Grossly Excessive Penalties in the Battle Against Illegal File-Sharing: The Troubling Effects of Aggregating Minimum Statutory Damages for Copyright Infringement by J. Cam Barker
I've long thought that there should be some legal challenge to the excessive penalties levied against file sharers. After all, if I go and steal a CD in any store in the US, it would be classified as petty theft, with fines of maybe $500 and a maximum of thirty days of jailtime, which is almost always waived. Yet, if I download even a single copyrighted file, I could be liable for literally hundreds of thousands of dollars. The reality of these cases is that they are never brought to trial. The RIAA has settled thousands of these cases for an average of $3000 a pop. The threat of large cash fines being levied is enough to make settlement virtually the only choice in such cases, regardless of the merits.
It appears that J. Cam Barker of the University of Texas at Austin School of Law has similar thoughts, but while I am not a lawyer, he is. Check out his paper:
The article dissects awards into punitive and compensatory damages, and illustrates how under the principles laid down in the Supreme Court case BMW v. Gore, these awards may be viewed as unconsitutionally excessive.
I've read only about half the paper, but it seems surprisingly clear and concise. Check it out.
There is a nice interview on dpreview.com with David Coffin, author of dcraw.c, a nice little Linux program that decodes most RAW formats from digital cameras. Very cool and useful stuff. From the interview:
3. Are you ever concerned about the legal implications of reverse-engineering proprietary file formats?
If anyone sued me, I'd be the biggest free software hero since Jon Johanson. It's better for the camera makers to ignore me and hope I lose interest.
Heh. Rock on, Dave.
This morning as I was driving in (and running late since traffic was bad, and the UPS outlet where I was supposed to be able to pick up my monitor wasn't even open so I went out of my way for nothing and... oh, never mind, I digress) and our local PBS affiliate ran a story about ClearPlay and the Family Entertainment and Copyright Act.
I see the bill as a mixed bag: it increases the penalty for clandestinely using a camcorder in a movie theater. The shocking claim made by the usual talking-head industry type is that such illegal copies cost the movie industry billions. BILLIONS! Get real. Watching one of these DVDs is like watching a kindergarten class do Shakespeare. The existance of a $2 copy of Lord of the Rings does not prevent the sale of a $25 authorized version in anywhere close to the one-to-one ratio that such extravagant claims require. I oppose this only because the penalty is so large in proportion to the actual damage done.
But the other thing that the FECA does is legalize companies like ClearPlay. ClearPlay manufactures a DVD player that downloads "filters" from their website which automatically instruct the DVD player to skip violent or sexual material, thereby making Natural Born Killers appropriate for viewing by your five year old. Some stories have run about this with the rather radical slant that Congress has legalized the censorship of DVD content. This is not censorship. Censorship occurs when someone desires to see material which is made unavailable by another agency. This is the reverse of censorship: I specifically choose not to view some kinds of content, and the player now makes that simple.
Studios don't seem to like this idea much, and again, their reasoning is puzzling. The existance of such technologies does nothing to decrease the sales of their products: in fact, if anything it should have a positive effect. They instead choose to complain that the "integrity" of the movies they produce will be harmed. Yes, the integrity of Harold and Kumar Go to White Castle will be harmed when the references to sex and drugs are dropped. What a pity. Perhaps the sounds of cash registers will help alleviate their inner angst.
Ed Felton has a nice summary on his blog:
The soccer-free version of "Bend It Like Beckham" is speech. The FMA allows that speech to occur, by preventing a copyright owner from suing to block it. And the FMA does this in an ideal way, ensuring that the copyright owner on the original work will be paid for the use of their work. That's the purpose of the "from an authorized copy" and "no fixed copy" language -- to ensure that a valid copy of the original work is needed in order to view the new, modified work.
It isn't clear to me whether the Family Movie Act (section 201 of the FMA) allows a certain kind of remix to be done. It would be kind of cool to be able to create a media player which allowed you to scramble, augment and annotate an existing DVD. As long as no fixed copy of the DVD content is made, it would seem to be no different in spirit than the modifications made by ClearPlay. The language of the bill does include specifications that such modifications be "limited" and may be only "deletions", so I'm not sure my interpretation would be legal. Still, interesting...
Maybe you have been sitting on the sideline with respect to some of the intellectual property issues that I raise here from time to time. Perhaps deep down, you suspect that all those who push for copyright reform are a bunch of card carrying communists. I mean really, just look at their T-shirts for pity's sake!
But the reality is that the threat to basic freedoms are real: witness this example, where a radio host was fired for airing material from C-SPAN which is in the public domain.
