Tuesday, March 2, 2010 - The Progress & Freedom Foundation Blog

Public Knowledge's "Copyright Reform Act of 2010": More Banal Cheerleading-for-Piracy.

For several years now, the interest group Public Knowledge has been announcing that it was working with Professor Pamela Samuelson of the Samuelson Law, Technology and Public Policy Clinic at the University of California at Berkeley's School of Law (the "Samuelson Clinic") to develop a comprehensive set of proposals for "balanced" legislative reform of our current copyright law, the Copyright Act of 1976.

Repeatedly, Public Knowledge President Gigi Sohn has stressed that this copyright-reform effort would be "balanced," serious and thoughtful--not some die-copyrights-die exercise in Free-Culture-Movement nuttiness. Gigi Sohn also stressed that her academic collaborator, Professor Pamela Samuelson, was also taking copyright reform seriously and was no longer, (as Gigi once put it), "a culture warrior like Professor [Lawrence] Lessig."

These oft-repeated pledges of seriousness and "balance," (and denials of "Lessigness") were needed because Public Knowledge brings much baggage and little credibility to the table of "balanced copyright reform." It has long been among the Free Culture Movement's most blindly strident defenders of the most deliberate and dangerous forms of Internet piracy. In the past, Public Knowledge has promoted blatant piracy--not "balance."

For example, in MGM Studios, Inc. v. Grokster, Ltd., academics like Professor Samuelson and groups like Public Knowledge all rushed blindly to the defense of blatant commercial piracy. But few defended corporate piracy more fiercely or obliviously than Public Knowledge, which joined the most pro-piracy amicus brief filed in Grokster. Unlike almost all other pro-Grokster amici, Public Knowledge actually argued, (pp.12-15) that if the Grokster and Morpheus file-sharing programs had some lawful uses, then their distributors should never be civilly liable just because they intentionally encouraged or duped children, teenagers, and students into using their programs to steal music so that they could profit from piracy by having "no product costs to acquire music" and "the ability to get all the music." And this position was just as broad and extreme as it sounds: the Grokster Defendants, citing their fear of "criminal investigation," (p.3, n.1), had refused to let amici like Public Knowledge review the record to learn what kind of potentially criminal conduct they were defending.

But any argument that would turn American children into meat-shields and dupes for corporate piracy is so extreme and "unbalanced" that no rational jurist could accept it--the law almost always holds people responsible for the intended consequences of their own actions. Consequently, at oral argument, (p.42), the Grokster Defendants themselves rejected the radicalism of Public Knowledge and conceded that, yes, they could be held civilly liable under existing law if they had intentionally encouraged or duped consumers into infringing copyrights. All nine Justices unanimously agreed. Grokster thus exposed Public Knowledge for what it was in 2005: an unbalanced, willfully oblivious cheerleader-for-piracy too extreme for even the commercial pirates that it had blindly defended.

And that is one reason why "Public Knowledge brings much baggage and little credibility to the table of 'balanced copyright reform.'"

Nevertheless, I have made it a point to keep an open mind about oft-announced Public-Knowledge/Samuelson copyright-reform project. Though we rarely agree on questions of policy, I do like many of the folks at Public Knowledge, and I have been suggesting to them since 2003 that their credibility depends upon a genuine "move towards the middle" of Internet-copyright issues. Consequently, I awaited the results of the Public-Knowledge/Samuelson copyright-reform project to see whether they would, finally, signal the long-needed shift towards moderation.

But the initial roll-out of this comprehensive copyright-reform project has been deeply depressing. Public Knowledge has just released the first "installment" of what it calls "The Copyright Reform Act of 2010" (the "CRA"). The released materials include some website explanations, proposed statutory text, and a longer report explaining the bases for the proposed reforms. Jennifer M. Urban, Report 1, Updating Fair Use for Innovators and Creators in the Digital Age (Samuelson Clinic, Feb. 13, 2010) ("Report 1").

As the name of Report 1 suggests, this first installment of "reforms" focuses on the affirmative defense of "fair use," which can provide a complete defense to a claim of copyright infringement. The CRA reforms would both expand the scope of the fair-use defense in Section 107 and preclude the award of either statutory damages or attorneys fees against most "unfair" uses. Public Knowledge and the Samuelson Clinic swear that these reforms are "limited," "modest" and "targeted."

But these fair-use-related "reforms" appear to be devoid of either serious thought or even a façade of "balance." Nor are they "modest":

Consequently, these "modest reforms" are not, and they include far too much of the sort of mindless cheerleading-for-P2P-piracy that one would expect from either the Grokster-era Public Knowledge or the most radical, copyright-hating, screwball academic in the Free Culture Movement--one even worse than "a culture warrior like Professor [Lawrence] Lessig."

