Copyright

Via the Google Public Policy Blog, the Computer and Communications Industry Association has a study out finding that the “fair use economy” accounted for $4.6 trillion in revenues in 2006 (roughly one-sixth of total U.S. gross domestic product), it employed more than 17 million people, earning $1.2 trillion (one in eight U.S. workers).

This study should get the same scrutiny as studies put forward on the other side of the copyright equation, no? Go to work, study-parsers!

Update: Mike “Radar” Masnick published his take on this study 30 minutes before I invited him too! His conclusion – Mutual Assured Bogosity: “The next time anyone cites the bogus piracy numbers, they should at least be forced to acknowledge these numbers on the value of fair use as well as a counterweight. They may be bogus, but they’re equally bogus to the piracy numbers.”

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I’m excited to report that Techdirt has asked me to be an occasional contributor to their blog as part of the Techdirt Insight Community. In my first contribution, I express skepticism about Japan’s plan to create a Google-killer using government subsidies. I assume that most TLF readers are already reading Techdirt, but in case you’re not, now’s the time to add it to your feed reader!

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Don’t miss the comments to this post, wherein Joe Gratz, who unlike me is an actual lawyer, sets me straight on the Golan decision and the relationship between copyright and the First Amendment. It’s awesome having smart and knowledgeable readers.

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I think the Golan decision is a good thing from a policy perspective, given how hard the copyright cartel has worked to keep anything from ever falling into the public domain. However, I share Joe’s puzzlement about exactly how the First Amendment is relevant:

The Tenth Circuit remanded the case to the district court. Its instructions on remand are a little curious. It asks the district court to determine whether the URAA is a content-based or a content-neutral restriction on speech. I’m not sure why, for two reasons. First, whether a law is content-based or content-neutral ought to be a pure question of law; there aren’t any facts to find, so I’m not sure why the district court gets first crack. Second, I can’t imagine a way to find that any copyright law is content-neutral. If I stand on a soapbox in the middle of town and recite a certain poem that begins “Shall I compare thee to a summer’s day?,” the law does not punish me. If I stand on the same soapbox and recite — at the same volume, in the same tone of voice — a different poem that begins “Oh baby baby, how was I supposed to know?,” the law punishes me. That’s the very definition of a content-based restriction. We’ll see what the district court does.

It seems to me that if the courts find a particular grant of copyright exceeds Congress’s power under the Progress Clause, that, in and of itself, should be sufficient to declare the law in question unconstitutional. Otherwise, why would the framers have gone to the trouble of specifying the precise limits of Congress’s powers to grant patents and copyrights?

Perhaps the legal theory here is that Congress has the power to do whatever it likes unless it runs afoul of a right enumerated in the Bill of Rights, but that, if a Congressional action falls within the scope of the Progress Clause, then it’s constitutional even if it runs afoul of the Bill of Rights. That seems bass-ackwards to me, but of course, I was equally perplexed when the Supreme Court decided that growing pot in your backyard for personal use is “interstate commerce.”

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Via Marc Andreessen comes the latest silly example of a foreign government trying to use industrial policy to help its companies catch up to the Silicon Valley. I’ll give you three guesses on how well this plan will work.

Of course, making fun of foreign governments and their search engine projects is old hat here on TLF. More interesting, from my perspective, is this tidbit:

Some blame Japan’s copyright laws for holding back the development of web services. Services such as Google hold copies of other companies’ web pages on their servers. Because Japanese law forbids the duplication of copyrighted works without the rights holders’ permission, Yahoo Japan, Google Japan and other search engines offered in Japan operate from US-based servers.

One wonders how the Internet might have evolved had a similar rule been imposed on the United States in the mid-1990s.

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I’m going to have to respectfully disagree with Braden Cox’s take on post-sale restrictions of the first sale doctrine. Braden did a good job of explaining why limiting the first sale doctrine would be good for software companies. But he did not, as far as I can see, provide any explanation for how limiting the first sale doctrine would benefit society as a whole, which is what copyright is supposed to accomplish.

I have no doubt, for example, that software companies desire to enforce “legitimate price and market segmentation” schemes. But the fact that software companies would like to enforce such schemes is in no way an argument for interpreting copyright in such a way as to make it easier to do so.

Indeed, it’s important to remember where the First Sale Doctrine came from. The Bobbs-Merril case was about precisely the sort of thing Braden is discussing in his post:a publisher using copyright law as an alternative method of enforcing its pricing policies. The Supreme Court, rightly in my view, held that that’s not what copyright was for. And the next year Congress agreed, codifying the First Sale Doctrine into the 1909 Copyright Act.

One can imagine the an advocate for the publishing industry in 1909 making precisely the same argument Braden makes here: that “If we rely more on contract instead of copyright rules, would there be a contract to sign every time a customer purchased a book?” But that begs the question. Obviously, this would be a big pain in the butt, both for the publishing industry and for consumers. And that is precisely why most publishers don’t require you to sign a contract before you sign a book. It is only when they have the option to use the copyright law as a means of shifting the costs of enforcing their contracts onto other people that publishers are interested in promulgating such contracts. When publishers are required to bear the full costs of enforcing those contracts themselves, as they were in Bobbs-Merrill, they discover that they can get along just fine without post-sale restrictions on the use of their products.

I think the same is true of the software industry. If the courts refused, as I think they should, to characterize retail sales of software as “licenses” based solely on the existence of an EULA inside the box, I do not believe that software firms would respond by making you sign a paper contract before you could leave the store with your Best Buy purchase. Rather, they would simply adjust their business models to accommodate the new legal environment. To be sure, this might have some negative effects—academic discounts might become less frequent, for example—but I think it would have some positive effects as well. Most obviously, fewer legal resources would be wasted in litigation over precisely which terms in a EULA are and aren’t enforceable against whom. It might also end the farcical situation in which we all “agree” to dozens of “license agreements” we never read, and which are almost never enforced in court.

But the fundamental issue here is that the convenience of the software industry is not a sufficient argument for any given change to copyright law. The copyright system is supposed to promote “the progress of science and the useful arts,” not to make Steve Ballmer’s life easier. The two aren’t always in conflict, of course, but they’re also rarely in perfect alignment.

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