DMCA, DRM & Piracy

Here’s an essay that (based on the abstract, at least, I haven’t had a chance to read the whole paper) perfectly crystalizes the anti-libertarian premises at the heart of the copyright maximalist position:

The adaptation to the Internet economy of intellectual property law in general, and copyright law in particular, is at the center of a profound power struggle for governance that places democratically chosen legal rules against technologist-defined network rules. This essay argues that many of the technological challenges to intellectual property rights such as peer-to-peer software are a movement against democratically chosen intellectual property rules. These challenges reflect a basic defiance of the Rule of Law. In making this argument, the essay first maintains that intellectual property rights have an important public function in democracy marking political, economic and social boundaries. Next, the essay shows that the public law, as enacted by democratic government, has re-allocated intellectual property rights to adapt to the information economy. While many aspects of the new allocation of rights have been controversial such as the scope of copyright’s anti-circumvention provisions, these decisions nevertheless emanate from duly constituted public authorities. The essay then analyzes the rejection of those rules by technologists and their fight to take control of rule-making. In essence, the technical community seeks to replace the state’s decision on public intellectual property law with the community’s own private preferences in subversion of democratic choices. The essay concludes with the normative prediction that public law prevails over network rule-making.

The (mis)use of the term “rule of law” here is telling. The American founders understood the phrase to refer to the idea that government officials may use the coercive apparatus of the state only in accordance with general laws that apply equally to all citizens. The founders would be appalled at the way many people seem to use it today, to express the idea that citizens have a duty to obey Congressional edicts, no matter how vague or arbitrary they might be.

Nor would any libertarian be comfortable with the notion that a “re-allocation” of peoples’ rights was justified merely because such an allocation “emanates from duly constituted public authorities.” Libertarians believe that rights exist prior to and independently of government edict. One of my examples of this is in Hernando de Soto’s The Mystery of Capital which includes a lengthy discussion of the origins of American property law. The American Congress tried repeatedly to impose top-down property rights systems on frontier territories. These efforts were resisted by pioneer squatters, who were not impressed by the fact that their edicts had “emanated from duly constituted public authorities.” Instead, the squatters came up with their own indigenous schemes for establishing their own property rights and recognizing their neighbors’. Eventually, after repeated efforts by American troops to drive squatters off land that (according to the official property system) belonged to someone else, Congress was forced to give up its efforts to “re-allocate” property rights, and instead recognized and formalized peoples’ existing property claims.

In a sense, it’s absolutely true that “the technical community seeks to replace the state’s decision on public intellectual property law with the community’s own private preferences in subversion of democratic choices.” But technologists are not “fighting to take control of rule-making” in the sense of imposing a different set of copyright restrictions on people. Rather, they’re fighting for the right to be left alone, free of meddling from a distant and incompetent federal government. Most geek activists simply want meddlesome laws like the DMCA repealed, leaving people free to do as they please with their lawfully acquired property.

Rarely has the case for copyright maximalism been put in such starkly anti-libertarian terms.

Brian Deagon’s August 6, 2007 article in Investor’s Business Daily, August 6, 2007, “Technology Doomed To Failure, Some Critics Say,” includes some remarks about filtering worth thinking about. The assurance of the quoted critics is convincing, but they seem to be missing a good part of the picture.

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Here’s another thing I disagreed with in this week’s podcast, from Solveig:

I think fair use often gets used very broadly as a generic term for any kind of limitation or exception to copyright law. But properly understood, the argument that fair use can evolve away and needs to change over time is really a pretty narrow one. It doesn’t mean that there shouldn’t be outer limits to copyright or that there can’t be exceptions to copyright. It just means that they don’t necessarily need to take the form of fair use. For example, there’s a hugely important outer limit that you can’t copyright ideas or facts. That’s not fair use, that’s just: copyright law doesn’t go there. Transformative use, another one. That’s not fair use, that’s transformative use.

Is that sentence right? My understanding is that the concept of “transformative use” comes from the 1994 Campbell decision, which concerned the fair use of parody. In particular, Justice Souter wrote that whether or not a work was transformative lay at the heart of determining “the purpose and character of the use,” the first and most important of the four fair use factors. For example, Judge Nelson quotes the Campbell decision in holding that displaying thumbnails in a search engine is a transformative use, and therefore fair.

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Prior Restraint and Fair Use

by on September 7, 2007 · 4 comments

Regular TLF readers won’t be shocked to learn that I had some strong disagreements with the opinions expressed in this week’s podcast: (Update: This quote is Bill Rosenblatt of DRM Watch)

The problem with fair use is that you need a court to decide it. The whole idea of these digital content technologies is to make things happen immediately. Whenever you are in a situation where you have to revert to the legal system to figure out if you can or cannot do something, you lose. Because the legal system is very slow-moving and clunky and inefficient mechanism compared to technology. So everyone loves the fact that digital media can be distributed instantaneously and very very cheaply. But when there are deliberations about what’s kosher and not kosher, you’re often in the realm of deciding on fair use… You’re talking about what’s been called cut and paste culture, basically, which is a very controversial topic. You know, I’m not going to venture an opinion on whether that’s good or bad. I have no opinion about that. But there’s no reason why fair use has to be the mechanism that decides that or not. My feeling, which is an unconventional opinion and probably one that no lawyer would ever share is that fair use, in order to be made to work at all, needs to be expressed in ways that technology can accommodate.

The hidden premise here, which I think should be rejected outright, is the notion that our digital devices should, by default, disallow any uses of content that haven’t been explicitly approved beforehand by the copyright holder or a court. If that’s our operating assumption, then it’s absolutely true that fair use becomes cumbersome because it’s obviously not feasible to go to court every time I want to take a 5-second snippet from an iTunes song.

