Monday, August 11, 2008

Building A Free Society: Toward A More Perfect Copyright Law

According to Matt Mason in The Pirate’s Dilemma, “Copyright laws are encroaching on the public domain, but if the history of pirates is anything to go by, such laws are not often observed, become impossible to enforce, and eventually change.” (p. 99)

Okay, folks, get ready for a rather lengthy review of The Pirate’s Dilemma, or rather, a brief review of Matt Mason’s book, followed by a more extended discussion of some of the ideas contained therein as they relate to two recent DC Bar-sponsored programs in conjunction with my current thinking about copyright law. For my fellow pedants, this essay is a logical partner to the April 3 note I called, A Digital Needle in the Haystack: Finding the Good Stuff Online, which considered problems of online plagiarism and provenance as well as the part from my 2/11/08 Kickoff to an odd-thoughts blog, a relevant paragraph of which could easily serve as the synopsis of The Pirate’s Dilemma (and this very post), to wit:
So here's my rule in our great goldfish-bowl of a world. If you like anything you see badly enough that you feel it should be copied and spread like gospel (or even perhaps smeared like cream cheese)... go ahead. Take it. Do with it what you will. Just please be sure to credit your original source (that would be me, I believe, as the author here). I make no claims to originality, except in the copyright sense. All my thoughts and work are surely derivative of whatever I've consumed (and the more recent, the more influence on the regurgitation), but at least it's been processed through this man's wetware.
My point here is less to quote myself, than to indicate the emergence of a new zeitgeist from a mere two data points. First, the brief review. Matt Mason’s book is a quick read that offers glib patter (e.g., "DJ Fezzy is getting ready for his set. It’s a cold, dark Christmas Eve in his studio, and the time is coming up to 9:00 p.m. Fezzy has come pre¬pared for a crazy-hot show, packing an arsenal of scripted material, instruments, and records, set to deliver a sonic blast of talk radio and live music. Then he’ll throw down on the wheels of steel," p. 39, referencing the first radio show broadcast in 1906 by Reginald Fessenden), lots of annoying internal hype (e.g., "That is… perhaps the most important economic and cultural question of the twenty-first century," p. 4; “The game has changed,” p. 236), a bunch of fascinating anecdotal examples of “piracy,” and a game theory-inspired model for contemporary business, sans analysis or conclusion. The anecdotes and the initial definition of the dilemma (compete with or try to suppress piracy?) are the book’s strength, and worthy of a couple hours’ browse. The book’s weaknesses preclude a need to read, however, given that much of the text is given over to filibustering platitudes and inconsistent (and therefore largely meaningless) application of the concepts “piracy” (used here to cover a gamut ranging from any crime that can be construed as social protest to any unregulated activity that has market potential, such as the first broadcasts that emerged with the discovery of radio transmission), “punk capitalism” (which ranges from idealistic kids working for love rather than money to do-it-yourself entrepreneurship), and “hip-hop culture” (the vaguest term of all, which Mason applies to everything from “youth culture” or “youth movements” as a whole dating back to the mid-to-late ‘80s to anything involving the combination of pre-existing elements that Mason likes to call remixing irrespective of context, as he uses it freely to reference collage, architectural influence/homage, music sampling, and which extrapolates as well to grade school papers derived from traditional secondary source material).

Let's forget about Mason's book now and deal simply with its eponymous dilemma -- whether it is more effective to defeat pirates indirectly by competition or directly by force. In that vein, I recently attended the first in an anticipated series of symposia whose overarching theme is, "Creative Industries in Transition." On this day, the topic was "The Continuing Vitality of Music Performance Rights Organizations," featuring a talk by UC-Berkeley Law Professor Robert Merges (hosted by rights organization BMI), the big take-home being (surprise!) that so-called music PROs like ASCAP, BMI, and SESAC are needed now more than ever to serve as clearing-houses and collective bargainers for rights holders because through economies of scale, they help minimize transaction costs.