In this post, I will examine the proposed CRA "reforms" related to "personal and non-commercial" fair use and statutory damages. Both individually and collectively, these reforms would privilege and encourage precisely the sort of file-sharing piracy that Public Knowledge and Professor Samuelson blindly defended far past the point of reason in Grokster.

Section 1(a) on "noncommercial and personal use": Let's don our Free-Jammie thongs, "Support Piracy", abrogate Tenenbaum and Grokster, and presume that global file-sharing piracy is "fair use"!
Public Knowledge and the Samuelson Clinic imply that the Copyright Act of 1976 makes parents afraid to "read books to our children before bed." Report 1 at 22. Nevertheless, like all other sane parents, I do so almost every night without the slightest fear of the author of Goodnight Moon. Nor am I more concerned when I "'time shift' television shows via TiVo, create mix CDs for the car and iPod playlists for the gym, [or] back up [my] computer hard drives." Id.

Nevertheless, Public Knowledge asserts that such acts will leave consumers like me awash in existential terror unless Section 107 of the Copyright Act is amended so that all "personal and noncommercial" uses of expressive works will be presumed to be "fair" uses until copyright owners prove otherwise.

But the absurdity of this proposal is most evident in the bizarre overbreadth of the class of uses that Public Knowledge and the Samuelson Clinic would classify as "personal and noncommercial." In Report 1, (p.25-26), they argue that such uses include even the most impersonal, profit-driven, global and deliberate forms of copyright piracy--like file-sharing via KaZaA, Morpheus, Grokster, or the Isohunt tracker site. The CRA would thus presume that KaZaA users like Jammie Thomas-Rasset and Joel Tenenbaum were merely making "fair uses" of the many hundreds or thousands of songs that they were "sharing"--unless and until copyright owners bear the burden of proving that a given Thomas-Rasset or Tenenbaum actually did cause them some harm, (while file-sharing-program distributors busily rewrite their programs to thwart every means of making such a showing).

If this argument sounds both absurd and familiar--it should. Unbeknownst to readers of Report 1, it was just made in Sony BMG Music Ent. v. Tenenbaum by the God-the-Father of the Free-Culture Movement, the co-founder of Harvard Law School's Berkman Center, and a 2009 consensus nominee for any legal analog to the Darwin Awards: notoriously radical academe, Professor Charles Nesson. Some attempts to politely characterize Nesson's deranged arguments and conduct in Tenenbaum can be found here, here, here, and here.

For example, in Tenenbaum, Nesson argued that the Supreme Court's decision in Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 450-51 (1984) created a rebuttable "presumption" that a consumer induced to serve as a paid-in-kind distributor for a global, for-profit copyright-piracy syndicate is merely engaged in a personal, noncommercial and presumptively "fair" use of copyrighted works. But Nesson's KaZaA-is-presumptive-fair-use argument was derided as "perfunctory" even by Judge Nancy Gertner, the 1960s-Counterculture radical who had personally and repeatedly recruited her Counterculture pal Nesson into the Tenenbaum litigation:

[T]he Supreme Court's holding in Campbell dispelled any notion that the Court [in Sony] intended to formally shift this burden.... [and] reiterated the commonsense point that "when a commercial use amounts to mere duplication of the entirety of an original, it clearly serves as market replacement for it, making it likely that cognizable market harm to the original will occur." If anything, this observation cuts sharply against Tenenbaum's effort to show fair use.
Memorandum and Order at 14-15, Sony BMG Music Ent. v. Tenenbaum, Case No. 0711446-NG (D. Mass. Dec. 7, 2009) (quoting Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 591 (1994)). Indeed, Nesson's presumptive-fair-use argument was so loony that it was denounced and rejected even by "a cultural warrior" like Professor Lawrence Lessig: "I have given literally hundreds of speeches where I expressly say p2p filesharing is wrong, and kids shouldn't do it."

But Public Knowledge and the Samuelson Clinic conclude that Lessig and Gertner were wrong and Nesson was right. The CRA would thus enact both Nesson's "reasoning" and his conclusion: paid-in-kind distributors for global, commercial copyright-piracy syndicates are engaged in personal, noncommercial and presumptively "fair" uses of whatever works they distribute. Report 1, at 25-26 (discussing file-sharing and citing and quoting Pamela Samuelson, Unbundling Fair Uses, 77 Fordham L. Rev. 2537, 2592 (2009) (arguing that Sony means that "private, noncommercial copies should be presumed fair, and that presumption should only be overcome if copyright owners bring forward proof that the defendants' use has, in fact, harmed the market for their work...")).

