ceases operations, its very existence has called a lot of attention to the idea of digital resale. The mechanisms are in place today: beyond ReDigi, there’s at least one more startup (the NYC-based ReKiosk); and Amazon was recently granted a patent for resale of digital goods. Indie music labels and a few e-book publishers, at first, will most likely experiment with it.
This court ruling won’t eliminate digital resale; if let stand, it will simply restrict it to content that copyright owners have given permission to resell — permission that will probably include say over pricing, timing, and other factors. This will complicate the lives of resellers, but it will ensure that digital resale doesn’t harm copyright holders. In other words, ReDigi has let the digital resale genie out of the lamp. It’s bound to happen, one way or another.
Supreme Court Affirms First Sale in Kirtsaeng Case March 20, 2013
Posted by Bill Rosenblatt in Law, United States.2 comments
The copyleft was jubilant, and Big Media disgruntled, at the Supreme Court’s opinion on Tuesday in Kirtsaeng v. Wiley, a case about the first sale doctrine in US copyright law. First sale, known as “exhaustion” outside of the US, states that the publisher of a copyrighted work has no say or control in distribution of it after the first sale. The law says that if you have obtained a copy of a work legally, you can sell it, lend it, give it away, use it to line a birdcage, or anything else, without consent of the original publisher.
The Kirtsaeng case existed firmly in the realm of physical products. It concerned a tension in the law between first sale (section 109) and another provision (section 602) that makes it illegal to import copyrighted works from outside the US into the country without permission.
Supap Kirtsaeng, a Thai citizen living in the US, got his friends and family to buy textbooks published in his native land at prices that were much lower than those charged here. They sent him the books; he resold them here and pocketed the difference. The books were published by a subsidiary of John Wiley & Sons and were virtually identical to titles published by Wiley in the US. (Disclosure: Wiley is the publisher of one of my books.)
Wiley sued, claiming that Kirtsaeng was infringing under section 602. Kirtsaeng claimed first sale rights to resell the books. Kirtsaeng lost in the lower courts, but the Supreme Court reversed. Now the case goes back to the Second Circuit in New York for a re-hearing consistent with Tuesday’s decision.
Many people are asking me what impact this decision may have on digital first sale, and more specifically, the fortunes of the digital resale startup ReDigi, which is fighting a lawsuit brought by Capitol Records. While I’m not in the business of reading Supreme Court tea leaves, I’d say there are two ways to look at it.
The narrower view is: not very much. Justice Stephen Breyer’s opinion was an exemplar of judicial restraint. It spent a lot of time analyzing key words in the first sale law (specifically that a copy had to be “lawfully made under this title” to qualify for first sale) and the factors specific to its geographic interpretation vis-a-vis section 602. It also focused on divining Congress’s intent in making the law in the first place and emphasized the law’s “impeccable common law pedigree” dating back over 100 years. It’s no wonder that the 6-3 majority crossed “party lines,” with conservative Justices Roberts, Thomas, and Alito joining liberals Breyer, Kagan, and Sotomayor.
The opinion also concerned itself with the decision’s impact on libraries and museums, saying that if the case went Wiley’s way, it would place undue burdens on them to get permission before they could lend or exhibit foreign-made works.
What Breyer did not do was spend much time discussing the business implications of the case. He said little about both the impact on publishers and Kirtsaeng’s right to carry on his resale business. Justice Ruth Bader Ginsburg’s dissenting opinion focused much more on those aspects.
That leads me to believe that if and when the Supreme Court revisits first sale, it will be more receptive to arguments from the library and museum communities than those about industry factions, which often suffuse high-profile copyright litigation. And libraries especially face difficulties without clear digital first sale rights. The Owners Rights Initiative, a lobbying organization set up specifically to deal with this case, turns out to have done the right thing by enlisting library organizations to be part of its “public face” rather than the likes of CCIA and eBay. (The list of organizations that submitted or signed on to amicus briefs in this case is a mile long.)
The other possible view of the Kirtsaeng decision is the bigger-picture one: that the Supreme Court is taking a broad view of first sale by refusing to weigh it down with exceptions like those in section 602, and therefore the Court may take the same broad view when it’s asked to opine on digital first sale — that is, when it’s asked to interpret another group of words in the copyright act: “‘Copies’ are material objects…”
(Props to Andrew Bridges of Fenwick & West for his insights.)
