copyright wars


Thursday, November 18, 2004
5:00 - 7:00 p.m.

E25-111

Abstract

In August, the Congressional Budge Office released a report titled "Copyright Issues in Digital Media." The report defined copyright as an instrument "for allocating creative resources," not an "absolute, inviolable set of rights to which either creators or consumers are entitled." But how do such apparently even-handed principles work out in practice? And what are the constitutional and intellectual principles that lie behind the idea of copyright? What lessons for current arguments over the downloading of music or films are embedded in the history of copyright? How is patent law different from copyright law? As part of this ongoing conversation about creativity, ownership and the powers of technology, the Forum is planning a series of panels on specific aspects of the copyright wars.

Recent copyright forums.

Speakers

Donna L. Ferullo is director of the Purdue University Copyright Office, which was established in 2000 and provides advice and guidance to faculty and staff on copyright issues. Prior to joining Purdue University, Ferullo had a solo law practice in Boston specializing in copyright law.

Michael Meurer is a professor at the Boston University School of Law where he teaches courses on patents, intellectual property, and public policy toward the high-tech industry.

Summary

DONNA FERULLO said that passage of the Digital Millennium Copyright Act of 1998 (DMCA) and the Technology Education and Copyright Harmonization (Teach) Act (2002), which defined “fair use” of copyrighted materials for distance learning, have made universities increasingly responsible for disseminating crucial copyright information to their constituencies.
Donna Ferullo

She pointed to the Teach Act Web pages on Purdue University’s Web site as an example of how a university provides educators with useful copyright information. The pages contain analysis of the law, and a checklist to help educators determine whether materials are eligible for fair use within the distance-learning environment.

On the issue of peer-to-peer file sharing, she said that schools are increasingly opting for license agreements that allow students and others to download music for a service fee. Purdue, for example, purchased a license that allows music sharing, and will soon extend it to the online sharing of movies. She said UCLA has deployed a system that disconnects a user from the Internet and notifies them when they have violated copyright.

Tighter copyright controls could inhibit academic research by imposing criminal charges on those who circumvent anti-piracy codes in their research, she said. A Princeton scholar, for example, was prosecuted when his dissertation included information about circumventing the copy protection code on Adobe’s Ebooks.

Although there is general agreement that the public should not have to pay twice for government-funded research, prevailing systems of publication often place crucial research findings in expensive professional journals, which then sell it back to the universities via library subscriptions. Some universities are turning to alternative licensing and publishing agreements such as those offered by Creative Commons, or engaging in open access initiatives such as MIT’s OpenCourseWare to offset the increased costs and loss of copyright control sometimes associated with journal publishing.

Ferullo said that many library services such as interlibrary loans, electronic reserves and 24/7 online reference help are burdened by issues of copyright. Increasingly, new companies such as Xanadu function as intermediaries, taking on copyright-permission, licensing and content management roles. This adds another complex and costly item to budgets already strained and threatened.

Ferrullo concluded by criticizing the repeated extension of copyright protection -- now the life of the author plus 70 years – and erosion of the fair use exemption, the legally protected use of copyrighted materials for educational purposes. Practical copyright policy should be collaborative, she said, and aim at balancing the rights of owners and users.

MICHAEL MEURER said that although he is a strong proponent of fair use he would describe “what’s right with the copyright system” and speak, to some degree, from an industry perspective.

He sketched out the basics of copyright law, saying that copyright exists from the moment of fixation or creation – “the moment pen is lifted from paper or finger from the keyboard” – and does not need to be registered with any official body. Patents, on the other hand, protect inventions and an application for a patent must be reviewed by the U.S. Patent Office to determine if it can be granted. Copyright protects expression, not fact or idea, he explained. Patents cover function rather Michael Meurerthan content, which is the domain of copyright. Both copyright and patent protect software but in different ways. While all software is copyrighted, not all of it is patented. Patent protection is more extensive, protecting features such as algorithms, but does not last as long as copyright protection.