The CRA thus presumes that what went on at The Pirate Bay was not piracy. Consequently, Public Knowledge President Gigi Sohn correctly assured us that the CRA would not be the sort of "reform" that would be proposed by "a culture warrior like Professor [Lawrence] Lessig." Instead, Report 1 proposes to enact the "reforms" proposed by a far more radical culture warrior--Professor Charles Nesson, the geriatric Counterculture radical whose grinning skull graces what could be the unofficial seal and motto of the Berkman Center and the Free Culture Movement:


In Section 1(a) of the CRA, Public Knowledge and the Samuelson Clinic would thus enact a version of "fair use" that would further Nesson's quest to "destroy" market economies generally by first destroying the many world-leading, growth-producing, job-creating American content industries that make most of their sales abroad while employing millions of Americans at home. Legislators who want to associate themselves with such mindless destruction of American jobs and world-leading American export industries should thus feel free to sponsor The Copyright Reform Act of 2010, a.k.a., The Destroy Capitalism and Support Piracy Act of 2010.

And to be clear, when they are caught trying to peddle the Free-Culture Nessiah's extremism as "reform," I expect Public Knowledge and the Samuelson Clinic to either lapse into sullen silence or to complain that I have exaggerated their perfidy because Report 1 notes that copyright owners might have some "legitimate concerns" that global piracy syndicates like Grokster and Morpheus "may affect" markets for their works, and that Professor Samuelson herself once speculated if we presume file-sharing piracy to be "fair use," copyright owners can still probably bear the burden of proving that a particular defendant's mass-distribution of their works was harmful. See Report 1 at 26. For three reasons, those non-binding speculative caveats are scarcely relevant.

First, presuming file-sharing piracy to be "fair use," does far more than just shift a burden of proof. Such a presumption would also abrogate copyright-owner victories in cases like in Napster, Aimster, Grokster, and Fung. All of these cases would appear to be wrongly decided--as would any future attempt to follow them--if KaZaA/Grokster/Fung-like commercial copyright piracy was presumptively "fair" because its architects intended to profit by duping or inducing their consumer/distributors to settle for payment-in-kind, rather than payment-in-cash. After all, we could hardly fault the distributors of Grokster if they merely sought to profit by inducing children to engage in presumptively fair acts, could we? See, e.g., Memorandum and Order at 15-16, Sony BMG Music Ent. v. Tenenbaum, Case No. 0711446-NG (D. Mass. Dec. 7, 2009) (finding that Nesson's arguments "would have the practical effect of overruling Grokster").

Second, all else aside, copyrights themselves make no sense if we can rationally "presume" that when Jammie Thomas deliberately empowered global commercial piracy by willfully distributing 1,700 songs to millions of strangers, she was merely making untold thousands of "fair uses." As I discussed in great detail here, (p.27), for over a century, the right to offer a work broadly, to the public generally, has been held by the Supreme Court and scholars to be the essence of the exclusive rights that copyrights protect. Consequently, if global distribution of unauthorized copies is presumptively "fair," then the CRA requires copyright owners to rebut the presumption that copyrights were always a bad idea. That does not sound very "balanced."

Third, and finally, those proposing, today, a rebuttable presumption that all "personal and noncommercial" uses are "fair uses" must either possess or feign vast ignorance of the evolution of both copyright law and copying technologies. Report 1 could suggest that the idea that personal and noncommercial uses of works are presumptively harmless to copyright owners was first conceived by Public Knowledge, the Samuelson Clinic, and Professors Samuelson and Nesson. That is wrong.

Granted, American copyright law has never treated noncommercial publication (i.e., the widespread offering or delivery of copies to the public), as presumptively harmless to copyright owners. But in other, narrower contexts, similar presumptions were once part of American copyright law. Nevertheless, they were repeatedly eliminated because technological change kept making them increasingly irrational and unwarranted.

For example, in his 1965 Supplemental Register's Report on the General Revision of the U.S. Copyright Law, the Register of Copyrights urged Congress to stop limiting the public-performance right to cover only performances "for profit." The Register warned that a "real danger to be guarded against is that of confining the scope of an author's rights on the basis of the present technology.... [T]he transmission of works by nonprofit... linked computers, and other new media... may soon be the most important means of disseminating [works]. Even when... not operated for profit, they may be expected to displace the demand for author's works by other users...." As a result, the "for profit" limitation on the performance right was--wisely--eliminated.

