The Rhetoric of Copyright Piracy

Yesterday I attended a program Leveraging Your JD in Today’s Economy put on by Santa Clara University School of Law.   At the program I reconnected with one of the presenters Shane Lunceford.  Shane remembered that I was an undergraduate Rhetoric major and recommended an article he and his brother Brett recently wrote for the Northwestern Journal of Technology and Intellectual Property.  The article, entitled Meh. The Irrelevance of Copyright in the Public Mind, considers how rhetoric affects the public perception of copyright law and how the music industry must change the discourse to gain public support and decrease infringement.

s5-1The article highlights an important part of law and society that is often over looked: without public support for a law the law will not be obeyed.  To demonstrate this point the authors describe a stretch of road in Las Vegas

it is not uncommon to see motorists on Maryland Parkway driving at 60 MPH suddenly drop their speed to 15 MPH once they enter a school zone … One part of this equation is legal—increased enforcement of the laws and stronger punishments. However, the more important reason for adherence to the speed limit in this instance is rhetorical—citizens needed a reason to believe in the law. Motorists believe in limiting speeds in school zones because they wish to avert tragedy and, more importantly, they believe that by obeying the speed limit they may realistically prevent accidents involving school children. Thus, they choose to obey one speed limit, while breaking the speed limit on either side of the school zone, despite the fact that the economic incentives are similar in each case.

The example and analysis clearly demonstrate the importance of public perception of a law on whether it is obeyed.  The article investigates this concept in light of copyright law in the music industry. Public perception of copyright law in music begins with the RIAA.  As has been repeatedly pointed out by IP enthusiasts the RIAA’s strategy of lawsuits has resulted in an extremely poor public perception problem.  The authors point out how the media’s framing of the lawsuits against roommates, students, and single parents has influenced the public’s view of the RIAA’s legal tactics.

The article goes on to suggest that

Editorial Cartoon, by Patrick Corrigan

Editorial Cartoon, by Patrick Corrigan

rather than attempting to change the law in order to change the citizen, perhaps it is time to begin looking at the citizen to see why he or she does not abide by the law. Citizens need reasons to obey laws that transcend fear of punishment; this is why the public conception of the music industry matters.

The authors point out a number of reasons why the public has not internalized copyright law.

  • Perceived low chance of being caught because “they can’t catch everyone”
  • View that content should be free
  • Perception that since time shifting in video is legal (Broadcast to VCR/DVR) than music should be too (Radio to Computer/MP3 Player)
  • Sense of identity with music to the point where it is a part of one’s identity (and therefore can’t be owned by someone else)
  • Confusion around copyright law and what is fair use

In my opinion one of the most important aspects of public perception of copyright is how the public is used to interacting with the content.  The authors describe how through radio music has been delivered to the public free of charge.  While people are used to paying money to go see a movie and even paying their cable bill to watch tv, radio has been allowing the public to listen to music for free since the early 1900s.  Furthermore between channel scanning and call in requests people are used to being able to hear the music they want to hear at any time.  Just as I have previously argued, the authors suggest that one way to overcome people’s accustom to getting music for free is to add-value.

The authors conclude by hypothesizing that for the music industry to succeed in its fight against piracy it must change the public’s perception of copyright law so that the reasons to obey the law are internalized.  To do so the authors propose that

Legislators and copyright holders must portray themselves as trustworthy. More specifically, the recording industry must appear to be treating artists and fans fairly, and legislators must appear to be acting in the public interest … copyright holders must make more compelling arguments concerning why the public should obey copyright law. If the people have a compelling narrative to follow, they will do so—whether it is true or not. The challenge, then, is not to craft better law; the challenge is to craft better rhetoric.

While there is no easy answer to the problem of piracy in the music industry, the article presents a great reminder that legal changes will not result in changes in public behavior.  Rather the music industry must focus on changing the public perception of copyright law through rhetorical discourse and add-value to purchasable copyrighted goods, to create the large change in public behavior they desire.

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Amazon, California, and Law Firm Jobs

california-bankrupt copyIt appears California and I have the same big stress factor right now: lack of money and fear of lack of future money. Mine stems from mounting law school debt and the current economy’s hit on law firm recruiting. California’s stems from years of over spending and a decline in tax revenue.