All of this I think begs the question: what is copyright for? To channel Lawrence Lessig for a moment, why do we bother with it? Originally, the idea behind our copyright law was threefold. (1)Allow creators to control the way in which their works could be exploited (the concept of 'droit morale,' moral rights) so that, by virtue of this control, society could (2) provide creators a means of making a living, so that (3) society would benefit from a constant influx of new, creative ideas. No control, no money. No money, no (or at least insufficient) new ideas. In other words, bestowing and limiting copyright protection basically came down to incentivizing production and creating a framework for negotiation that enables distribution for the benefit of the public and ideally assures the livelihood of sufficiently popular creators. Understand that for these purposes, we don't care about the guy who sings for his shower-head or the gal who writes for her desk drawer. From a public policy standpoint, if a tree falls in a forest and no one is around to broadcast a sound recording, there is no sound.

Accepting the logic of copyright's original premises as a platform for negotiation between creator (owner) and would-be user (audience/owner) raises a surfeit of interesting questions about the nature of control we impose by law on those who would enjoy creative works (essentially, anyone with an iPod) or allow to be imposed by creators as a contingent requirement of further use or enjoyment (essentially, freedom from theft, distortion, and plagiarism). How much protection is needed to administer and enforce creators' rights to get paid and manage the exploitation of their work? What kind of controls or barriers to access should we allow (technological, legal, etc.), and how do we balance the transaction costs of seeking & granting permission against the societal benefits of free use? Should we allow a distinction between authorship and ownership, and if so, when the values of growing (or circulating) communal wealth and growing (or circulating) communal knowledge are in opposition, which should prevail?

If you buy that copyright was established primarily as an economic regime to lubricate the cogs of creativity (as I do), then I'd argue that the best way of addressing these questions and likewise the piracy 'problem' is by maintaining a close relationship between the actual cost to create, copy, adapt, and/or distribute creative works and the amount of control we give to creators or copyright owners. Your average sculptor, photographer, or designer of drapes needs no incentive to express themselves, only the wherewithal to spend their time doing so and still afford the oatmeal needed to fuel their waking existence. Application of the current copyright protection regime must ape market behavior, and if we want to see the emergence of vastly expensive shows, we must find a way for producers to reap a return on their collective investment. There's no guaranteed return from copyright protection to assure creation: the point of monopoly is less to minimize the monopolist's risk than to give them sole power to manage it, so fair punishment to the fools who brought us "Heaven's Gate."

Now consider the flip-side to the 'cost = control' premise, namely that the cheaper production and distribution are, the fewer controls we should impose. "Cheaper production? Cheaper distribution?" asks the guy typing these thoughts on a workstation for instantaneous upload to a blog and worldwide publication. Welcome to the age of digital democracy, in which the costs of production and distribution are for all intents and purposes universally low. Under this economic analysis, we must relinquish the ideal of allowing copyright owners control of works of authorship in today's digital world. Take movies again, for example, which in their Hollywood blockbuster incarnation are notoriously expensive to produce and distribute. If it doesn't (or needn't) cost much of anything to shoot a decent video and post it on YouTube (or digitally transmit to theaters), we don't need to grant so much as a limited monopoly to assure the producer breaks even. We can move the point of risk assessment back from the point of exploitation (what's the best way to maximize my profit?) to the point of production (how can I best afford to make something right now?).

You see where this is leading. Is (the need for) copyright protection obsolete? Should we keep fiddling under the hood or is it time to send the car to the scrapheap? I'm almost there, but have one more service station to visit -- Ethos.

The foregoing discussion has conveniently ignored the social justice component(s) of copyright policy. In so doing, I do not mean to gainsay the value of an author's moral rights. I think it would be a shame to allow the willy-nilly destruction of a creator's art or reputation, simply because the quid pro quo of creation renders control irrelevant. Expedience should not dictate our ethics, but to the extent that enforcement costs resources (time, money, and effort), I do think that practical considerations force us to become more precise about the protections we afford. Even in the context of the droit moral the digital world challenges the traditional paradigm of copyright control.

Increasingly, we are choosing (or forced) to sacrifice privacy for convenience. Cell phones invite eavesdropping, electronic banking invites identity theft, and social apps make us exhibitionists in a virtual, parasocial community. Data mining and semantic data association facilitates targeted communication (and observation) in a way that threatens even the inherent protection of anonymity. Our world is beginning to resemble a giant terrarium, such that it is becoming impossible for a tree to fall in a forest without being seen by somebody. In such a context, attempts to control (in this case meaning "prevent") exploitations of creative works are futile. If you don't want anyone to read your thoughts (or hear your music, see your drawing, taste your recipe, etc.), you'd best keep them to yourself. Therefore, society must relinquish the concept of control as a moral foundation of copyright. This level of copyright protection is now available only to those who can afford to pay for enforcement, and is not viable in any case.

