About this Issue

Does copyright have a future in the digital age? Or are new technologies steadily making it obsolete? As the copying of digital texts, audio, and video grows cheaper, the restrictions needed to enforce copyright grow more expensive and invasive. What are the implications of easy digital copying and storage for public policy? How can copyright be preserved in the digital age, and is it even worth preserving?

To discuss these issues, we’ve brought in Rasmus Fleischer, one of the co-founders of Piratbyrån, or “The Piracy Bureau.” Piratbyrån is a Swedish advocacy group opposed to invasive digital copyright laws. Although Piratbyrån does not engage in illegal activities, some of its members did help found The Pirate Bay, a BitTorrent tracker for downloading copyrighted material online. As such, both organizations have gained considerable notoriety.

In his lead essay, Fleischer discusses the proliferation of digital copying online – and the widening circle of laws designed to stop it. He questions whether these laws are enforceable without destroying the Internet’s openness and innovation, and whether technological fixes to impose traditional copyright will not end up destroying civil liberties. To comment on his essay, we’ve invited Timothy B. Lee, a Cato Institute adjunct scholar specializing in technology issues and civil liberties and a frequent contributor to Techdirt, Ars Technica, as well as the Wall Street Journal and the Los Angeles Times. We’ve also invited Professor Doug Lichtman, who teaches on law and technology at the University of California, Los Angeles, and who is co-author of Telecommunications Law and Policy, a textbook on the federal regulation of broadcast television, cable television, radio, telephony, and the Internet. Finally, we will also be hearing from Tom W. Bell, a law professor at Chapman University and author of the forthcoming book Intellectual Privilege: Copyright, Common Law, and the Common Good.

Lead Essay

The Future of Copyright

How relevant is it to declare oneself to be “for” or “against” copyright? Neither the stabilization nor the abolition of the copyright system seems within reach. All we see is a seemingly endless assembly line of new extensions to the law being proposed and enacted. The most recent is the proposed “Anti-Counterfeiting Trade Agreement” (ACTA) [1], to be tabled at next month’s G8 meeting in Tokyo, including a clause known as the “Pirate Bay killer” that would force countries to criminalize services that may facilitate copyright infringement, even if not for profit. This is just one example of how copyright law is mutating into something qualitatively different than what it has been in previous centuries.

A very condensed version of copyright history could look like this: texts (1800), works (1900), tools (2000). Originally the law was designed to regulate the use of one machine only: the printing press. It concerned the reproduction of texts, printed matter, without interfering with their subsequent uses. Roughly around 1900, however, copyright law was drastically extended to cover works, independent of any specific medium. This opened up the field for collective rights management organizations, which since have been setting fixed prices on performance and broadcasting licenses. Under their direction, very specific copyright customs developed for each new medium: cinema, gramophone, radio, and so forth. This differentiation was undermined by the emergence of the Internet, and since about the year 2000 copyright law has been pushed in a new direction, regulating access to tools in a way much more arbitrary than anyone in the pre-digital age could have imagined.

This change has taken place because previously distinct media are now simulated within the singular medium of the Internet, and copyright law simply seems unable to cope with it. Consider radio broadcasting and record shops, which once were inherently different. Their online counterparts are known respectively as “streaming” and “downloading,” but the distinction is ultimately artificial, since the same data transfer takes place in each. The only essential difference lies in how the software is configured at the receiving end. If the software saves the music as a file for later use, it’s called a “download.” If the software immediately sends the music to the loudspeakers, it’s called “streaming.”

However, the receiver can always choose to transform a stream to a digital file. It’s simple, legal, and not very different from home taping. What now fills the record industry with fear is the possibility that users could “automatically identify and separate individual tracks from digital transmissions and store them for future playback in any order.”[2] In other words, they fear that the distinction between streaming and downloading will be exposed as a big fake.

For example, Swedish company Chilirec provides a rapidly growing free online service assisting users in ripping digital audio streams.[3] After choosing among hundreds of radio stations, you will soon have access to thousands of MP3 files in an online depository, neatly sorted and correctly tagged, available for download. The interface and functionality could be easily confused with a peer-to-peer application like Limewire. You connect, you get MP3s for free, and no one pays a penny to any rights holder. But it is fully legal, as all Chilirec does is automate a process that anyone could do manually.

Cutting a recorded radio stream into individual tracks and entering each correct song title is easy, but takes lots of time. The open source community is continuously coming up with free tools for simplifying it, such as a program called The Last Ripper that can turn the on-demand streaming service Last.fm into a library of MP3 files.

Record industry lobbyists smell the danger, and now they are urging governments to criminalize such practices. On their orders the so-called PERFORM Act (“Platform Equality and Remedies for Rights Holders in Music Act”) was introduced in the U.S. Senate last year. [4] The proposed law would force every Internet radio station to encrypt the transmission of file information, such as the name of the song. Yet anything visible on the screen can still be easily obtained by special software, encryption notwithstanding, and such restrictions would therefore be ridiculously easy to circumvent. Thus the PERFORM Act includes a follow-up clause banning the distribution of this class of software.

People with some programming skills, however, won’t need to do much more than combining a few readily available and otherwise perfectly legal code libraries to compile their own streamripping tool, one that would circumvent the PERFORM Act. For regulations like these to be effective, it is necessary also to censor the sharing of skills that potentially can be useful for coding illegal software. The circle of prohibition grows still larger: Acoustic fingerprinting technologies, which have nothing copyright-infringing to them, but which can be used for the same feared identification of individual tracks, must probably also be restricted.

This domino effect captures the essence of copyright maximalism: Every broken regulation brings a cry for at least one new regulation even more sweepingly worded than the last. Copyright law in the 21st century tends to be less concerned about concrete cases of infringement, and more about criminalizing entire technologies because of their potential uses. This development undermines the freedom of choice that Creative Commons licenses are meant to realize. It will also have seriously chilling effects on innovation, as the legal status of new technologies will always be uncertain under ever more invasive rules.

Anti-piracy agencies are today fiercely attacking different kinds of search engines, solely because they provide links to files which may be copyrighted. This includes the bizarre case against Swedish BitTorrent tracker The Pirate Bay, as well as recent lawsuits against Yahoo! China and Baidu. Only Google remains largely uncontested, although they operate in the same gray zone of copyright. For example, the business model of Google Books is to display millions of pages of copyrighted and uncopyrighted books as part of a business plan drawing its revenue from advertising.

Gray zones like these are omnipresent in 21st century copyright law. One reason for this development is the uncertain status of the very idea of “copying” today. Contrast today’s world with the golden age of copyright, roughly speaking between 1800 and 1950. Back then, enforcement was easy. The act of reading a book was far removed from the act of printing one. Record presses and gramophones were safely distinct machines. Since then, things have changed.

When American troops liberated the city of Luxembourg in 1944, they made a strange capture: a machine capable of recording sound on magnetic tapes. Shortly after the war, this German military invention made its appearance in private homes. Tape recorders integrated listening and reproduction in one device, but as separate functions. That’s no longer the case with digital technology. Today, to use digital information is to copy it.

Computers operate by copying. They couldn’t care less whether the physical distance between original and copy is measured in micrometers or in miles; both work equally well for them. Copyright law, on the other hand, must somehow draw a line between use and distribution. That means putting an imaginary grid over the chaotic myriad of network nodes, delineating clusters of devices that can be attributed to individuals or households.

Whatever happens inside such a cluster is defined as private use, while any trespassing of these borders is potentially criminal. But what can this strict division between private and public mean to someone with 400 “friends” on Facebook?