In one of its many attempts to avoid potential bankruptcy California is considering AB 178. According to Assemblymember Nancy Skinner (D – Berkeley)

This legislation will close the current loophole in California tax law which has allowed out-of-state companies to avoid collecting California sales and use tax

One other justification for the bill is to “level the playing field for California’s brick and mortar businesses” who must collect taxes. The bill is intended to change the definition of retailer for the purpose of sales tax revenue to include a

retailer engaging in business in this state” a retailer entering into an agreement with a resident of this state under which the resident, for a commission or other consideration, directly or indirectly refers potential customers, whether by a link or an Internet Web site or otherwise, to the retailer

As I understand it, this means that all retailers who use an affiliate program to “generate sales” will have to collect sales tax to all residents of the state. The bill’s authors assume this will raise lots of money for the state in new sales tax revenue.

AmazonAfilliateUnfortunately for the state, internet retailers disagree.  Amazon and other retailers are lobbying against the bill.  Furthermore many retailers, including Amazon, have threatened to sever all ties with California affiliates if the law passes. However given the backlash from internet retailers it appears to mean that many affiliate programs will shut down their relations with affiliates in the state. Thus the state may receive little extra sales tax revenue. Additionally it appears state residents will lose income as they are barred from these affiliate programs (potentially resulting in a net loss for the state as it will lose the income tax it would have received on that income.)

California and I are currently stuck in the same poor position:  taking steps to increase our income and potentially hurting it. (Before law school I was getting paid poorly but wasn’t in debt.  After law school I will be in debt and fear that if the economy doesn’t improve will still be being paid poorly.)

In law firm economic news a recent  survey by Hildebrandt International shows that while the economy appears to be improving for law firms more partner layoffs are planned.  Not great news in my search for the suddenly elusive post law school job.  Thankfully I still have a year to find it.  Here is hoping both California and I find a solid source of income.

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Where Blogging and Branding Clash

EverydayFoodieYesterday my girlfriend alerted me to a post over at one of the food blogs she follows.  The blogger had received a cease and desist letter from a major brand alleging trademark infringement. After receiving legal advice the blogger has decided to abide the cease and desist letter despite a relatively strong legal position.

The post goes on to complain about the cease and desist tactic.  However I believe her response is one of the very reasons this tactic continues to be used where it shouldn’t be.  Instead of asking the brand to justify its position the blogger has acceded to their outrageous demands.  The attorney who sent the demand can report beak that he successfully defended the brand without mention the potentially devastating brand tarnishment that occurred by treating  a popular food blogger as a criminal.

We the people are stuck in a legal catch-22.  We continue to receive cease and desist letters and take down notices which border on ridiculous.  However fighting them can put oneself in an untenable position.  Having to fight a legal war against a large corporation with significant legal resources.  As a result the cease and desist letters and take down notices become more frequent as attorneys can cite their high success rate.

Until someone fights back and can get a judge to award a major penalty for sending unwarranted cease and desist letter corporate attorneys can continue to  blindly send out unjustifiable take down notices and claim victory.  The sad truth is that no one is winning.  The brands that the attorneys represent lose major PR and brand loyalty every time one of these letters is sent to someone it shouldn’t have been.

There is hope though!  United States District Judge Jeremy Fogel, denied a motion to dismiss in a lawsuit filed by Stephanie Lenz against Universal Music alleging misrepresentation pursuant to a DMCA take down notice. Fogel also held that copyright owners must consider fair use before sending take down notices.

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Email to an Artist re: Jamie Thomas and KaZaA

trueAnthemscreenshot(As regular readers already know, I work part time for trueAnthem an online music distribution and viral marketing company.  Below is an email from one of trueAnthem’s artists and my response.)

Greg what is your stance on the RIAA suing people that do downloads on KAZAA and like services…. as I was logging in to yahoo saw this article featured … Yahoo Jamie Thomas Verdict

Suing individual consumers while sound legally is a stupid business strategy.  However it is not surprising given the old business model.   The people in charge of the RIAA and music labels got to their positions because of their knowledge of the music industry, contracts, distribution, and marketing.  As a result it is not surprising that they failed to understand the technology available and how to profit off of it.