Apparently you really can patent nonsense. In United States Patent 5,533,051, we get the following intriguing claim:
A second aspect of the present invention which further enhances its ability to achieve high compression percentages, is its ability to be applied to data recursively. Specifically, the methods of the present invention are able to make multiple passes over a file, each time further compressing the file. Thus, a series of recursions are repeated until the desired compression level is achieved.
Any first year computer science student taking any kind of discrete math should be able to tell you what is wrong with this claim.
You can read the oral arguments in the Supreme Court case MGM v. Grokster on p2p.weblogsinc.com. A couple of brief comments from my skim of it.
Much of the early testimony surrounded the stifling effect finding in favor of MGM would have upon inventing. The justices focussed in on the idea that if you are inventor, your ability to invent and bring new products to market is effectively quelched by the standard proposed by MGM. You'd have to show that there are no substantial infringing uses, rather than what is called for in the Sony decision, which is to show that there are significant non-infringing uses.
The example of the iPod came up, and the Mr. Verrilli argued that it was more or less obvious that the iPod had significant non-infringing uses. But I think that's incredibly unclear. If you figure out how many songs can be stored in a 20gb player, it probably is the range of 6000, which is maybe 400 CDs or so. While it isn't unheard of for individuals to have that many cds, I sincerely doubt that the average is anywhere near that total. I think it is relatively easy to argue that the majority of individuals must have songs on their iPods which are infringing, that indeed the product design and marketing of the product itself is carefully designed to take advantage of this huge capacity and the ease with which such a player can be filled with infringing content. I think that were MGM v. Grokster to be reversed, he'd be coming right back to argue the opposite of his claim here in court.
I think similar arguments could easily have been made when the VCR was new. I'd contend that the vast majority of uses for the VCR in the early days was infringing use, and in all likelihood, that continues to this day.
Scalia seemed focussed on the issues related to stifling startup companies who are trying to bring new technologies to market.
JUSTICE SCALIA: Will you give a company ten years to establish that?
MR. CLEMENT: Well, I don't think
JUSTICE SCALIA: I mean, what I worry about is the suit that just comes right out of the box, as soon as the company starts up. Will you give the company a couple of years to show that it's developing a commercial use?
MR. CLEMENT: Well, Justice Scalia, we have concerns about that, as well. I don't know that we would give them ten years of, sort of, free space to do as facilitate as much copyright infringement as possible. I think what we would say is that when you're -- when a suit targets a nascent technology at the very beginning, there ought to be a lot of leeway, not just for observed noninfringing uses, but for the capacity of noninfringing uses.
I also found this exchange interesting:
JUSTICE BREYER: I -- and the country seems to have survived that standard. There is innovation. There are problems in the music industry, but it thrives, and so forth. So there is an argument for just following it, because it's what it is. But suppose it's totally open. Why should that be the right test, instead of some other test, like substantial use, et cetera?
MR. TARANTO: I -- because I --
JUSTICE BREYER: That, I think, was the question, and I'm very interested in your answer.
MR. TARANTO: Right. Because I think any alternative is worse. A focus on intent to profit means that virtually every business which requires money and has the least bit of sensible forward-looking thinking about what the usage is going to be will be subject to litigation, arguing about their knowing that a substantial amount of the value of the product was going to be based on infringement.
JUSTICE KENNEDY: But --
MR. TARANTO: Every --
JUSTICE KENNEDY: -- but what you have -- what you want to do is to say that unlawfully expropriated property can be used by the owner of the instrumentality as part of the startup capital for his product.
MR. TARANTO: I -- well --
JUSTICE KENNEDY: And I -- just from an economic standpoint and a legal standpoint, that sounds wrong to me.
MR. TARANTO: Well, I'm not entirely sure about that formulation. Sony clearly sold many more tapes because of the illicit activity of Library. Sony presumably sold more machines, maybe even priced them higher, because there was a group of people who wanted the machine for the illicit activity. The Apple iPod, in the 60 gigabit version, holds 15,000 songs. That's --
JUSTICE KENNEDY: So you think that --
MR. TARANTO: -- a thousand CDs.
JUSTICE KENNEDY: -- unlawfully expropriated property can be a legitimate part of the startup capital.
MR. TARANTO: No, I -- what I think is that, as a matter of general judicially formulated secondary copyright liability law, there is no better policy balance that the Court can strike, and that only Congress can make the judgements about what the industry-wide facts are. And I -- let me pause there a minute -- there are no industry-wide facts in this record. Every citation in the Petitioner's brief about the magnitude of harm to the industry is extra-record citation. There are 26 billion...
Dave Slusher has an excellent article detailing just what is at stake in the case of MGM v. Grokster. He says:
I am the benificiary of being able to serve my podcasts to an order of magnitude more users than I could without it.
