Copyright Enforcement Revisited

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Today, the motion picture industry announced that it will begin filing copyrightinfringement lawsuits against individual file sharers. The industryclaims its intellectual property (IP) rights have been violated bythe uploading and sharing of movies on various peer-to-peer (P2P)networks. The movie industry's targeted lawsuit strategy mimics themodel previously employed by the music industry, which has filed over 6,000 lawsuits against onlinefile sharers since September 2003.

As was the case when the recording industry announced itslawsuit strategy, many observers will roundly castigate the moviestudios for this decision. Indeed, this round of lawsuits will opena window onto the stances of various parties involved in debates oncopyright. Opponents of these lawsuits should answer the toughquestion they often avoid: If not direct enforcement againstinfringers, what else? Whereas many of the other enforcement strategies theindustry has pursued in recent years are excessive and unwise,targeted lawsuits against individuals who violate the copyrightlaws are probably the most sensible and just way of protectingcopyrights without destroying new technologies in the process.

Restating the Copyright Bargain. Copyright lawin America can be thought of as a grand bargain between creatorsand the public. In essence, the bargain is an economic and socialquid pro quo, which says: "If you create, we will reward you with amonopoly right to exploit your creation for a limited period oftime."

In many instances, however, this bargain is difficult toenforce. Nowhere is that more evident than in the case of filesharing on the Internet. The P2P phenomenon represents one of themost remarkable developments of our current technological age.Millions of citizens are able to share massive amounts of contentwith the rest of the world at the click of a button. Such arevolutionary technology was bound to have a downside. In thiscase, it was the widespread redistribution of copyrighted materialswithout compensation.

People who believe in unlimited sharing of copyrighted contentmust be ready to dispense with copyright law altogether. Thesharing of information and culture is good, but if there are nolimits on sharing whatsoever, copyright will fall. Some might greetthat development with enthusiasm, arguing that creativity andinnovation will happen in the absence of the copyright bargain. Butthere remain good reasons to believe that some level of copyrightprotection is essential to encourage creativity and ingenuity.People act on self-interest and will probably create more if theywill profit from doing so.

Assuming this premise is still generally accepted, society mustdraw some lines to preserve the copyright bargain. If balance isthe goal, as indeed it must be, then we need a model of enforcementthat takes into consideration both the importance of compensatingcreators as well as the widespread exchange of ideas and culture.Undeniably, there will always be tension in this balance, but thatdoesn't mean the balance isn't worth preserving.

Making the Tough Enforcement Choices. So, howdo we strike the balance in the case of P2P file sharing? The firststep will need to be a realization on the industry's part that notall file sharing is preventable or even undesirable. There aregreat benefits that accrue to both users and the industry itselffrom the limited sharing of content. Just as a book sharedbetween friends can encourage a reader to purchase more titles byan author, a song or movie shared online can encourage additionalpurchases.

But there is a world of difference between sharing a few copiesof a song or a movie and uploading entire libraries of albums ormovies. Someone who shares thousands of works, giving noconsideration to the economic well-being of creators, hasfundamentally broken their end of the copyright bargain. If theynever compensate creators, file sharers should not be surprisedwhen the industry slaps a lawsuit on them.

Again, many critics will blast the industry for this move. Butwhat are their alternatives? Hopefully, copyright skeptics wouldagree that targeted individual lawsuits represent a vastly superiorenforcement strategy to imposing contributory or vicariouslyliability on P2P software providers or Internet service providers(ISPs). There are good reasons to be concerned about such"shoot-the-middleman" strategies since they could compromise P2Pfunctionality or deputize ISPs as copyright policemen. The industryfavors secondary liability lawsuits, as well as the recentlyproposed Induce Act, for precisely that reason. It wouldbe far easier for them to push the enforcement costs and headachesonto the middlemen instead of going after the end users themselves.Moreover, the middlemen have "deep pockets" whereas the individualfile sharers do not.

Without categorically ruling out the application of contributoryor vicarious liability-after all, did Napsterreally have any "substantial non-infringing uses"?-itwould certainly seem preferable to avoid imposing secondaryliability on third parties until we have exhausted all efforts toimpose direct liability on end users. What makes many uncomfortablewith contributory liability in general, and the Induce Act inparticular, is that they could cast such a wide enforcement net.Overly broad constructions of contributory liability could resultin the shuttering of networks or services with many other importantuses.

Twenty years ago, for example, the Supreme Court struck down (by just onevote) a misguided request by the movie industry to imposecontributory liability on Sony for marketing Betamax videorecording devices to the public. Imagine the lost innovation hadthe decision gone the opposite way. And imagine the lost sales forthe movie industry itself had gotten its way in the Betamaxdecision! Even before the Betamax decision was handed down in 1984,the industry was making more money from home video rentals andsales than from first-run cinema receipts. That's still the casetoday. The industry adjusted its business model in response totechnological change and has profited handsomely as a result.

But what is most troubling about the hasty pursuit of secondaryliability solutions is that they preceded the more justifiableapproach to enforcement-targeted lawsuits against the mostegregious file-sharers who cause the biggest problems. Enforceagainst them and then see what happens. It could be the case thatenough targeted lawsuits will act as a sufficient deterrent towidespread file sharing in the future. More specifically, thelawsuits (as well as industry-led copyright education campaigns) will hopefully instill in theminds of most file sharers that it is not acceptable to sharemassive amounts of IP with the rest of the world withoutcompensating those who create that content in the first place.

Again, it all goes back to balance. Targeted copyrightenforcement along the lines of what the music and movie industryare pursuing with their lawsuits against individuals file sharersprovides the best way of ensuring baseline copyright protections.It is certainly preferable to a regime of overly broad contributoryliability, or ham-handed legislative or regulatory responses.