Category Archives: Copyright

Veoh dodges the DMCA bullet

veoh

My friend Andrew Bridges points out an important development in the ongoing war between content producers and their customers this week.  A federal district judge granted summary judgment in to file-sharing service Veoh in a lawsuit brought by Universal Music.  Greg Sandoval gets the story mostly right at CNet.

Universal sued the site, claiming that its users were posting content protected under copyright law.  Veoh responded that it was immune from lawsuits over what its users did under the notorious Digital Millennium Copyright Act (DMCA), which provides a “safe harbor” for website operators, provided they respond to takedown demands sent in good faith by content owners who believe their rights are being infringed.  Universal argued that the site wasn’t entitled to the safe harbor defense because it was complicit in the violations committed by its users.  Because Veoh responds in a timely manner to takedown letters and otherwise tries to minimize infringing postings by users, however, the court held it was entitled to immunity.

Some reporters were quick—too quick–to declare victory not only for Veoh but for YouTube, which is still facing a $1 billion lawsuit by Viacom on similar facts.  As I’ve explained in earlier posts, summary judgment rulings by district courts are hardly the last word in a case, no matter how strongly worded.  Universal will surely appeal to the Ninth Circuit Court of Appeals, where anything can happen (and often does).  District court opinions have no precedential value, and even if the Ninth Circuit affirms Judge Matz without modification, Ninth Circuit decisions have no precedential value in another circuit (the YouTube case is in the Second Circuit).

All this litigation, of course, is part of a larger shadow play within the entertainment industry to work out new ways of distributing and monetizing content in the digital age.  UCLA Law Professor Doug Lichtman, quoted in Sandoval’s article, gets it just right:

“The most important antipiracy efforts under way these days aren’t cases but (rather) business initiatives like Hulu and Redbox,” Lichtman said, “where the content community is struggling to figure out how to give consumers what they want, in forms they want, and at reasonable prices.”

The litigation is a sideshow.  An expensive, time-consuming, and potentially out-of-control sideshow, but a sideshow nonetheless.

Update on Google Books Settlement – Strange Bedfellows

googleThe deadline for filing objections to Google’s settlement with the Author’s Guild and the Association of American Publishers has now past. Miguel Helft summarizes some of the last-minute objections in an article in yesterday’s New York Times.

I explained some of these arguments in an earlier post. What is interesting to note about the last-minute filings (including one from longtime Silicon Valley antitrust lawyer Gary Reback) is that they suggest not so much a coalition of opponents as a wide range of people with an axe to bear against the settlement, most with very different agendas for doing so.

The concern that the settlement gives Google a de facto monopoly on digital copying for out-of-print books seems strained for two reasons. Right now, there are of course NO publishers making those books available in any medium. Second, there’s nothing in the settlement that precludes any other entity from making a similar arrangement. If it is a monopoly, in other words, it’s only because no one is trying to compete.

Much Ado About Google Books Proposed Settlement

As L. Gordon Crovitz of The Wall Street Journal points out in his August 17th, 2009 column, 60% of all books are out-of-print but still protected by copyright. Yet Google’s effort to make these books available through cheap digital copies is being met with fierce opposition from an unlikely coalition of publishers, libraries, European governments (who seem to oppose everything these days), law professors, and, just recently, Amazon.com.

This is a complicated story, and a variant of the “it all goes back to” problem. Whether Google’s efforts are to be seen as a public service or a massive land grab, whether the settlement does or does not make sense, depends on how far back you go in unraveling the problem.

First a little background. Google, in its typical audacious way, simply started its project to digitize some of the world’s largest libraries. Eventually that effort caught up with the sleeping drones at the Association of American Publishers and the Author’s Guild, who sued the company in 2005, claiming that regardless of how or even whether these digital copies were made available for use, Google was committing copyright infringement on a massive scale.

Google claimed its activities were protected by the much-abused doctrine of “fair use,” but in 2008 the company reached a tentative settlement with the plaintiffs. Under the pending agreement, participating publishers and authors would receive royalties from any revenue Google derives from the effort, in exchange for immunizing Google against any further copyright infringement claims. Under the settlement, copyright owners (whether publisher or authors) who do not wish to participate in the settlement must affirmatively opt-out. (See the Google Settlement FAQ here.)

The principal objection to the settlement is that it gives Google too much power, effectively granting a monopoly for digital books, especially those that are out of print and whose ownership is unknown (so-called “orphan” works). Such books will be included in the settlement because the owners of their copyrights can’t, by definition, opt out. Perhaps other on-line publishers will be granted similar rights in the future, but until then, Google will be the sole producer of copies. For now, of course, there are no producers of copies, and, given the unknown ownership status of these works, how could there ever be producers of copies until the copyrights on these works expires?

