In past posts, I have noted that the problem of intellectual property theft on the internet was likely to become a problem for consumers as those who are impacted by it look to implement more draconian measures.

And so it appears that consumers in the United States may reap what they sow much sooner than they anticipated.

A few weeks ago, both the US Senate and US House of Representatives passed a RIAA-backed bill that seeks to clamp down on intellectual property theft.

The measures in the "Prioritizing Resources and Organization for Intellectual Property Act of 2008" include:

  • The creation of a White House Intellectual Property Enforcement Coordinator to oversee and coordinate the fight against intellectual property theft.
     
  • Increased civil and criminal penalties for intellectual property infringements.

Although the bill lacks a controversial proposed measure that would have enabled the government to file civil lawsuits against peer-to-peer filesharers who share copyrighted materials on behalf of the owners of the infringed materials, opponents of the bill still aren't too happy.

Gigi Sohn of Public Knowledge claims that "the bill only adds more imbalance to a copyright law that favors large media companies."

While I think it's unfortunate that the issue of intellectual property theft has been pushed to the point where legislators are being involved, I also think individuals like Sohn are misguided.

She stated:

"At a time when the entire digital world is going to less restrictive distribution models, and when the courts are aghast at the outlandish damages being inflicted on consumers in copyright cases, this bill goes entirely in the wrong direction."

“Instead of being focused on giving large media companies what they want, Congress instead should take a comprehensive look at the current state of the law, and of technology and write legislation that recognizes the reality of the situation and the reality that consumers have rights also."

As it relates to copyright, Sohn and other copyright infringement apologists ignore the fact that The Copyright Act grants certain rights to copyright holders, including the rights of reproduction and distribution.

I'm not sure which "less restrictive distribution models" Sohn refers to outside of outright theft, but distribution models themselves are the purview of intellectual property owners, not consumers.

Consumers have absolutely no right to dictate to a record label, for instance, how it should distribute its music. Consumers do have the right to vote with their wallets, however, and can encourage record labels to implement more attractive distribution models by not purchasing their music - not by stealing their music.

At the end of the day, it remains to be seen what impact the new bill will have on piracy. Obviously, intellectual property infringement isn't going to be eliminated entirely by the rule of law and intellectual property owners are still fighting an uphill battle - one that needs to be fought practically.

Yet the trend is clear - lawmakers are increasingly being asked to bulk up the powers of enforcement and by in large, they're obliging. This isn't good for consumers who would be better off fighting for what they want in a manner that doesn't lead to increased government "intervention."

Drama 2.0

Published 16 October, 2008 by Drama 2.0

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Craig

Phew, it must be hard to breathe up on a horse that high...

"This isn't good for consumers who would be better off fighting for what they want in a manner that doesn't lead to increased government "intervention."

- Naughty, naughty consumers. Bad! Do what some guy posting under and anonymous nickname on some blog tells you to do.

But seriously, I agree to a point with what you are saying, only I wouldn't be such a patronising ******* about it.

Sure all this "ooh, all stuff should be free" is a load of rubbish. However, hiding behind the rule of law is the preserve of failing and desperate businesses.

The fact is that technology does dictate involuntary changes to business models. And at the risk of sounding trite, it is those companies who adapt and innovate that tend to succeed.

The "content" owning companies have been utterly dreadful in embracing the possibilities of the internet, and so they have been spanked up and down by illegal and maybe-illegal services.

And, such is the nature of things, the net outcome is that they have had to move faster and further than they might have liked, but the end product is way better than it would have been.

I would personally never "steal" content anymore, because commercial and free-ish (i.e. taxed) on demand TV services and relatively inexpensive music downloads are now good enough that they are worth paying for.

Plus I couldn't cope with knowing just how much you'd disapprove of me, daddy.

almost 10 years ago

Drama 2.0

Drama 2.0, Chief Connoisseur at The Drama 2.0 Show

Craig: if believing in the rule of law makes me pretentious, guilty as charged.