Without the technological innovation of P2P networks, Dave would be unable to reach the huge numbers of individuals that he currently does: it simply wouldn't be cost effective. A reversal of the Sony decision would allow the creators of Bittorrent or similar programs to be held liable for piracy created by their sharing technology, and we would be back in a world where media is controlled by the few who can afford the higher costs associated with the classic means of distribution.
Another major intellectual property issue which is unfolding is the Supreme Court's consideration of the Grokster case. With exchanges like the one below, I'm hopeful that the Supreme Court will rule against the media. I mean really...
Over 700 comments were received during the inquiry period for comments by the Copyright Office on the topic of "orphaned works": works whose copyright holders are either impossible or very difficult to find.
Currently, orphaned works are held in limbo: their creators (even if determined) cannot be located, so their works are in limbo, perhaps for forever, given the willingness of Congress to extend copyright terms. There seems to be some consensus that this is undesireable, and some push to allow a mechanism which allows such orphaned works to enter the world of the publically exploitable works.
I've surveyed only a couple of these comments. They seem very good. Check 'em out.
The Register reports that major music labels are trying to get music retailers to increase prices. What a good idea! Let's make it even more costly for individuals to acquire music, that's sure to drive down the rates of copyright infringement!
Seriously, what are they thinking?
The problem appears to be related to Apple's iTunes Music Store. Apparently 65% of all music downloads for money occur through the iTunes music store. Apple's success in online marketing of music appears to be at the expense of the major labels (or so they apparently believe) and they apparently aren't happy.
I do see why they are worried. The wholesale price for songs is 65 cents per track. Apple collects 99 cents per track, netting themselves 34 cents. The record companies do have expenses that Apple probably does not: they do after all pay to produce albums, and they have to manufacture them. One could expect that over time, online distribution of music will become the norm, and the overall market for the solid
vinyl plastic form of music will become a thing of the past, and record companies will not be able to maintain their lofty lifestyles.
But it's there fault for handing a huge market over to Apple for a pittance. You can't put the djinni back in the bottle, and it will be damned tough for them to take the market back. Raising prices at this point results in a Pyrrhic victory for all businesses involved.
It's time to evolve or perish.
Wil Wheaton has some distinctly harsh words for the notion that ASCAP now will sell you a license to play music on your podcasts. Peter Kim responded that:
Wil, you WOULDN'T pay for an individual song. ASCAP licenses are blanket licenses, and the interactive minimum pricing they've set below $300/yr. Once you have the license, ALL ASCAP music is legal to play. (Some people might actually be making money from online distribution . . .)
Frankly, I'm not at all upset with ASCAP. I simply don't use any of their music, because I can't afford it. $300 dollars a year exceeds the budget of all other expenses I incur to put out my podcast, and I can't justify it. That's fine, I'm comfortable using music from more friendly labels like magnatune or music which is licensed directly by artists under liberal Creative Commons licenses.
It does bring up something interesting though: they charge roughly $300 to license the playback of ANY of the music under their catalog. Doesn't it seem odd that the penalties for copyright infringement are so draconian by comparison? Just as someone noticed with Napster (which grants a license to play any music they have for a mere $15 a month), doesn't this ASCAP license fee structure imply that the real damages caused by any individual act of copyright infringement is incredibly tiny?
Color me surprised...
"Despite the vast disparity between SCO's public accusations and its actual evidence--or complete lack thereof--and the resulting temptation to grant IBM's motion, the court has determined that it would be premature to grant summary judgment," Kimball wrote Wednesday. "Viewed against the backdrop of SCO's plethora of public statements concerning IBM's and others' infringement of SCO's purported copyrights to the Unix software, it is astonishing that SCO has not offered any competent evidence to create a disputed fact regarding whether IBM has infringed SCO's alleged copyrights through IBM's Linux activities."
One wonders just why the judge didn't issue a summary judgement against SCO.
For more legal commentary, try groklaw.
Information Week is running an article on weblogging and the workplace. It seems mostly common sense to me. For instance:
Forrester Research advises companies to provide guidelines not only for company-sanctioned Weblogs, but also for employees who do them on their own time. The IT research firm even recommends that managers occasionally view the personal Weblogs of subordinates to see what they're saying. "Respecting existing confidentiality agreements and companies' secrets is a no-brainer--and not doing so should clearly be grounds for firing," Li wrote.
Well, duh. I'm sure that many people would like to hear about the inner workings of the place where I work, but since I'm not certain exactly what the boundaries would be, it's simpler (and frankly, more fun for me) just to not blog about work related issues.
The article goes on to discuss the copyright issues and the problems that RSS syndication create, unfortunately without shedding any real light. Still, interesting to read for anyone working on blogs...