Friday, October 2, 2009 - The Progress & Freedom Foundation Blog

Moral Panics and the Copyright Wars: A Worthless Book

William Patry's new book Moral Panics and the Copyright Wars ("Copyright Wars") ranks among the worst books yet written about copyrights and the Internet--a stunning achievement, given the competition. I began it hoping for a slanted-yet-thoughtful analysis of how to reconcile the potential of both copyrights and the Internet. I got the same shopworn Scary Stories, sophomoric and droning lectures on cognition and economics, no solutions, and the self-anointed "most prolific scholar of copyright in history" venting venom like this:

[C]opyright is not an engine of free expression, but a yoke around innovation put on to retard progress by preserving existing and failed business models. (p. 157).

In other areas where a government monopoly, created to serve the public interest, is blatantly abused over a long period of time, it is taken away. (p.199).

It is the innovation of [consumer electronics manufacturers and Silicon Valley] that creates the demand for copyright owners' works. (p. 21).

The Copyright Wars must be understood as archetypical responses of businesses that are inherently non-innovative.... I cannot think of a single significant innovation in either the creation or distribution of works of authorship that owes its origins to the copyright industries. (p.198).

Only the most profligate "scholar of copyright in history" would make such claims. The "scholar of copyright" who "cannot think" of "a single significant innovation" in the works of, say, Walt Disney just cannot think--unlike Forbes, which just ranked Walt Disney Studios among America's 10 Most Innovative Companies.

Indeed, how could any "scholar of copyright" be unable to "think" of even one significant innovation implemented by any video-game developer or publisher? Similarly, while Copyright Wars praises the band U2, it was not Mr. Patry who discerned (and funded) U2's talent when they were unknown and losing money--it was a record label. Shouldn't consumer products as successful as CDs and DVDs count as "significant innovations"? And if copyright industries are "inherently non-innovative," then what were those generations of "technical Oscars" rewarding?

A serious point underlies this ridicule of the ridiculous: Not even the most gung-ho "copyright warrior" can rationally deny that American creators and creative industries have become very successful producers--and exporters--of expression. Not so long ago, even America's admirers agreed that we were abject failures as producers of expression. In 1840, Alexis de Tocqueville thus titled an entire chapter of Democracy in America as follows: The Example of the Americas does not Prove that a Democratic People can have no Aptitude and no Taste for Science, Literature or Art.

But the pain of that dart is soothed by history. In less than 160 years-in the blink of an eye, culturally-America became a world-leading creator and net exporter of an array of works that would astound de Tocqueville: books, magazines, music, movies, TV shows, video games and application software, to name a few.

As I noted here, copyrights were not the only significant factor in this transformation. Nevertheless, these diverse successes usually resulted from the imagination, innovation, and hard work of creators empowered by the guidance and the risky, long-term investments made by copyright-driven American creative industries. Their successes expose the absurdity of Mr. Patry's claims--our creators and creative industries could not be so successful unless they were highly innovative, progressive and productive. The scholar of copyright who "cannot think" of innovations in film-making achieved by George Lucas and Industrial Light and Magic, can thus cure his ignorance by searching the Internet.

Consequently, even a "scholar of copyright" will become the bonfire of his vanities if he tries to throttle Yoda, kick Old Yeller, re-incinerate Rosebud, and shoot Private Ryan--while decreeing that no "significant innovation in... the creation of works of authorship" was ever achieved by Walt Disney or his studio. Recently, Disney animators were working to make every leaf in an animated forest move individually in gusts of animated wind--a small detail, perhaps--but one of many that affirms a towering truth: A battle over creativity in which William Patry meets Walt Disney ends like Bambi Meets Godzilla.

This blog post can only begin to catalog the defects of Copyright Wars. For example, its account of the critical economic insights of Joseph Schumpeter is inane, and its account of (your) major cognitive defects quotes a "dream analyst" (p. 51). Nevertheless, two more of its major failings can be easily summarized.

Copyright Wars Averts Its Eyes from Inconvenient Truths.
Copyright Wars is laughably biased. In 2009, anyone who writes another copyhate-filled book about the "copyright wars," had better have either the intellectual integrity or the knack for self-preservation required to scribe the word "Grokster." The author of Copyright Wars had neither.