Let me ask you a question: if you owned a jewelry store and you had no ability to prevent people from walking in and taking everything they wanted, would you be a "failing and desperate business" because you didn't have saleable products or would you be a "failing and desperate business" because you couldn't keep people from stealing your products?

If you don't like the way record labels, movie studios and other content owners "package" and sell their products, here's a thought: maybe you should vote with your wallet. Don't buy their products. Sales will plummet and they'll either figure it out or die.

"Free market" does not mean that everything in the market is "free" for the taking.

You appear to hide behind the "technology is forcing businesses to change" nonsense that obscures the only price acceptable to those who steal is $0. That's right, these people love the product. They just don't want to pay for it.

Of course, this creates a problem - eventually you might get to the point where the profit motive to keep producing it doesn't exist but maybe I'm just thinking too rationally.

I'll have more to say about this subject in a post next week but I would like to point out that I care a whole lot less about the fate of record companies and movie studios than I do about individual rights, although I do believe that those who produce creative works should be able to do with them what they please.

I'm not a fan of government interference. I prefer less law to more law, less regulation to more regulation. Unfortunately, the rampant piracy that exists today has provided ample opportunity for politicians and a whole plethora of special interest groups to push quite successfully for government legislation that erodes our rights.

And make no doubt about it - it will only get worse. That's the point of this post.

So ask yourself: do you prefer The Pirate Bay or BitTorrent to your individual rights? In many ways, it really comes down to that. I'm not your daddy; your government is. And daddy can be a mean disciplinarian. You just apparently don't have the historical perspective to know that.

almost 10 years ago

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Craig

Having never been on The Pirate Bay or used BitTorrent I can't comment on whether or not their rights are worth protecting.

However, your analogy of a 'jewelry' store is rather beneath someone of your normally first rate commentary (I am a fan btw).

The jewellery store only has one distribution method open to it, exchange of a physical item for money. It can only sell one bit of jewellery once - I buy a particular ring, it is mine forever and they don't get it back, nor do I ever have to pay for it again.

Content owners have a lot more options and by acting like a cartel, they can oppose or seek to have criminalised the behaviour of huge sections of the population in a way that a mere retailer of physical things simply wouldn't be able to. If all the jewellery stores got together and decided to quadruple the price of the ring I wanted to buy, then (in the EU at least) the Competition authorities would be getting their dawn raid team readied for action.

So when you talk of voting with my wallet - it was simply not possible when (virtually) the entire industry was behaving in a concerted effort to either ignore the internet in the hope that it would go away, or treat it as a way to impose even more restrictive practices (like DRM) than had previously existed.

As a consumer, it was as if the country I lived in had built tarmac roads but banned the invention of the motorcar.

To give a bit of historical perspective, one of the world's first factories, the Albion Mills (of dark Satanic fame) burnt down in suspicious circumstances. Rather than be aghast at the criminality of the situation, it was celebrated publicly by other millers. Why? Because they had the temerity to install a Watt steam engine to somewhat speed up the production of flour and that threatened an entire industry.

Vested interests hate really good new technology, that is normally a given. But what is also normally a given, is that new competitors eventually defeat the vested interests by using the new technology to out- compete. You just can't find a good roadside blacksmith these days.

However, when it comes to intellectual property rather than physical stuff, things are always more complicated. Hence the brouhaha over tape decks and VHS video recorders and for the past (at least 8 years now) internet distribution methods.

The morality (and thus the law) on theft of physical stuff is pretty straightforward. You nick the ring I bought earlier from the jewellery store and a theft has taken place. I give you the ring, and there is no theft, even if (because, say, your poor fashion sense) the store doesn’t want someone like you wearing ‘their’ rings.