The primary tool used by copyright owners such as publishers is the direct reproduction rule, which prohibits unauthorized reproduction of protected works. Citing recent cases against peer-to-peer music file sharing Web sites such as Napster, Aimster and Grokster, Meurer said these sites have not been successfully prosecuted for violating the direct reproduction rule because they are considered intermediaries between users who are actually copying protected material.

The recording industry won legal victories against Napster and Aimster by invoking indirect reproduction provisions, persuading the courts that these companies had aided and abetted copyright infringement by providing an extensive search function for finding illegal online copies of copyrighted materials. But the case against Grokster was lost because Grokster did away with a centralized search system, and that loss forced the music industry to rethink its litigation strategies.

Describing the United States a “low-protection regime” in which users have stronger rights than in other parts of the world, Meurer said that when the possibility of sharing is built into a system, costs rise accordingly. In the days of photocopying, for example, journal prices soared as publishers sought to recover indirectly the value lost to Xeroxing. Similar increases in costs have resulted from digital copying, but the scale and anonymity of digital file sharing make it unlikely that pricing strategies will succeed in recovering more than a fraction of lost revenues.

Discussion:

DAVID THORBURN, Communications Forum Director: Michael, you commented on how some publishers are raising their prices to libraries to offset losses. But, this has caused subscriptions to journals to diminish. University budgets are horrifically attacked by the cost of these journals. This isn’t a no-loss situation. Isn’t this is a negative thing?

MEURER: On balance, I’d say not. I don’t have strong sympathies for the publishers, but copyright is supposed to provide financial incentive for authors to write and publishers to disseminate, and publishers are now vulnerable to cheap and faithful copies that can be easily distributed through digital technologies.

I point to these different business models – different means of appropriating value – as a way for publishers to offset what they see as lost income. One of these strategies is differentiation, in which different customers including libraries are charged different prices. I am not saying it is socially desirable, but the point is that publishers have new marketing strategies open to them by the same digital technologies that allow easy and effective copying.

CAROL FLEISHAUER, MIT Libraries: Donna, I am intrigued by something you wrote in the Chronicle of Higher Education a couple of years ago, and I’ll read part of it. You wrote, “Fair use is far from death’s door. It is alive and well and becoming more powerful with each shift in the law that strengthens the copyright holder’s stake and weakens the public’s right to use the work.” What exactly did you mean by that and do you still believe it?

FERULLO: Yes, I do still think it’s true. That was written in response to a long article that said fair use was dead, and I disagree with that. Fair use is such a great exception to copyright laws for us – for universities – to use, but we don’t. We’re afraid of lawsuits. There are a lot of situations in which fair use would apply, but we see what’s going on with the recording industry, for example, and it has a chilling effect. But we still have fair use and we need to use it. There are laws that may try to erode it, but the principle exists in law, and we need to use it and be advocates for it.

THORBURN: Are you aware of the differences in the application of fair use as it applies to print materials and images?

FERULLO: Fair use as a concept is technologically neutral and should apply to all media. But, as Michael said, we are getting to the point where fair use is available by law but the technology is eroding its use.

IAN CONDRY, MIT: I have a comment and a question. Copyright is about markets, and fair use strikes a balance in markets. There is this assumption that one free download equals one stolen CD or DVD. But several studies indicate that is not true. Lawrence Lessig, for example, points out that there is massive downloading of CDs with a fractional impact on sales. Nevertheless, file sharing has become synonymous with stealing, and I see that as bad for the educational mission in which we promote sharing. We want to share ideas; that’s how we move forward in the intellectual world.

My question is based on the fact that many American college students now download episodes of Japanese animated broadcast television shows. I can understand that copyright would apply if one downloaded an HBO movie, but what about something that is publicly broadcast in Japan? Is this an infringement of copyright?

MEURER: The Japanese producers would say yes. They would say they have an opportunity to sell DVDs of their show in the U.S., and if Americans are getting the show through file sharing then they are losing money. The courts would probably side with the Japanese producers.

