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01.25.2007 (previous | next)
Managing Rights and Fair Use

Yesterday the online version of The American Magazine was kind enough to publish an op-ed I wrote based on my observations at the International Consumer Electronics Show. Of course I'd encourage you to read it, but in summary I noted a dichotomy I saw in Vegas -- policy advocates from D.C. called for reduction in copyright by claiming copyright was holding back the march toward ubiquitous use of media by consumers, yet there were plenty of demonstrations of such technology on display, and the CE manufacturers I spoke with had no problem with content creators getting paid and with conducting whatever business transactions were necessary to roll out their devices that were so dependent on content.

I've received a great deal of positive feedback for the piece, but Mercatus' Jerry Brito took issue with the piece. I respect Jerry, and his response is a good one. In it he points out that there are differences between real and intellectual property, and also wonders what my feelings are on fair use. I sent him a response, but now have been persuaded that I should post it here as well. My response (edited only to remove personal asides) is after the jump:

I don’t disagree that there is a difference between real and intellectual property. I am not of the mind of some prominent libertarians that IP should be perpetual, but I’m sympathetic with Rand’s argument that it is important and worth protecting.

On fair use, you’ve got a pretty good sense of my thinking. I find “fair use” as nebulous as “net neutrality”: it sounds great, but what is it, where did it come from, and what will it look like in the future? Let’s take my TiVo box; I was one of the very first purchasers, have a lifetime subscription (which makes me a free rider on their service, but a legal one). I love time-shifting. I can space-shift, too, by dumping it onto a VHS tape. (I have an old box, I don’t have TiVo to Go.) I’m glad I can do these things, and I’m glad I don’t have to pay. But do I have a “right” to time-shift?

I think if you look at just about everything that is called a “fair use” by advocates, what you have is a service or technology that empowered consumers to do something before the content creators could figure out how to monetize that use. I truly believe (and both copyright law and common law supports me on this) that when a creator creates, he or she is given full rights to that work. In an ideal world, that creator can rent, sell, loan or give away those rights as needed. Now in the real world, sometimes the transaction costs of truly monetizing all of those rights is too high, due to technology restrictions or consumer backlash. The latter is the market at work, of course.

Philosophically, I don’t object to the idea that I should have to pay for the privilege of space-shifting on my TiVo. But let’s look at that service; it’s aggregating copy sent to me by broadcasters and cable operators, but for the most part the actual content being aggregated isn’t owned by those distributors; the owners are farther back in the chain, and often there are multiple owners. What would the market look like that would have my TiVo box determine rights clearances for each TV show and how much I should pay for time-shifting? It would be pretty messy. I don’t think it will come any time soon. But technology continues to evolve. Someday perhaps it will be possible to have a micropayments system with DRM and other means that makes the process seamless to the consumer. I am reluctant, as a believer in the rights of copyright creators, to forfeit time-shifting as a right simply because the technological means don’t currently exist to properly monetize it. I also believe that a future court, in a future with more copyright-friendly technology, might very well revisit Betamax, and rule it was a decision that reflected its time but no longer does so. (I’m reluctant to make this last point, however, because the decision is such a Holy Grail to many that when you even raise the faintest question about it people tend to become irrational; not suggesting you would.)

Anyhow, at the end of the day for me it is about preserving the rights of creators. I believe if that happens everything else falls into place. But in the meantime, I recognize that technology frequently will get ahead of rights models, and we need to find rational ways to deal with that.

Best,

Patrick

posted by Patrick Ross @ 10:37 AM | Access: Commons, Fair Use, Orphan Works, Public Domain

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Patrick,

Probably the most common example of fair use is the use of text excerpts. Do you think it would be an improvement if authors found a way to monetize that type of fair use as well? For example, suppose that browsers were re-designed so that any time I wanted to cut and paste a quote from an article on the New York Times website, I had to get out my credit card and pay $1 for excerpt rights to that quote. Would that enhance the market for news reporting?