But when I give you a song by your favourite singer, a theft could have taken place, or it could have been okay, but that might depend on where I live, and where you live, and how I acquired the song in the first place, and on what media I gave you the copy of the song, and what I did with any other copies of the song I might have, and who wrote the song, and when they died, etc. As for the morality - whoa, don't even get started on that...

Where such uncertainty and ambiguity exists so do lawyers and well-meaning law makers. And you are totally right, in this instance special interest groups are using the 'rampant' piracy to persuade ignorant law makers that their business models are somehow worth protecting.

However, and I think this is where we differ in opinion just a tad. I think that without the rampant piracy, we would be facing a whole lot worse situation.

There was a market failure when it came to delivering content using internet technologies. All the vested interests lined up behind laws written for a different time to pretty much prevent any new commercial interests from changing the market. And so it was up to the silent majority to once again prove that when enough people break a law, it is the law that is broken.

Shawn Fanning, as the first to try, got royally slapped around by the content owners and so did subsequent file sharing networks, but then along came a second generation headed by the likes of Youtube and instead of getting slapped around, they because of the many millions of people using the services, got bought by big players who had the might to start doing deals which in effect legalised much of the criminal behaviour (it is no longer illegal to watch XFactor clips on Youtube because it is Simon Cowell that is putting them there).

This, I would argue, directly led to TV-on-demand over the internet (which in the UK is provided by the BBC and all the major commercial broadcasters, the latter being ad-supported and/or subscription-based) meaning that I can now download films and TV shows that only two years ago could only have been obtained illegally, even if I had no desire to be a law breaker.

Yes, you might be right that there will be the odd legislative set-back, but eventually content will be significantly more freely available than it is today, and companies will still be making plenty of money from it. And it will be because of, not despite the (presently) nefarious actions of millions and millions of otherwise law-abiding consumers.

almost 10 years ago

Drama 2.0

Drama 2.0, Chief Connoisseur at The Drama 2.0 Show

Craig: thanks for the thoughtful response.

I don't necessarily disagree with your opinion that content owners are often backwards and reluctant to change although I would point out that oftentimes, that reluctance is well-justified (technologists are great at developing new technologies but often fall short of developing monetizable technologies).

I suppose our difference of opinion comes down to one word: respect.

The law grants certain rights to intellectual property owners and I respect those rights, even if I feel that said intellectual property owners are using them foolishly.

Your argument that there's a difference between a jewelry store owner and a content owner because one has more distribution "options" than the other is, frankly, disingenous.

The law grants to intellectual property owners, not consumers, the exclusive rights of reproduction and distribution. They are not obligated to choose the reproduction and distribution options that we desire just as we are not obligated to purchase their products.

There's a lot to debate pragmatically about intellectual property law in the 21st century but there's very little to debate morally.

Theft is theft regardless of whether or not the product is physical or virtual and thieves only have one satisfactory price - $0.

Using music as an example, I'd finally point out that I've been buying CDs since I was a teen and have been buying music online for years. I've never found a reason to complain about the cost and I've never run into any problems with DRM.

It's hard for me to believe that my experience is atypical so for anyone who believes that $15 is too much for a CD, 99 cents is too much for an iTunes download and that DRM is a real impediment to enjoying content, I call BS.

almost 10 years ago

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Craig

I buy a song on platform X and discover that I can't play it in my car.

Or I buy an album from an online shop and am listening to it on my PC without an internet connection (lets say BT are having an off day). I get a message on screen telling me that my music player needs to check my licence but can't so I am not allowed to listen.

So I go to my neighbour and get him to lend me a copy of the same album that he was sensible enough to buy on CD. However the neighbour tells me that he can't copy his CDs anymore because there is an application that the CD installed on his PC without his permission that prevents it. He moans that for almost 20 years he used to copy all his CDs to make a personal backup of them (in case the disc got damaged by his kids, etc), but not any more (although he is still paying the same price for each CD).

So yeah DRM never bothered nobody...