Isn’t that where we've come to with orphan works? "Good users" who purport to be public stewards of knowledge and ideas (museums, documentarians) had been hamstrung by copyright protection in cases where the legitimate owner of a work could not be readily identified. Authorship/ownership is left ambiguous for many works (fonts, field recordings, collective efforts), perversely chilling exploitation even by users who would be only too happy to pay a reasonable usage fee or whose usage might otherwise be encouraged and let gratis. A recent DC Bar panel at Arent Fox called, "Will Orphan Works Finally Find a Home?" established that new laws resolving this issue are imminent. You can get into the nitty-gritty of this issue (as well as the nuts-and-bolts of recently passed legislation) here.

As you can see, each special interest group and pending bill articulates the details of their orphan works solution slightly differently, but the commonalities are these. If you make a good-faith attempt to identify and notify the legitimate owner of a work ahead of time and come up blank, you're free to make use of the work however you like at no cost. If and when the legitimate owner emerges, you either negotiate a reasonable use fee or stop using the work. Of course, it's not so simple, since the greater your investment in use, the greater the leverage of the revealed owner. For this reason, each proposed legislative solution tries to find a way of defining "reasonable compensation" or a transactional mechanism for establishing one. At the panel I attended, representatives of the Copyright Office recommended against imposing a compulsory royalty scheme such as the one that exists for digital rights in sound recordings and music publishing, claiming that the (transaction) cost of the bureaucracy needed for oversight and enforcement was too clunky and expensive. Still, a formal orphan works resolution is imminent, even if the business model takes a while to fine tune.

Ugh! Those pernicious transaction costs, the friction that impedes the free exchange of ideas and trade! Well, wait a minute, let's recast this in light of what we know about our digital universe. Taking time to identify the legitimate owner has a cost -- if nothing else, then as a judgment call. Negotiating with the owner costs at least the value of time. Enforcing one's entitlements in the courts has an absolute cost, but that's arguably the penalty of living outside the Badlands. It seems to me that what we have in orphan works is a system whereby we say to good actors, "Go ahead and use whatever you like however you please until you get caught. Then pay for it." If we agree that some kind of regime is necessary to regulate the payment part of things, why apply this only to orphan works? To my mind, we're still trying to fix a copyright protection scheme that our would-be frictionless digital environment has rendered irretrievably broken.


(Thank you, Steve Miller.)

In keeping with my "Digital Needle" take-homes:
Here, then, are a few things that museums should do to assure the continued purity and vitality of the marketplace of ideas in an increasingly-polluted digital world:

1. Be an authority:
  • seek out authors and remain vigilant about properly attributing all sources;
  • keep primary source material alive and digital so that it can be referenced;
  • build semantic widgets to accurately and efficiently tag their "good stuff;"
2. Be a filter:
  • dedicate resources to portal activity to identify others' "good stuff;" and
3. Be a good citizen:
  • participate in discussions to create statutory royalty reservoirs
I think the foundation of copyright law needs to change from its obsolete "control" paradigm to a purely moral foundation of attribution and transparency. The pirate's dilemma as defined by Mason disappears when pirates are legally recognized as legitimate entrepreneurs as opposed to parasites. Acknowledging a situation that already exists, once a creator makes a work, it's "out there," and has to be considered fair game for anyone and everyone to exploit. In the digital environment, if we want to continue to incentivize creativity, then I think the way to do so is to be sure that creators receive the credit they are due. By recognizing legitimate authorship through enforced attribution, we allow the public to directly engage and support creators while at the same time protecting them from later distortions for which they are not responsible. By requiring transparency of authorship we assure the provenance of creative works that is so critical to the preservation of their communicative value. For those exploiting the works of others for fun/profit (by re-publication, broadcast, or other distribution; by sampling or adaptation; by display or performance; etc.), mandating transparency of cost/compensation allows the public to distinguish among those exploitations that they feel are fair in an otherwise crowded forum.