From their standpoint the technology was something to fear.  Take a look at the recent writers’ and actors’ strikes and you will see how everybody is fighting over what the revenue distribution should be for digital downloads.  Because people don’t know what the digital pay model will look like they are afraid to create deals (they have no idea whether they are getting a good deal or a bad one.)  The alternative is to license content on a revenue share model rather than a royalty rate.  This would leave music labels and movie studios in the positions they have put their talent for years: relying on someone else’s honest accounting.  Given the rumors of bad accounting in the movie and music business it is not surprising that the revenue sharing model is not one that the studio executives jumped on quickly.

catch22Personally I believe the RIAA and record labels should have made licensing of catalogs extremely easy early on and thus allowed lots of different distribution models to be tested.  Had they done this, market theory suggests that the good ones would have succeeded and everyone would be in a better position than they are today. (Again I think studio executives expertise is partly to blame. As I said earlier their expertise was not technology.  As these models succeeded they would be replaced by executives who were both experts in technology and the music industry.  Thus even if they had been smart enough to have done this they would have been signing their own pink slips.  Considering this Catch-22 it is not surprising that they did not embrace the technology.)

Another reason why they did not adopt digital distribution early on was the fear of piracy.  The theory behind most early RIAA and studio attempts at digital distribution revolved around DRM (trying to assure that the music was not copied and distributed for free.)  One of the problems with this focus is that it mainly restricts legitimate uses by your customers while doing little to restrict those who are going to pirate music.  Video game companies are currently dealing with this as well and are beginning to realize that they will never be able to keep everyone from getting the game for free. Instead they are focusing on creating incentives to buy the game rather than get it for free (back to value added services.)

Had the music industry recognized this from the start I believe they could have discovered they were profiting despite the piracy.  A working paper by some people at Harvard Business school argues that they are still profiting despite piracy (and their own missteps.)  Ars Technica has written a good summary of the paper.

I think that some of this should have been obvious in the sense that the music industry has been profiting despite free distribution for a long time.  Radios have been playing music for free since the early 1900s.  Despite this free distribution, music labels have profited.  In fact I would argue that without this free distribution they would have profited much less because they would have had no easy vehicle to get people to listen to the music.  Very few people are going to buy music from a band they have never heard.

Getting back to KaZaA, I think that even with the reduced digital distribution market available it was not hurting music sales as much as record labels believe (I have an old post about other possible reasons for decline in music sales.)  I believe a majority of people are using the internet to discover the music people discovered on the radio in the past.  While some people will inevitably “steal” music they otherwise would have purchased, lots will buy music they otherwise would never have discovered.  I think the biggest thing digital distribution has done is create larger markets for niche bands.  In the past labels where limited in signing and distributing bands that catered to smaller niche markets because of the distribution costs.  The internet reduces this problem by aggregating people with similar music tastes (such that they can find bands that fit their niche more easily) and reducing the cost of distribution (less of a financial barrier to distribute the music in the first place.)

happy-gilmore-cheque-checkAs far as the Jamie Thomas $1.9 million dollar verdict I think it hurts the record labels as much if not more than it helps them.  From what I have read Jamie Thomas was the perfect person for them to go to trial against (other than her being a mom.)  While I believe the evidence linking a user to specific uploads is tenuous at best, the evidence against Jamie Thomas was strong: she did not have a wireless router, she replaced her hard drive after being notified of her infringement, she used her only internet username, she regularly locked her computer, she was caught lying numerous times…  She clearly deserved to lose the lawsuit.

That being said the RIAA is never going to see the $1.9 million dollars and all it does is make them look like even bigger bad guys because of the large amount of the award.  Nobody objectively thinks that $1.9 million is a fair penalty for her.  If the RIAA were smart it would settle with her today for $5-10k and announce how given the circumstances of a single mother of two they would rather not see the money then be at all responsible for financially ruining the family.  Then they need to bring up the artists whose songs she “stole” and give them each their share of the settlement.

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EMI sues Grooveshark, but what about the songwriters?

groovesharkToday’s big IP headline not involving the Jamie Thomas trial is that EMI has sued Grooveshark. Grooveshark is an interactive online streaming music service.  Grooveshark’s motto is “play any song in the world for free.”

The focus is on how Grooveshark was in the midst of negotiations with EMI when EMI sued. While the articles I have seen correctly point out that this is not an usual negotiation ploy by labels (see Universal/Myspace and Imeem/Warner) none have mentioned the royalty rates Grooveshark must pay to songwriters and music publishers as an interactive music service.

My question isn’t why EMI is suing Grooveshark, but why hasn’t someone else done it already. The latest agreement approved by the copyright royalty board bases the rates on the licenses with record labels. Given that their is apparently no agreement with any of the major record labels, I find it unlikely the songwriters and music publishers were getting paid.

