Friday, October 23, 2009 - The Progress & Freedom Foundation Blog

Copyright Wars, "Welfare for Authors" and Pedophiles: Part Two of a Reply

In my first blog post on William Patry's book Moral Panics and the Copyright Wars ("Copyright Wars") I focused on three of its fundamental defects: 1) its absurd claim that the world's most successful creators and exporters of expressive works are "inherently non-innovative"; 2) its refusal to acknowledge the existence of inconvenient realities like Grokster; and 3) its anti-market economics that transform its attempted attack on copyrights into an assault on the differentiated, Schumpeterian competition critical to all copyright and technology industries.

Mr. Patry's response, Why I made Tom Sydnor's enemies list, ("Enemies List"), was packed with rhetoric. In The "Moral Panic" of Copyright Wars: Part One of a Reply, I replied to Mr. Patry's rhetoric and outlined the four substantive questions that I expect to answer. I will now address the first of those questions:

Would a thoughtful, honest analyst of recent debates between content creators and distributors be unable to think of "a single significant innovation in either the creation or distribution of works of authorship that owes its origins to the copyright industries"?

My answer will stress two points. First, the innovation and art of American creators and creative industries cannot be denied in any rational debate about copyrights and the Internet. Second, Copyright Wars' attempt to deny the reality of pedophiles on file-sharing networks eviscerates its Lessig-remix smear of the late Jack Valenti and reveals the "moral panic"--the book's central rhetorical device--as an unrealistic, backfiring monstrosity.

American Creators and Creative Industries Are Inherently Innovative.

At its core, Copyright Wars seems to be a request for a regulatory exemption or waiver. Ordinarily, we usually avoid refereeing disputes between content creators as innovative as recording artists and content distributors as innovative as Apple or Amazon. Instead, we grant content creators exclusive rights in their content; we grant content distributors exclusive rights to their distribution devices and systems; and we grant potential content recipients exclusive rights in their money. We then let those parties decide whether, or on what terms, an exchange would leave them all better off. But Copyright Wars argues that the "copyright wars" are the rare case in which this exclusive-rights-for-all approach has failed because the equities of the disputes at issue weigh almost entirely in favor of the content distributors.

This exemption/waiver request forms the central thesis of Copyright Wars: The book argues, (correctly) that Schumpeterian competition, (competition by innovation), is the lifeblood of a modern market economy. It then argues that content distributors are inherently innovative and honest, (e.g., p. 177), but content creators are "inherently non-innovative," and thus experience "a great sense of insecurity" that drives them to concoct moral panics about "conjured up enemies" that demonize the real innovators (the distributors). Therefore, to promote innovation, Copyright Wars urges that the exclusive rights of content creators must be "taken away," (p. 199), or greatly curtailed unless their "business models are tailored to the Internet," (p. 189).

But the validity of this central thesis of Copyright Wars rests upon its oft-stated premise that content creators and industries are "inherently non-innovative and... rely on the innovation of others to succeed." If that premise is false--if both content creators and content distributors tend to be really innovative, then Copyright Wars has failed to show why we should restrain the creators.

And that premise is dumbfoundingly false. In my first post, I noted the sheer inanity of the following claim from Copyright Wars, (p.198):

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. Being forced to rely on others' innovation creates a great sense of insecurity that is reflected in efforts to control innovators and consumers.

Nor was this a one-time misstatement. Here is another example, (p. 21-22):

[T]he copyright industries fail to innovate but are saved by others who do. Those others are consumer electronics manufacturers and Silicon Valley.... It is the innovation of these others that creates the demand for copyright owners' works.... [T]he copyright industries proverbially resent the success of innovators and claim that the innovators' success is caused solely by the value provided by the copyright industries. The innovator is described metaphorically as a parasite, fattening itself off of copyright owners. Working themselves up into righteous indignation, copyright owners then insist that the innovator disgorge a healthy share of its profits to them, even though if the copyright industries were left to their own devices, they would have starved to death decades ago.

The preceding point is then repeated, almost verbatim on p. 156, which then concludes, "After such economic castration, innovations are no longer regarded as a threat but rather as one more dependable source of income feeding the beast." Consequently, in Copyright Wars, Mr. Patry--the self-described "most prolific scholar of copyright in history"--concluded that a case has been made "for regarding the entirely of copyright as a form of welfare for authors," (p. 174).