Posted by: Tim Lee at January 25, 2007 2:09 PM

But Tim, that kind of fair use is already legal; it falls within the market failure basis of fair use, and is well received by the 4-prong test (there is a test for fair use by the way:)

Posted by: Noel Le at January 25, 2007 3:39 PM

I'm sorry Noel, but your comment doesn't make any sense. Patrick's argument is that technological change is gradually making fair use irrelevant by allowing companies to sell more finely-grained rights to their customers. I'm trying to figure out how he would apply that principle in the print world. If it's good old fashioned capitalism for a record label to be able to charge me extra each time I want to exercise fair use with respect to music, does the same principle apply to written works? If not, what's the difference?

Posted by: Tim at January 25, 2007 6:25 PM

Tim, you say you're asking me about the print world, but you're really not. My background is in publishing, so I can speak on this with more confidence, frankly, than with music. First of all, your argument may be fair use to you, but a journalist would say it raises a different constitutional issue, namely the First Amendment, and there is voluminous case law to back that up. That is not a copyright issue.

We already have some interesting experiments occurring in flexible rights in the digital print space. For example, textbook publishers are experimenting with sales of digital textbooks where you pay less than the cost of a physical book and you get a certain set of uses (say, no more than two computers, can only print so much at a time, etc., book expires after a year, etc.) and of course it's DRM that enables some uses and not others. I've had some of these in some MBA courses I've taken. Last fall, one publisher set up a model of use restrictions that potential customers found restrictive, so they very quickly made the uses more flexible, and the sales picked up. It was another case of the market at work. You may think it's a better world if a textbook only comes at one price and with a universal set of rights, but if there are consumers who need less and wish to pay less, I don't see why we would wish to disempower them.

Posted by: Patrick Ross at January 26, 2007 9:46 AM

So your contention is that quoting an except from a copyrighted work for purposes of comment or criticism is not an example of fair use? What about making copies of a copyrighted work for classroom use?

Posted by: Tim at January 26, 2007 10:46 AM

Tim, all of your examples in this post try to equate scenarios on the fringes of fair use with commonly accepted and legal fair use practices. By doing so, you hope that everything but outright piracy and theft falls under fair use.

Posted by: Noel Le at January 26, 2007 12:53 PM

As a journalist I quoted from copyrighted works every day. I also almost never was able to digitally copy-and-paste those excerpts over to my stories (you can take a printed press release, tape it to your monitor, and rub on it with a stone, but for some reason the words don't hop off the page into Microsoft Word). I did something we old-fashioned journalists know how to do -- I retyped them. I don't think I'm any worse for it.

As for classrooms, you must be aware that professors routinely clear copyright before using materials in class. Here at PFF we frequently give consent to professors and academic officials who approach us seeking permission to reproduce our papers. I mentioned my MBA classes above; almost all of them involve handouts of chapters of books or magazine or newspaper articles, and the university clears copyright on all of them, the clearance notices accompany the materials.

Posted by: Patrick Ross at January 26, 2007 2:29 PM

Patrick, I'm still confused. You wrote:

"I think if you look at just about everything that is called a “fair use” by advocates, what you have is a service or technology that empowered consumers to do something before the content creators could figure out how to monetize that use. I truly believe (and both copyright law and common law supports me on this) that when a creator creates, he or she is given full rights to that work. In an ideal world, that creator can rent, sell, loan or give away those rights as needed. Now in the real world, sometimes the transaction costs of truly monetizing all of those rights is too high, due to technology restrictions or consumer backlash."

Now, it seems to me that the "full rights" to a printed work would include the right to decide where and how that work can be excerpted, just as "full rights" in a song would include the right to decide where and how the song can be played. Whether you make the excerpt by cutting and pasting or by re-typing doesn't really have a bearing on whether excerpting rights are in the bundle of "full rights" that you say are due to authors.

My understanding of copyright law is that fair use is the principle that allows you to make excerpts, just as it allows you to rip CDs and time-shift television programs. You seem to disagree, but I don't understand what the legal status of excerpts is in your view.