Another important consideration is that the digital is larger than the online. According to one recent study 95 percent of British youth engage in file sharing via burned CDs, instant messaging clients, mobile phones, USB sticks, e-mail, and portable hard drives. [5]

Such practices constitute the “darknet,” a term popularized by four Microsoft-affiliated researchers in a brilliant 2002 paper.[6] Their thesis is simply that people who have information and want to exchange it with each other will do just that, forming spontaneous networks which may be large or small, online or offline. By being interconnected they can always keep the most popular material available. Attempts to curb open file-sharing infrastructure may only drive activity towards smaller and darker networks.

One early darknet has been termed the “sneakernet”: walking by foot to your friend carrying video cassettes or floppy discs. Nor is the sneakernet purely a technology of the past. The capacity of portable storage devices is increasing exponentially, much faster than Internet bandwidth, according to a principle known as “Kryder’s Law.” [7] The information in our pockets yesterday was measured in megabytes, today in gigabytes, tomorrow in terabytes and in a few years probably in petabytes (an incredible amount of data). Within 10-15 years a cheap pocket-size media player will probably be able to store all recorded music that has ever been released — ready for direct copying to another person’s device.

In other words: The sneakernet will come back if needed. “I believe this is a ‘wild card’ that most people in the music industry are not seeing at all,” writes Swedish filesharing researcher Daniel Johansson. “When music fans can say, ‘I have all the music from 1950-2010, do you want a copy?’ — what kind of business models will be viable in such a reality?” [8]

We already have access to more film, music, text and images than we can possibly incorporate into our lives. Retreating from this paradigm of abundance to the old paradigm of scarcity is simply not an alternative. Adding more “content” will strictly speaking produce no value — whether culturally or economically. What’s valuable is supplying a context where people can come together to create meaning out of abundance.

The digital world poses questions whose answers can’t remain within the digital sphere. A key challenge is to relate the digital to that which is not digital: time, space, human relationships, and so forth. Kevin Kelly, the founding executive editor of Wired magazine, has recently captured it well: When copies are superabundant, they become worthless, while things which can’t be copied become scarce and valuable. What counts in the end are “uncopyable values,” qualities which are “better than free.” [9]

The file-sharing explosion beginning around the year 2000 marked not only the start of a falling trend in sales of recorded music, but also of a drastic rise in spending on live music experiences. Only ten years ago, live music was widely conceived of as merely a way to market recordings. Today that strange equation seems to have been turned on its head.

Music is far from unique in demonstrating how the pendulum has swung. Kelly mentions how writers increasingly make their money from appearing in person, promoted by their books, which may well be available for free. The computer game industry has understood how to make big money not by selling software, but by selling access to online worlds.

Businesses that adopted the copyright industry’s old formula of selling “content without context” are meeting harder times. “Intellectual property is the oil of the 21st century,” was once the motto of Mark Getty, the businessman who used his family’s oil fortune to invest in one of the world’s largest copyright portfolios, controlling more than 60 million images.” Getty Images saw its stock price fall steadily since its peak in 2004, before the company earlier this year was sold out to private equity.

The failure of Getty Images can’t be blamed on piracy, but rather has to do with the spread of digital cameras. Editors increasingly tend to prefer on-the-spot pictures, regardless of image quality. Sitting on a large database of archived pictures becomes less relevant when newspapers want photography to produce a feeling of real-time presence — an uncopyable quality.

Faced with these new realities, copyright industries may instead go on the offensive. First out on the battlefield were the record industry’s watchdogs, the Recording Industry Association of America and its international counterpart, the International Federation of the Phonographic Industry. Together, the RIAA and IFPI have set the industry’s lobbying agenda. Topping their wishlist is legislation requiring “carriers of digital content” to intervene in the use of communications services, or what they call “ISP responsibility.” [10] The ACTA might soon deliver them such legislation, which basically encompasses measures of two kinds.

One is simply net censorship. In several European countries, the IFPI is already taking ISPs to court to make them block access to search engines like The Pirate Bay. The question arises: Which site would be next? That infringement hotbed called YouTube? Probably not, but such implicit threats are increasingly being used by copyright industries in their hunt for profitable but one-sided licensing deals.

Yet more alarming, the very existence of an Internet blacklist will constantly tempt politicians to expand that list’s uses to all kinds of morally or politically inconvenient sites. Franco Frattini, the EU Justice Commissioner, is already pushing to censor online information about bombmaking. [11] Censorship, however, can be circumvented, as demonstrated in Denmark, where more people started using The Pirate Bay after a court-ordered block was implemented.

As a second measure, the anti-piracy lobby demands authorization to order ISPs to disconnect users and to force ISPs to give out subscribers’ identities on request. Unfortunately, criticisms of such policies have hitherto been limited to concerns about the violation of privacy. While privacy is a valid concern, there are other reasons to mistrust this measure.

Consider first that the Internet is not a network of people; it is a network of computers. Any node in a network is not necessarily an endpoint, but a potential opening to a sub-network. Firms and neighborhoods routinely install one fiber connection and share it via a router. Only their local network administrator can then trace online activities to an actual user. In other words, anonymity will remain a possibility.

Yet in the name of ISP responsibility, virtually any Internet user might be called to account by the recording industry. Here’s why: In discussions about so-called ISP responsibility, it is crucial to remember that big telecom companies are far from the only existing “operators of electronic communications networks and services.” This is the actual definition of an ISP, used within the European Union bureaucracy, but by this definition, you may be one, too. The U.S. Digital Millennium Copyright Act is equally vague: It defines a “service provider” as a “provider of online services or network access, or the operator of facilities therefor,” leading many to wonder whether libraries, employers, or private individuals operating routers might also qualify as ISPs.

Given such a broad definition, any company or person sharing connectivity, as well as anyone hosting a blog or a web forum, could, in the name of “ISP responsibility,” be obligated to register the identities of users and to deliver them to copyright enforcers on request. The range of possible abuses is enormous. Attempts to save an already broken policy will mean an ever more absurd sequence of follow-up regulations.

Meanwhile, darknets will proliferate and demand for new anonymization techniques will remain high as a general side-effect of the hunt for small-scale copyright infringers. The most eager to take advantage of that situation will of course be the real criminals, including terrorists, while the legitimate Internet may grow fragmented and lose its open, freewheeling character.

Copyright enforcement weakens general law enforcement. And it’s expensive. The proposed ACTA treaty would create international legislation turning border guards into copyright police, charged with checking laptops, iPods, and other devices for possibly infringing content, and given the authority to confiscate and destroy equipment without even requiring a complaint from a rights-holder.

It’s characteristic of the dishonesty found in copyright law that the ACTA has been promoted as a treaty aimed to save people from dangerous fake medicine, which has very little to do with issues like “ISP responsibility.” While patents, trademarks, and copyright are significantly different in many respects, copyright industry lobbyists prefer to present their draconian enforcement strategies as a matter of “intellectual property” in general.

The real dispute, once again, is not between proponents and opponents of copyright as a whole. It is between believers and non-believers. Believers in copyright keep dreaming about building a digital simulation of a 20th-century copyright economy, based on scarcity and with distinct limits between broadcasting and unit sales. I don’t believe such a stabilization will ever occur, but I fear that this vision of copyright utopia is triggering an escalation of technology regulations running out of control and ruining civil liberties. Accepting a laissez-faire attitude regarding software development and communication infrastructure can prevent such an escalation.

Unauthorized sharing of files will prevail in darknets, online and offline. On the other hand, certain non-digital activities, like book publishing, continue to work relatively well under the terms of classical copyright law designed for printing presses. Still other fields, like software and music, are characterized by complex competition among different models, where some make money on selling copyable units, while others profit by delivering uncopyable services. A qualified guess is that we will have to live in this landscape of gray zones for quite a while, for good and bad.