Similar, but less developed, claims riddle Copyright Wars (see pp. xx, 36, 39, 47, 121, 133, 172, 174, 175, 177, 178). Collectively, these claims seem unprecedented: I have read almost every "skeptical" book about copyrights published since Lessig's Code in 1999. But I recall no other author who declared the world's most successful creators and exporters of expressive works "inherently non-innovative."

I will thus focus on Mr. Patry's "inherently non-innovative"/no-significant-innovation claim because its length and placement ensure that it cannot be credibly defended with cries about vicious abstraction. Here are its critical assertions: "[Copyright industries]... 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."

This indictment of content creators begins with a fallacy called "poisoning the well"--it compares the relative "innovativeness" of content creators and content distributors in a way that conveniently deprives the creators of any credit for their most important achievements. Copyright Wars presumes that the only "significant" innovations are those that relate to the "creation" or the "distribution" of works--the works themselves do not count.

That is sophistry. Schumpeterian competition-by-innovation can occur in any market for goods, services, or expressive works, so long as entrepreneurial producers are making risky investments to make their products, services, or works different from--better than--those of other competing producers. Indeed, this is how producers of expressive works compete against each other. Nothing but raw fallacy powers a claim that only devices and switches can be innovative--not books, films, games, software, or music.

Such raw error suggests the risk inherent in the poisoning-the-well fallacy: Unless executed discretely, it backfires. For example, imagine what we would think of an author who made the following claim:

If we ignore computers, e-commerce, and electronic devices and focus on the production of animated films, then Apple Computer is not an innovative company.

Even if this hypothetical claim is true, the claim is still obviously misleading and inane. Here is less-hypothetical version of the same claim:

If we ignore films, television programming, and theme parks and focus on the production of smartphones, then Walt Disney Studios is not an innovative company.

Sadly, multiple-industry-spanning, more-extreme versions of the preceding claim are actually made, repeatedly, in Copyright Wars.

Worse yet, the author of Copyright Wars did not just pretend that significant innovation cannot be found in the content of books, films, music, video games, sculptures, paintings, and other works. As if alluding to the film Thelma and Louise, he chose to "keep going"--off a cliff. He thus claimed that no "significant innovation in... the creation of... works of authorship... owes its origins to the copyright industries."

That claim is truly ridiculous. For example, watch Tron, one of the first feature films that made extensive use of computer-generated images. Then watch a not-state-of-the-art-but-recent film that made extensive use of computer-generated images, like The Matrix or The Two Towers. Even viewers as unsophisticated as me can detect "significant innovation in... the creation of... works of authorship...."

Indeed, it makes no sense to imagine that entities that specialize in creating particular expressive works have achieved no "significant innovation in... the creation of" the works that they specialize in creating. The pace of technological innovation in the creation of works--particularly in photography, film, music and software--has been astounding. No scholar who can compare Pacman to modern computer games should be able to report that he "cannot think" of any significant innovations in the creation of works of authorship attributable to the entertainment-software industry.

Moreover, even Mr. Patry's one potentially plausible claim about copyright-industry non-innovation dissolves when analyzed. He claimed, "I cannot think of a single significant innovation in... the distribution of works of authorship that owes its origins to the copyright industries." This claim seems less obviously wrong: Specialization of labor is surely the most important positive externality in history, so content industries that focus their innovative and entrepreneurial energies on creating works could be less innovative when it comes to the distribution of those works.

But as Copyright Wars correctly notes, (p. 176), "Innovation is thus not the same as invention. The Brookings Institute has properly defined innovation as 'putting new ideas into commercial use.' Without a successful commercial application, an invention cannot realize its potential." So defined, the music and movie industries, for example, are due credit for "innovations" like the CD and the DVD: even if they did not invent the recording mechanism or format, recorded music and films were the commercial applications that enabled these optical disks not only to realize their potential, but to expand it to become widely-used storage media for computer files.

In conclusion, Copyright Wars claims that we should narrow or eliminate the exclusive rights of content creators because these "inherently non-innovative" dishonest parasites are obstructing inherently innovative and honest content distributors. But that claim merely conjoins the poisoning-the-well fallacy with repeated denials of reality. Consequently, Copyright Wars' argument for curtailing the rights of content creators fails.

Certain basic realities must be acknowledged before reasoned debate about copyrights and the Internet can begin. Copyright Wars denies one of them: the remarkable creativity and innovation that have made American creative artists and American creative industries world-leading producers of a vast array of expressive works--from books and print journalism to movies, music, and entertainment and application software.