The DMCA and Presidential Politics, Part 2 March 4, 2013
Posted by Bill Rosenblatt in Law, United States.add a comment
A minor war of words broke out yesterday in the U.S. government over consumers’ rights to “jailbreak” (unlock) their mobile phones. The White House and the FCC both made public statements in which they politely condemned the U.S. Copyright Office’s decision not to renew the DMCA 1201 exception for jailbreaking and stood in favor of unlocking mobile phones for the purpose of switching wireless carriers.
This is what happens when a government process that’s supposed to be confined to relatively arcane business interests spills over into the public sphere. The question is, why are we even talking about this at all?
A little background for those who need it: the Digital Millennium Copyright Act of 1998 has two parts. The part that has gotten most of the attention over the past few years is the second part (Title II, section 512), which includes the “notice and takedown” regime that online services have to follow to avoid copyright liability for files that users upload. This part of the DMCA has been the subject of several recent high-profile litigations, such as Viacom v. Google, EMI v. MP3Tunes, and UMG v. Veoh.
The first part of the DMCA, section 1201, makes it illegal to crack DRMs. This law was originally used to go after DRM hackers such as those who distributed DVD ripping software, in cases such as Universal v. Reimerdes. But that was many years ago.
Since then, we’ve only heard about how this law has been distended out of shape by the likes of makers of garage door openers and laser printer toner cartridges. And soon after Apple ushered in the smartphone revolution with the introduction of the iPhone in 2007, the major wireless carriers appropriated it to cover mobile phone jailbreaking. Let’s be clear: these are all abuses of a law that’s dubious to begin with.
There is a provision in DMCA 1201 that requires the U.S. Copyright Office — the agency that advises Congress on the copyright law — to conduct a “rulemaking” every three years to consider whether any exemptions to the anti-hacking law should be made. Anyone may submit proposals for such exemptions, though the requirements are fairly rigid. The Office evaluates the proposed exemptions and may approve some of them, but the approved exemptions only last three years, until the next rulemaking. They must be proposed and approved again in order to last longer.
In 2009, the Copyright Office approved an exemption for mobile phone jailbreaking. In the subsequent 2012 rulemaking, the Office chose not to renew it; instead they listened to wireless industry lobbyists who persuaded them that consumer choice and competition were doing fine, and therefore that jailbreaking wasn’t necessary. The 2009 exemption expired at the end of January 2013.
An entrepreneur named Sina Khanifar decided to do something about this: he submitted a petition to the White House, through its We the People online petition system, which has a policy of responding to petitions that get over 100,000 signatures within 30 days. The petition did cross that threshold, and the White House did respond.
It would be nice to do something to curtail these abuses of the DMCA. Right now, the DMCA is only “useful” in that it keeps actual DRM hacks in the shadows and prevents things like a “Convert from Nook” option in your Kindle (or vice versa).
But does anyone seriously expect any results from the White House’s populist grandstanding on this issue? The executive branch has no power to implement changes in the DMCA, and it’s unlikely that the FCC (also part of the executive branch) has any relevant authority either. Only Congress can change the law, and the Copyright Office is Congress’s legal advisor. The Office’s own statement on the matter (released via email, not yet available on the Office’s website) basically said “The White House is right, this is a bigger public policy matter than the arcane issues we usually deal with in these rulemakings” — in other words, that they’ve simply done their job according to the law.
The connection between mobile phone jailbreaking and the original intent of DMCA 1201 is tenuous at best. Maybe Khanifar’s petition will spur Congress to act, but I’m not holding my breath.
Publisher-Library Feud over E-Books Heats Up October 1, 2012
Posted by Bill Rosenblatt in Law, Publishing, Rights Licensing, United States.4 comments
The US trade associations for public libraries and book publishers exchanged heated words last week regarding the growing impasse over e-book lending. The American Library Association’s (ALA) newly-installed president, Maureen Sullivan, issued an open letter to trade publishers such as Simon & Schuster, Macmillan and Penguin demanding that they license e-books for digital lending. The Association of American Publishers (AAP) issued a response saying, in effect, “Sorry, our hands are tied.”
An article I wrote last year explains the legal background of this issue. Thanks to a legal doctrine known in the US as First Sale, libraries can buy print books and lend them without permission from publishers. But because First Sale doesn’t apply to digital downloads, libraries must get licenses from publishers to acquire e-books for lending. Thus some of the major trade (consumer) book publishers are refusing to license e-books to libraries or are placing restrictions on lending terms.