Granted, Copyright Wars began, (p. xxiv), by noting how destructive bias can be: "The first step in copyright recovery is honesty about where we are and how we got [here]." What followed was basically a paste-smeared shoebox diorama full of cardboard-cutout devils (content industries) plunging pitchforks into cardboard-cutout angels (technologists, online service providers, and consumers)--with a voice-over pronouncing anathema against the "large and growing" "sin of copyright" (p. xx).

Earthly conflicts among three-dimensional humans tend to be more complex. And few earthly conflicts tend to be more complex than those among producers of complementary goods-like content creators and content distributors. But Copyright Wars concealed complexity by omitting conflicts, outcomes, events, and Terms of Service that might suggest that debates among producers of complementary goods could be anything but a remix of the clash between the looms and the Luddites.

And so, in 2009, Copyright Wars pretended that the last significant Supreme-Court intervention in the "copyright wars" occurred in 1984. Both my reading of Copyright Wars and its index confirm that its text fails to mention--much less explain--ugly words, phrases, and realities like "Grokster," "Sharmin Networks," "KaZaA," "StreamCast Networks," "Morpheus," "get all the music," "no product costs to acquire music," "In re Aimster," "technological features to induce users to share," and, of course, "MGM Studios, Inc. v. Grokster, Ltd." And as Judge Posner noted in In re Aimster, blindness this willful is evidence of intent.

Copyright Wars' affected blindness to Grokster is most telling because Grokster refutes two of Copyright Wars' central themes. This book argues ceaselessly that copyrights and content industries are inimical to the Internet and "innovation." But Grokster proved that many Internet savants cannot distinguish productive "innovation" from commercial copyright-piracy schemes--even after their perpetrators, "citing a concern about the possibility of a criminal investigation," (p.3 n.1), refuse to let their still-eager defenders learn what potential crimes they were defending. In Grokster, far too many technologists mindlessly defended blatant--and blatantly inefficient--piracy schemes.

Copyright Wars also argues that when content industries win policy debates, they do so--not because copyrights and markets protect free speech by promoting the private production of expression in a democratic republic--but because content industries concoct and repeat nonsense until it brainwashes star-struck government officials. (And if you think that was not a fair one-sentence summary, do read Copyright Wars.)

Grokster thus raises questions: Is brainwashing of the gullible really how Mr. Patry explains the content industries' 9-0 Supreme-Court victory in MGM Studios, Inc. v. Grokster, Ltd.? Were all nine Justices just star-struck, (in Grokster, note 13), when they eliminated a once-fatal causation problem and transformed the moribund inducement doctrine into a deadly serious theory of secondary liability?

Similarly, Copyright Wars (p. 178) praises the nuanced understanding of "monopoly" displayed by "Nobel Prize winner in Economics Kenneth Arrow." But does Mr. Patry really think that tricky metaphors duped Professor Arrow into becoming the lead author of the most aggressively pro-copyright and anti-Sony amicus brief filed in Grokster?

Copyright Wars cannot answer such questions--because it ignored realities as basic as the KaZaA litigation and MGM Studios, Inc. v. Grokster, Ltd. It is thus useless to anyone who wants to understand or resolve debates about copyrights and the Internet.

These debates are rarely one-sided. Sometimes, technologists are right and copyright owners are wrong. For example, I agree that Copyright Wars, (pp. 182-186), correctly dismisses The Associated Press's claims that Google and other online news aggregators are infringers: AP and newspapers confront problems that have little to do with infringement or copyrights--their problems that would remain even were copyrights absolute and perfectly enforceable.

But sometimes, copyright owners are right and technologists are wrong. Too many technologists have used the Internet to profit from deliberate, destructive piracy. Sometimes, they even pursued commercial piracy through means so malign that they achieved a result once unimaginable-they turned piracy of popular movies and music into a documented threat to national, military, commercial, and private data security. No one could have expected that "free music" could become so costly.