In one sweeping move, we eliminate piracy and the concept of the public domain. All uses are legitimate, all uses are fair, and copyright protection subsists for as long as a creator's estate is on hand to stand up for the right to be counted. Maximizing income from exploitation is a business problem, not a creative one, and the marketplace should be allowed to take care of itself (albeit, as I think will happen, on the backs of the orphan works' compensatory solution, more on which below). As the Lynn Ahrens song says, we impose law to "establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity," and I think these are best accomplished by restricting copyright protection to promoting the ethical values of fair attribution and fair competition (in the form of mandating a transparent marketplace).

Who pays for all this free content? As Trey Parker and Matt Stone so eloquently put it in "Team America," freedom isn't free (although as they would have it, it costs $1.05, which is right now higher than the cost of the average download). It's easy to be dismissively glib here, but it has been pointed out to me by my intellectual superiors that economic incentive is a founding problem in the recognition and promotion of intellectual property. Absent a legal framework (control) to force negotiation between creators and subsequent users, the only way to assure compensation for creators is via the establishment of a compulsory licensing scheme. This, in turn, opens the door to the endless fighting over rates, the constant lobbying for re-regulation or legislative changes that take forever to implement, and the incessant fiddling in the market and Capitol to set rates at a level to protect those with the least power or by volume of exploitation, all of which will inherently change the business structure to make it possible for people to still enjoy the production of movies/operas and other complex or high-investment creative undertakings. Got that?

Not to repeat myself, but isn't that what we're coming to with orphan works? If we're setting up a scheme to regulate fair compensation to re-discovered copyright owners for otherwise grandfathered (meaning uncontrolled) exploitations, and we're groping toward a mechanism which nonetheless favors exploitation (that is, remains affordable), then economies of scale would favor extension of this model across the full spectra of creative endeavor, from architecture to zither recordings. Understand that as I conveniently gloss over the issue of monetization, I do not mean to imply that I regard this as a trivial problem. Establishing the playing field that will allow for a reasonable quid-pro-quo structure is arguably the lynchpin holding together the existing copyright structure. However, I do think these issues are resolvable and that the time is ripe to take them on. Heck, I think it's essential we do. If this blog could act as a call to arms in service of initiating this dialogue, so much the better. You'll excuse me for suggesting that the parameters yielding a new, practical, and fair payment regime for creative works will likely require much lengthier consideration, analysis, and surely heated debate than can be afforded by this short essay.

This note began with Matt Mason, and so it seems fitting to end there as well. As he writes on p. 159 of The Pirate's Dilemma:
"This new democracy looks a lot like the model used by the music business in China. A total of 95 percent of all CDs sold there are pirate copies. This is because there are such tight restrictions on the legiti¬mate sale of foreign media, and also because in Chinese society, the idea of paying for downloading music is, by and large, considered ridiculous. Recorded music is effectively a public good, free at the point of consumption. Yet a large middle class of artists make a living there, primarily from live performances. As columnist Kevin Maney wrote for USA Today, “Chinese rock stars aren’t getting as wealthy as, say, Michael Jackson, but . . . why should they? Only a relatively few American rockers ever sell enough CDs to get fabulously rich. Should society care if rockers can’t afford to build their own backyard amusement parks?”
I say no, but society should care if rockers can't stand up and demand recognition for rightful authorship, and if commercial exploiters can hide or camouflage the means by which they exact ROI from their investment. Free speech and sunshine are the cornerstones of a strong democracy. They lead to an informed citizenry, or at least to a cacophony of voices that vent the public boiler continuously enough to keep it from exploding (or if not, to give we-the-people sufficient warning signs to hopefully proactively, positively intervene before an explosion can take place). And while ideas and expression are freed from artificial constraints, popular creators can still commoditize themselves by selling access to their performances, appearances, participation in new projects, and commissioning of new works.

The digital revolution invalidates the traditional copyright paradigm, but presents a tremendous opportunity for social progress. Embracing change rather than fighting it is the best (or at worst, least disruptive) way to move forward. We must therefore retool the law to accommodate works whose circulation and evolution cannot practically be controlled and which it is legal folly to persist in trying to prevent.

Talk amongst yourselves.


Bruce Falk said...

So soon an epilogue! The European Union's recent announcement has profound implications in this context. I would argue that it represents a de facto change in copyright application to the paradigm I recommend.

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