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We took the podcast on the road this week and recorded at our Alcohol Liberation Front event on the last day of the PFF Aspen Summit conference. First off, Bill Rosenblatt of DRMWatch.com tells us why he thinks fair use might just be a quaint old notion that’s on its way out the door. We continue the fair use discussion with Solveig Singleton of PFF and Jim Harper of the Cato Institute. Finally, Adam Thierer of PFF and Declan McCullagh of C-Net’s News.com discuss the specter of data retention mandates.

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Over at Ars Nate Anderson makes an important point that hadn’t occurred to me: The cell phone unlocking exception I mentioned in my last post applies only to the act of circumvention, not to trafficking in circumvention devices. That means that you’re safe if you unlock your own iPhone, but if you develop software or hardware to help others do so, you could wind up in legal hot water under the DMCA.

Of course, that depends on whether unlocking your cell phone is an act of circumvention in the first place. It’s not obvious that cell phone locks “effectively controls access” to a copyrighted work. Perhaps AT&T could argue that unlocking your phone is the first step toward pirating ringtones, but it should be possible to develop a hacking tool that enables carrier-switching without enabling ring-tone piracy.

In any event, this is almost certainly not the sort of situation Congress had in mind when they passed the DMCA.

Another IPI Piracy Study

by on August 25, 2007 · 6 comments

When the Institute for Policy Innovation published a study purporting to show the harms of movie piracy to the United States economy, I wrote a post critiquing it that was unnecessarily vituperative. After further reflection, I posted a follow-up post apologizing for the tone of that post. IPI president Tom Giovanetti apparently didn’t find my apology adequate, because he sent letters to the president and several board members of the Show-Me Institute, where I was employed at the time, seeking to have me reprimanded. Thankfully, they didn’t consider my post to be a firing offense.

I’d like to avoid repeating that experience, so I’m going to be a lot more polite in my analysis of IPI’s latest study, this one on music piracy. Unfortunately, the new paper exhibits the same methodological defects as the previous study, and introduces some new problems as well. The gory details are below the fold.

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Nate Anderson at Ars reports that Wal-Mart is jumping on the no-DRM bandwagon:

DRM isn’t yet dead in the music business, but it has a nasty, hacking cough. Wal-Mart is the latest company to ditch the DRM in an attempt to crack the coveted iPod market, which for years has been out of reach. The company announced this morning that it has embraced high-bitrate MP3s from Universal and EMI (iTunes only has DRM-free files from EMI, not from Universal), and it promises to continually expand its offerings.

Wal-Mart has actually run a download store for years, selling DRM-encumbered WMA files at $0.88 a pop. They couldn’t play on either the iPod or the Zune, but at least they were cheap!

Now that the DRM shackles are loosening, Wal-Mart can offer a store with at least a chance of attracting customers. As a sign of how badly Wal-Mart want to attract iPod users, the music store doesn’t list tracks as being DRM-free, but as being ready to “play on the iPod.”

Because neither Warner nor Sony BMG are yet licensing their catalogs without DRM, many of the tracks at the store are still DRM-encumbered WMA files—it’s a confusing situation and a huge drawback if the company wants iPod users to shop there. Most users don’t think in terms of what record label their favorite artists appear on, so finding music for download can be a hit-and-miss affair. Still, there’s not much that Wal-Mart can do except try to compete on price with its current selection of tracks and stress the fact that it has MP3s from Universal as well.

At this point, it’s only a matter of time before Warner and Sony BMG follow suit. Wal-Mart customers are not going to be happy about a situation in which half the music on offer plays on an iPod and the other half doesn’t. And when customers complain, Wal-Mart is likely to point the finger straight at the labels and say “we’d love to sell you unencumbered songs, but they won’t let us.” Warner and Sony will be leaving money on the table if they continue to sell their songs in crippled formats.

Google Acts Un-Evil

by on August 21, 2007 · 6 comments

Kudos for Google for making amends for the bone-headed way Google decided to shut down its ill-fated video store. Customers will now be able to watch videos for another six months, and for every dollar they spent at the video store, they’ll get a dollar of Google Checkout credit and a dollar of cash. Google sure is sorry.

But here’s what I don’t get: why doesn’t Google just keep its DRM servers running? I don’t know exactly how they work, but it can’t possibly cost more to keep them running than to provide refunds to everyone who’s ever purchased from the store.

I hope this serves as a cautionary tale for other firms considering whether to introduce DRMed or non-DRMed content offerings: the DRM isn’t just a pain in the ass for the customer, it can be a pain in the ass for the vendor as well. Had Google heeded Mike’s advice and sold videos in an open format from the beginning, they wouldn’t be having these problems now, because files in open formats don’t require magical authentication servers to continue playing.

Google Video Goes Kaput

by on August 13, 2007 · 24 comments

Over at Ars, Ken FIsher reports on Google’s decision to drop its online video store:

Google contacted customers late last week to tell them that the video store was closing. The e-mail declared, “In an effort to improve all Google services, we will no longer offer the ability to buy or rent videos for download from Google Video, ending the DTO/DTR (download-to-own/rent) program. This change will be effective August 15, 2007.”

The message also announced that Google Checkout would issue credits in an amount equal to what those customers had spent at the Google Video store. Why the quasi-refunds? The kicker: “After August 15, 2007, you will no longer be able to view your purchased or rented videos.”

See, after Google takes its video store down, its Internet-based DRM system will no longer function. This means that customers who have built video collections with Google Video offerings will find that their purchases no longer work. This is one of the major flaws in any DRM system based on secrets and centralized authorities: when these DRM data warehouses shut down, the DRM stops working, and consumers are left with useless junk.

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