For markets, for fair use

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In an op-ed in The American today (and also in comments to National Journal on the reintroduction of the Boucher fair use bill), PFF’s Patrick Ross writes that those of us who advocate reversing the DMCA and strengthening fair use rights have little faith in markets. According to him, curtailing the DMCA means government intervention in emerging markets.

What arguments like Patrick’s ignore is that copyright is unlike other property rights, copyright is a different animal. This is evident in the fact that the power to create copyright is one of the enumerated powers of Congress laid out in the Constitution. Copyright would not exist but for the grace of Congress. If Congress decides to create copyrights, it has complete discretion (within constitutional bounds) to set the outlines of copyright. Congress can decide, among many other parameters, that copyright is for only one year or for 100 or for any length of time in between. Therefore, whatever market in copyrighted works emerges once Congress has created copyright, it must conform to the shape of the copyright Congress created.

Patrick writes:

It’s easy to forget that when we purchase digital content, we are in fact purchasing a set of rights to that content, rights shaped by current technologies, as well as the expectations of both creators and consumers. When those rights are sold to us, there are some uses that the creator does not authorize. As we discover new ways of using content, those uses begin with the creator, who can then decide the terms on which he wants to sell them.

As I have shown, though, the shape of these rights are not just set by contract, but by Congress as well. (The reason why is a bit beyond the scope of this blog post, but suffice it to say it’s because ideas, unlike tangible property, are not scarce, and copyright is less property right than government grant.) Patrick continues:

I can see why a consumer, having paid for a song or a movie once, wouldn’t want to pay for it a second or third time in order to use it on another platform. However, when the market offers sets of flexible rights, consumers will be able to buy only the rights they want. If you want to listen to music only on your home stereo, say, but not in your car, then in the future you may be able to pay less–you won’t have to buy (and then not use) the right to listen in your car, as you do today.

What Patrick is arguing against here is a notional fair use right to format-shift or place-shift. I wonder if he’s also against a right to time shift since you could contractually limit consumers to only watch your content from noon to one on Tuesdays.

Patrick writes that “Congress should only alter the state of a market when there is a sign of market failure.” Quite true. However, another legitimate rationale for Congressional intervention is government failure. First carved out by common law courts and later codified by Congress, fair use is one of the outlines of copyright. To the extent one has to circumvent an anti-copying measure in order to make fair use of a work, the DMCA has hobbled fair use (and, some free-marketers would say, replace it with rent-seeking and barriers to competition). Repealing the DMCA will affect markets for copyrighted works just as its enactment did. This is because, in effect, Congress shapes the market. It is within its constitutional power to do so. Those of us who favor a less-restrictive interpretation of fair use are in fact seeking more vibrant markets in culture.

Cross-posted at TLF. You can leave and read comments there. →

Jan 24, 2007 | Comments Off | Tags: , , ,

Rip, Mix, Sell?

We can all agree how pernicious the DMCA is when it’s used by the MPAA to put out of business Load ‘N Go–a small company that sold iPods preloaded with movies along with the DVDs of those movies. Piracy was not an issue here because consumers had to buy the DVD of every movie loaded onto their iPod. The reason MPAA acted, of course, is because Hollywood wants us to pay twice for movies–once for a DVD and again for an iPod or PC version.

Sometimes, however, the content industry has a point. Today Todd Dominey posted on his excellent blog his experience getting rid of his 3000-CD collection and going completely digital. He ripped everything to his computer and then sold all the CDs on the Amazon Marketplace. Today’s post is a great howto for folks with big collections. The thing is that he kept the music, but every used CD he sold is arguably one new CD the recording industry didn’t sell. (There’s probably not a one-to-one correlation there, but probably pretty close.) As more folks move to digital, this practice will only grow.

As far as I can tell this is plain and simple copyright infringement. I don’t think DRM coupled with the DMCA is the solution. Given the new reality of the internet, the only choice the content industry has is to change its business model. But when you see something like this, you have to feel their pain. I believe ripping your CDs or DVDs for use on your portable devices is fair use, and I think the Copyright Office should have issued a DMCA exemption for the practice. That said, you can’t have your cake and eat it, too.

Cross-posted at TLF. You can leave and read comments there. →

Dec 13, 2006 | Comments Off | Tags: , ,

New DMCA exemptions (plus iPhone rumors)

I can’t believe Tim Lee hasn’t posted about this already, but the Copyright Office has released its list of new exemptions to the DMCA. All around they’re pretty good considering how stingy the Copyright Office has been with exemptions in the past. Missing, of course, is an exemption that would allow folks to format-shift their DRMd DVDs or CDs onto other devices like PCs or iPods. Derek Slater has a round-up of reaction from around the web.

Notable among the exemptions is one for locked cell phones. Wireless carriers will subsidize your phone purchase, but the phone you get is locked so you can only use it on one network. This exemption will now allow consumers to take their locked phones to a competing network who I’m sure will be happy to unlock it for them. On the surface this is great for consumers, but I also wonder what impact it will have on carriers’ willingness to subsidize phones. On the margin, at least, their incentive has shrunk. If that’s the case (and allow me to be a geek for a moment) then it might help Apple’s assuredly forthcoming iPhone better compete since many believe that it will be sold unlocked and without attachment to any carrier.

Cross-posted at TLF. You can leave and read comments there. →

Nov 27, 2006 | Comments Off | Tags: , ,

IP Chairman Boucher?

WIlliam Patry writes today about what the election could mean for copyright. Bottom line, either Howard Berman or Rick Boucher will take over the IP subcommittee in the House, and Patry thinks there’s a good chance it will be Boucher. Boucher is no friend of the DMCA and seems to understand fair use.

Mr. Boucher is viewed by content owners as generally less sympathetic to their interests, although I would phrase the matter quite differently. Mr. Berman will always play an important role in the House on IP matters even if he is not chair of the subcommittee. In the past, he has taken great interest in international issues, and that may be the way he goes. The idea that he would pass on a different chairmanship solely at the urging of content owners is an idea that doesn’t reflect Mr. Berman’s overall interests or his role as a member of Congress. This isn’t to say he won’t take the IP subcommittee, it is only to say that I doubt the matter is as settled as some think.

Cross-posted at TLF. You can leave and read comments there. →

Nov 8, 2006 | Comments Off | Tags: , , ,

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