But that’s not all. E-book technology is also enabling companies like Amazon to supplant some library functions in the private sector, while indie authors and publishers are likely to increase giveaways of their content in digital form, in hopes of exposure. More and more people are reading digitally, while libraries may face a future of lending hardcopy books only. Library patrons will lose, and it’s far from clear that any (legal) private-sector function will completely fill in the gaps.
The good news is that public libraries are finally waking up from the what-me-worry stance they appeared to affect a year ago; Digital Book World says that Sullivan’s “open letter” was borne out of libraries’ frustration about the way things are going.
The bad news is that this situation is going to get worse before it gets better… if it ever does.
The problem with “open letters” is that they are often tacit admissions of powerlessness. Sullivan’s open letter is primarily an attempt to explain the value proposition of libraries to publishers. Yet that aspect of it contains little that publishers haven’t heard before. It also attempts to convince publishers that they, together with libraries, have a special role in society to spread information and culture that they must maintain. This aspect of it is likely to fall on deaf ears.
The heart of the problem is that libraries aren’t comfortable acting like businesses, while the major publishers are. Yet libraries are being forced into discussions with publishers about business terms instead of relying on laws like First Sale. Many library people find such discussions distasteful or distracting, because they believe (rightly) that theirs is a greater mission than being a “channel” for publishers. Moreover, the reality is that such discussions are unlikely to lead to satisfactory conclusions for libraries.
Library gurus such as Robert Darnton of Harvard have suggested innovative models for libraries and e-books. It’s possible that as wireless broadband and connected devices become more pervasive, publishers and libraries may be able to come to some arrangement that involves licensing e-books for time-limited cloud-based reading, instead of relying on downloads of DRM-packaged e-book files as they do now. But if publishers require that such deals reflect libraries’ true value in book sales, then the numbers may well come up short for libraries. They can argue (again, rightly) that they help publishers sell books in general by promoting reading, but it’s hard to quantify that benefit sufficiently.
The AAP’s don’t-look-at-us response to the ALA open letter is at least honest. Trade associations already labor under constant antitrust restrictions. Not for nothing does every trade association meeting begin with what lawyers call an “antitrust benediction” warning participants not to say anything that could be interpreted as collusion; talks I give at trade associations’ events have to be scrubbed by their antitrust attorneys. Furthermore, the Justice Department’s recent investigations into collusion with Apple over e-book price-setting have made it even more for difficult for publishers to collaborate, whether under the AAP banner or otherwise.
Publishers’ lack of ability to agree on library lending terms will only lead to more and more confusion and complexity for libraries and their patrons. In fact, publishers may be loathe to work together to create a workable solution for libraries precisely because it could backfire: if the ALA doesn’t like the terms on offer, it could sue on antitrust grounds.
Libraries may have better luck on the legal front than with technology or business terms. As I have explained, getting First Sale to apply to digital content in general (so that anyone can lend, sell, or give away lawfully obtained digital content) is virtually unthinkable. Yet it might be possible to get Congress to pass a narrower change in the law — specifically to Section 108 of the Copyright Act — that would give lending libraries statutory licenses to lend digital content without affecting First Sale rights in general. It remains to be seen whether the political climate in Washington could entertain such legislation, but it may be libraries’ best hope of survival in the e-reading age.
The DMCA and Presidential Politics July 29, 2012
Posted by Bill Rosenblatt in Fingerprinting, Law, Music, United States.3 comments
A minor firestorm has hit the techblogosphere over the past several days regarding the removal of a Mitt Romney campaign ad on YouTube that contained a short clip of President Obama singing Al Green’s “Let’s Stay Together” (while at a campaign stop at the Apollo Theater in Harlem). Commentators used this as an occasion to blast an aspect of DMCA 512, the U.S. law that provides for “notice and takedown.” The knee-jerk reactions to this incident have been wrong-headed and a little bit depressing.
The law says that if a copyright owner sends a proper notice to a site operator (in this case Google for YouTube) about an unauthorized content item, then the operator may take the item down to avoid liability. The law enables the operator to provide counternotice but stipulates that the operator must wait 10 days after issuing the counternotice for a reply period before it can repost the item without risk of liability.