How can books become orphans in the first place? The answer is the one-size-fits-all nature of copyright protection, which extends monopoly power to the author of a work (or a publisher to whom she assigns that power) from the moment of creation until 70 years after the author’s death. For published books that never earned a profit (most books fall into this category, by the way), it is often the case that ownership interests languish. Publishers are unlikely to keep records of such books for 100 years or so, and authors are unlikely to dispose of their rights in their wills. Interests may be subdivided to the point of being untraceable.

So the real problem goes back to copyright, or in this case to its extremely generous duration. In the U.S., copyright protection started out much more modestly, lasting only 14 years. Most of the extensions have taken place in the last fifty years, under pressure from large media companies who hold vast hordes of copyrights that continue to generate profits.

Prof. Lessig has argued that a simple solution to the orphan problem is to require copyright holders to register their rights with the Copyright Office, and to reassert their interests periodically (say, every five years) if they still want protection. Once an author fails to re-register, the works falls into the public domain, and anyone can do whatever they want with it, including producing and selling (but not copyrighting) new copies.

Indeed, registration was required under the Copyright law until 1976. Given the explosion of new content made possible by cheap publishing technology, it was felt at the time that registration and other technical requirements would hold back the development of valuable information and impose unnecessary costs and bureaucracy on a system that would work just fine on its own. Thanks to the Law of Disruption, of course, the cost of producing, publishing and distributing information has only fallen, at an accelerated rate.

Still, the same technology could be used to create a low-cost registration system. But in reality, only popular works would be registered, and everything else would fall into the public domain. Lessig’s proposal is an elegant, clever solution to a serious problem that goes well beyond orphan works. Which is to say it would undo, for the most part, the excessive extensions of copyright granted at the urging of large media companies.

Or rather, it would effectively create a two-tiered system of copyright. Popular works would continue to be registered, and would continue to get excessive protection (life plus 70 years). Unpopular works would fall into the public domain in a matter of a few years.

Well, that’s a start. But the real problem is excessive protection. The solution to that problem is to go back to the drawing board, and create a copyright system that grants only so much protection as is needed to incentivize information production without stifling the free flow of information for a century or so. Popular works do not need 100 years or more of protection. The land grab has already happened, and keeps happening every time Disney finds itself coming close to losing control of a single shred of its content.

The real fix would require us to look well past the Google settlement, past the moribund fair use doctrine, past the orphan works problem, and straight into the abyss.

Change we can't believe in–at least not when it comes to copyright

In Chapter 9 of “The Laws of Disruption,” I write about the ridiculous increases in statutory fines for copyright violations that the entertainment world has forced into law over the last few decades, even as the costs of production, marketing and distribution of content decrease with the advent of electronic channels. In the one file-sharing lawsuit against an individual user that actually went to trial, the RIAA won a judgment of $220,000 against Jame Thomas-Rasset, who was found to have shared 24 songs on a file-sharing network. (The other defendants, including teenagers and grandparents, all settled out of court.)

The jury instructions were fatally flawed, however, and the judge granted Thomas-Rasset a new trial. This time, as Declan McCullagh of CNET reported a few weeks ago, the retrial resulted in a new calculation of “damages.” The second time around, the jury awarded the RIAA almost $2 million for the same 24 songs! (The rather eclectic playlist, which Thomas-Rasset argued was not hers, is here.)

Thomas-Rasset moved again for a new trial, arguing that the fine is unconstitutionally high. Not so, said the Obama Justice Department, which filed a brief in support of the RIAA. Since the subsequent reposting of online files and the effect such infringement has on the legal market for copyrighted works is, in the DoJ’s word, “unknowable,” Congress sensibly developed default or “statutory” damages that the victims of consumers like Thomas-Rasset can use to calculate their losses and deter future miscreants. $2 million for 24 songs, on this view, is rational. The Bush DoJ made the same argument.

The Obama administration promised change, but the Justice Department, at least when it comes to copyright infringement, clearly didn’t get the message. The media industries are still pursuing their suicidal jihad against customers, aided and abetted by the elected representatives they’ve bought and paid for.

Individual lawsuits have been a PR nightmare for the recording and film industries, which have stopped bringing them. And collecting anything close to $2 million from the defendant, as everyone involved knows, isn’t going to happen. But for those who expected a new attitude toward copyright reform, here’s at least one data point to suggest otherwise.