Ensuring that these remarkable achievements continue is what makes the often miserable task of defending copyrights on the Internet worthwhile. But denying them is inexcusable: never, even during my own worst moments, have I thought it necessary, fair--or rational--to deny either of two other equally basic realities: (1) the remarkable creativity and innovation of American producers of consumer electronics (like Intel, Apple, Micron, and Amazon); or (2) the remarkable creativity and innovation of American providers of online services, (like Verizon, Comcast, Google, Microsoft and Yahoo).

All of these persons and entities--from newly signed former garage-bands in Maine or Florida to the largest West-Coast technology corporations--are entrepreneurial innovators: They are all making risky long-term investments of money and sweat, (and the dwindling asset of life itself), in the hope that they may be rewarded IF their risky innovations DO enrich the lives of many others.

Consequently, Copyright Wars' attempted attacks on copyrights often gore Silicon Valley more than Hollywood. Suppose we do regard the exclusive rights provided by copyrights as "a form of welfare for artists." That would then force us to regard patents, trademarks, mask works, and trade secrets--which provide even more powerful exclusive rights--as "a form of welfare for technologists." But that is ridiculous. The patents and trademarks that differentiate the iPod and the iPhone do not make Steve Jobs and Apple corporate welfare queens. Similarly, Google is creating application software for the Internet and its open-source Android smartphone platform. The copyrights that protect these interesting, risky innovations do not make their owner some sort of TARP-fund recipient.

Worse yet, I have focused on the reality-denying treatment that Copyright Wars accords to the critical question of content-industry innovation because it relates directly to the book's central thesis. But the fundamental problem revealed--denial of basic realities--recurs repeatedly in Copyright Wars, and at least one of its manifestations implicates both fair advocacy and public safety.

Reasonable Authors Should Not Deny the Existence of File-Sharing Pedophiles Just to Smear the Late Jack Valenti.

Sadly, there are people in this world worse than even megalomaniacal "copyright dwarves"--like the pedophiles who regularly end or shatter young lives. Consequently, the author who chooses to discuss child pornography or pedophiles must do so responsibly, carefully, and seriously. Copyright Wars did not--child pornography was lightly invoked as one more way to smear the late Jack Valenti.

Among many other overlaps, Copyright Wars and Professor Lessig's book Free Culture (2004) both personify their demonic foes in the then-vilified person of the late Democrat, Mr. Jack Valenti, who served as the President of the Motion Picture Industry Association, ("MPAA"), for 38 years until August of 2004. Free Culture branded him "the nation's foremost extremist when it comes to the nature and scope of 'creative property'" and warned that he "speaks for an industry that cares squat for our tradition and the values it represents," (p. 118; see also pp.10-17, 76, 116-20, 140 205, 238). Copyright Wars branded him the "Master of Moral Panics," and warned, "In the United States, the most colorful expositor of moral panics and folk devils was Jack Valenti" (p. 139; see also pp. xxi-xxii, 37, 52, 109-11, 130, 137, 139-158, 217 n.52).

To summarize two long, mostly redundant stories: during his nearly 40 years guiding a creative industry through many high-profile public debates, even Mr. Valenti sometimes made the sorts of rhetorical overreaches that often occur during the rough-and-tumble of policy-making in a federal democratic republic. Two examples would include analogizing VCRs to the Boston Strangler and analogizing Internet copyright piracy to "our own terrorist war."

Nevertheless, Free Culture's smear of a few overreaches was effective enough to inspire young "copyfighters" to celebrate the by-then-retired Mr. Valenti's death with charming posts like Ding Dong the Lich Is Dead. Copyright Wars now repeats and expands upon Lessig's Valenti-bashing in three ways.

First, Copyright Wars "conjured up"--from some real cultural overreaches, some socio-babble about "folk devils," and a flood of psycho-babble about how easily metaphors overwhelm (your) frail cognition--its titular rhetorical device of "moral panics." This device then transforms, (pp. 136, 139), scattered overreaches into a calculated, forty-year plot to deceive, destroy, and corrupt: "As metaphors, Mr. Valenti's moral panics provided the means by which busy and sympathetic members of Congress could appear to be engaged in sober reasoning" (p.139). Metaphor-drunk, panicked politicians would then vent their ghoulish hatred of wealthy technology companies: "[P]olicy makers have treated the consumer electronics and Internet industries much like a vampire regards garlic" (p.172).