Sites like Public Knowledge and Ars Technica have focused on the fact that the five-second clip in the Romney ad is highly likely to be fair use, how dare BMG Music Publishing do this, etc., etc. Public Knowledge also complained that the counternotice period forced the political ad off the air for too long a time and thus constituted abuse of copyright.
There’s no question that the clip makes a fair use of the song snippet; the “fair use analyses” done by people like Public Knowledge’s Sherwin Siy are beside the point. More importantly, it’s wrong to blame the “evil music company” for instigating the takedown.
Here’s a much more likely explanation of what happened: The Obama campaign contacted the copyright owner and asked them to issue the takedown notice, as a tactical response to Romney’s attack ad. BMGMP issued the notice as a routine clerical matter, as it does all the time at the request of songwriters or their management. The notice triggered YouTube’s automated system, which took the clip down.
Mike Masnick at TechDirt — the only one here who appears to have done some actual investigation instead of mere grandstanding — noticed that other YouTube clips of Obama singing the song remained up for a while until they were taken down as well. He also found that other singers’ versions of the 1972 classic hit remained up. Masnick attributed this to overzealous lawyers at BMGMP ”doubl[ing] down” on takedowns for the sake of consistency.
Uh,no. The truth, once again, most likely lies in campaign tactics. The Romney campaign (or allied interests) probably tried to re-post the ad several times with different titles or metadata. The Obama camp then responded by asking BMGMP to use YouTube’s automated Content ID scheme (based on fingerprinting), which would find all instances of the singing president and get them taken down as well. And once again, BMGMP would have handled this as a routine request. This was the only way that the Obamians could have ensured that the attack ad would not reappear.
It’s also worth pointing out here that the DMCA 512 does not obligate anyone to take content down; it only enables someone to avoid liability by doing so. YouTube automates 512 takedowns to minimize risk of liability and do so as efficiently as possible.
In other words, YouTube also responded to this situation in a routine fashion. I would venture to guess that if a lawyer at YouTube actually looked at BMGMP’s takedown notice, he or she would have left the clip up, secure in the knowledge that no one would bother to file an actual copyright lawsuit against it. (Similarly, I’m convinced that no one with a legal brain at BMGMP looked at this initially either.)
In other words, if anyone is liable for abuse of copyright — which is itself actionable — it’s the Obama campaign, which simply used routine mechanisms at both BMGMP and YouTube to accomplish its aims. (Disclosure: I plan to vote for Obama in November.) Otherwise, the errors were of omission, not commission; no actual human beings at BMGMP or YouTube appear to have thought or cared about, let alone considered the fair use implications of, this incident.
Meanwhile, clips of Obama’s Apollo Theater performance have been restored to YouTube. Yes, it took time, but that’s what you get when humans have to decide questions of Fair Use.
P.S. Romney’s ad has always been available elsewhere, just not on YouTube.
A Nail in Public Libraries’ Coffins May 20, 2012
Posted by Bill Rosenblatt in Publishing, Services, United States.2 comments
There it was, on the entire back page of the A section of the New York Times a few days ago, at a likely cost of over US $100,000: a full-page ad from Amazon touting free “lending” of all of the Harry Potter e-books for members of Amazon’s $79/year Amazon Prime program who own Kindle e-readers, starting next month.
I wrote last December about the challenges that public libraries face as e-reading becomes popular and major trade book publishers increase restrictions on public library e-lending of their titles. Copyright law allows publishers to set license terms for digital content, so instead of giving e-book buyers the standard “copyright bundle” of rights, publishers can dictate whatever terms they want — including refusal to license content at all. Currently five of the Big 6 trade publishers restrict library e-book lending in some way, including two of them that don’t allow it at all. Libraries have little leverage against publishers to change this state of affairs.
I also discussed Amazon’s Kindle Owners’ Lending Library (KOLL), which is one of the benefits of Amazon Prime membership (along with free shipping and access to streaming video content), as a step toward the private sector invading the turf of public libraries. In case anyone doesn’t see this, Amazon makes it quite clear in its press release:
“With the Kindle Owners’ Lending Library, there are no due dates, books can be borrowed as frequently as once a month, and there are no limits on how many people can simultaneously borrow the same title—so readers never have to wait in line for the book they want.”
In other words, Amazon has implemented a model of ”one e-book per user at a time, not more than one per month.” It can configure any such model on its servers and enforce it through its DRM.