Similarly, under both the 1909 and 1976 Acts, only "commercial" uses of works were presumed to be capable of causing the sort of harm that should trigger criminal liability for copyright infringement. One of the first of the non-commercial "warez-site" cases, United States v. LaMacchia, 871 F. Supp. 535, 545 (D. Mass. 1994), concluded that Congress thus had to decide whether "home computer users" could be criminally liable for copyright infringement. In the No Electronic Theft Act of 1997, Congress answered in the affirmative and eliminated the commercial-only presumption.

Indeed, as these examples suggest, it is a great credit to Internet technologies that they have made it wholly irrational to presume that all "personal and noncommercial" uses of works do not harm copyright owners. For the first time, perfectly ordinary people can, without commercial purpose or resources, exercise the powers of global speech and publication. That wonderful development has an obvious corollary: Not since copyright law was born along with the printing press, has it been more irrational to start "presuming" the fairness of all "personal and noncommercial" uses--even those that can now deliver billions of copies to billions of people. Joel Tenenbaum did not act "fairly" as a paid-in-kind distributor empowering commercial piracy. Nor would he have done so had he "merely" empowered mass copying by a billion strangers by posting his entire music collection on a noncommercial, personal webpage.

Section 2(a)&(b): Let's create a compulsory license for file-sharing and other "unfair uses" (at least until we can reduce all copyrights to mere non-compulsory licenses by abolishing statutory damages)!
After bloating the affirmative defense of fair use into Nesson's enabling mechanism for global file-sharing piracy, Public Knowledge and the Samuelson Clinic attacked statutory damages. Their goal was simple: abolition. Like Professor Samuelson, they doubt that statutory damages and fee-shifting provisions "serve a desirable purpose in copyright law...." Report 1 at 30.

But until deterrent remedies for infringement are wholly abolished, the CRA proposes that whenever a corporation's potentially "fair" use is actually found to be "unfair," then that infringing corporation should have--instead of a complete defense--a compulsory license that makes copyright holders suffer financial losses because they challenged its "unfair use" of their works. More specifically, the CRA proposes that if an infringing "unfair user" could have thought that their infringing use might have been a fair use, and if they get caught, then copyright owners should recover only compensation for harm done (if they can prove it)--not deterrent statutory damages or the costs and expenses incurred in enforcing their federal civil rights.

And by the way, could one always "reasonably" believe that one's use was a fair use if that use was so special and so privileged that it had been declared a "presumptive" fair use, as file-sharing would be under the CRA? I would assume that the answer to that question is "yes."

In other words, absent piracy more extreme than that orchestrated by KaZaA, Grokster, or Isohunt, (all presumptively "fair" under the CRA), Public Knowledge and the Samuelson Clinic propose to turn copyright enforcement against "unfair," infringing uses into a masochistic exercise in self-abuse. Whenever expanded "fair use" could exist, infringement will become not merely rational, but wise. If potentially "unfair users" respect copyrights, then they would have to pay a license fee equal to the fair market value of their use of particular works. But if they just take without asking, then, even if they get caught, they can rationally expect to pay only the fair market value of their use of particular minus the litigation costs that they could inflict upon any copyright owners who dare to enforce their exclusive rights.

Sheer ignorance is required to believe that this "reform" is necessary or wise. For example, in Report 1, Free-Cultist Jennifer Urban tried to justify this attack on statutory damages by making the same remedial error as her mentor, Professor Samuelson:

"...Congress has amended the statutory damages provisions since developing the current structural provision as part of the '76 Act... they have raised the ceiling of maximum awards."
Report 1 at 29; see id. at 29, n.95. Again, another economically illiterate Samuelson-Clinic "scholar" has thus compared dollar values across decades without adjusting for inflation. That is an inexcusable, remedial error precisely because such unadjusted comparisons inevitably mislead.

For example, if you adjust dollar-values for inflation so they can be rationally compared, then you discover that Public Knowledge and the Samuelson Clinic have gotten reality backwards: statutory-damage ranges have not been "raised" since 1976, they have been reduced: they have not even paced inflation--in other words, they are less threatening to infringers and less beneficial to owners than they were in 1976.