I imagine songwriters and music publishers are used to this as the 2006 agreement is still under appeal (and thus it is unlikely they have seen any money.)  Still given the amount of fighting over this latest agreement and the late payment provisions it seems like some litigious songwriter or music publisher would have wanted to set a precedent.

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Entertainment Industry Value Added Services

(Note from the blogger: this post is less legal in nature and more my reflection on a business solution to the legal problem of copyright infringement in the entertainment industry and in particular movies)

PiracyWarningWhile much of the focus in the entertainment world seems to be on minimizing pirating of content there has been little focus on what the entertainment industry can do to make pirated content less appealing than legal content. This is something that every industry other than the entertainment industry has had to deal with for years.

Let me explain. People can buy electronics anywhere. This has become even more apparent as the number of electronics stores online increases exponentially. As a result local brick and mortar stores have had to compete with infinite competitors when they used to have to deal with only a handful (or perhaps even none). As a result stores have had to refocus their efforts to retain customers or risk going out of business. Since most of these stores cannot compete with the prices of online electronics stores, they have instead focused on adding value by offering good customer service and expertise. The largest examples of this are Best Buy and Circuit City. Best Buy has a reputation of having good customer service, advertises its expertise, and provides a geek squad to aid consumers who need additional help. These are all services online stores have difficulty offering. Thus while Best Buy cannot compete with online prices (as evidenced by their unwillingness to offer their price match guarantee to online prices), they continue to attract customers. Conversely Circuit City had built up a reputation of poor customer service. Thus it was unable to retain as many customers as Best Buy and has gone out of business.

MBMarriotPerhaps a simpler example is hotels. This past weekend I paid $90 to stay at the Marriot rather than $55 to stay at a cheap nearby motel. Why? Because Marriott provides services I value above and beyond a place to sleep. Marriott has a reputation for great customer services, clean rooms, and fancy hotels whereas I suspected the $55 hotel might not maintain the same level of cleanliness or service.

How does this relate to the entertainment industry? The entertainment industry has held a monopoly on content for a long time. As a result consumers had a choice between the entertainment industry’s offering or nothing. Now however there is a plethora of cheap or free content available to the consumers as well as pirate content. As a result the entertainment industries is seeing a reduction in profits. In response to this reduction the industries has fought to limit/eliminate the pirated content. While nobody should argue that the industries should not try to prevent piracy. The fact is that entertainment piracy is a reality in the world today. Thus the entertainment industry should focus on how it can provide value added service like Best Buy and Marriott which entice consumers to pay more for something. Marriott and Best Buy continue to succeed despite lower priced alternative, and I believe the entertainment industry can do the same thing.

UpMonday evening I saw my first 3-D movie, Up. While watching animated movies is usually something I relegate to my Netflix list rather than paying $10+ dollars in a movie theater, I was curious to see the 3-D technology up close and in person. I was impressed. In my opinion the movie was good not great, but the subtleties of depth on the screen were incredible. Some of the people in our group felt that the movie did not have much 3-D and were disappointed with the lack of a large difference. I on the other hand felt that the depth of the movie was fantastic and part of the beauty of the 3-D was that it was so realistic and well done that it wasn’t in your face.

The point of all this is that 3-D movies are something I will likely pay to see in a theater again. Recently my movie going experience has dropped to a handful of movies a year with the rest relegated to my wonderfully cheap Netflix account. However by adding something above and beyond what I can get at home for cheap (or free if I wanted to download a pirated version), the studies have enticed me to go to the theater and spend more money. By adding a feature (3-D) studios have enticed me to pay more for something that I can get for less just as other industries have and do. I believe the entertainment industry can flourish despite piracy by providing value added services unavailable with pirated content.

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Danger Mouse Releases a Blank CD!

DNOTOne of the stories that broke during finals that I was dying to write about was Danger Mouse’s release of his new album “Dark Night of the Soul.”

The story is that for unknown legal reasons EMI has refused to release Danger Mouse’s album. While in the past record labels’ decisions where conclusive, the internet age has given artists other options. In that vain, Danger Mouse has refused to not release the album and has decided to release the cd as a book:

This limited edition art book contains 100+ pages of original photographs by celebrated film director David Lynch. Only 5000 copies have been printed and each one is hand numbered.  The book will also come with a 24″ X 36″ poster as well as a custom designed CD-R (poster comes folded).
Please note:  Due to an ongoing dispute with EMI,  Danger Mouse is unable to include music on the CD without fear of legal entanglement. Therefore, he has included a blank CD-R as an artifact to use however you see fit.

