INFORMATION & TECHNOLOGY LAW
Paying the Piper
By Jon M. Garon*
As published in Interface Tech News, March, 2003
Last month's decision by the Supreme Court in Eldred v. Ashcroft that the twenty year copyright term extension was constitutional struck a sour note with the public. Five years after Congress granted this copyright largess to new and old authors alike, the public is beginning to wonder whether the incentive we pay for the creation of new books, songs, plays, software, and art has become too high.
Unfortunately, changes in copyright policy and interpretations of contract law suggest that a new and more dangerous intellectual property policy has arisen to distort copyright, simultaneously raising consumer prices and lowering income for authors and artists.
The purveyors of information have become the true villains in this drama on stage at the marketplace of ideas. The purveyors include companies that package public domain information like telephone directories, public domain art and plays, and data not protected by copyright. The purveyors include consumer electronics manufacturers that sell "ripping" software with anti-encryption utilities. The purveyors include ISPs and other sellers of the pipes — the T1, cable, ISDN and similar connections — necessary for the information, entertainment, and content we want to make it into our homes.
Without question, the purveyors provide a useful and necessary service. Without access to art and literature, the works cannot entertain, enlighten or inform. The problem, however, is that a history of commercial radio and television have led to a perverseness in the marketplace whereby eighty percent of the public will pay the cable company for access to free, broadcast television. Consumers are being encouraged to buy computer-assisted DVD machines costing hundreds of dollars so they can make copies of DVD's and pay little or nothing for the actual movies they watch.
To the extent that the DVDs manufacturers can distribute copyright-free goods, they can earn even higher profits. Eric Eldred's idea of a free library for public domain materials remains both laudable and valuable to the public. But if the goal is nothing more than to allow AOL or MSN to charge a higher access fee, it has lost its purpose.
Are these fears alarmist or merely an apologist's response on behalf of greedy media companies? Not any more. When Napster was first sued, the company pointed to record sales increases as evidence that Napster was helping the recording industry despite itself. Since then, the industry has seen double digit decreases in sales in each of the past two years. In other countries, where consumer electronics are cheaper and piracy is already higher, the threat is even more pronounced. The Wall Street Journal recently featured an article which referenced the near collapse of the Philippines motion picture industry. Film production has dropped from approximately 300 movies per year to less than 40 as a result of piracy and the inability to sell that which is produced quickly enough to compete with the pirates.
When Congress first contemplated an extension to the length of copyright protection, a number of voices were heard. Libraries and museums raised concerns that older, out-of-print works would be harder to collect and restore, since recreation of those works would require finding the correct copyright owners. Restaurants complained that they already paid too much for music and sought exemptions from copyright licensing fees. ISPs were concerned that they might be liable for copyright violations of their users and sought protection from lawsuits. Each one of these issues was addressed by Congress as it created a statutory compromise. Unfortunately, few voices were raised on behalf of the public's access to out-of-print older works and none of those voices succeeded in protecting the public domain from either copyright or contract law.
Even as the debate was taking place, federal courts were deciding that the shrinkwrap licensing agreement on packages and the "I agree" button clickwrap licensing agreements were fully enforceable contracts. The purveyor of free, public domain material therefore could control how the consumer used the content it packaged and sold the public. Of course, no author is paid for that material. Instead, the clickwrap assures the purveyor unlimited, perpetual and absolute authority over the material it collected and packaged.
If the purveyor happens to have an exclusive license with the owners of the available copies, then the public can be denied all access or charged whatever the purveyors — not the creators — think the market will bear. In this manner, museums license the great masters in their collection to software companies who sell the virtual tours. Back at the museum, the patron can buy licensed postcards or the computer software, but the exclusivity of the license now requires the museum to ban all photography of copyrighted and public domain works alike (even if no flash pictures are used). Did I mention the museum is likely to be a public charity which has used public funds to pay for some of the facility and the collection?
The result of this exclusivity is to deprive the public access to public domain works and increase costs, while doing nothing to promote progress or encourage the creation of new works.
Over the course of the litigation brought by Larry Lessig on behalf of Eric Eldred, the public's interest in a champion became a rallying cry. Some voices called for those copyright owners who were no longer making money from their works to voluntarily relinquish those rights. Instead, the copyright concerns have been usurped by the contractual power of the packagers, cable companies, and ISPs who sell access to the works rather than the works themselves. Against this backdrop, it has become irrelevant whether the copyright holders divest themselves of copyright. The packagers control distribution, so the public cannot see any benefit.
Eldred has become a rallying cry for the consumer electronics industry. It seeks to further erode copyright protection so that more of the public will upgrade to broadband and to recordable DVD machines. These are the killer-apps needed to prop up sluggish computer sales.
Left out of this equation is both the author and the consumer. In the end both groups can only suffer. Fewer authors, artists, and composers will earn livings. The cost paid by consumers to acquire books and music will continue to rise.
Eldred was an important watershed for our marketplace of ideas. Unfortunately, the fees for entering the marketplace are now being pocketed by the gatekeepers. Copyright once fueled the progress of the ideas and information in this marketplace. If piracy continues and efforts to thwart it are stalled by the equipment manufactures, then we will face the fate of the Philippines. What will become of our marketplace for ideas if it devolves into nothing more than a computer hardware superstore.
If we are only willing to pay for only the pipe, there may someday be no piper to pay.
*Jon M. Garon is admitted in New Hampshire and California.
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