Forbes thinks that legislation to protect databases is dead for this session of Congress.

posted by James DeLong @ 1:26 PM | General

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NewsForge is an Internet organ of the open source software movement, which makes it part of the general Free Culture Movement. It reacted to yesterday's news story about the impact of unauthorized file sharing on music sales with glee -- "RIAA Lied."

Today, it has a story on how some people have been ripping off content from Newsforge, and its attitude toward such activity is rather different. The description of how creators need to make a living is downright touching.

posted by James DeLong @ 9:29 AM | General

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The parody NYT columnist correction page put up by The National Debate was discussed here and here.

While I was out of town, the parties settled their differences. The NYT acknowledged that as long as the site had a disclaimer, it had no further concerns about possible confusion and TND put up such a notice. Log on to TND and scroll down to March 15.

Also, Daniel Okrent, the NYT's Public Editor, made a wry comment on the imbroglio:

"Anyone who calls the Internet's bustling trade in columnist-attack a cottage industry might more accurately liken it to the arms bazaar in Peshawar. Peace and calm were not enhanced a few weeks ago when Times lawyers took a legal sledgehammer to an imaginary Op-Ed corrections column published by Robert Cox of the Web site The National Debate - but peace and calm rarely accompany arguments about political opinion in a polarized age."

posted by James DeLong @ 2:24 PM | General

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A new study by two business professors -- The Effect of File Sharing on Record Sales: An Empirical Analysis -- concludes that "downloads [of music] have an effect on sales [of CDs] that is statistically indistinguishable from zero."

The result seems counter-intuitive, since industry data show that the number of units of music shipped fell from 1.161 billion in 1999, the year of Napster, to 798 million in 2003, a drop of 31%. In any event, the music industry has already expressed its skepticism, and will soon have its computers humming, so the debate has just begun.

This does not really seem like the right question, though. Realistically, music distribution must shift away from putting bits on pieces of plastic called CDs and shipping them around the country on trucks, and toward the practice of sending the bits over the Internet. The recent bankruptcy of Tower Records is the writing on the wall.

This transition will require huge investments by many companies to create the infrastructure of online businesses. These investments seem to be happening. In fact, the field may be over-crowded; a recent Wall Street Journal headline said, "Shakeout May Mute Download Services" (March 23, 2004)(subscription required).

So the more important issue concerns not the impact of unauthorized downloading on CD sales, but on legitimate downloading services, ones that reward the artists for their work and that must recoup both these costs and their investment. In both law and good sense, the copyright holders are the ones who get first crack at the new business model.

posted by James DeLong @ 1:47 PM | General

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Last month, Professor Lawrence Lessig of Stanford and I had some acerbic blog exchanges over the Free Culture Movement. (Scroll down to entries for February 9, 10, 11, and 18 and the links contained therein.)

Yesterday, we moved the debate to the National Press Club in Washington. Here is the webcast. We should also have a transcript in a week or so.

posted by James DeLong @ 1:59 PM | General

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Tony Healy, a software developer, thinks that my paper on The Enigma of Open Source Software overstates the extent to which programmers support the open source movement, for reasons he explains here.

For more of Healy's thoughts on the open source software issue, see Has Open Source Reached Its Limits? (an Issue Brief for the Institute for Policy Innovation), and Support for Open Source Software is Based on Several Misconceptions (a column in the Australian webjournal Online Opinion).

posted by James DeLong @ 6:01 PM | General

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The fight is escalating, as the New York Daily News reports that ten more sites have picked up the original parody.

Also, the Times is accused of abusing the notice and takedown provisions of the DMCA by sending the ISP a shotgun complaint devoid of detail about the alleged copyright affronts. Why, one might even think the Times wants to rely on corporate muscle and superior resources to avoid any debate about free speech and the rights of parody.

Were I a content producer with a stake in maintaining the workability of the DMCA and its copyright protections, I would not like this trend of events. The content providers have a huge stake in ensuring that users of the DMCA turn square corners.

So let us call attention to subsection (f) of section 512 of the DMCA, which says:

"(f) Misrepresentations. -- Any person who knowingly materially misrepresents under this section --

"(1) that material or activity is infringing,
". . . .
"shall be liable for any damages, including costs and attorneys' fees, incurred by the alleged infringer, . . . or by a service provider, who is injured by such misrepresentation, as the result of the service provider relying upon such misrepresentation in removing or disabling access to the material or activity claimed to be infringing . . . ."