Creative practices, with some exceptions, thrive in economies where digital abundance is connected to scarce qualities in space and time. But there can never be a question of finding one universal business model for a world without copyright. The more urgent question regards what price we will have to pay for upholding the phantasm of universal copyright.


[1] IP Justice: Anti-Counterfeiting Trade Agreement (ACTA).

[2] IFPI: “Digital Music Report 2007″, p. 20.

[3] http://www.chilirec.com/

[4] http://feinstein.senate.gov/06releases/r-dig-music.htm

[5] Katie Allen: “Home copying – burnt into teenage psyche.” The Guardian, April 7, 2008.

[6] Peter Biddle, Paul England, Marcus Peinado und Bryan Willman: “The Darknet and the Future of Content Distribution.”

[7] Chip Walter, “Kryder’s Law.” Scientific American, July, 2005.

[8] Daniel Johansson: “The Future of Private Copying.” Digital Renaissance, March 27th, 2008.

[9] Kevin Kelly, “Better than free.”

[10] IFPI: “Digital Music Report 2008.”

[11] “Website bomb-making lessons to be outlawed across Europe” Times online, July 4, 2007.

Rasmus Fleischer is a co-founder of Piratbyrån, a Swedish anti-copyright organization.

Response Essays

Two Paths for Copyright Law

The picture Rasmus paints for the future of copyright seems grim. He’s right that technological change will make it increasingly difficult for the law to prevent individuals from sharing copyrighted materials from the privacy of their homes. Whether we like it or not, copyright law will have to adjust to this new technological reality. But it is important not to overstate the magnitude of the change. It is often supposed that giving individuals more freedom to share copyrighted materials with one another will amount to the abolition of copyright. But this is far from true.

The starkness with which the copyright debate is often framed reflects a misunderstanding of the function copyright served in the 20th century. Copyright is commonly conceived as a system of restrictions on the copying of creative works. But until recently, it would have been more accurate to describe copyright as governing the commercial exploitation of creative works. From this perspective, the inevitable legalization of non-commercial file sharing looks less like a radical departure from copyright’s past, and more like an incremental adjustment to technological change. It will require the rejection of some misguided policy developments of the last decade, to be sure, but in a sense it will simply restore the common-sense principles of 20th-century copyright law.

Before World War II, only large, capital-intensive organizations could afford the technologies for efficient copying of creative works. The equipment needed to copy a book, album, or movie was generally too expensive for ordinary consumers. The second half of the 20th century saw the emergence of new technologies — photocopiers, tape recorders, and VCRs — that brought copying to the masses. But these technologies were still sufficiently limited and cumbersome that they did not pose a significant threat to the incumbent content industries. By the 1960s, you could photocopy a book for personal use, but doing so was a lot more work — and not significantly cheaper — than buying a freshly printed book.

Hence, until the final decade of the 20th century, the legality of non-commercial home copying was almost entirely an academic question. Mix tapes and libraries of recorded movies may have been technically illegal, but Hollywood and the major labels recognized that they weren’t a big enough threat to their bottom line to be worth suing customers over.

But as the 21st century dawned, technological progress brought this latent ambiguity in copyright law into stark relief. Peer-to-peer file sharing transformed non-commercial home copying from a minor nuisance to an existential threat to the recording industry. The major labels (with some help from Hollywood) persuaded Congress to criminalize non-commercial copyright infringement and give content industries unprecedented legal authority to regulate the design of media devices. They used lawsuits to shut down numerous peer-to-peer sites. And in 2003, the recording industry began filing lawsuits against individual music fans caught using peer-to-peer file sharing networks.

It hasn’t worked. New file-sharing technologies pop up faster than the labels can take them down. Recent legislation has stunted the development of new media technologies, and the recording industry has created a PR problems for itself by threatening 12-year-olds, grandmothers, and grieving family members. But file sharing continues virtually unchecked. As Rasmus points out, things are only going to get worse if we continue down the path advocated by the copyright lobby.

The copyright policies of the last decade have been based on the idea that copyright is about controlling unauthorized copying. An alternative is to treat copyright as a limitation on commercial exploitation of creative works. Under this option, individuals could make any non-commercial use they liked of copyrighted works, including sharing them with strangers on the Internet, without fear of legal consequences. Copyright law would focus on commercial entities, who are both easier to regulate and better equipped to deal with copyright law’s complexities.

I contend that this would represent only a modest change from the principles of 20th-century copyright law, but many people will nevertheless view it as radical. It is commonly supposed that the decriminalization of non-commercial file sharing will doom the major content industries and impoverish the thousands of authors, musicians, and programmers who currently make their living producing creative works. These fears are unfounded. Creative industries do depend on copyright protection, but what they need most is not a total ban on unauthorized copying, but protection from the commercial exploitation of their works by rivals. If firms are ensured a monopoly on commercial exploitation of their works, there are many ways they can profit from their creative efforts even if they are unable to stop file sharing among their customers.

Consider the music industry, which has been hardest hit by peer-to-peer file sharing. Rasmus has already mentioned the growing trend toward giving away music in order to sell more concert tickets and merchandise. This is a trend that would likely continue even in the unlikely event that illicit file-sharing were brought under control. Most musicians would rather be famous than rich, and many new acts will choose to give away their music as a way to build their fan bases. The most successful will then be able to make a living touring and selling merchandise. The rest will have to keep their day jobs. Given that few musicians have ever been able to quit their day jobs, things won’t look much different from the perspective of the average musician.

For their part, the labels are beginning to acknowledge the inevitability of file sharing among their customers. Last December, a site called Imeem announced that it had negotiated revenue-sharing deals with all four major record labels. Imeem allows users to upload their favorite songs and share them with their friends without paying a dime. Imeem displays ads on the site and shares revenues with record labels based on the popularity of their music. It is only a slight exaggeration to say that the Imeem deals amounted to the de facto legalization of online file sharing, provided that the labels get a cut of any associated revenues. It will take time before deals of this type become commonplace. But by allowing users to share their music without paying a dime, the industry has conceded the principle and is now only haggling over the price.

In the long run, the recording industry is likely to consist of a variety of free music-sharing sites that share advertising revenues with music publishers. Of course, some amount of illicit file sharing will continue to occur, but the market share of illicit file sharing services would plummet if they had real competition. Legitimate file-sharing sites will be able to raise the capital required to make their sites fast, comprehensive, and user-friendly. The music labels’ revenues are unlikely to rebound to their highs at the turn of the millennium, but there will continue to be profits to be earned from music publishing.

Space constraints prevent me from discussing other copyright-based industries in as much detail. Instead, allow me to offer a few guesses about how the legalization of non-commercial file sharing will affect the software, news, photography, and movie industries.

Many computer programmers do custom software development for business use, either as full-time employees or as consultants. Other programmers produce off-the-shelf business software such as Microsoft Office and Intuit’s Quickbooks. Still others produce software that is pre-loaded on computers or smart phones or embedded in everyday electronic devices. And a growing number produce web-based applications supported by subscriptions or advertising. None of these programmers would be seriously harmed by the legalization of non-commercial file sharing. As for the minority of the software industry that produces off-the-shelf software used primarily by consumers, it must be remembered that even software that is readily available online can still be sold at a profit. Red Hat, for example, has successfully sold copies of its Linux distribution in retail outlets, despite the fact that identical software can be downloaded online from Red Hat’s website. Evidently many consumers value the convenience, security, and technical support that comes with boxed software.

Newspapers and magazines are already transforming themselves into free, advertising-supported websites. The New York Times, for example, encourages its readers to email its articles to friends, print them out, and save them to their hard drives. File sharing poses no threat to them.