Those who avert their eyes from these ugly facts do not change them--they just spare themselves the burden of confronting the critical question facing policymakers: How do we want copyright owners to enforce their rights when deliberate, commercial copyright-piracy schemes encourage--or dupe--ordinary consumers into performing directly infringing acts? Copyright Wars cannot answer that question because it affects the pretense that no such question exists.

The Angry Arguments in Copyright Wars Often Backfire upon Technologists.
Copyright Wars is not just a perhaps-ironic plea for "honesty," it also seethes with such hatred for creative industries, (particularly those that create music and movies), that the snapping jaws of its rabid rhetoric often tear into technology companies like Google, a corporation that even the author of Copyright Wars seems to respect (p. xiii, 2-3, 25, 38-39, 40, 169, 179, 185, 187).

For example, responsible commentators carefully discuss China because of the challenges facing U.S. companies-and particularly Internet companies-doing business there. Personal experience leads me to conclude that these companies are "doing good"--that their presence will help produce a more open and lawful China. But in China today, American companies may have to disclose data that could help imprison people for criticizing their autocratic government. Responsible works thus avoid rhetoric that might imply that American companies support the Chinese government's historic and ongoing repression of its own people.

But not Copyright Wars. To better declare his war on copyrights, its author argued that in a law-abiding democratic republic, IF corporations intend to profit from piracy by designing file-sharing programs and networks so that copyright owners must, (under existing law), either to pay off the architects of piracy, sue the consumer-distributors who empower them, AND IF record labels facing such rotten choices sue consumer-distributors in courts of law to deter intended infringements of their federal civil rights, THEN those record labels have launched a terror-campaign analogous to China's horrifying Cultural Revolution:

[The President of RIAA's] words evoked the Maoist Great Proletarian Cultural Revolution, especially the December 1968, "Down to the Countryside Movement," in which intellectuals living in cities were ordered to go to the countryside, where their bourgeoisie thinking would be worked out of them and they would be reeducated by the masses.
Assume, arguendo, that using federal courts to deter violations of federal civil rights in a law-abiding democratic republic could be analogous to the Cultural Revolution that a paranoid communist dictator unleashed upon people who saw their parents, children, or neighbors clubbed to death by book-burning Red Guards. Even so, the analogy backfires. If suing the consumer-distributors who empowered deliberate commercial piracy really was analogous to the Cultural Revolution, then Google, CNET, and their trade association NetCoalition advocated this Cultural-Revolution--analog--this "fight against our children"-as the solution to file-sharing piracy:
Copyright owners] claim that the District Court's decision [in Grokster] leaves them powerless to combat infringement over P2P networks. Two recent developments prove the opposite. First, the Recording Industry Association of America (RIAA) has begun to sue individual file traders engaged in large scale infringement.... [T]his strategy appears to have caused a decrease in file trading.... The combination of vigorous enforcement against hard core infringers and attractive business models for legal downloads should solve appellants' problems with P2P networks without crippling the IT industry.
Oops. Naturally, the Grokster amicus brief just quoted does not really reveal that Google, CNET or NetCoalition supported a "fight against our children," (p. 29), analogous to China's Cultural Revolution. Rather, it reveals mostly the reckless vacuity of the rhetoric in Copyright Wars.

Indeed, in Grokster, many other Internet luminaries advocated copyright-infringement lawsuits against Internet-using students and children. Such arguments were also made by certain ISPs, the ACLU, university librarians, law-school librarians, the Internet Archive, Project Gutenberg, four Harvard Law School professors--and, (of course)--by the corporations distributing the file-sharing programs Morpheus, Grokster, and LimeWire. "Just sue my customers!" was thus the Internet-piracy "solution" advocated by many Internet luminaries who chose to defend potentially criminal piracy intended to let corporations "get all the music" without any "product costs to acquire music." Indeed, Copyright Wars itself would blame consumers if they buy and use copying devices for their intended purpose (p.49)).

Perhaps this ugly spectacle from Grokster suggests that these "copyright wars" involve conflicts more important and more balanced than a rerun of the looms and the Luddites. Perhaps it also suggests that after more than 200 years, American copyright owners finally had to sue consumers to stop EFF, and Public Knowledge, and online service providers from arguing that suing consumers--their customers or constituents--was a great way to enforce copyrights on the Internet. And perhaps that suggests why Copyright Wars pretended that Grokster never happened....