Of course, that term "knowingly" is a barrier, given the uncertainties about parody as fair use. On the other hand, a shotgun complaint is quite vulnerable -- a judge might say it swept in material that the copyright holder should have known was not infringing, and this is sufficient to trigger subsection (f). So The National Debate could wind up with enough money to fund itself for a while.

In the meantime, the bloggers keep condemining the Times. See here, here, here, and here. The Electronic Frontier Foundation does not seem to have noticed, though, perhaps because it is too busy attacking the RIAA to worry about small fry like the NYT or the importance of political criticism.

posted by James DeLong @ 11:23 AM | General

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The New York Times has used the DMCA to force a website called The National Debate to take down a parody page called "Columnist Corrections."

As anyone who follows current political controversy knows, some people, known as "conservatives," are upset with what they charge is partisanship and inaccuracy on the part of NYT columnists, compounded by Times policy of not correcting alleged factual errors. The parody was a list of corrections that the critics think should have been made, but weren't. It did indeed use the Times logo, and someone coming on the site could have possibly have thought it was for real, if they did not look very closely. (Except for the content, the critics note with glee, which was impossible because the Times does not confess error. See Glenn Reynolds.)

The paper reacted with a letter saying: "Your actions are deliberately designed to confuse people and are clearly illegal. By using The Times's name, logos, advertisements, live links, design and layout, you are blatantly infringing upon our exclusive rights." It insisted that the site be removed, and sent a take down notice to the site's ISP, alleging copyright violations.

The blogosphere is fighting back. The National Debate has taken down the site, but others are re-posting the offending column (seven, at last count), and they have added a notice at the top that says, more or less, "this is a parody and not a real NYT site." So if the Times' lawyers chase them, the NYT will clearly be in the position of using copyright law to suppress political controversy, not to protect real economic interests or prevent confusion. The critics are moving from glee to ecstasy, and The National Debate is reporting the controversy in detail, missing no opportunity to mock the Times.

The notice and takedown provisions of the DMCA are reasonable provisions designed to protect intellectual property against the depredations made possible by the Internet. But this situation points up a problem - they should not be used for political purposes, and in the context of political controversy and parody, the doctrine of Fair Use should receive a broad reading. The NYT recently published an article called "The Tyranny of Copyright," (available for $2.95) and it should rethink its position here before it becomes fodder for a sequel.

It used to be said, "never pick a fight with someone who buys ink by the barrel." But the guerrillas of the Internet have photons by the google, so now things are a bit more even.

posted by James DeLong @ 11:48 AM | General

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Alan Greenspan spoke last Friday on the topic Intellectual Property Rights. He noted:

"In recent decades. . . the fraction of the total output of our economy that is essentially conceptual rather than physical has been rising. This trend has, of necessity, shifted the emphasis in asset valuation from physical property to intellectual property and to the legal rights inherent in intellectual property. Though the shift may appear glacial, its impact on legal and economic risk is beginning to be felt.

"Over the past half-century, the increase in the value of raw materials has accounted for only a fraction of the overall growth of U.S. gross domestic product (GDP). The rest of that growth reflects the embodiment of ideas in products and services that consumers value. This shift of emphasis from physical materials to ideas as the core of value creation appears to have accelerated in recent decades."

Greenspan elaborated on the topic, mostly with questions rather than answers. But they are good questions. Such as:

"If our objective is to maximize economic growth, are we striking the right balance in our protection of intellectual property rights? Are the protections sufficiently broad to encourage innovation but not so broad as to shut down follow-on innovation? Are such protections so vague that they produce uncertainties that raise risk premiums and the cost of capital? How appropriate is our current system--developed for a world in which physical assets predominated--for an economy in which value increasingly is embodied in ideas rather than tangible capital?"

This issue of the nature of capital, the reality that it is increasingly conceptual rather than physical, is fascinating, crucial, and seldom discussed. For more on it, see works by Margaret Blair, then of the Brookings Institution, and Baruch Lev, a scholar at NYU. See also my articles on the stock options controversy, here and here, and the references therein.

posted by James DeLong @ 9:30 AM | General

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