Likewise, the legalization of non-commercial file sharing would have little effect on photographers. Commercial publications would still be required to pay for the photographs they used. Photographers that cover events such as weddings can easily charge by the hour rather than by the photograph.

Finally, we come to Hollywood, which has been predicting its own demise at the hands of technological progress for a quarter century. Despite the proliferation of home video options and the growth of illicit file sharing, Americans spent a record $9.6 billion at the box office in 2007. Going to the movies is valued as a social experience as much as a form of entertainment, and it’s hard to imagine most Americans would stop going out to the movies simply because they could get the same movie on BitTorrent. In addition, much of Hollywood produces ad-supported television content, a business model that is already being adapted to the Internet.

Notice that while none of these business models require restrictions on non-commercial file sharing, most of them do depend on copyright. Bands’ ability to sell merchandise profitably depends on their ability to stop commercial knock-offs. Imeem would have had no incentive to share revenue with the major labels absent copyright law. And theaters would have little incentive to send their ticket proceeds to Hollywood without copyright law. The war on BitTorrent is probably hopeless, but copyright law remains eminently enforceable against commercial firms. That has always been where copyright mattered most, and it will continue to matter in the 21st century. The war on file sharing is hopeless, but that’s hardly a reason to abandon copyright law.

Timothy B. Lee is an adjunct scholar at the Cato Institute.

Nobody Puts Copyright in the Corner

Copyright law and copyright policy are both in the midst of enormous change. That seems to bother Rasmus Fleischer and for reasons that I cannot understand. As Fleischer emphasizes in his lead essay, in recent years the technologies available to facilitate the creation and distribution of creative work have themselves undergone enormous change. Of course copyright law and policy are busily following suit. Copyright, after all, is about building an environment where expressive work is created and ultimately shared. If technology alters the costs associated with any of the relevant steps, or opens up new possibilities in terms of who can be involved, or in any of a million other ways changes the social calculus, copyright law should identify those new possibilities and adjust accordingly. That process is not evidence of a legal regime overstaying its welcome, or an incumbent industry inappropriately fighting for its survival. It is evidence of a legal system properly at work, engaging in the changing realities of the field it is designed to nurture.

But Fleischer, it seems, would have none of it. Copyright law in his ideal world would remain stagnant in the face of technological change, neither taking steps to protect the work that has traditionally been within copyright’s purview nor in any way influencing the development of copyright-related technology. Copyright law would be sent to the corner. Technology would determine not only what we are capable of, but also what is actually done.

And how would artists survive in Fleischer’s brave new world? Fleischer suggests that a world without copyright would work just fine, thank you very much. Instead of selling music, Fleischer tells us, musicians would earn their keep through public performances. Instead of selling video games, the computer game industry would recoup expenses by hosting online worlds. Fleischer says nothing about the movie industry, but on his view movie companies presumably would earn their cash not by selling tickets at the box office but instead by peddling action figures and t-shirts. Copyright would be dead. Artists would still flourish.

This analysis is of course familiar. Esther Dyson wrote in Wired well over a decade ago about a similar shift in business strategy.[1] But Fleischer is too quick to embrace the Dyson approach. Yes, there are other ways for singers, writers, programmers, and the like to earn whatever they need to support their craft. But these approaches have substantial limitations, ones that make clear the continued need for a viable copyright option.

Consider, for example, the suggestion that musicians give away their music and sell instead concert performances. This suggestion might work well for a mainstream artist who can travel the big cities and fill stadium after stadium with paying fans. But what of the niche performer? The very technologies that Fleischer celebrates are technologies that finally make it possible for smaller acts to distribute their work to a geographically dispersed fan base. But if those acts cannot profit from the duplication and distribution of their work and are left only with the option of gathering their fans at in-person venues, geography would again become an insurmountable problem and the niche acts that copyright could today support would instead again be relegated to a deeply second-class existence.

Similarly, movies indeed could be funded through the sale of related merchandise like action figures and movie-themed clothing. But that, too, would work for some movies but not others. Star Wars would still get produced and then spawn thousands of Ewoks. A Beautiful Mind, not so much, unless I am sharply underestimating the demand for John Nash action figures and accessories.

The same criticism can be repeated across all of the Fleischer and Dyson stories. Software companies could give away their software and earn returns by hosting online forums, but that would skew the market, favoring entries that have an interactive multi-player component at the expense of equally worthwhile games that happen to be more self-contained. Authors likewise could rely on book tours and public talks for their monthly rent, but that would take away the option of being a modern Harper Lee — the reclusive author who won a Pulitzer for To Kill A Mockingbird but soon thereafter decided to share only her words, but not her life, with her wide base of fans and admirers.

And thus we return to what must be the real difference in views between me and Rasmus Fleischer. Fleischer is not merely interested in allowing alternative models like free peer-to-peer distribution to compete with traditional approaches; he wants to take away the traditional options and leave intact only his favorite alternatives. And why? Not for any articulated policy rationale about why creators ought not be allowed to choose their own business approach or why consumers are harmed by dueling models of creation and distribution. No. Fleischer’s defense is simply that peer-to-peer and the related technologies are here, and cool, and new, and can be brought into the fold only by making some careful changes to how copyright law articulates rights and responsibilities.

That sentence sounds to me like a call to actually update the law and make sure that the copyright system’s approach to third-party liability, statutory damages, fair use, and the definition of rights all actually work given the new challenges and opportunities. To Fleischer, however, any such adjustments are inappropriate. To write new rules, he tells us, would be to graft an “imaginary grid” over a naturally “chaotic” infrastructure.

As if law ever is something different from that.



[1] Esther Dyson, “Intellectual Value: A Radical New Way of Looking at Compensation for Owners and Creators in the Net-based economy.” Wired vol 3.07, July 1995.

Towards a Copyriot Act — and Away from It, Again

What lies ahead for copyright? As Rasmus Fleischer observed, infringement has grown cheap, easy, and widespread. He concludes that copyright will wither into irrelevance. That might happen, I grant. Allow me, though, to describe another future for copyright, one in which lawmakers impose crushing penalties to discourage rampant infringement.

Put yourself in the shoes of a Hollywood executive. For decades, copyright served your industry well. You hawked expressive works, consumers calmly lined up to pay, and everybody seemed pretty happy about the results. Your long years in the business have seen American culture light up the planet. “What vases were to ancient Athens,” you say, “music, films, and TV are to Hollywood.”

Now, though, you see your cultural empire crumbling. Inspired by anti-copyright rhetoric and taking advantage of lax enforcement, mobs have swept through the marketplace. They boldly break the locks protecting copyrighted works, greedily grab the goods, and disappear into the crowd. “We cannot make money under these conditions!” you exclaim. “Lawmakers need to act or we will abandon the market.”

What would you have lawmakers do? “The same thing they do whenever mobs start breaking into stores,” you reply. “The police need to fire a few shots over the infringers’ heads. And if the looting continues, they should shoot some of the looters. That may sound severe, but we face a breakdown of civil order. After all, wouldn’t police — or perhaps the National Guard — do the same if mobs threatened to take over Wall Street, Rodeo Drive, or Constitution Avenue? Hollywood deserves the same protection. The time has come to get tough on infringement. The Copyright Act’s mild remedies evidently do not suffice. We need a Copyriot Act!”

Now step outside of that Hollywood executive’s rather irritated skin and consider his complaint objectively. However extreme his rhetoric, he has a valid point. Suppose that copyright protects property and promotes the public good — a plausible claim. Suppose further that, as Fleischer observed, the odds of getting caught violating copyright have plummeted. Holding all else equal, then, to keep copyright policy in balance, lawmakers should increase the disincentives to infringement.

