Copyright

I just noticed that the latest version of Cato Policy Report, Cato’s bimonthly newsletter, contains edited excerpts from three of the best presentations at March’s copyright conference. Here’s Jim Harper on the philosophical foundation of intellectual property:

John Locke gave us the best explanation for how we divvy up things in the physical world: by mixing our labor with something, we make it ours. If you imagine a Garden of Eden or an original place with plentiful common property, the way you make property your own is by mixing your labor with it, by tilling soil, by plucking an apple from a tree, and so on.

It’s a happy coincidence, of course, that ownership of property puts us in a position to trade goods with one another. So that if I’m particularly good at collecting apples from trees and Drew is particularly good at collecting fish from streams, we can trade apples for fish and have wonderful meals of apple fish pie.

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Ars reports that the RIAA has graciously moved to extend the deadline in its lawsuit against one Larry Scantlebury. Because, as the request puts it:

Plaintiffs do not believe it appropriate to discuss a resolution of the case with the family so close to Mr. Scantlebury’s passing. Plaintiffs therefore request a stay of 60 days to allow the family additional time to grieve.

In the event the parties do not reach a resolution with Mr. Scantlebury’s estate or the other family members involved, Plaintiffs anticipate amending the complaint following depositions of members of Mr. Scantlebury’s family.

Maybe they can hold the depositions in conjunction with the funeral to expedite the process.

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Luis Villa just pointed me to this excellent review in the Wall Street Journal of Larry Lessig’s Free Culture:

Free Culture, in short, is an insightful, entertaining brief for changing our copyright policy. There is just one problem. Mr. Lessig aims most of his arguments at people like himself­standard-issue Howard Dean liberals. Bad choice. He should be talking to conservatives. Viewed up close, copyright bears little resemblance to the kinds of property that conservatives value. Instead, it looks like a constantly expanding government program run for the benefit of a noisy, well-organized interest group­like Superfund, say, or dairy subsidies, except that the benefits go not to endangered homeowners or hardworking farmers but to the likes of Barbra Streisand and Eminem.

It looks like Superfund in other ways, too. Copyright is a trial lawyer’s dream­a regulatory program enforced by private lawsuits where the plaintiffs have all the advantages, from injury-free damages awards to liability doctrines that extract damages from anyone who was in the neighborhood when an infringement occurred.

Quite so. The advocates of constantly expanding the scope of copyright have managed to cloak their rent-seeking agenda in the mantle of free markets and private property. And unfortunately, most of their critics have made it easy by deploying left-wing rhetoric. The result is that most people on the right-hand side of the political spectrum–the side that’s in power in Washington right now–reflexively line up with the rent seekers, not because they’ve given the issue any real thought, but simply because they perceive them as being on “their side.”

But if “conservative” is understood in the Barry Goldwater/Ronald Reagan mold of limited government and free markets, there’s nothing conservative about the copyright cartel’s agenda. Advocates of sensible copyright laws desperately need to find ways to talk about their agenda that Republicans, conservatives, and libertarians find more appealing.

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EFF has filed an amicus brief in the Perfect 10 v. Google appeal to the Ninth Circuit. The case focuses on whether an image search engine can be held liable for displaying thumbnails of copyrighted images that were posted on third-party web sites without permission of the copyright holder. Judge Matz’s decision appears to be in tension with the Kelly v. Arriba Soft decision, which found that search engine thumbnails are a fair use. Here’s EFF’s argument:

Copyright law grants to rightsholders a limited set of statutorily defined exclusive rights, supplemented by narrowly drawn, judge-made principles of secondary liability. That set of rights plainly reaches the infringing activities of websites that amass and post unauthorized copies of Perfect 10’s photographs. Unsatisfied with the remedies afforded by copyright law against these infringers, Perfect 10 and its supporting amici urge this Court to expand the reach of copyright law to the four corners of the digital universe, ensnaring everyone from the individual web surfer who comes across a Perfect 10 image online, to search engines like Google that index these images alongside billions of others on the Web. Like the District Court below, this Court should reject this effort to hold the whole world liable for the infringing acts of a few.

As I wrote back in February, Judge Matz’s fair use analysis is deeply flawed:

Google Image Search doesn’t give any particular preference to web sites that serve up AdSense ads. And AdSense serves up ads regardless of what search engine brought the user to the site. If Google cancelled Google Image Search altogether, there’s little reason to think AdSense would suffer financially–users would likely find the same pages using other search engines… Google Image Search and AdSense are unrelated products. It makes no sense to consider them as a single product for the purposes of fair use analysis. That should be obvious to anyone with substantial experience using the web. It seems like a reasonable assumption that Judge Matz isn’t the most Internet-savvy guy around.