As for respect - I'd probably agree with you. I don't have as much respect for the rights of content owners as you do. I have respect for their right to charge appropriately for their content, but I feel that they have an obligation to make that content available in ways that suit the consumer. And when they fail to do so, I respect the actions of millions and millions of people who circumvent their short-sighted approaches and threaten the "system" to force them to change.

Like, say, EMI offering superior quality DRM-free recordings (for more money of course). As if that would ever have happened without widepread flouting of DRM and widespread condemnation of the practices used.

Ultimately we are talking about vast swathes of cultural output that, although privately owned, is part of the total human artistic output. It is for that reason that copyright expires (although I see that is under threat too) which in effect gifts the content to mankind for $0 after a set period. Content owners are ultimately custodians of their content, and whilst, due to the money they invest in facilitating the creation of that content (i.e. paying for the entourage and the crib), they are entitled, rightly, to make money from it, they should also behave responsibly.

Although possibly it is the case that both of us, albeit for very different reasons, are somewhat naïve about this whole subject.

almost 10 years ago

Drama 2.0

Drama 2.0, Chief Connoisseur at The Drama 2.0 Show

Craig: perhaps I'm lucky in that I've never run into a problem with DRM.

But once again, such issues come down to personal choice and a respect for contracts. If I understand that there are certain restrictions that limit the ways in which I can use a piece of content and choose to purchase that content anyway, I should take personal responsibility for the decision.

I think we'd both agree that, in theory, DRM-free content is a nicety. At the same time, I have no doubt that record labels, for instance, could offer every single song they own the rights to without DRM and it will not do a whole lot to stop infringement.

The reason, of course, is that the number of people who just want a free lunch far exceeds the number of people with legitimate complaints about DRM, interoperability, etc.

almost 10 years ago

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Catherine

(Apologies for the long comment - I don't mean to troll, I just found this article on an IP list I'm on and it's an area that interests me greatly.)

I found the jewellery shop analogy erroneous not because of distribution opportunities but of loss sustained. If a necklace is stolen, it can't be resold - the jewellery shop owner has a clear loss. If a song is copied and the receiver would have never bought it, then the song owner doesn't actually suffer an economic loss. If the person would have bought it then the song owner would have suffered an economic loss. But these copied songs where the receiver wasn't intending purchase can lead to future purchases because of the discovery. So despite the presence of unfair advantage, there is the theoretical potential to even out any losses and possibly even benefit the market in the way that theft of real property can never because of the limits of the laws of nature. There's no incentive for a jewellery owner to open his/her store to thieves but music labels have been known to seed music on torrents for the purpose of publicity (look at the Arctic Monkeys first album which appeared intentionally seeded and it did very well in the sales charts).

The analogy also disregards the nature of IP copying as not black and white - while stealing is. If you take something out of a store knowingly and not under duress without paying for it, it's stealing. If you make a copy of some IP, it depends on a whole heap of factors including intention and scale whether it can be seen as legal or not. Under Australian law, if I make a copy for my mother of a CD, it's fair dealing (similar but also very different concept to fair use), if I make it for a flat mate that I hardly speak to, it's fair dealing, if I make it for my best friend, it's infringement. With that ambiguity, comes a moral ambiguity that just isn't present in the theft of physical items.

“Theft” and “stealing” are convenient rhetorically, but they have baggage and over-simplify a complex issue where the winners and losers are not so clear cut. The RIAA are not musicians (check their charter - it doesn't allow them membership), it represents recording labels and their interests are very different. There's actually little evidence to prove the majority musicians are substantially hurt by piracy (not surprising as live performances are the main source of income for most musicians - piracy can act as free advertising for this) in fact one study found that musicians on the whole did not support the RIAA's clampdown and found that benefits from the internet outweighed any perceived losses from piracy.