As for classroom copies, Section 107 specifically says that "the fair use of a copyrighted work, including such use by reproduction in copies or phonorecords or by any other means specified by that section, for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright."

So am I off-base in thinking that (at least some) unauthorized reproductions of copyrighted works in a classroom setting are legal under fair use?

Posted by: Tim at January 26, 2007 4:50 PM

I have a fundamental problem with the concept that creators have total control over how their creations are used. Basically, what is the source of this supposed "right??? It seems to me that this "right" is being created out of thin air by carefully disassembling the rights of the consumer. For example, with MP3 music, it is possible to time shift, place shift, reorganize the music, and keep the music forever. This rights were recognized as belonging to the consumer. Now, as a misuse of word of innovation these consumer rights are being taken away under the assertion that the creator somehow has acquired these rights. This is wrong.

Posted by: Steve R. at January 26, 2007 5:04 PM

Unfortunately, I hit a time constraint so I was not able to finish my earlier response.

To continue, we are in the realm of the slippery slope - how far can the creator go in expanding their supposed "right" to control content. For example we already have entered the realm that content can be disabled by device, Zune versus the iPod. Content can also be limited to one, two, three plays. If we look at other price models, we could even charge different rates depending on the time when one is listening to the music. The DVD industry even limits the playing of DVDs by region. My point is that we have an endless (yes endless) number of ways in which the owner could assert ownership control. Logically there has to be a limit. One limit is that we have a meter attached to a users credit card that continues to pay the creator even if the product is not being used; logically absurd of course. There needs to be a reasonable limit. We have gone beyond reasonable since we are depriving the content user of fair use.

Copyright was meant as a LIMITED right of the content owner to recover/make money for his/her efforts in creating work that would promote the progress of science and useful arts. Copyright is not a blank check.

Posted by: Steve R. at January 26, 2007 6:10 PM

"Copyright is not a blank check."

No, but it should be. I'm not sure what makes you think you have any "rights" to the creations of my mind. Any benefits to "society" and "progress" are concessions I should be able to choose to make or not make. Not you or anyone else. In other words, yeah, the founders screwed that part up.

The following is not addressed to you specifically, Steve R., but I'm often astonished at the volume of "pro-consumer" argumentation that has established itself post-Napster. It's like this huge, tortuous body of justifications that have been clumped together, ultimately in the name of getting free music online. Hardly anybody cared about this stuff before 1999; suddenly every 15-year-old on the Internet has become empowered with half-baked talk about "fair use," "the public domain" and the rest of it.

It's all been so exceedingly frustrating to witness.

Posted by: Tom at January 29, 2007 8:11 PM

Tom,

Before about 1998, the courts resisted a variety of efforts to use copyright law to squelch new technologies (see, for example, the VCR in 1984 and the MP3 player in 1998). Since then, the courts, with some encouragement from Congress, have tended to take the opposite tack, almost always holding that copyright law bars the development of new technologies and services that might threaten the interests of copyright holders (see the MP3.com decision for a particularly egregious example). As you might imagine, many of us who care about technological progress are upset about that.

It has nothing to do with getting music for free online, and everything to do with the fact that we don't believe that technological freedom, and the technological progress that it produces, should be sacrificed at the alter of copyright companies' profits.

I'll stop complaining about copyright law the moment that copyright law stops stifling the development and use of innovative new technologies. And no, I'm not primarily thinking of Napster here, which I think is a case that the courts more or less got right.

Posted by: Tim at January 29, 2007 10:18 PM

Tom, that makes more common sense than I've seen in a while.

Again, Tim misunderstands the DMCA and copyright history. He takes every instance where circumvention is ruled illegal, where there is any kind of restriction on development or use of technology, and generalizes it in some kind of doomsday speak; even though innovation in modern society is at a good level.

Posted by: Noel Le at January 31, 2007 7:35 PM








 
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