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DSO.com has an in-depth look at a dispute I first mentioned last week between Green Hills and Express Logic over whether Green Hills can reverse-engineer Express Logic’s API in order to build compatible products. I’m pleased to see that Jason Schultz’s take on the subject is about the same as mine:

On June 12 Express Logic accused Green Hills Software, Santa Barbara, Calif., a licensed reseller of Express Logic’s software, of illegally copying its ThreadX API. The API is a piece of the RTOS that defines the interface between the OS and the programs a customer will build on top of it.

Express Logic also claims that Green Hills then used the illegal copy to create an API in its micro-velOSity RTOS. Green Hills has publicly denied all of Express Logic’s charges. The dispute will be adjudicated by a professional arbitrator .

“What’s at stake here,” says Jason Schultz , a staff attorney at the Electronic Frontier Foundation (EFF) in San Francisco , “is a long-time tradition of computer programming–the tradition of interoperability.”

Express Logic’s position strikes me as rather weak:

“If it turns out we’re wrong and that you can, in fact, copy an API without infringing on a copyholder’s copyright, then that opens the door to a lot of other things,” says John Carbone, vice president of marketing at Express Logic, San Diego, Calif . “For example, what other portions of the source code can you copy? Data structures? The comments? The functions? The user manual? That’s dangerous–it’s a slippery slope. Basically, [such a ruling] would make everybody’s API open source. The API would no longer be a distinguishing factor.”

Well yeah, you don’t want a product’s API to be its “distinguishing factor,” any more than you would want railroads to run their trains on different-guage rails. The courts don’t seem to have had any difficulty drawing the relevant distinctions between a program’s interfaces and its source code. There’s little reason to think this case is different.

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Nick Gillespie has a great article at Reason on the Clean Flicks decision. His conclusion is right on:

I have no problem with gratuitous nudity (is there any other kind in a movie?), foul language, and graphic violence; but I’m squarely on the side of the easily offended CleanFlicks’ customers. They are doing precisely what technology is there for: to create the sort of art, music, video, and text that an individual or group of individuals wants to consume.

By all accounts, the CleanFlicks-type outfits weren’t ripping off Hollywood in any way, shape, or form–they were paying full fees for content–and they weren’t fooling anyone into thinking their versions were the originals; the whole selling point of CleanFlicks’ Titanic is that it spared audiences the original movie’s brief moment of full-frontal Winslet. CleanFlicks was simply part of a great and liberatory trend in which audiences are empowered to consume culture on their own terms–not the producers’. Big content providers may have prevailed in this specific case, but the sooner they understand and adapt to a much larger and more powerful cultural dynamic, the better they’ll be at serving the audiences who are increasingly in control of what they watch, listen to, and read.

Hollywood sure seems to be shooting itself in the foot with this decision. Instead of litigating Clean Flicks out of existence, they ought to have negotiated a licensing agreement with them. Not only would that mean more revenue for Hollywood and fewer boobs on the TV screens of conservative viewers, but it would also give conservatives one less reason to lobby for censorship.

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Yahoo reports on music sales for the first half of 2006:

Physical album sales continued to decline in the U.S. during the first six months of 2006, down 4.2 percent in comparison to the same period last year.

However, Nielsen SoundScan figures indicate that digital sales might boost the business as a whole. Sales of digital albums soared 126 percent during the first half of the year, while digital tracks rose 77 percent.

Looking at the entire sales picture–comprising physical albums, digital albums and digital tracks–overall sales to date this year have gained about one-tenth of a percentage point over the first six months of ’05.

A total of 270.6 million physical albums were sold domestically through the end of June, representing a drop of 12 million units from last year’s six-month total of 282.6 million.

Digital albums improved by 8.2 million units, with 14.7 million units sold since January versus just 6.4 million units in the first half of 2005. Digital tracks gained by 122 million units; 281 million tracks were sold in the first six months of the year versus 158 million in the same period last year.

If we assume, as Ars did in January, that an album is equivalent to 12 stand-alone tracks, we can calculate the rough market share of downloads as a proportion of all music sales in the US. For 2004, downloads comprised 2.3 percent of the market, while for 2005, it was 7.3 percent. This year, it appears there were 270.6 million physical albums sold, 8.2 million digital albums, and the equivalent of 23.4 million albums worth of individual tracks. Adding that up, there were 31.6 million online sales out of a total of 302.2 million sales, or 10.5 percent for the first half of 2006.

It looks like sales growth isn’t quite keeping pace with last year’s growth rate, but it’s still a safe bet that downloads will be the dominant revenue source for the music industry by the end of the decade. It’s also worth noting that download revenues are probably much higher margin than physical CD sales, so even if industry revenues remain flat, industry profits are likely to rise significantly as more and more users shift to online downloading.

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