On Drawing Lines in Copyright Law

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As Wayne Crews and I pointed out in the introduction to our bookCopy Fights: The Future of Intellectual Property in theInformation Age, striking a sensible balance when it comesto copyright law has always been a challenging, messy task. Theinherent tension in copyright law comes from trying to accomplishtwo noble goals that are sometimes difficult to reconcile. On onehand, copyright is supposed to reward innovators by granting themlimited terms of protection so they can commercially exploit theircreation before anyone else. On the other hand, copyright law issupposed to help encourage the widespread dissemination of ideasand useful products in our economy. Questions about where to drawthe line and when we should call in the IP cops to resolve disputesare what make the process so contentious. Optimally, we shouldavoid injecting coercion into the IP process unless absolutelynecessary. Contracts, technological self-help measures, andcreative business models can go a long way toward achieving aworkable IP balance. But at the end of the day, if these marketmechanisms aren't enough, copyright holders are going to want tocall in the cops to protect their rights.

But how we call in the cops and who the IPcops are makes a big difference. In particular, we shouldn't expectCongress or regulatory agencies to legislate on every problem thatcreeps up or ban or mandate specific technological solutions in anattempt to solve IP debates. But when certain parties areegregiously violating the rights of copyright holders, they arecertainly justified in seeking redress in the courts. Common lawresolution to copyright disputes has the advantage of avoiding ahasty, ham-handed legislative quick fix. As has been the casethroughout most of copyright's history, courts can sort throughrival claims to determine where the creators' concerns have meritand where the rights of consumers should instead carry the day. Tworecent IP disputes illustrate how this sensible framework can stillwork today.

The "Broadcast Flag" Decision. Last November,at the request of several content companies and broadcasters, theFederal Communications Commission mandated that by July 1, 2005, every consumerelectronic device in America capable of receiving digital TVsignals must be able to recognize a "broadcast flag"-or string of digital code-thatwill be embedded in future digital broadcast programming. Intheory, the presence of this embedded code will encourage contentcreators and broadcasters to air more digital programming "in theclear" (i.e., over the air), on the assumption that the broadcastflag will allow them to prohibit mass redistribution throughpeer-to-peer (P2P) networks. In other words, the broadcast flagmandate is supposed to prevent the "Napsterization" of videoprogramming.

But in their rush to preempt this supposed problem, a completelysensible alternative was ignored. Namely, if you're a broadcasteror a movie studio and discover that a handful of individuals areredistributing your products without permission or compensation,why not just sue them directly and avoid all this regulatorynonsense? No good answer was provided. What makes this all the moresurprising is that such a model already existed in the lawsuitsthat the Recording Industry Association of America (RIAA) wasfiling against individuals accused of widespread copyrightinfringement. As distasteful as some find the RIAA lawsuits, theyare certainly superior to the strategy the music industry waspursuing previously: trying to shut down all (P2P) file sharingnetworks. At least a lawsuit strategy would be capable of targetingthe handful of individuals causing the most serious problems,without seeking to ban technologies or concocting grand industrialpolicy solutions to the problem. But instead of taking this moretargeted approach and using the courts to go after the handful whomight illegally distribute digital TV programming, the broadcastflag proposal opens the door to an intrusive FCC regulatory regimefor the Internet and computing in the future.

The 321 Studios Case. Another instance wherethis model could have been tapped is the fight over the "DVD XCopy" and "DVD Copy Plus" software products sold by 321 Studios,which allow consumers to make backup copies of DVDs. In fact, 321Studios is currently involved in a heated lawsuit with the members of the Motion PictureAssociation of America (MPAA) over the legality of 321's software,which MPAA believes violates Section 1201 of the Digital Millennium Copyright Act of 1998. Section 1201bans technologies that would circumvent or defeat the technologicalmeasures used by copyright owners to protect access to their works.This anti-circumvention mandate is quickly proving to be one of themost controversial copyright reforms passed by Congress in yearsand now threatens to remove software from the market that is beingused for entirely legitimate and lawful purposes.

MPAA president Jack Valenti-the same man who once said,"the VCR is to the American film producer and the American publicas the Boston strangler is to the woman home alone"-has argued thatconsumers have no legitimate need for software products like thosesold by 321. Last November he said, "If you buy a DVD you have a copy. If youwant a backup copy you buy another one." But this worldview is notconsistent with the rights consumers already enjoy with regard totime-shifting or saving content on audio cassettes or VHS videotapes. Consumers should have the reasonable expectation that theywill be able to make at least some copies of the content theypurchase, whether that content appears in books, music, or movies.For example, I have personally used similar DVD backup softwarecalled "DVDShrink" that I freely downloaded from an overseas website tocopy and burn my favorite individual movie scenes onto a singleDVD. I use this single DVD to show friends and family all myfavorite DVD scenes in rapid succession without having to put theoriginal movie in the player each time. (This is similar to whatmillions of American already do with music when they burn theirfavorite songs onto one tape or CD.)

But, following the logic of the case against 321, presumably theMPAA would like to see the "freeware" I downloaded outlawed andthen throw me in jail to boot. But why? It's hard to see how I'vebroken the copyright bargain in this case since I went out andpurchased dozens of new movies to make this compilation of myfavorite movie scenes. If, however, I had made additional copies ofthis compilation DVD and sold them on e-Bay, or even shared thedisc with the entire world via a P2P network, I would agree that Ihad crossed a line and broken the copyright bargain and should beheld liable for my actions. And 321 Studios acknowledges this, too.On their "Protect Fair Use" website, the company states, "Fair use isn't the same as free use.Consumers shouldn't have the right to make copies for commercialuse without the permission of copyright holders. They should not beable to sell illegally acquired copies of digital works, either ondisk or over the Internet." That's exactly right, and the propercourse of action in cases where consumers betray this trust wouldbe for the movie studios to file suit against them for undercuttingthe commercial viability of their products. But if millions ofaverage movie lovers like me are considered criminals for merelycopying a few of their favorite movies or individual scenes onto adifferent disc, then something has gone horribly wrong withcopyright law in America.

Intellectual property plays a vital role in our modernInformation Age economy, but we should not adopt a"by-any-means-necessary" approach to copyright enforcement.Targeted, court-based adjudication of clear-cut copyrightinfringement is the better way to balance the interests ofconsumers and creators.