KOLL’s selection had been limited to a few thousand titles from smaller publishers. Recently Amazon has been moving aggressively to increase the KOLL catalog, despite lack of permission from some publishers and authors; it now claims a catalog of over 145,000 titles. Amazon did make a deal with Pottermore, the organization that distributes J.K. Rowling’s Harry Potter titles in digital form, to include those titles in KOLL. Pottermore admits that Amazon paid it “a large amount of money” to do so. Taken together, these steps take KOLL to the next level.
Of course, there are several reasons why the Harry Potter case is exceptional. The only way to purchase Harry Potter e-books is on the Pottermore site, and Amazon wanted to find some way of luring Potter fans back to its own site; Harry Potter is a series of seven books, and Pottermore believes that allowing users to borrow one title per month will lead to increased sales of other titles; The Amazon Prime and public library demographics may not overlap much.
But still, this deal is an example of Amazon using content to make its devices and services more valuable. The company is subsidizing a bestselling author’s work to induce people to buy Kindles and Amazon Prime memberships. This kind of arrangement is likely to become more commonplace as authors, publishers, and retailers all get more information about the value of private-sector e-lending and learn how to make such deals strategically.
This is nice for already-famous authors, but it doesn’t benefit the multitude of authors who haven’t made it to J.K. Rowling’s rarified level. It’s not something that libraries are able to replicate — neither the subsidies nor the full-page ads in the New York Times.
Roots of the Online Upheaval of SOPA/PIPA May 13, 2012
Posted by Bill Rosenblatt in DRM, Law, United States.add a comment
I’m in the middle of reading a new book called Hollywood’s Copyright Wars: From Edison to the Internet, by University of Pennsylvania professor Peter DeCherney. I’ll report back on this book later; today I want to talk about a PhD dissertation that appears in a footnote in this book.
Bill Herman’s dissertation at Penn’s Annenberg School of Communication is called The Battle over Digital Rights Management: A Multi-Method Study of the Politics of Copyright Management Technologies. It was written in 2009, and it presciently anticipates the online movement that led to the downfall of SOPA and PIPA two years later.
Herman — now a professor of film and media at Hunter College in NYC — looked at four legislative developments in U.S. digital copyright policy and measured how they were influenced by three types of communication: direct communications with legislators (e.g., lobbying), the press, and online. The four developments were the Audio Home Recording Act (1992), the anticircumvention provision of the Digital Millennium Copyright Act (1998), efforts to revise the DMCA (2003-2005), and the FCC Broadcast Flag regulation (2006).
Herman’s research analyzes communications in those three arenas and grades them according to whether they tilt “strong copyright” or “strong fair use.” He finds that communications with congress, which tilted strongly “strong copyright,” predominated in the earlier years; press reporting (in the Washington Post and New York Times) was roughly balanced, with a slight “strong fair use” tilt; then online communication took over the debate with a forty-to-one “strong fair use” slant and influenced the repeal of the FCC Broadcast Flag regulation in 2007. Although Herman is unabashedly on the “strong fair use” side, his methodologies for identifying and characterizing these various communications are rigorous and do not show bias.
In his introduction, Herman writes: “While the time period under study does not include their ultimate triumph at the bargaining table — as of this writing, what I describe as the strong fair use coalition still has not won a major legislative victory — it does include the beginning of their time as a genuine force at that table.” As a prediction of the online and copyleft communities killing SOPA and PIPA, this is pretty impressive.
Herman’s thesis goes into great detail about the ways in which the “strong fair use” axis posted lots of material online to feed the debate, while the other side didn’t. It’s a trove of factual evidence about how to shape policy debate in the Internet age (and how not to). It also, in effect, shoots holes in the theory held by some strong-copyright people that a Google-led cabal caused the defeat of SOPA and PIPA.
I admit not to having read the entire 400-plus pages of the dissertation, though it contains a much more manageable 27-page introduction that summarizes the methodology and results. With that caveat in mind, I can identify one shortcoming in Herman’s methodology that, if he had corrected it, might have changed the nature of his conclusions.
Herman tracked press stories that specifically covered the four legislative developments mentioned above. But he didn’t track stories that covered the real-world marketplace of the technologies being regulated – articles by the likes of David Pogue in the Times and Walter Mossberg in the Wall Street Journal. (Nor did he track online content about the same, from the likes of TechCrunch, CNet, etc., not to mention Internet ideologues like Cory Doctorow and thousands or millions of blogs.)
