Last week, Adam Thierer reacted to the recent EFF study opposing the record industry's lawsuits against illicit file sharers:

OK Fred, then what exactly IS the answer to the P2P dilemma? Because you don’t favor individual lawsuits, you don’t favor P2P liability, or much of anything else. This is what infuriates me most about the Lessig-ites; they give lip service to the P2P problem but then lambaste each and every legal solution proposed. In my opinion, if you can’t even support the lawsuits against individual users, then you essentially don’t believe in ANY sort of copyright enforcement.

Now we have a dialogue going. Fred von Lohmann responds:

I see you were quoted by Jim in the PFF blog decrying EFF's failure to propose an alternative to the "sue 'em all" strategy against P2P file sharing.

I must admit, I was a bit disappointed, when the very report you criticize includes a description of our proposed alternative (see pages 12-13).

It also refers to our lengthier treatment, which has been on our website and discussed in many digital media fora for over two years.

To it's credit, the blog post mentions our proposal, despite your statement that we don't have one. Our proposal is NOT compulsory licensing, as is made clear in the paper and in our public statements about it. Nor is it a voluntary "tip jar" approach. Rather, it is a system that has proven feasible and relatively efficient for licensing performance rights in a wide variety of contexts (including broadcast radio). The system would continue to rely on enforcement by the collecting society (just as ASCAP does today), but the enforcement would be directly linked to market results -- the collecting societies will set prices and invest in enforcement in order to maximze gross revenues.

I predict that would yield a very different result than the current campaign, which is relatively remote from market incentives.

As you may also know, collective licensing is what was embraced by Prof. Robert Merges in his CATO white paper.

As you may have heard, it appears that Sony-BMG is experimenting with something very much like our proposed collective licensing proposal in the UK.

So, while I appreciate your frustration at those who attack the RIAA/MPAA lawsuit campaign and offer no alternative solutions to the P2P dilemma, I think that charge cannot be fairly leveled at EFF.

Fred

Adam rejoins:

Hi Fred. Nice to hear from you again.

My comment in passing to Jim was essentially an expression of my continuing puzzlement regarding the lack of enforcement proposals coming from copyright critics. It’s easy to castigate the industry for making a few mistakes in how they go about enforcing their copyrights but does that mean that they are always wrong to seek redress in this manner?

As I told you long ago when we first debated these lawsuit issues in your offices in San Fran several years ago, I am a big believer in the direct lawsuits strategy and I have actually criticized the industry for not pursing this approach more aggressively instead of first resorting to third-party liability proposals or silly regulatory efforts like the broadcast flag. But many copyright critics seem to think that ANY attempt to directly enforce copyrights in the courts is misguided.

Indeed, in some ways, I think the lawsuit strategy provides a good litmus test for where people really stand on copyright enforcement. If one opposes even the direct lawsuits, then they are left with very little in terms of enforcement strategies. I get a little tired of copyright critics saying; “I believe in copyright enforcement as much as the next guy, BUT…” and then they go on to criticize almost every single enforcement strategy that the copyright holders propose! I really wonder if such critics believe in copyright law at all.

Now I know this is the point in the conversation where my critics jump up and say: “But they oughta just change their business models!” Well, yes, the industry should take steps to change their business models in response to market / technological changes, and I think the industry has finally gotten around to doing just that. We probably disagree on the effectiveness / sensibility of some of their new business models, but the fact is that many copyright holders ARE trying to improve their business models to account for changing marketplace realities and new consumer expectations. (There are many interesting DRM discussions we could get into here, but I’m going to ignore those for the moment).

The key question here is this: If piracy problems persist even after the industry has taken steps to change its business methods, shouldn’t copyright holders have a right to take the cases to court and seek redress? Must legislative compromises be forced upon them (compulsory licensing, or otherwise)?

You note that you do have an alternative: the EFF “Let the Music Play” model. Personally, I have no problem with EFF’s proposed voluntary collective licensing regime IF IT IS TRULY VOLUNTARY IN NATURE. I have no idea how well it would work in practice, but I can see the sense in it. But, again, what if some people STILL won’t “pay to play”? Should copyright owners have the right to sue those who engage in unauthorized use / distribution?

In essence, what you’re putting forward is a suggestion for a new industry business model, not a legal enforcement strategy. To be fair, I know that in your “Let the Music Play” white paper you at least acknowledge this issue, but you really didn’t address it in any detail. Under the “What about file sharers who won't pay?” section of the white paper, you noted that:

The vast majority of file sharers are willing to pay a reasonable fee for the freedom to download whatever they like, using whatever software suits them. In addition to those who would opt to take a license if given the opportunity, many more will likely have their license fees paid by intermediaries, like ISPs, universities, and software vendors. So long as the fee is reasonable, effectively invisible to fans, and does not restrict their freedom, the vast majority of file sharers will opt to pay rather than engage in complex evasion efforts. So long as "free-riding" can be limited to a relatively small percentage of file sharers, it should not pose a serious risk to a collective licensing system. After all, today artists and copyright owners are paid nothing for file sharing—it should be easy to do much better than that with a collective licensing system. Copyright holders (and perhaps the collecting society itself) would continue to be entitled to enforce their rights against "free-loaders." Instead of threatening them with ruinous damages, however, the collecting society can offer stragglers the opportunity to pay a fine and get legal. This is exactly what collecting societies like ASCAP do today.

The key line here is: “Copyright holders (and perhaps the collecting society itself) would continue to be entitled to enforce their rights against ‘free-loaders.’” But you fail to spell out how that might work outside of “the collecting society can offer stragglers the opportunity to pay a fine and get legal.” Well, what if they don’t accept? What if $5 bucks is $5 bucks too much for them and they refuse to pay any copyright holder a dime? Can the copyright owner at least sue them then?

While I wouldn’t favor the award of “ruinous damages,” I would support the awarding of at least SOME damages for copyright violations. If one believes in at least some sort of baseline copyright protections / enforcement, someone is going to have to pay something when they break the rules or else the rules will be all but meaningless.

Cheers - - AT

And Fred's final word:

If alternative approaches can more efficiently raise compensation for creators, thereby protecting the incentives that copyright law seeks to generate, while simultaneously promoting access to works, it seems everyone would be better off. As you correctly point out, EFF's proposed collective licensing solution would entail continued enforcement. It's not enforcement that is the problem, but inefficient enforcement that increases social costs without securing commensurate benefits, either to individual creators or society as a whole. I think the existing empirical evidence suggests that the RIAA/ MPAA enforcement strategy has so far fallen far short by this measure. I think a collective licensing solution, because it would create an environment where intermediaries would have market incentives to "bundle" licenses with other products and services, would do a better job "enforcing" copyrights -- that is to say, getting people to pay rightsholders (it has in the ASCAP/BMI/SESAC context). It looks like at least Sony-BMG is ready to begin experimenting along these lines, which I welcome.

Finally, you may be interested to learn that not all "copyright critics" eschew enforcement of the kind you discuss. In fact, Professors Mark Lemley and R. Anthony Reese (who would not themselves adopt the label "copyright critic", but have certainly had to endure it) last year published an interesting article in the Stanford Law Review proposing ways in which the individual enforcement mechanism might be lubricated to permit more lawsuits, at lower cost to copyright owners, with more draconian remedies.

I do not agree with their analysis, largely because the RIAA already has nearly unlimited civil enforcement powers (they could easily increase the number of suits, which are now breaking even on a going forward basis) and has not had any measurable success in reducing the incidence of P2P file sharing.

Fred