How high, on that view, should the costs of infringement rise? Our disgruntled executive would have National Guard troops shoot copyright infringers. That certainly sounds extreme but, as he observed, officials have applied similarly harsh measures to curb civil disorder. Lawmakers could increase the disincentives for copyright infringement without resorting to summary execution, however; they could simply impose the death penalty, for instance, with all of its many procedural protections. Even mandatory life in prison would go farther than present law in discouraging copyright infringement. Exactly how much copyright infringers should suffer of course remains subject to empirical study. Regardless, however, the executive’s argument stands: If technology allows almost all copyright infringers to escape punishment, the law should inflict extraordinarily harsh punishments on those few infringers that it does manage to catch.

Our hypothetical executive can also cite precedent for his view that extraordinary civil unrest calls for extraordinary law enforcement measures. By most accounts — and certainly by Fleischer’s — the Copyright Act evidently no longer suffices to discourage infringement. We might thus say, to quote another federal law,[1] that a technological condition has arisen that “so hinders the execution of the laws” as to deprive copyright holders of “a right, privilege, immunity, or protection named in the Constitution and secured by law” — namely, their copyright rights. That same law provides that if state or local authorities “are unable, fail, or refuse to protect that right, privilege, or immunity, or to give that protection,” the president “may employ the armed forces, including the National Guard in Federal service” to restore public order.[2] On that view, a Copyriot Act does not seem so far-fetched.

In addition to keeping copyright policy in balance, threatening infringement with severe sanctions offers efficiency gains. Cognitive psychologists tell us that humans routinely overestimate the likelihood of so-called “dread” risks — those that capture our imaginations with the prospect of spectacular crashes and terrible pain. Most travelers wrongly regard airplanes as more dangerous than autos, for instance. Lawmakers might thus economize on the costs of enforcing copyrights by inflicting especially dreadful penalties for infringement. It should take only a few high-profile prosecutions — giving some file sharers the Guantanamo treatment, for instance — to discourage a great many other would-be infringers. Although that may seem cruel, “mercy to the guilty is cruelty to the innocent,” as Adam Smith observed.[3]

So goes the case for radically increasing the penalties for copyright infringement. Despite the impassioned plea of our imaginary Hollywood executive, however, and the ruthless logic we might marshal in his support, I suspect that most who read this essay will reject his call for a Copyriot Act. I do, too. What explains our hesitation?

Perhaps simple self-interest drives us. Not being Hollywood executives, after all, few of us stand to lose our jobs and our fortunes to copyright infringement. We might instead relish the prospect of winning unrestricted access to formerly protected works. We might, in other words, want to join the mob of looters decried by our imaginary Hollywood executive.

I doubt that so crass a motive can fully explain our hesitation to view widespread copyright infringement as little better than looting, however. Despite their rhetoric equating infringers to thieves, and copyrights to cars, handbags, or televisions,[4] even copyright industry representatives have not (yet) called for anything so merciless as a Copyriot Act. Perhaps that will come, of course. As suggested by passage of the Sony Bono Copyright Extension Act and Title I of the Digital Millennium Copyright Act, powerful lobbies have consistently sought and won expanded copyright protection.

More likely, though, even Hollywood executives regard their Bentley sedans, Gucci purses, and Sony HDTVs as more deserving of rigorous legal protections than they do their movies, television programs, and songs. On that count, moral intuitions reflect the same view taught by economic reasoning, political philosophy, and sound public policy: Copyright represents a statutory privilege designed to maximize social utility — not a private property we can claim as a matter of natural or common law right.

If lawmakers should not react to the advent of cheap, easy, and widespread infringement by treating it like an outbreak of looting, how should they react? On that question, one might write a book (as, indeed, I did).[5] Suffice it to say, here, that lawmakers should not seriously consider passing anything like the Copyriot Act called for by our hypothetical Hollywood executive. If saving copyrights require any measure so extreme as that, they are not worth saving.



[1] 15 U.S.C. § 333(a)(2)(A).

[2] Id. § (a)(1)(A).

[3] Adam Smith, The Theory of Moral Sentiments part II, § 2, ch. III, para. 21 (1790).

[4] See Patricia Louise Loughlan, “You Wouldn’t Steal a Car”: Intellectual Property and the Language of Theft, 29 European Intellectual Property Review 401 (2007).

[5] See Intellectual Privilege: Copyright, Common Law, and the Common Good (draft v. 2008).


The Conversation

Social Norms, Technology, and Copyright Law

I think the discussion so far has been really interesting, but I’d like to see Rasmus Fleischer and Doug Lichtman engage one another’s arguments more directly. Lichtman’s essay strikes me as a solid defense of the public goods argument for copyright. I think he’s right to be concerned that without copyright, society will suffer from the underproduction of certain categories of copyrighted works.

But I think Lichtman may have ducked Fleischer’s core argument: that regardless of copyright’s desirability, copyright protections just won’t be enforceable in the future, at least not without adopting the kinds of police state tactics Tom W. Bell warns us about. We’re now ten years out from the passage of the No Electronic Theft Act and the Digital Millennium Copyright Act, and five years into the Recording Industry Association of America’s legal campaign against file sharers. I see little reason to be optimistic about these anti-piracy campaigns. And as Fleischer points out, things are likely to get harder, not easier, than they are now.

The fundamental problem, I think, is that every successful legal regime works in tandem with a set of social norms and economic constraints that do most of the heavy lifting. Laws against burglary work mostly because most people have internalized norms against theft, and because we all have locks on our doors. The actual anti-burglary laws just play clean-up, catching the rare individual who isn’t deterred by the locks or the social pressures. If we lived in a society in which no one had locks on their doors and most people thought burglary was OK, no conceivable set of legal sanctions could keep burglary under control.

There is evidence that that’s the world we’re heading toward with regard to copyright law. The most important part of the 20th-century copyright-enforcement regime was the fact that the technologies for efficient duplication and distribution of copyrighted works were very expensive. That’s obviously no longer true. Digital rights management vendors portray their products as the digital equivalent of locks on our doors, but DRM is woefully inadequate to the goal of preventing unauthorized copying. And David Pogue claims that hardly any of today’s college students believe there’s anything morally objectionable about peer-to-peer file sharing. In a world where there are no practical barriers to file sharing, and where file sharing carries no social stigma, it’s simply naive to think that the law can singlehandedly prevent copying.

I’d be interested to learn if Lichtman shares Fleischer’s (and my) pessimism about the enforceability of the existing rules of copyright. If not, what is Fleischer’s analysis missing? And if so, how should copyright law adapt? I agree with Lichtman that the full-on abandonment of copyright law would be going overboard, but I think it’s pretty obvious that some changes are needed.

On the other hand, I note that Fleischer carefully avoids reaching a specific conclusion about how copyright law should be changed, but Lichtman seems to assume that Fleischer wants to see copyright abolished. Assuming that’s true, I’d like to see Fleischer address Lichtman’s point about the potential disruption that could result.

Lichtman is quite right that copyright helps to solve market failures that would otherwise lead to the underproduction of certain kinds of creative works. I’m not worried about music; there’s no shortage of people who are willing to make music whether or not they’re able to make a living at it. But I think there are categories of movies, books, and software that would be underproduced in the absence of copyright protection. I like $100 million blockbusters, for example, and it’s not clear to me how the creation of such a movie would be financed if there were thousands of pirate movie theaters that started playing new blockbusters within days of their release.