"The reason, of course, is that the number of people who just want a free lunch far exceeds the number of people with legitimate complaints about DRM, interoperability, etc." - I'd be interested if you could give me a pointer if you have any evidence of this (I'm currently researching the economics of this area). I do think this is a bit of a sleeper problem - for most people iTunes songs don't cause an issue because iPods are the most popular player - but as this changes and more and more people are locked out of their iTunes bought downloads (or unable to switch because of them), it will become a very big problem if the DRM is not removed or modified. But there’s been plenty of documentation of the DMCA being misused for anti-competitive purposes (e.g. the Lexmark printer cartridge case which had a pro-competitive result but it was acknowledged by one of the judges that companies could “use the DMCA in conjunction with copyright law to create monopolies of manufactured goods for themselves just by tweaking the facts of this case…”). The EFF have a paper on the unintended consequences of the DMCA where they give numerous cases where companies have used legal pressure to stop legitimate actions and Timothy B Lee did a report for the Cato Institute on the “Perverse Consequences” of the DMCA to name a couple of resources. Email me if you need links but they should all be easily found via Google.

I'd caution jumping to the conclusion that people who file share are those who want a free lunch - it's an error the recording industry has made, much to their disadvantage. There are many who do but there are many others who use it for searching and discovery and who will then go on to purchase - even the music and movie industries' own research show that a good proportion of people who "steal" by downloading will actually buy the content legitimately (they emphasise the number that don't about 60% instead of the 40% that do). I won't go into a lecture about the complexities of consumer behaviour but it is certainly complex and not sufficiently understood.

I do agree with the sentiment that consumers should boycott the recording industry (but still support musicians through live gigs) rather than revert to file sharing. I'd say that many consumers have been voting with their wallets but the reason why they are doing so is too often attributed to them getting it free from the internet rather than for valid reasons (e.g. they've already upgraded their LPs/cassettes collection to CD and now there's no superior format, their needs aren't being met, marketing isn't creating any need at all, there're competing sources for time e.g. all the legitimate free content on the internet, increased working hours and other places to spend disposable income e.g. telephony bills, flat screen TVs, computers). I've seen very few studies that have attempted to separate the legitimate abstainers from the freeloaders - without that separation any claims of loss must be overstated. Consumers can’t effectively protest through not purchasing, because the less legitimate consumers buy and the more there's file sharing even if they aren't the same people doing both activities - the more the recording industry says it needs harsher laws. That's not to say file sharing doesn't have a net negative effect, the question is how significant is that effect and does it warrant such radical changes that not only affect consumers but other industries? Given that the few studies I've seen that do tease out the differences have mainly found that the effect of piracy was not the major cause for the downturn in CD sales, I'd suggest we should be putting our laws under greater scrutiny because they don’t seem to be solving the problem and certainly are creating new ones.

I do disagree with your characterisation that copyright distribution is the exclusive domain of the owners. In both the US and Europe, limitations and exceptions exist based on either principles of fairness or public utility. Look at the ability of educators and researchers to copy and distribute portions of copyrighted works regardless of the approval of the rights holder. Fair use and fair dealing can also allow a limited amount of personal sharing, again without authorisation. The creation of stronger copyright laws certainly is coming close to bestowing an exclusive right of control, especially as what was once a limited reproduction right moves towards including a broad access right with the creation of anti-circumvention provisions, but not yet. There are still limitations and exceptions, weak as they are in comparison with their historical counterparts.

I should be clear that I don't buy into the argument that intellectual property rights are unfair in of themselves or that all content should be free. I think artists have rights the fruits of their labour and I also believe consumers are better off when innovators have the incentive to innovate. IP laws have important economic and moral functions but certainly in the US, they were created with the clear acknowledgment that the ultimate beneficiary was the public and this required protecting sufficient user rights (you can argue differently for Europe where the intrinsic moral sentiment is much more important rather than the economic incentive public benefit model). That's not what's happening now. The US founding fathers were well aware of the dangers of creating overly broad IP monopolies – were only current legislators more prescient.

almost 10 years ago

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