Second, Copyright Wars tried to recharacterize Mr. Valenti's run-of-the-mill resort to the sort of economic nationalism invoked in almost every policy debate as another mortal sin--it accused Mr. Valenti of "Japan-bashing," "vulgar xenophobia," and of selecting "one of the crudest tactics in the book of moral panics: jingoism, in the form of Japan-bashing," (pp. 146, 148).

Third, Copyright Wars then resorted to a far cruder tactic from the book of moral panics: Copyright Wars hissed that Mr. Valenti was such a malign deceiver that he would even "conjure up" imaginary file-sharing pedophiles in order to smear innocent innovators--like the distributors of the Grokster and Morpheus file-sharing programs:

Later, in reaction to the advent of peer-to-peer networks, Mr. Valenti sought to tie such networks to the dissemination of child pornography, asserting that peer-to-peer file sharing made available "the most throat-choking child porn" "on a scale so squalid it will shake the very core of your being" (p. 137).

But here is the reality that Copyright Wars denied: This child pornography was no "conjured up" "moral panic." Jack Valenti was right about pedophiles using file-sharing networks. Indeed, their reality would become worse than he could have imagined in 2003. Mr. Valenti made two claims: (1) file-sharing networks were being used to disseminate child pornography of "throat-choking" depravity, and (2) they were being so used on a vast scale.

As for the throat-choking depravity of the child pornography on file-sharing networks, Mr. Valenti was right. For example, during a 2003 Senate hearing, (p. 213), District Attorney Thomas Spota of Suffolk County, New York, testified about his prosecution of eleven KaZaA users "sharing" child pornography:

The images of child pornography available on peer-to-peer networks are some of the worst seen by law-enforcement to date. Included in the images seized by police in the cases being prosecuted by my office are still photographs of very young children engaged in sexual acts with other children and adults and video clips lasting several minutes of children being subjected to unspeakable acts of sexual violence.... [I]n one case, a [toddler] can be heard screaming, "No, daddy, stop, no daddy" in a futile effort to prevent a rape...."

Similarly, in United States v. Park, 2008 U.S. Dist. LEXIS 19688 (D. Neb. March 13, 2008), the Court sentenced a defendant who used LimeWire to share over 600 images and videos of child pornography that "portrayed sadistic acts" involving children--including a three-hour video that "depicted 'a female minor bound with a rope and being choked with a belt by what appeared to be an adult male.'"

Tragically, Mr. Valenti's point about "throat-choking depravity" was all-too literally true. Nor are these examples isolated or rare. See, e.g., United States v. O'Rourke, 2006 U.S. Dist. LEXIS 1044 (D. Ariz. Jan. 12, 2006) (a LimeWire user was held to be a "danger to the community" because he allegedly shared many "extraordinarily abusive" images of "horrific child abuse" inflicted on "a very young girl, with hands bound and mouth gagged"). Moreover, basic legal research would have disclosed many such examples to anyone adopting "an evidence-based approach to law," as Patry claims to do.

As for volume, Mr. Valenti was right again. In 2003, the Government Accounting Office studied child pornography on file-sharing networks and concluded--in its study Child Pornography Is Readily Accessible Over Peer-to-Peer Networks, (p. 27)--"we found that child pornography, as well as other types of pornography, are widely available and accessible through peer-to-peer networks." Before the Senate, District Attorney Thomas Spota confirmed that conclusion in his testimony: "If you search for songs by artists as popular as Brittany Spears, the Beatles, or Pokemon, if you are looking for any song or any movie with the word ''young'' as part of its title, your search results will most certainly include child pornography" (p. 213).

Nor has the problem abated. On April 10, 2008, in Officials Find Child Pornography on 20,000 Va. Computers, The Washington Post discussed a report prepared for Virginia by Special Agent Flint Waters, a member of the federal Internet Crimes Against Children Task Force:

The recorded numbers are just a small percentage of the traffic generated by child pornography distributors, who use peer-to-peer file-sharing networks such as Lime Wire to peddle often violent and hard-core movies and images, Waters said....


"Right now, there is no way that law enforcement can keep up with all this activity," Waters said....

But no matter how bad the child-pornography problem on file-sharing networks was in 2003, it would soon metastasize in ways that were then unimaginable--but now all-too obvious to any 2009 author who "insisted on an evidence-based approach to law."