The war on personal file sharing may be hopeless, but it will continue to be eminently practical to prevent copyright infringement by commercial entities such as movie theaters. If Fleischer is in favor of abolishing copyright, I would be curious to know how he envisions the creation of big-budget motion pictures. And if he’s not in favor of abolishing copyright, how does he think the law ought to change?

Suggestions for copyright reform, and reflections on music as service and product

I fully sympathize with Timothy B. Lee’s idea of bringing copyright back on track, even if I personally can’t see such a development as very likely. He is right to point out that legalization of non-commercial file sharing wouldn’t amount to a radical break when compared to 20th-century copyright principles governing the commercial exploitation of works. In fact, such a reform is maybe best described as a restoration.

The 1990s could have been the perfect time to put copyright law on a better footing, avoiding the current regulatory escalation. At that time, it was far a more open question whether a file transfer was akin to a unit sale, a broadcast, a public performance, or simply a private use which could (given its non-commercial character) be left outside enforcement, as Tim Lee reasonably proposes. Since then, however, a series of law extensions complying with shortsighted industry demands have created a path dependency, making a smooth restoration of copyright law very unlikely. But that does not lessen the value of the kind of copyright conservatism that Tim proposes, an approach to copyright focused on preserving certain principles rather than certain industry structures. (I may add that such approaches are practically non-existent in the debate here in Sweden.)

While re-restricting copyright law to the regulation of commercial exploitation may be a step in the right direction, the definition of “commercial” is without doubt tending to become more and more blurred. Instead of a gray zone between public and private copies, the law might have to handle a gray zone between commercial and non-commercial. The consequences are very hard to predict in detail, but the general idea of shifting focus from the regulation of tools to the regulation of exploitations makes a lot of sense. Such a direction for reform should be complemented by other limitations to copyright, which I don’t see mentioned in Tim’s posts. One is a radical limitation in time: It’s extremely hard to understand the motivation for the current term of “lifetime plus 70 years.” Another would be a careful widening of the “fair use” principle, in the direction of legalizing contemporary creative practices like recycling sound samples in new musical creations. Last of all, it should be made clear that copyright law does not regulate linking and indexing, and this could probably be done by strictly limiting the definition of “contributory infringement.”

I have now hinted at some possible directions for copyright reform, as Tim asks in his follow-up post. I’m still a non-believer in (rather than an opponent to) copyright, but in a close future of intensified gray-zone conflicts I think that it’s more urgent to prevent ACTA and similar dangerous proposals which are already in the process, than to construct detailed plans for how copyright should work ideally.

These proposals are not merely “adjustments;” they are changes to the fundamental character of copyright law, and I’d like Doug Lichtman to address them. His essay ends with the point that any law, not only copyright, is putting an “imaginary grid” over a chaotic reality. That’s true. Doug seems to draw the conclusion that the attempts to restrict distribution of metadata like song titles, to prevent the distinction between “streaming” and “downloading” from collapsing, is “evidence of a legal system properly at work.” I maintain that the regulation of tools, which copyright law is increasingly used for, can’t be described as only “engaging in the changing realities of the field it is designed to nurture,” but that it represents a fundamental shift in the function of copyright law.

Tim is absolutely right when claiming that “every successful legal regime works in tandem with a set of social norms and economic constraints that do most of the heavy lifting.” For that tandem to work well, the law must be easy to understand. Copyright law has grave problems with that. Not only is the distinction between private use and public distribution appearing more and more arbitrary — not only in relation to digital “sneakernets” or the widespread habit of sharing files via personal messenging software — but also the distinction between free ideas and copyrightable expressions, a distinction called into question by new artistic practices.

In other words, the crisis of copyright is not simply caused by technology. I’d like to underscore that, as it seems that Doug tries to accuse me of what is usually known as technological determinism.

(However, for the technically inclined I must highly recommend this piece by an anonymous Swedish blogger, written in response to my discussion here on Cato Unbound about the question of darknets. It’s a brilliant sketch about factors pushing toward one of two alternatives — “total streaming” or “digital vaults” — showing that in the end, it comes down to the question of how we as humans want to interact with information. Read that post and give comments!)

My own academic research focuses on how people have talked about music, and demonstrates how the institutions intended to safeguard musicianship have at different times had very changing motivations. Even for most of the 20th century, a musician was commonly defined as someone who earned money by performing music — selling recordings was rather a secondary activity, with economic importance only for a privileged minority of all musicians. Music was first a service, only second a product.

Doug makes the opposite assumption when he writes, “Instead of selling music, Fleischer tells us, musicians would earn their keep through public performances.” Such a formulation asserts that “selling music” is the same thing as selling digital copies, and that any performance aspect to music is secondary. That view became commonplace during the golden age of the CD, the last two decades of the 20th century. But what if that was rather a historical parenthesis? Maybe we now see the pendulum turning, so that music again becomes a service first, and a product second (which of course doesn’t mean that musicians will stop recording, but that the recordings get their economic value and cultural meaning by connecting to scarce qualities in space and time).

Doug’s idea that sales of reproductions will prevail as the future hub of the music economy — because the technology for reproducing music is there — is not uncommon. Much stranger is his claim that the economy of live performances inherently privileges large acts at the expense of smaller artists. In fact, it is more reasonable to assume the opposite: that the possible shift back to a model where music is more a service than a product is creating more multiplicity. It is fully possible for only a relative few artists, and a few large record labels, to flood the market with recordings which can be and are played everywhere. But it is not possible for artists to perform live at more than one place at a time. Thus, a performance-centered music economy tends to require more musicians. From my own experience — as a musician, as an event arranger, as part of audiences — it is very clear that most smaller acts have to rely on performances to make money (and, it could be added, to maintain a relationship with the audience).

Even if I am very reluctant to generalize over different music scenes, which all have their own customs, I have a hard time identifying Doug’s “niche acts that copyright could today support.” It’s also hard to see how a draconian copyright “could” be better at supporting niche acts. I’m also not convinced that geography must be such a big problem as Doug thinks. Every month I pay money for concerts or club nights with relatively small international artists coming to Stockholm from London, Berlin or Tokyo.

There is, once again, no universal solution for all musicians. But firstly, the question of how to create a viable institutional framework for music can’t be reduced to a question of copyright law. Copyright maximalism will not guarantee anyone’s income, especially not in the current climate of cultural superabundance. Secondly, Tim is completely right in pointing out: “The rest will have to keep their day jobs. Given that few musicians have ever been able to quit their day jobs, things won’t look much different from the perspective of the average musician.”

Movies are a somewhat different thing. Let me return to that question in a separate blog post.

Movies: Major Art or Minor art?

…but what about movies? Sooner or later, any copyright discussion seems to gravitate towards that question. That’s not strange, as there are several good reasons to regard the future of movies as much more uncertain than the probably quite bright future of music.

Before proceeding to the usual evaluation of business models, however, we should halt for a while and re-think what we mean by “movies.” The comparison I just made between music and movies is highly problematic, in particular because music seems to be something of a generic human faculty, while moving pictures as an art form are not much older than a century.

Everyday use of the word “movies” tends not to include all artistic uses of moving pictures. It usually refers specifically to the standardized format of the feature film. Neither the art videos exhibited in galleries, nor the home videos of funny cats available on YouTube are included. More importantly, the artistic use of moving pictures within computer games grows more and more refined. At the same time many people — especially file-sharers — tend to prefer watching episodic narratives produced for television.

Accordingly, any intelligent discussion about copyright and movies must carefully define what it is that the law should safeguard. Is it the artistic use of moving pictures in general, or is it the format of big-budget feature films under conditions established in the last century?

