DMCA, DRM & Piracy

The Progress and Freedom Foundation has a new study out by Michael Einhorn (who also did a Cato study on DRM last year) urging Canada to adopt stronger anti-circumvention laws. I have to admit I’m having trouble figuring out what his argument is. He describes the state of the marketplace in great detail, but he never gets around to explaining in any detail why the world would be worse without anti-circumvention rules like the DMCA.

Case in point: one of the longest sections, titled “The Music Services,” surveys the most popular DRM-based music services. We’re told that the growth of online music stores demonstrates “the potentialities of DRM.” Yet he doesn’t really make the case that things wouldn’t be working so well without DRM. He doesn’t mention the rapid growth of DRM-free eMusic. Nor does he mention My.MP3.com, a DRM-free service that attracted hundreds of thousands of users before it was shut down by the industry in 2000.

The closest we get to an argument is the statement that the growth in music sales occurred because “the labels feel safe enough with the security” provided with DRM to allow their catalogs to be used online. He apparently believes that without the DMCA, the labels would have refused to permit their music to be released in digital formats online. But that’s absurd: the labels have been releasing virtually every song they produce in a high-quality DRM-free format since the early 1980s. It’s called the CD. If Einhorn’s argument were true, we would have expected them to begin phasing out CDs as soon as DRMed alternatives became available. But of course they haven’t done so.

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Via TechDirt, Hillary Rosen, former head of the RIAA, writes about file-sharing lawsuits and digital rights management:

But for the record, I do share a concern that the lawsuits have outlived most of their usefulness and that the record companies need to work harder to implemnt a strategy that legitimizes more p2p sites and expands the download and subscription pool by working harder with the tech community to get devices and music services to work better together. That is how their business will expand most quickly. The iPod is still too small a part of the overall potential of the market and its propietary DRM just bugs me. Speaking of DRM, it is time to rethink that strategy as well……… At some point, I will write more comprehensively about those years and these issues….then again, maybe not.

I hope she expands on these thoughts sooner rather than later.

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My discussion at the ipcentral blog links to an interesting post by David Friedman on movies, games, DRM, and copyright.

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Relatedly, the Register has an article on the legal battle over the Pirate Bay:

One pressure group associated with the site claims that the Swedish police were misled and incompetent in their actions.

“[Anti piracy group] Antipiratbyran has clearly misled the police in this case,” said Tobias Andersson of Piratbyran, a spin-off of Piratebay.org dedicated to promoting file-sharing. “They seem to have convinced incompetent police that the servers in question are filled with copyright protected materials.” The Piratbyran statement said that there is “no illegal material on the actual server”.

The servers contained not media files but links to BitTorrent files containing material. Christopher Wallin of the IT group of Swedish law firm Delphi & Co said that this is not likely to be a successful defence. “Our opinion is that that is silly. That is an argument they have been making for the last two or three years,” said Wallin. “They have committed a contributory offence, it is a contribution to copyright infringement.”

That defense wouldn’t fly in an American court, but it’s possible Swedish law is different.

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Whatever you might think of the Pirate Bay from a legal or moral perspective, they’re proving to have undeniable entertainment value:

Swedish hackers are evidently not too pleased with the shutting down of Pirate Bay. This weekend they launched a DOS attack against the Swedish government’s website, as well as the Swedish police site. Both were offline for a couple of hours. The government’s website was functioning again at around 8am on Sunday, according to news site The Local. A group calling themselves World Wide Hackers claimed responsibility for the attacks in a phone call to the newspaper Aftonbladet.

On Saturday, hundreds of demonstrators with pirate flags gathered in downtown Stockholm. In G¶teborg, the country’s second largest city, another 200 protesters took the streets. They demanded that The Pirate Bay’s servers, which were seized on Wednesday, are given back and the investigation against the site’s operators closed.

Now, my ignorance of Swedish politics is as complete as my knowledge of Swedish law, but I have to say this doesn’t seem like a very effective PR strategy. Most of the intellectually serious defenders of services like Grokster focused on the potential of peer-to-peer technologies for distributing non-infringing content like open source software and public domain works. The pirate party seems to be taking the opposite approach, celebrating the role of peer-to-peer networks in copyright infringement, and generally providing the opponents with an easily-caricatured image.

On the other hand, one of the crucial differences between Swedish and American political systems is that the Swedish Riksdag has proportional representation. According to Wikipedia, that means they only need four percent of the vote to earn seats in parliament. In that kind of system, self-caricature might actually be an advantage. They don’t need to attract the median voter, they just have to attract the votes of the 4 percent of voters who support their cause. The exaggerated pirate antics may be an effective strategy for increasing their media coverage and attracting the requisite 4 percent of the vote.

Unfortunately, the party’s website has only a small amount of its content available in English, so it’s hard to judge how serious their ideas are. They say they want to abolish the patent system and replace it with something better, but the English summary doesn’t elaborate on what the “something better” would be. And for copyright law, they propose a broad exemption for personal copying, and a reduction of copyright terms to five years. That strikes me as fairly radical, although it does fall short of advocating a repeal of copyright outright. Their proposal to ban DRM and contract terms approximating DRM strike me as a bad idea.

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On a flight last night, I got to pore over the most recent issues of InformationWeek. It has the right mix of technology, business, policy, innovation, and gadgetry for a person with my mix of knowledge, interests, and time.