If he had done this, he would have found a much more anti-DRM tilt in the press during the early-mid 2000s than he did. Articles from this period (and thereafter) took a populist, pro-consumer viewpoint: after all, people read Pogue, Mossberg, and CNet to help them choose the best digital content services and devices. The job of these writers isn’t to defend the interests of copyright owners or content creators; it’s to help sell newspapers and drive traffic to websites.
These sources routinely praise digital content services and devices that offer as many rights to as much content for as little money as possible. DRM can be used to enable new content distribution models, but it can also be used to force consumers to pay, limit interoperability, and restrict uses of content that are allowed under copyright law. Thus it makes sense that these writers would paint DRM in a negative light.
One has to wonder how much the pro-consumer point of view in this press coverage influenced legislation. The journalists who covered legislative developments during the period Herman studied did not overlap much with those who covered products and services. For example, Jenna Wortham, Jonathan Weisman, and Brian Stelter provided the bulk of legislative coverage at the Times, while over at CNet, Declan McCullagh wrote about policy and legislation while Greg Sandoval did (and does) most of the marketplace coverage.
Herman attributes the “strong fair use” coalition’s increased legislative influence to its greater effectiveness than the “strong copyright” community in putting its message out online. But I would suggest that they had a lot of help from both professional and amateur writers about consumer media technologies, who led people to wonder why technologies like DRM exist and then what role government plays in them.
It might not be as easy to gauge that influence, but it was — and is — surely significant; and that means that the press could well influence digital copyright legislation more strongly than Herman surmises. Herman seems eager to glorify the power of the Internet by itself. While there’s no doubt that Internet forces killed SOPA and PIPA, what Herman calls the “strong fair use” movement has roots outside of the copyleft academia and advocacy groups that he credits (he was an intern at Public Knowledge and considers Larry Lessig a hero).
Regardless, the defeat of SOPA and PIPA has made it clear that the online community now has a lot of power over policy debate. Gary Shapiro of the Consumer Electronics Association wrote a letter to the editor in the Times admitting that “back rooms do not exist on the Internet.” I would suggest that if the RIAAs and MPAAs of the world want to understand how to engage the online public in order to shape future legislation, Herman’s thesis ought to be required reading for them.
As a postscript, there is now a bit of overlap in coverage of digital content products and services and legislative policy, now that people are digging through the post-SOPA/PIPA wreckage and considering what to do next. David Pogue, for example, got around to actually reading the legislation back in January as it was failing. He made two badly-needed observations: that many of the objectors to SOPA and PIPA didn’t like it simply because it could cut off their supply of free content, and that such people generally didn’t have a clue about the actual legislation and acted on misinformation about it. Let’s hope that now that Pogue has connected the dots, more people will follow that train of thought to some reasonable policy developments.
Public Knowledge’s “Blueprint” February 28, 2012
Posted by Bill Rosenblatt in Law, United States.1 comment so far
My recent review of William Patry’s book on copyright reform segues neatly into Tuesday’s announcement of the Internet Blueprint campaign by the copyleft advocacy group Public Knowledge (PK). Apparently PK has taken some grief for its vociferous objections to the SOPA and PIPA legislation, and the ACTA agreement, without coming up with alternative ideas of its own.
As PK would have everyone believe, the Internet Blueprint is intended to remedy that situation. It’s a set of ideas for copyright reform, which come complete (in true lobbyist style) with draft legislation; and it’s open to ideas for expansion.
It also has nothing whatsoever to do with the objectives of SOPA and PIPA, which — in case anyone has forgotten — were to reduce copyright infringement.
Here is a quick summary of most of the ideas in Public Knowledge’s Internet Blueprint:
- Reduce abuse of the notice and takedown system in Section 512 of the Digital Millennium Copyright Act (DMCA) by imposing additional requirements on takedown notices and fines on bogus ones, as well as expanding the “safe harbor” granted to internet service providers under this law.
- Impose regulations on the US Trade Representative that would forbid negotiating intellectual property terms in secret (as was done in the ACTA process).
- Relax section 1201 of the DMCA by making it legal to hack DRMs for lawful uses of copyrighted material protected by them.
- Shorten copyright terms from life of the creator plus 70 years to life plus 50 years.
- Empower the Federal Trade Commission (FTC) to require labeling of DRM on digital content that uses it.