Nor is that the whole story: here is an easily-verified chart showing every change in statutory-damage ranges made during the 20th and 21st centuries. This chart shows the minimum/maximum statutory-damage award ranges for innocent/ ordinary / willful infringers in comparable, CPI-adjusted 2008 dollars, and (to further assist rational comparisons) the 2008 award ranges expressed in the same 2008 dollars:


But not even this chart fully captures the severity of the statutory-damage awards available from 1909 through 1977: during that time, copyright owners were entitled receive to one statutory-damage award for each infringement of their rights. Since 1978, copyright owners have been entitled only to far fewer statutory-damage awards--only one for each work infringed--no matter how many infringing copies of that work were made. This fact, when combined with this chart, thus reveals the cold hard truth: today, statutory-damage-award ranges are significantly lower today than they were in 1976, and generally far less severe than they were from 1909 to 1977.

That truth exposes the vacuous dishonesty of the CRA: Statutory damages have been part of U.S. copyright law since 1790--and as I discussed, here, statutory damages actually tended to be less overtly punitive after the 1909 Act than they were between 1790 and 1908. Nevertheless, statutory-damage ranges today tend to be lower and far less punitive than they have been throughout the last 101 years.

And yet, since 1909, we have seen--right here in statutory-damage-awarding America--growth in the production of both expressive works and technological innovation so explosive that America emerged from obscurity to become the world's leading producer and net exporter of not only a vast array of expressive works, but also a vast array of innovative technologies. Not only are we home to the world's most successful creators and net exporters of expressive works like books, movies, periodicals, television, music, video games, and music, we also can take pride in the some of the world's leading technologists--Microsoft, Google, Apple, Yahoo, Intel, AMD, Micron, Amazon, Oracle, eBay and many, many others.

No other country in the world has better balanced the production of expression and technological innovation. No other country has come close. And the combination of both a flexible, but rational, fair- use defense and highly deterrent statutory damages for infringement have always been part of the winning equation that made America a world leader in the production of both expression and technology.

Indeed, this combination of a flexible exemption and deterrent remedies is what makes American copyright law unique. And perhaps it helps explain why America's copyright system has been so uniquely successful at delivering on copyright-law's promise of a system of cultural production driven by market forces and ordinary people--not bureaucrats, Tenure Committees, or philanthropic billionaires.

This is the obvious reality that Public Knowledge, the Samuelson Clinic and the CRA willfully ignore. As a result, little but histrionics, contempt for creators, ignorance of history, and economic illiteracy drive their claim that deterrent statutory damages will just throttle the American "innovation" and "creativity" that both grew explosively during the first 220 years in which American copyright laws provided statutory damages even more deterrent (or even overtly punitive) than those available today.

And that is why the proponents of the CRA need to grow up--at least enough to let more the more obvious (and wonderful), of life's realities intrude upon the woe-is-us, doom-mongering "chilling effects" of their Free-Cultist theology.

In short, critical elements of the first installment of the Copyright Reform Act are just depressing. They reflect neither balance nor thought. Indeed, they seem to reflect just the sort of extreme, brain-dead cheerleading-for-global-piracy that made groups like Public Knowledge, Free Press, and the Consumer Federation of America, into the duped, too-extreme-for-Morpheus laughingstocks of the Grokster litigation.

Nor have I exhausted the defects in the first installment of the Copyright Reform Act. So join me again, soon, for more analysis of the CRA's first installment.

Soon, we will watch Public Knowledge and the Samuelson Clinic embark on a long, droning, and seemingly pointless discussion of why we must protect already protected "nonconsumptive" research and scholarship by presuming all "nonconsumptive" uses to be "fair uses"--a presumption that would also happen to have the undisclosed effect of declaring the controversial Google Book Search project a presumptively fair use of the world's books.

Soon, we will also watch Public Knowledge and the Samuelson Clinic try to rationalize a presumption about "incidental" fair use utterly nonresponsive to either of two "problems" to be remediated. Report 1 concedes that one of these problems was actually solved years ago. As for the other, we will review Jennifer Urban's Report 1 to answer to the following question:

Can the proponents of the CRA collectively conceive of the possibility that the title of the 1984 film, Purple Rain, could suggest that its use of the Prince song "Purple Rain" might be more than just "incidental"?
Those who do not wish to await my answer can read page 15 of Report 1 and then ask the question "overlooked" by Public Knowledge and the Samuelson Clinic: What title did YouTube user Stephanie Lenz give to the home video of her dancing 14-month-old son in which she made her allegedly "incidental use" of the Prince song "Let's Go Crazy"?
PS and Spoiler Alert: Extra hint for Public Knowledge and the Samuelson Clinic: Ms. Lenz no-so-"incidentally" entitled her video, "Let's Go Crazy" #1....

posted by Thomas Sydnor @ 1:01 PM | Capitalism , Copyright , IP , Innovation , Internet