Jerry Brito

For markets, for fair use

In an op-ed in The American today (and also in comments to National Journal on the reintroduction of the Boucher fair use bill), PFF’s Patrick Ross writes that those of us who advocate reversing the DMCA and strengthening fair use rights have little faith in markets. According to him, curtailing the DMCA means government intervention in emerging markets.

What arguments like Patrick’s ignore is that copyright is unlike other property rights, copyright is a different animal. This is evident in the fact that the power to create copyright is one of the enumerated powers of Congress laid out in the Constitution. Copyright would not exist but for the grace of Congress. If Congress decides to create copyrights, it has complete discretion (within constitutional bounds) to set the outlines of copyright. Congress can decide, among many other parameters, that copyright is for only one year or for 100 or for any length of time in between. Therefore, whatever market in copyrighted works emerges once Congress has created copyright, it must conform to the shape of the copyright Congress created.


Patrick writes:

It’s easy to forget that when we purchase digital content, we are in fact purchasing a set of rights to that content, rights shaped by current technologies, as well as the expectations of both creators and consumers. When those rights are sold to us, there are some uses that the creator does not authorize. As we discover new ways of using content, those uses begin with the creator, who can then decide the terms on which he wants to sell them.

As I have shown, though, the shape of these rights are not just set by contract, but by Congress as well. (The reason why is a bit beyond the scope of this blog post, but suffice it to say it’s because ideas, unlike tangible property, are not scarce, and copyright is less property right than government grant.) Patrick continues:

I can see why a consumer, having paid for a song or a movie once, wouldn’t want to pay for it a second or third time in order to use it on another platform. However, when the market offers sets of flexible rights, consumers will be able to buy only the rights they want. If you want to listen to music only on your home stereo, say, but not in your car, then in the future you may be able to pay less–you won’t have to buy (and then not use) the right to listen in your car, as you do today.

What Patrick is arguing against here is a notional fair use right to format-shift or place-shift. I wonder if he’s also against a right to time shift since you could contractually limit consumers to only watch your content from noon to one on Tuesdays.

Patrick writes that “Congress should only alter the state of a market when there is a sign of market failure.” Quite true. However, another legitimate rationale for Congressional intervention is government failure. First carved out by common law courts and later codified by Congress, fair use is one of the outlines of copyright. To the extent one has to circumvent an anti-copying measure in order to make fair use of a work, the DMCA has hobbled fair use (and, some free-marketers would say, replace it with rent-seeking and barriers to competition). Repealing the DMCA will affect markets for copyrighted works just as its enactment did. This is because, in effect, Congress shapes the market. It is within its constitutional power to do so. Those of us who favor a less-restrictive interpretation of fair use are in fact seeking more vibrant markets in culture.

UPDATE: Patrick wrote me earlier today with his thoughts on my post and he then posted his comments to IPCentral, which you can see here. Here are my final thoughts.

Hi Patrick,

Thanks for your kind response. First, I’m glad you posted your response online. It’s good and everyone should see it. Second, I think you’re right that ultimately we just have different starting points, different axioms regarding the nature of copyright, so we arrive at different conclusions. Although I disagree with you, I admire that you are certainly consistent.

You ask, “[D]o I have a ‘right’ to time-shift?” and I think that highlights what the difference is between our positions. I think you have a right to time-shift if Congress’s copyright says you do. Courts have found that there is such a right, so yes, I do think you have that right. The question, then, is should one have that right? That, to me, is a policy question that must be answered in light of the constitutional purpose of copyright. The purpose of copyright (and its inclusion in the Constitution, to me, is a limitation on Congress’s power) is to promote to progress of science. It is not to compensate creators; that is a secondary purpose of copyright. I believe, as an empirical matter that we can discuss some other time, that the progress of science is better served by liberal fair use, and any rights that creators may be given by Congress are secondary to serving the constitutional purpose of copyright.

Anyhow, keep up the good work. Good ideas come out of friendly, respectful, and vigorous debate, and I enjoy sparring with you!

All the best,
Jerry

January 24, 2007 | Comments |

Viewing 16 Comments

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    Jerry,

    I don't find that Patrick conflates real and intellectual property. But to the point- Patrick's article shows that he is amenable to changing current copyright policy if certain market failures indicate such a need. He argues that the current market is vibrant, benefiting both consumers and producers.

    You are right that copyright policy provides structural enforcement for the creation of markets, and that once those markets arise, they may foreclose the creation of some other kinds of markets. However, lets not fall into "the road not taken" story too much when talking about serious policy.

    Your argument that sales of digital goods fall under both contract and federal copyright policy seems a bit vague. I gather your point is that since Congress *chose* to grant copyrights, and because sales of digital goods are, in part, governed by copyright law, that Congress can simply *choose* to amend copyright policy when it feel like. Is this right? I'd opt for Congress to rely on messages from the market.

    Your point about time-shifting so that consumers can only watch content during some hours and only on some days is also vague because it tries to raise an issue Patrick does not even address (being able to enjoy content only during some hours and only on some days). I see you anticipating that Patrick would argue for expanded copyrights, or more restrictions on (purported) fair use. That argument does not arise nor is it suggested in his article.

    At the end of your critique, you raise the issue of government failure in not protecting fair use and thus Uncle Sam should try to fix its *mistakes*. This does not support the argument you later make for amending copyright policy to facilitate (perfectly) free markets however.

    I would also like to see the DMCA's anticircumvention provision aligned more with traditional fair use doctrine as you may agree with, however, lets be a bit cautious here. The TLF post you cite as support for your argument assumes that society should vie for perfectly free markets (as far as I know such a market has not been successful anywhere in the world), and that any instance of non-perfect competition is detrimental to innovation (as far as I know, perfect competition has proven itself the applicable model in almost zero industries).