- Prohibit various types of abuses of copyright law, such as deceptive warning notices and frivolous lawsuits.
- Expand Fair Use.
Nope, nothing in here about reducing infringement. Even Consumer Electronics Association CEO Gary Shapiro, while being harshly critical of the music industry and its push for SOPA and PIPA, referred to “the very real problem of Internet piracy” and called for the RIAA to work with him on solutions that are more “reasonable” than those pieces of legislation. PK’s Internet Blueprint is not about working with anyone to reduce piracy.
Furthermore, for an organization that professes to be against larding the Internet with excessive regulations, this is a very interesting list of additional regulations. For example, instead of adding qualifying conditions to DMCA 1201, why not just call for its repeal?
Public Knowledge’s home page says: “In the weeks since SOPA and PIPA, many people have been wondering ‘what now?’ Policymakers here in DC ask us a similar question — ‘[I]f you don’t like SOPA and PIPA, where are your ideas?’” Some people may have asked PK that question, but the Internet Blueprint doesn’t answer it. I think a more accurate statement is probably something like, “After the success of the SOPA and PIPA protests, we would like to see what other items on our agenda we can get the public excited about.” Connecting the Internet Blueprint with SOPA and PIPA is just disingenuous.
Of the actual ideas in the Blueprint, the abuse-curbing regulations seem sensible, and the proposed legislation on DRM labeling is unworkable — as the FTC probably knows, having looked into this issue in depth back in 2009. Otherwise, for the record, I’m not expressing opinions on PK’s ideas, except to say that in general I am not a fan of regulating technology, and I believe that the United States copyright law is already too complicated. (I am particularly not a fan of DMCA 1201, though not for the typical set of reasons — but that’s a different discussion.)
It’s a good thing to try to rally the public around actionable ideas rather than feel-good slogans. But in this case, PK is guilty of excessive opportunism — or what politicians like to call “overplaying their hand.” Just as one shouldn’t bother asking vegetarians for better steak recipes, one shouldn’t bother asking Public Knowledge for ideas on reducing copyright infringement.
Who’s Subsidizin’ Who? February 9, 2012
Posted by Bill Rosenblatt in Business models, Music, Publishing, Services, Uncategorized, United States.add a comment
Barnes & Noble has just announced a deal offering a US $100 Nook e-reader for free with a $240/year subscription to the New York Times on Nook. Meanwhile, MuveMusic, the bundled-music service of the small US wireless carrier Cricket Wireless, passed the 500,000 subscriber mark last month. MuveMusic has vaulted past Rdio and MOG to be probably the third largest paid subscription music service in the United States, behind Rhapsody and (probably) Spotify at over a million each.
MuveMusic isn’t quite a subsidized-music deal a la Nokia Ovi Music Unlimited, but it does offer unlimited music downloads bundled with wireless service at a price point that’s lower than the major carriers. (The roaming charges you’d incur if you leave Cricket’s rather spotty coverage area could add to the cost.) Cricket is apparently spending a fortune to market MuveMusic, and it’s paying off.
It looks like the business of bundling content with devices is not dead; on the contrary, it’s just beginning. The fact that both types of bundling models exist — pay for the device, get the content free; pay for the content, get the device free — means that we can expect much experimentation in the months and years ahead. Although it’s hard to imagine a record label offering a free device with its music, we could follow a model like Airborne Music and think of things like, say, a deal between HTC and UMG offering everything Lady Gaga puts out for $20/year with a free HTC Android phone and/or (HTC-owned) Beats earbuds. Or how about free Disney content with a purchase of an Apple TV?
As long as someone is paying for the content, any of these models are good for content creators. device makers, ane consumers alike. Bring them on!
ReDigi Gets RIAA Nastygram November 15, 2011
Posted by Bill Rosenblatt in Economics, Law, Music, Services, United States.8 comments
Last week the RIAA issued a cease-and-desist letter to a music startup called ReDigi, which has been attempting to create a market for “used” digital music files. It allows users to sell their music files for prices below those of “new” files on iTunes or Amazon, and gives a portion of the proceeds to record labels. (It does not have licenses from the labels to do this.)
I had been paying attention to ReDigi since it had gotten some attention on the tech blogs when it issued a beta release a month ago, and I consulted a couple of copyright law experts about the legality of what they are doing. Based on the results of my research, the RIAA’s actions towards ReDigi were about as surprising to me as an announcement that the sun will rise tomorrow morning.