In late 2003, public-interest groups, file-sharing program distributors, and other Internet content distributors got the tragedy that they had demanded: Copyright owners began enforcing their rights against individual Internet users. These distributors theorized that suing consumers would deter illegal uses of piracy-adapted file-sharing programs while preserving their theoretical "capacity for substantial noninfringing use." But this was mere theory--in reality, these systems were most useful for distributing only those works that were widely shared because they had already been made popular by other means.

And when users of these programs were actually sued, most tried to stop sharing files--except for a few who seemed blissfully unaware that they were sharing files at all. As predicted by computer scientists, distributors of many popular file-sharing programs then deployed "technological features to induce users to share"--tricks long known to dupe users into sharing thousands of personal files inadvertently, including financial data, identifying data, entire collections of digital photos, and--of course--their entire music collections. (Illustrations of some of these features can be found here; analysis of more recent iterations is here.)

Among many other frighteningly real consequences, (see, e.g., here and here), the resulting wave of inadvertent file-sharing gave child predators get-out-of-jail-soon cards and new ways to target victims. If prosecutors find a pedophile who seems particularly dangerous, they can secure an increased sentence by showing that he knowingly distributed child pornography. Inadvertent sharing can preclude that showing.

For example, the defendant in United States v. Park was convicted for "sharing" over 600 images and videos including three-hour video that "depicted 'a female minor bound with a rope and being choked with a belt by what appeared to be an adult male.'" But he secured a reduced sentence because he "lacked an understanding of the software and thus ... the knowledge to distribute the illegal wares that he possessed." As a result, developers of file-sharing programs are not just writing code, they are testifying in child-pornography prosecutions:

THE COURT: ... [D]oes your software make it possible make it possible for people to accidentally share personal files or sensitive data?

* * *


Worse yet, the same "features" that tended to trick children into sharing their family's entire music collection--and its tax returns with identity thieves--also tend to cause sharing of scanned documents and family photo collections that disclose frightening amounts of identifying data about children. Readers of Copyright Wars do not know this. Testimony from Tiversa, Inc., a data-security company that actually studies file-sharing networks and assists law-enforcement agencies, reveals that pedophiles do:

[C]hild... predators are actively searching P2P networks for personal photos of children and others that may be stored on private computers.... [T]hese individuals will [then]... download all additional information being shared from that computer.... This accompanying information can be used by the predator to locate... the potential victim.

Meanwhile, Copyright Wars shrieks that pedophiles on file-sharing networks are just some "moral panic" involving imaginary enemies "conjured up" by that "Master of Moral Panics" Jack Valenti, and that "[t]he problems in the Copyright Wars are not caused by technologies... acting badly..." (p. 198).

Worst of all, to take Copyright Wars seriously, we would have to conclude that its author did all this deliberately--that a "scholar of copyright" intended to conceal data-mining pedophiles from parents in order to secure an unjust political advantage for content distributors by smearing the late Jack Valenti:

"Moral panics in copyright involve the construction of a political strategy for obtaining political benefits. They are not hyperbole: they are the core of a careful strategic plan to alter the copyright landscape" (p. 139).

"Moral panics are not irrational acts by those who construct them, but rather are the result of deliberate political opportunism" (p. 136).

Frankly, I reject that conclusion. This episode surely reflects serious error by the author of Copyright Wars. But intent?--I don't believe that, and my own incredulity ought to refute the hateful and backfiring rhetorical device of "moral panics." Consequently, I find Copyright Wars' assault on the character of its author just as reality-defying as its assault on the character of the late Jack Valenti--or its claim that American creators and creative industries are "inherently non-innovative."

In any case, my next post on Copyright Wars will shift focus toward the question of whether a useful account of overreaching arguments and overblown rhetoric in the debates about copyrights, consumer electronics and the Internet can be provided by a book that fails to acknowledge the existence of the Grokster case or Professor Lawrence Lessig, whose many scholarly analyses include the following account of the motives of the MPAA:

The most powerful and sexy and well loved of lobbies really has as its aim not the protection of "property...." Their aim is not simply to protect what is theirs. Their aim is to assure that all there is is what is theirs.

Free Culture, p. 255 (emphasis and histrionics in original).

posted by Thomas Sydnor @ 10:33 AM | Books & Book Reviews , Copyright , Cyber-Security , E-commerce , Economics , Googlephobia , IP , Innovation , Internet , Mass Media , Software