In the early 1950s, Paul Oskar Kristeller published an extremely influential article in the Journal of the History of Ideas. One passage is worth quoting at length for the purpose of this discussion:

There were important periods in cultural history when the novel, instrumental music, or canvas painting did not exist or have any importance. On the other hand, the sonnet and the epic poem, stained glass and mosaic, fresco painting and book illumination, vase painting and tapestry, bas relief and pottery have all been “major” arts at various times and in a way they no longer are now. Gardening has lost its standing as a fine art since the eighteenth century. On the other hand, the moving picture is a good example of how new techniques may lead to modes of artistic expression for which the aestheticians of the eighteenth and nineteenth century had no place in their systems. The branches of the arts all have their rise and decline, and even their birth and death.

In other words: “Movies,” in the narrow sense of the word commonly used today, will not remain a “major” art form forever. It is fully possible that history books will write about them as a phenomenon whose golden age occurred roughly between years 1900 and 2000. That does not mean that no more feature films will be produced, or that movie theaters will cease to exist. Compare them with opera, an art form which has obviously seen its best days, but nevertheless lives on, in its pure form largely tax-financed, but also as a living influence within popular culture as well as in experimental avant-garde arts.

Relegating “movies” from the status of a “major art form” to just a subdivision of a broader field of moving images does not necessarily mean discarding a whole century’s artistic advances. These creative developments can be carried further in music videos, in computer games, in ad-supported episodic video, and in other formats.

My friend Oscar Swartz, an economist and prominent Swedish blogger on information technologies, wrote earlier this year (my translation):

Distribution of income might be very different compared to today. Enormous production costs might not be possible to recover. The movie industry might need to stop paying 20 million dollars to a Hollywood actor for one film. Movie actors might be paid like theater actors are today. Digital effects might be added to movies at a hangar in Inner Mongolia where low-paid Chinese are working day and night — just like in the textile industry — while some of the development of new technologies will stay in California.

The really big-budget blockbuster was perhaps a cultural form of expression which had its golden age in the 20th century, when monster-large film cameras cost a fortune to buy, when film was chemically processed, and when a few big stars could dominate a few media channels.

Of course, such a development will be resisted by Hollywood executives, some of whom might even call for a police state to protect what their worldview holds as an eternal art form. It is however important to remember that illegal copying is not the only potential threat which new media brings to the elevated status of movies. Another one is that people simply choose to spend their time on interactive games rather than on passive watching.

There is no need to try to predict the future of moving images in detail. Looking at the numbers, Americans’ spending at the box office keeps breaking records, as Tim Lee points out. On the other hand, the blockbuster business industry has been centralizing in a very risky way, becoming extremely dependent on grabbing public attention during just one release week. “These days blockbusters form an orderly queue, rarely competing on the same weekend,” The Economist wrote last year in an article pointing to a problem which should perhaps be as worrying as piracy for Hollywood executives: “the rapid spread of opinion on the Internet […] can quickly inform cinema-goers around the world if a film is a turkey.”

Should copyright be designed as a support for creative endeavors in general (whatever that means), or with respect to a defined list of broad art forms (music, moving pictures, visual arts, etc) — or should it take into consideration historically specific cultural forms (jazz music, pantomime theater, music videos, etc)? I don’t have an answer, but more clarification on that point could reduce the confusion in many copyright discussions. According to Kristeller, “there is hardly any ground but critical tradition or philosophical preference” for deciding whether an artistic practice is to be regarded as a separate art, or as a subdivision of a broader art form.

With that in mind, I would like to ask Tim Lee to define the extent to which it should be the task of copyright to solve the problems of “underproduction of certain kinds of creative works.” Looking outside the field of moving pictures, which kinds of creative works are underproduced today? The Romans arranged re-enactments of famous sea battles at the Colosseum — a popular form of art, and a very costly one, which is hardly produced anymore. But is this a problem of underproduction?

An extreme example, of course. But let’s take the more recent example of live performing arts, which many — most notably economist William J. Baumol — thought were threatened with underproduction as a result of rationalization in general and reproduction technologies in particular. What if, in the very long run, digital technologies are rather correcting that case of underproduction? Not a bright future for Hollywood, maybe. But it could represent an artistic opportunity to diversify the uses of the moving image, and re-connect it to a sense of community, one which the movie theaters, after all, were rather poor at creating.

Picking Winners

There are dozens of interesting issues now afloat between the essays and responses. Let me here pick up on two that seem particularly central to the conversation.

First, I agree with the rest of the posters that, given modern technology, copyright law will only be effective if it changes emphasis away from simple first-person enforcement and toward more complicated interventions that, by design, influence the development of technology tools and services. So, yes, copyright law will likely need to pressure Internet Service Providers to lend a hand in discouraging the most egregious forms of online infringement; and, yes, a site like YouTube in my view should have an obligation to filter for obviously infringing work. Copyright will need to take these steps with due caution. If liability is poorly implemented, these sorts of rules could chill innovation and otherwise interfere with a great deal of legitimate activity. However, I have confidence that indirect liability of this sort can be intelligently crafted, and my sense is that the law is moving helpfully in that direction. The rhetoric about a “police state” therefore sounds misplaced to me. Copyright liability can be appropriately nuanced, careful, and effective.

Second, implicit in the debate thus far is a fundamental disagreement about what copyright’s role should be. I think copyright law should do what it can to accommodate as many business models as plausible. So if new technology can lead to a rebirth of local live performances, copyright law should try to support those efforts. And if Paramount thinks that there is still room for the major motion picture even now, copyright law should again endeavor to leave that door open. The idea overall should be to let artists and entrepreneurs decide which approaches to champion, with the law doing everything it can to support those choices without itself picking winners.

This is even true as applied to Rasmus’ intentionally silly example about sea battles. Yes, copyright law should protect sea battle recreations in roughly the same way it protects Broadway musicals. That would allow the market to decide whether both or either of these creative outputs is worthwhile given the costs. This would not be copyright law subsidizing sea battles. After all, the copyright on the sea battle performance would be worth, at most, the value that consumers place on the joy of seeing the battle. I doubt that value is high today, and hence I suspect that even copyright could not and should not encourage the rebirth of this art form; but I would write the law with an eye toward allowing the relevant artists and entrepreneurs to take that risk for themselves. The elegance of copyright law is that we can do just that. Were copyright a cash grant from the government to the artist, we would have to pick winners carefully. But copyright is not cash. It is a limited right that allows the artist to capture for himself and his backers some substantial portion of the economic value created by his work. The virtue of that design is that copyright law itself does not need to vote in favor of one artist or approach at the expense of another. Instead, when it works, the law allows each artist/entrepreneur to reap what he has chosen to sow and play out the strategy he has chosen for his work and its distribution.

Copyright’s Losers

Can copyright law avoid picking winners and losers? Rasmus Fleischer argues that copyright law should not favor any particular medium — including, most notably, big-budget feature films. On that view, if Hollywood movies cannot survive the advent of cheap, easy, and widespread infringement, so be it. Doug Lichtman agrees that copyright law should not play favorites — but adds that it need not do so. “[C]opyright law itself does not need to vote in favor of one artist or approach at the expense of another. Instead, when it works, the law allows each artist/entrepreneur to reap what he has chosen to sow and play out the strategy he has chosen for his work and its distribution,” Lichtman concludes.

Lichtman’s adds, however, that to protect Hollywood revenues copyright law will have to move “away from simple first-person enforcement and toward more complicated interventions that, by design, influence the development of technology tools and services.” That sounds about right. Notably, however, those “complicated interventions” will impose new costs on those tasked with helping to police copyright infringement. Here as elsewhere, the privileges that the law grants to copyright holders come only at the expense of others’ rights.