Not even Lawrence Lessig's Free Culture stooped quite so low as to analogize copyright enforcement to China's Cultural Revolution-or the guillotine and the Terror in France (pp. 11-14). But as Copyright Wars notes, (p. xviii, 46, 30), debate about copyrights and the Internet can "degenerate into name-calling" because vacuous demagogues "routinely rely on... hateful messages to demonize the other side," and "attack the character of their perceived opponents." How sadly true. See, e.g., Copyright Wars at 75 (anger and megalomania lead the "most prolific scholar of copyright in history" to exploit a tragic genetic condition while arguing that "copyright dwarves can see no farther than their own megalomania"); id. at 207, n.65 (a lawyer conducts an amateur psychiatric diagnosis of the psychoses of the CEO of a record label that does business with his employer); id. at 21 (in-house counsel for a content distributor argues that content distributors created the demand for Finding Nemo and Schindler's List: "It is the innovation of [consumer electronics manufacturers and Silicon Valley] that creates the demand for copyright owners' works").

Worse yet, this defect--the argument so angry and unhinged that it backfires even upon its author and technology companies--recurs throughout Copyright Wars. Those who want to regulate online advertising, (and especially contextual advertising "honed and targeted by information provided by consumers," (p.11)), will find in Copyright Wars a goldmine of other-people-are-so-stupid sophistry and big-business-is-bad orthodoxy (p. 48-49 and passim). Opponents of the Google BookSearch Settlement--or any successor--will love how Copyright Wars describes British book-publishing "congers" that used "closed auctions" to throttle competition (pp. 115-119). And circling Internet regulators who deem "Google's monopoly on Internet search... valuable and potentially dangerous" will smile as Copyright Wars warns that piracy has left the recording industry so dangerously concentrated that there are "only four major [competitors]..." (pp. 119-120). That could inspire regulators to attack--unless they think of larger markets with even fewer major competitors....

But here is my favorite example:

"In the case of copyright, there can never be a free market where price is set at what a willing buyer and willing seller would agree on because the very existence of the copyright monopoly permits copyright owners to restrict supply and to prohibit competition." (p. 128)

Were Mr. Patry's economically illiterate claim valid, then the same rhetorical dagger could be flung at every producer of any differentiated technology, microprocessors, iPods, Android, FIOS, YouTube, smartphones, Kindle, etc. Mr. Patry's attack on copyrights thus unwittingly became--not just an attack on almost all Silicon Valley and consumer electronics companies--but a frontal assault upon the imperfect, differentiated competition that Joseph Schumpeter correctly argued is the essence of real completion in actual market economies. Mr. Patry feigns affection for "Schumpeterian competition," but understands it so poorly that he denies that there can be a "free market" for any differentiated--and thus innovative--product, service or work.

There may be an account of the frailty of competition that would do a better job of alerting every would-be regulator on Earth to the big "KICK ME" signs that its author has just pinned upon the backsides of almost all of the most successful American employers. Forgive me if I don't try too hard to imagine what it might be.

And stay tuned for more dispatches from the self-destruction of Copyright Wars....

PS: By going here, you can also see Mr. Patry argue that if 8,000 artists petition for the redress of their grievances about copyrights on the Internet, then President Obama should throw their petitions "in the trash where they belong." Mr. Patry then roars into a disjointed sexual tirade--something about permitting "evil forces" to "have their way" with "copyright sweethearts" and "vestal virgins" like 68-year-old Helen Reddy, who helped to inspire millions of women to be more than just "sweethearts" in her song I Am Woman.

Predictably, the letters that prompted this tirade did not refer to rape, violation, vestal virgins, or sex; nor did they disparage female artists as mere "copyright sweethearts." To the contrary: such acts of "reasoned analysis" (p. xv), reflects only the erudite eloquence of the self-anointed "most prolific scholar of copyright in history."

posted by Thomas Sydnor @ 12:27 PM | China , Copyright , Cyber-Security , E-commerce , Economics , IP , Innovation , Internet , Regulation