    The differences between perfectly free markets v free markets, and perfect competition v competition are important, because they all pose different economic models. If you ask me, they can be seen as reflecting another distinction; those who argue policy based on abstract principle v those who look towards the industry in question. I trust basing the market more than on abstractions, because the market reflects what actually happens.

    I'm a strong supporter of fair use, perhaps as much as you are, and am often disappointed that more people don't talk it about it since its an integral limitation to copyright policy (as is the public domain, time limitations on copyrights, and subject matter). See some writings I've done on reverse engineering and fair use- there is a bit more flexibility under the DMCA than some critics understand. You might also look up some stuff on IPcentral on the public domain. These seem to be issues you hint at as your concern.
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    It seems to me Patrick Ross' argument forgets what the initial goal of copyright is, i.e. "To promote the Progress of Science and useful Arts[...]." The purpose of the copyright law is not necessarily to give copyright holders the maximum revenue from the works. I don't think I'm teaching anyone anything. In any case, it's not clear to me that by giving copyright holders the right to restrict place-shifting (or time-shifting as was brought up in this post), one help promote the progress of science and the useful arts. It appears to me that if creators can control to any degree they wish the way consumers of cultural content experience that content, then future creation becomes, in most part, subjugated to the will of the current creators. I don't see this as a favorable outcome in any way.

    I also don't believe that Patrick Ross' interpretation of the copyright of digital content is correct. "It's easy to forget that when we purchase digital content, we are in fact purchasing a set of rights to that content, rights shaped by current technologies, as well as the expectations of both creators and consumers." This just seems wrong. Rights of the creators and the consumers are set by congress through the copyright law, the goal of which is to promote ... You see where I'm going. I take it this is what Britto was explaining.

    The final argument by Ross that congress shouldn't change the DMCA because the market seems to work fine could just as well be turned on its head. Why did the DMCA get enacted anyway? 9 years ago was 1997. What sort of indication did congress had that the market was "broken" in 1997 that prompted the DMCA? It seems to me it was mostly lobbying by the large content companies. As far as I know, it's not like 50% of them filed for bankruptcy. Yes, they would have had to change the way they distribute their content (the same way it's happening now). Who said that once you started making money with something it had to stay profitable for all of eternity? Markets are dynamic and technology changes. You have to adapt.
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    PFF's Patrick Ross writes that those of us who advocate reversing the DMCA and strengthening fair use rights have little faith in markets.

    The whole DMCA itself is one giant governmental market intervention. Anyone who argues in favor of DMCA is against market forces. It really is that simple.
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    Charles, I don't believe the digital market was *broken* in 1997, rather it needed some regulatory basis in order to form- and hence, we are here today in a vibrant digital landscape.
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    Noel, I agree with parts of what you say.

    1-The market was not "broken" in 1997.
    2-We have today a digital content landscape.

    I disagree with parts of what you say:

    1-I don't think the market needed section 1201(f) in order to form. It would have formed anyway.
    2-I wouldn't describe today's digital content landscape as vibrant. It exists and expands, but I think this digital content landscape would be much more vibrant without the anti-circumvention clause.

    Of course, this is mostly beliefs, as what you just wrote is.

    regards,
    Charles
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    The DMCA anti-circumvention clause is the rankest sort of protectionism, pure and simple. To dress it up in free-market rhetoric takes some serious chutzpah.
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    Since the digital market place was in its infancy in 1997, you can't really know that the DMCA was helpful or harmful in its evolution. Since the market didn't have much time to grow unregulated before the passage of the DMCA, I could just as easily say the digital landscape would be a lot better now than it is if the law was never passed.
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    Noel: I knew it!!! Deep down under, your are really in favor of regulation. You wrote "... rather it needed some regulatory basis in order to form- and hence, we are here today in a vibrant digital landscape." (emphasis added) So government regulation really does help promote the progress of society and science!!!!

    Enigma: Like you I am opposed to the DMCA; however, I have one syntactic quibble. You wrote: "The whole DMCA itself is one giant governmental market intervention." While the DMCA was clearly approved by the government, the government was simply acting as a lackey to corporate special interests. We have a government of, by, and for the corporations. If the government would develop a backbone and serve the public interest we wouldn't have absurd laws, such as the DMCA
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    As I re-read Patrick's article, the more it appears to be nothing more than Orwellian doublespeak. Patrick in glowing terms makes it appear that the consumer is being given greater freedom, the dark reality is that the consumer is being castrated.

    Patrick writes: "we are in fact purchasing a set of rights to that content".(emphasis added) With real estate, when you buy a house you do have a set of real rights in what you can do with that piece of property. You can remodel the house, you can sell it, and you can, if you lived long enough, own it forever. Music in MP3 format can be transferred to a variety of devices and can be held forever. The consumer is able to manage a set of rights. However, Patrick's digital "set of rights" is a null set, it is the vendor who is totally defining how the consumer can use that content. Since the consumer lacks any discretionary authority to manage content in Patrick's digital age, the consumer literally has no rights. Furthermore, the content vendor is aggrandizing his/her property rights by limiting the ability of the consumer to implement normal usage rights such as time shift, multiple play, and device independence. The logic of how deprivation constitutes freedom is strait out of Orwell's universe.
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    Steve R, you called me out on that one. Yes, I believe regulatory policy has its role.

    Take a look at Jane Ginsburg, Copyright and Control over New Technologies of Dissemination, 101 COLUMBIA LAW REVIEW 1613 (2001). It explains how the DMCA is inline with historical amendments to copyright law by Congress.
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