The internet of course has obliged and the album is currently available on torrent sites as well as NPR’s on demand music service.
tpbdnotsscreenshot

Not only is Danger Mouse’s release yet another demonstration of how music can be released both for free and for profit. But it also demonstrates yet another way artist can and are releasing music without labels.

Legally the release presents an interesting question of contributory copyright infringement (assuming EMI owns a copyright in the album not Danger Mouse.) Contributory infringement requires knowledge of the infringing activity and material contribution. While Danger Mouse’s instruction arguably raise a case for both, the question of the CD is not so simple.  Purchasing music CD-Rs includes a royalty payment. 17 USC §1008 provides that no action  may be brought for the “noncommercial use by a consumer of such a device or medium for making digital musical recordings.” Thus burning the album to the CD-R would not be actionable.

While EMI would/will likely argue that Danger Mouse is still inducing purchasers to download the music (itself a potential infringement), the material contribution claim is considerably weakened without the CD claim. Since the full story of who owns the copyright in the album and why EMI has refused to release it is currently unknown, the legal implications of this release are impossible to know.

All of that being said, Danger Mouse’s innovation in releasing his album makes this my favorite music release story of the internet age.

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No Fair Use at Copyright Office

I discovered something interesting by accident today. If you go to http://www.copyright.gov/laws/

http://www.copyright.gov/laws/ screenshot

http://www.copyright.gov/laws/ screenshot

Now click on the “Fair Use” link.

You discover that Fair Use does not exist!

Fair Use link screenshot

Fair Use link screenshot

Conspiracy or honest mistake?

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The Case for Digital Casebooks

Kindle DX

In connection with the recent release of the Kindle DX, I have been reading a lot about how the Kindle and digital books will affect law school and lawyers.  (Also the bankrupt state of California just announced it would begin using open source, digital textbooks in schools.)  Considering laptops fill modern day law school classrooms, digital law school casebooks seems like a no-brainer.  Students would be able to carry all of their casebooks with them everywhere, search for a particular phrase or case easily, and copy and paste phrases into notes.  With the wealth of e-reader and pdf technology available, highlighting and making notes in the margins is as easy on digital copies as it is on physical ones.

The more I think about the usefulness of having digital copies of my law school books the more I am surprised they are not currently widely available.  I would definitely pay an extra $20 to have both a physical and digital copy of my casebooks.  I would never have to haul the heavy books with me to class.  Nor would I have to prioritize which books to take with me since they don’t all fit in any bag I am willing or able to bike to class with.  Unfortunately, digital copies of casebooks are limited at best.  Presumably one of the major reasons is the fear of the books being pirated online.  While DRM is an obvious solution, the successes and failures of DRM make it a less than ideal one.

Pirated BooksIn the meantime, one blog I found advocates manually converting physical casebooks to digital ones.  While this raises major copyright and fair use issues, it also demonstrates that digital copies are already available.  Consider again the laptop filled law school classrooms.  Do you believe that these students will continue to be satisfied with physical copies of their books?  I believe the market demand for digital casebooks is just beginning to rise and thus legal publishers ought to figure out a way to publish digitally for a profit before pirated books fill the void.


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National Broadband Plan – Crowdsourcing Needed!

Last semester I participated in the Broadband Regulatory Clinic. In a stroke of luck for me, the Economic Stimulus Package’s Broadband Stimulus coincided with the timing of the class. Thus we worked together to research the history of Broadband Stimulus on the federal and state level as well as a few notable city government projects. The end result was a filing before the FCC with regard to what the definitions of broadband, served, underserved, and unserved should be with respect to FCC’s role in the broadband stimulus.

Yesterday was the deadline for the FCC’s Notice of Inquiry regarding a National Broadband Plan. As part of the stimulus package Congress required the FCC to come up with a National Broadband Plan. The FCC requested comments from the general public and 318 comments were filed. All of the top broadband providers had there say (Comcast, Verizon, AT&T, Time Warner, etc.)  The FCC’s decisions in this matter will likely shape the broadband infrastructure of America for the foreseeable future.  Thus it is vital that consumers voices are heard not just the broadband providers who stand to profit.

Replies to comments are due July 7th.  I recommend you at least review the plan of one of the current providers.  If you find it lacking file a short comment!  Every voice is important.

For more information check out the discussions at Broadband Stimulus Exchange Home.

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