(Another, related but relatively minor, quibble: Contrary to Lichtman’s claim that “the rest of the posters” agree that “copyright law will only be effective” if it adopts those measures, I am not at all sure that expanding secondary liability for infringement will increase copyright’s net social utility. And that — not simply its power to protect copyright holders’ revenues — sets the standard for copyright’s effectiveness.)

Perhaps copyright law can avoid favoring one art form over another. It cannot, however, avoid picking winners and losers. If lawmakers update the Copyright Act to ensure the continued profitability of feature films, the people who develop and use new technological tools will have to foot the bill. Whether we all, on net, come out ahead in that redistributive scheme remains an open question. It is not one we can dodge, however, by ignoring copyright’s losers.

Copyright and Innovation

I’d like to expand on Tom Bell’s point regarding winners and losers.

Doug Lichtman writes that the continued viability of copyright will require “more complicated interventions that, by design, influence the development of technology tools and services.” This is spot-on, although “influence” is an understatement. Lichtman suggests that he wants to “accommodate as many business models as plausible,” but I think Bell is right that he’s ignoring the trade-offs involved. Allow me to illustrate this point with a couple of examples.

Back in the late 1990s, companies started to develop MP3 players that are essentially miniature musical jukeboxes. The recording industry sued to block their sale, but was unsuccessful. The result was a surge of innovation, culminating in the iTunes/iPod ecosystem that now dominates the digital music marketplace. It’s tough to say what would have happened if the recording industry had won that lawsuit, but I think it’s safe to say that it would have taken longer for portable music players to emerge on the scene, and that the digital music ecosystem would be less advanced today.

Fast forward a few years, and we can see that hard drives are now large enough that one could easily build a set-top box that does for your DVD collection what the first iPod does for your CDs. Insert each DVD you own once, and the box copies it to your hard drive. From then on, you can watch any DVD you own with the touch of a button. And of course, you’d likely be able to do much more than that: stream movies wirelessly to different TVs around your house, stream them to yourself while you’re on the road, transfer them to an iPod or other mobile device to watch on the road, and so forth. Even more important, the existence of a competitive DVD jukebox market would likely produce spin-off innovations, just as the MP3 player did, with people developing devices, software, and accessories that interoperate with the DVD jukeboxes.

Unfortunately, Hollywood sued the first DVD jukebox out of existence. And this time, thanks to the DMCA, they’ve won. CDs have no copy protection, so under copyright law anyone is free to make a device to play or manipulate music on CDs. But DVDs do have copy protection, so in effect no one may innovate in the DVD marketplace without Hollywood’s blessing.

Recently, firms have started rolling out video jukeboxes without DVD ripping functionality. Apple has a set-top box called Apple TV, for example, that won’t rip your DVDs, but will sell you the same movies a second time from the iTunes Store. Apple TV is a fine device, but it’s much less capable than the devices we would have gotten had Congress not enacted the DMCA.

I could (and have) give other examples of technology markets the DMCA has harmed, but I think that one suffices to make the point. The “business models” we should be concerned about are not only those concerned with the creation of music and movies, but also with the development of new technologies for manipulating sound and video. A copyright policy that gives content creators veto power over technological innovation may marginally deter file sharing (I have my doubts) but it will also dramatically affect the pace of innovation in digital media devices.

I’m still not sure Lichtman fully grappled with Fleischer’s point regarding the inevitability of widespread sharing. Our current computers and networks are designed from the ground up to facilitate copying without regard to what is being copied. Putting the file sharing genie back in the bottle would required dramatic changes to the Internet and our computers — changes that would make them dramatically less useful for other purposes.

Like Lichtman, I don’t think we’re going to wind up in a police state. But that’s because I don’t think our elected officials will have the stomach to impose the kinds of draconian legal restrictions and penalties that would be required to actually reduce file sharing We’re all copyright nerds so we get excited about questions like contributory liability and safe harbors, but those are really nibbling at the margins of the file-sharing problem. Lichtman seems to think that we can discourage file sharing by going after intermediaries; the hard question is what happens when there are no intermediaries to sue. To repeat Fleischer’s example: “I have all the music from 1950-2010, do you want a copy?” No tweaks to secondary liability rules are going to stop that kind of sharing.

Hollywood and the labels have had more or less free rein inside the beltway over the last decade, getting most of what they’ve asked for from Congress. And they haven’t been shy about sending their lawyers after individual music and movie fans caught using peer-to-peer networks. If these strategies were going to work, we should have started seeing results by now. Yet as far as I can tell, piracy continues uninterrupted. If it were true that the DMCA were essential to stopping file sharing, I might consider the resulting chill to innovation a price worth paying. But that’s not the world we live in. What we’ve gotten instead is rampant piracy and no DVD jukeboxes. That’s not a good outcome, and I don’t share Lichtman’s optimism that more of the same will produce a different result.

Closing Thoughts

Tim and Tom both read my most recent post in a way I did not intend it. I was responding to Rasmus’s several posts where he was picking winners and losers among copyright industries. I thought that was off the mark. Whether Rasmus thinks movies are a good or bad form of creative expression is in my view irrelevant. My point to him was that copyright should try not to choose.

Tim and Tom go on to talk about how copyright policies will have implications for the development of technology markets. That’s certainly right, and I don’t think any of us disagree on that score. My view on YouTube, for instance, is that Google ought to be obligated to implement some filtering technologies, but that YouTube should not be required to implement perfect filtering because that would require the site to shut down. Similarly, my view on the old Grokster fight was that copyright should impose liability, but do so in ways tailored to fight piracy without much interfering with Grokster’s legitimate uses. So I agree with Tim and Tom that copyright has implications for technology, and indeed that’s a big part of what I think about when taking positions about what copyright should and should not ask of technology providers.

The real puzzle before us, then, is whether copyright can influence technology in ways that would help keep copyright intact while still leaving technology markets sufficiently profitable and unfettered so that they promote rapid innovation. On that, I am optimistic. For instance, in a previous post I linked to the UGC filtering guidelines that were promulgated by Yahoo, Viacom, Microsoft, and many others. A solution like that seems to hit the balance nicely. A site like YouTube would be required to undertake reasonable efforts at filtering, adjusting as technology in that area improves. In return, however, the site would be immune from cash liability for the infringement that cannot at reasonable cost be excised. True, YouTube would maybe prefer a world where it not only had no cash liability but also had no filtering obligation. But that is just the balance at work. We want innovation in both copyright and technology, after all, and so trading a bit between them is not upsetting.

Taken from another perspective, the real question here is how to divide the value created by the combination of the copyright system and technological innovation, all the while accounting for three important facts: we want both, copyright provides input that makes many of the relevant technologies more valuable, and technological advancement typically makes copyrighted work more valuable too. I don’t think there is a simple answer to that question, and I don’t think Tim or Tom or I want to see any of the extremes.

Left for discussions like this, then, are questions about how best to craft middle-ground rules. Should we limit cash damages to only those situations where the technologist worked in bad faith? If there are a large number of plausible intermediaries who could help enforce copyright, how best do we choose between them or spread any minor burdens among them? Under what situations should some form of compulsory licensing kick in, thereby obviating the need to tweak the relevant technology at all? (Is that maybe the solution in instances where DarkNet scenarios turn out to be right, and law cannot effectively regulate behavior?) These are the types of questions that seem central to me and in need of continued thoughtful conversation like the one we’ve worked on here.

And yes, I am optimistic that through those conversations — and with careful attention to the concerns that Tim and Tom and Rasmus rightly raise — copyright can continue to do the good work it has long done and at the same time give a hand to the exciting new technologies about which Rasmus wrote so warmly a few days ago.