Who were the “legal experts” that ReDigi claims told it that what it does is within the law? What investors were credulous or rash enough to finance this venture? Or did everyone involved do this just to try to make a point? Regardless of the motivation, ReDigi’s legally embattled state has been a foregone conclusion.
ReDigi purports to implement something called Digital First Sale. The First Sale Doctrine (a/k/a Section 109 of the U.S. copyright law, and known as Exhaustion in most other countries) says that if you obtain a copy of a copyrighted work legally, you can do as you wish with it – keep it, lend it, sell it, give it away, use it to line a birdcage – as long as you obtained it legally and you don’t do anything with it that infringes copyright law, such as make unauthorized copies.
The issue is that this law was designed to apply to physical goods; no one is quite sure about its applicability to piles of bits. The U.S. Copyright Office was asked for an opinion on Digital First Sale a decade ago. The Office stated that Digital First Sale would require a complex technical mechanism that ensured that once you gave your copy of a file to someone else (whether for money or not; whether permanently or not), you had no further access to the file. The technical shorthand for such a mechanism is “forward and delete.” The Office opined that such a mechanism might be feasible at some point in the future but wasn’t then, so it declined to endorse the concept of Digital First Sale.
ReDigi claims to have implemented a robust forward-and-delete mechanism. It uses acoustic fingerprinting from Gracenote to ensure that once a user has sold a file, the same song no longer exists on the user’s PC or iPod. There are ways to hack the system, but that’s somewhat beside the point.
Digital First Sale remains very much unsettled law, even according to copyleft legal scholars, such as Jason Schultz of Berkeley (formerly of the Electronic Frontier Foundation), who would generally like to see Digital First Sale become reality.
Even putting First Sale aside, there’s another legal issue with ReDigi’s model. ReDigi only lets users sell files that they bought on sites such as iTunes and Amazon, in order to ensure that users are only reselling legally-obtained files. (The source of a file can be determined by examining metadata or watermarks.) There’s just one little problem with that: these sites have Terms of Use that expressly forbid resale of purchased digital files. (Here are Amazon’s and iTunes’s.) In other words, users who sell files on ReDigi may or may not be infringing copyrights, but they are certainly running afoul of iTunes or Amazon’s Terms of Use, which are contracts between the retailer and the user.
But wait a minute: if the Terms of Service forbid users from doing something that copyright law allows, which one prevails? Apparently that’s an unsettled question as well, according to both a senior legal authority at the Copyright Office and one of America’s leading copyright litigators. The latter told me “the ink is not dry” on this area of copyright law.
Yet one thing is very clear: Digital First Sale scares the media industry to death. Think about it: if anyone could resell their digital content at any price, then ReDigi would only be the beginning. There would be many competing content-resale marketplaces. People could auction their “used” files on eBay. People could “donate” them to public libraries with virtually no cost or effort – and get a tax deduction for a charitable donation. All perfectly legal. The result of this would be a rapid acceleration of what I have called the race to the bottom: the price of legal content would drop to near its cost of coping and distribution, i.e., virtually nothing. Furthermore, the major copyright owners would lose a lot of control over distribution; for example, Hollywood studios’ release windows would become virtually meaningless.
It’s also evident that the media industry would much rather nip this trend in the bud than endure years of litigation with uncertain outcomes. Even attempting to negotiate a license with a service like ReDigi would imply some comfort with Digital First Sale at a conceptual level, which is something that the media industry would surely want to avoid. Thus the RIAA’s actions against ReDigi come as no surprise.
The RIAA’s “nastygram” points to file copying that must take place in order for ReDigi’s system to work as evidence of copyright infringement, even though, of course, that’s not the real issue here. Other litigation concerning Digital First Sale, such as Vernor v. Autodesk (commercial software), is working its way through the courts. Whatever happens with Digital First Sale, the law will take years to reach clarity — and until then, services like ReDigi will continue to be in limbo.
Incidentally, Digital First Sale is going to be a topic at our Copyright and Technology conference week after next (Wednesday November 30). We will have legal experts on this topic as well as Paul Sweazey of the IEEE 1817 standards initiative, which is another attempt to implement something approximating Digital First Sale. The discounted registration offer I made last week still stands.
Azita Arvani
Niels Thorwirth
Bill Rosenblatt
Bill Jones