I came across a refreshing article on open source. I think I liked it so well because it was pretty much devoid of interpretation. Nothing about open source’s meaning or consequences – just neutral reporting about who’s doing open source and why. How businesses are using it, encouraging it, or shunning it.

The money quote for me came from a sidebar:

The reason [Chase Phillips] contributes code “boils down to a passion or belief that Mozilla provides freedom to people to control their own computers,” he says. “I believe in different layers of freedom, technological freedom.”

I’m not a coder, but the people featured in the article remind me of me when I was a gear-head in high school. There were Ford guys and Chevy guys – and a few Dodge guys (freaks). Maybe these analogize to the major operating systems. (The former car guy in me wants to beat me up right now.)

We spent our leisure time tricking out our cars and helping each other trick out cars. My car wasn’t all that great – I didn’t have enough money to do it right – and I haven’t even owned a car for 10 years, but I still enjoy the car culture in this country, from the lowriders in San Jose and SoCal to NASCAR’s roots in bootlegging.

It’s all a challenge to auto manufacturers who would just as happily stamp out identical cars and control the revenue stream from parts and repair. But they don’t, and we’re better off because people can still get under the hood.

(N.B., The distinction between cars and computers is collapsing. Hackers will decide whether car culture stays or goes.)

While I’m on InformationWeek, let me recommend the columns of Editor-in-Chief Rob Preston. Recent gems: Rob mentions John Locke in a piece on broadband regulation/”‘net neutrality.” And here’s Rob’s poke in the eye to CNN anti-progress blowhard Lou Dobbs.

That’s good times, people.

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Earlier this week, Swedish authorities raided the offices and server racks of “Pirate Bay,” an extremely popular Bittorent tracker site with millions of page views per day, as part of an investigation into possible copyright infringement charges against the site’s operators. Pirate Bay stored and indexed thousands of “torrent” files, which point to files that are shared by users’ Bittorent clients. By opening a torrent, a user is able to download the files to which it points, such as a movie or computer application, and quickly begins serving to other users what has already been downloaded. As its name implies, Pirate Bay was used almost solely to facilitate piracy of copyrighted works.

For what it’s worth, the operators of Pirate Bay contend that they have violated no law because they did not serve copyrighted materials, merely pointers to such. They may be right. In any case, the site is down for now (though its operators maintain it will be back in a few weeks). What I’m wondering is, how do “copyfighters” feel about this?

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Business Week reports on the sad state of MovieLink, the music-download service created by major Hollywood studios that’s been getting a less-than-stellar reception from consumers. It seems that the studios want out of the download business, but they can’t find anyone to buy the thing:

Last year, Movielink brought in Salem Partners LLC, a Santa Monica-based investment banking firm to find buyers. It was Salem Partners that brought Blockbuster to the table, according to a source close to Movielink, although the deal was vetoed by one of the five Movielink studio board members. Salem Partners would not comment.

Another potential buyer early on was former Warner Bros. (TWX) home video chief Warren Lieberfarb, who put together a group of investors but couldn’t get the studio’s approval. The key roadblock: The studios’ refusal to change the terms of existing agreements to offer films for download, including an insistence that the films not be “burned” onto discs that could be played in DVD players.

Studios have long since resisted allowing burning, for fear that large DVD retailers like Wal-Mart Stores (WMT) and Blockbuster would rebel, threatening the huge sums studios now get from them. And for those movies that the studios would allow Movielink to sell, Hollywood would only offer a short-term, one-year deal to Movielink’s buyer. That frustrated buyers who worried that the studios would change their mind down the road.

Not surprisingly, potential buyers of the site want a service that consumers will actually want to use. And not surprisingly, consumers don’t seem too excited about buying movies they can only watch on their computers screens, not on their TVs or DVD players.

We sometimes hear that without digital rights management technology, Internet-based music and movie services wouldn’t be possible. Yet this appears to be a case where DRM is the primary obstacle to the creation of a successful movie-download business: Business Week says that MovieLink only has enough cash in the bank to last about another year.

(Hat tip: TechDirt)

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Ars reports that Swedish police have shut down The Pirate Bay, which bills itself as the world’s largest BitTorrent tracker:

The assault on BitTorrent tracker sites began in December 2004. At that time, the MPAA filed a barrage of lawsuits, going after over 100 BitTorrent tracker sites, Direct Connect hubs, and eDonkey servers. Shortly thereafter, some of the more popular torrent sties began going dark. In February 2005, LokiTorrent.com was shut down and its server logs turned over to the MPAA’s attorneys. The MPAA then began going through the logs with an eye towards filing lawsuits against heavy users.

Through all the lawsuits, takedowns, and criminal charges, The Pirate Bay has continued to operate openly and with utter disregard for the MPAA, RIAA, and any other copyright holder. In fact, the site owners have maintained a “Legal” page where they post cease-and-desist letters along with mocking responses.

All along, The Pirate Bay has maintained that its operations are perfectly legal under Swedish law (an argument familiar to Allofmp3.com users). This insistence continued in the wake of a new law passed by the Swedish Parliament in July 2005 that strengthened the country’s copyright enforcement law. As The Pirate Bay only hosts trackers and not the copyrighted material itself, it claims that it has every right to operate in Sweden.

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