I agree with your sentiment about sharing. One definition of sharing is a shared experience and that notion of sharing fits with what economists call a public good, but I do worry about widespread sharing a la Napster.

Three studies I know of indicate no lost sales due to file sharing, and two others indicate about a ten per cent to twenty per cent loss in sales. It’s not a hundred per cent loss. I do think there will be economic harm if there is widespread file sharing, but not as bad as the industry makes out.

Blockbuster purchases one video and allows several people to view it. Blockbuster does the industry a service by smoothing out consumer demand, but the industry fought it. I think there is some merit to the argument that file sharing of music or films includes some element of advertising, some sampling, some tasting as radio broadcast does. But the industry says ‘we don’t need file sharing for purposes of advertising.’ They want to control their own marketing.

QUESTION: What about mechanical royalties? Do you see a reasonable method for micropayments?

MEURER: We’re still waiting for micropayments to take off. There is a long list of elements used in the copying process and that could be taxed. I am not excited about micropayments because it is pretty hard for the government to establish these taxes and it accelerates a trend I don’t like: copyright law being more and more politicized. It creates more of a chance for pork-barrel politics, for Congressional involvement in setting rates, establishing the terms for the issuing of licenses.

STEPHEN MARX, TV producer: I am interested in media criticism published on the Internet along with samples of a movie to illustrate an intellectual point. I have found so far is that movie distribution companies are not supportive of this, but it seems as if it would promote their product.

FERULLO: That goes back to fair use and why I like fair use. When you are doing criticism, it shouldn’t matter if you are doing it online or in print.

MARX: But a moving image is not possible in print. The Internet is the only way you can use a moving image in a practical way.

THORBURN: I once published an essay that involved a close reading of the television show Lonesome Dove, especially of the title sequence. Once the Internet came along, I wanted to post it online, but MIT attorneys said that I couldn’t, that they were afraid of being sued. I think they were wrong.

FERULLO: It sounds like fair use.

MEURER: We both think it’s fair use.

MARX: Now I am confused. I buy a DVD and figure out how to make a copy of a small portion of it. I intentionally degrade the image. I reduce the file size. But I beat the encryption and you’re saying that’s the problem.

MEURER: That’s the problem. One way to beat this is to use an analog output. You play the movie and you tape it from the screen.

QUESTION: Wal-Mart puts radio frequency identification (RFID) chips on their products before shipping, and they can track them throughout the world. Is there an opportunity for publishers to put such a chip on printed material? Could this happen in libraries? You go to make a copy of a book or article and you are automatically charged?

MEURER: Law students don’t use books any more; they use online services like LEXUS and WESTLAW. Products have been replaced by service, and the advantage to the publishers is that they can count every use. They can determine light users and heavy users and charge them accordingly.

HENRY JENKINS, Comparative Media Studies Director: A recent case that intrigues me involves Marvel Comics and a gaming company that produces a game called City of Heroes. It begins with the user creating a super hero using generic characteristics. Marvel is suing because in theory you can make a series of choices that could recreate the Incredible Hulk. So, a first argument is that it is copyright infringement. A second argument is that playing that character in the game world is the equivalent of publication.

If that’s publication then is it publication if I make my kid a costume to wear at the mall where he’ll be seen? How do we attack this notion of aiding and abetting infringement with these authoring tools?

MEURER: I have two independent lines of attack. First of all, the program that would allow the user to replicate something that is copyrighted creates a hard question about what to do with the independent creation defense. The copyright holder must prove an infringement, for example, that the creators of the City of Heroes software were thinking about Marvel heroes. If that was motivating them, then the independent creation argument is weak.

Second, the word “publication” has a place in copyright law, but not here. This is more of a display or performance. So, is this public or private? I think there have been lawsuits over costumes. Day care centers putting Mickey Mouse on the walls is public. A small group of friends playing a game online might be construed as private.

--compiled by Brad Seawell

Audiocast

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