UK Entertainment Industry: Fair Use Hurts Economic Growth

from the are-these-guys-serious? dept

Just as we're seeing increased recognition about the importance of exceptions to copyright law in making sure that creativity can thrive, you have a bunch of the biggest copyright trade organizations in the UK putting out a document that completely trashes the notion of copyright exceptions. In a list of "myths about copyright" the most stunning one is:

‘…exceptions deliver economic growth...’

Wrong. Exceptions remove the core asset value of the creative work and so reduce incentives for creators for greater economic activity. An exception may benefit the public sector, but that has to be weighed against the loss of revenue to the creative sector of the economy. Far better for the Government to examine ways of modernising copyright licensing that incentivise digital businesses and creators together, so that consumers pay a fair price and creators receive a fair reward and incentive.

This shows a rather stunning, and near total, misunderstanding of culture, creativity and economics, all in one brief paragraph. That's impressive! First of all, exceptions do not "removed the core asset" of the creative work. The core asset of the creative work is the creative work. And that remains in place. All it does is allow for a few specific uses that, for the most part, do not interfere with the economic prospects of the work, and can often increase the value of the work itself.

Second, claiming that exceptions "reduce incentives for creators" is flat out ridiculous. The US has had fair use rules in place for decades (the UK does not, and that's part of what they're arguing against), and it's widely recognized how useful fair use has been in creating incentives for creators to create without having to be bogged down with asking permission and paying tolls. Imagine where hugely successful TV shows like The Daily Show would be if it couldn't make fair use of news clips?

Next, it's a bizarre statement to note that an exception may benefit the public sector... and then to diminish that because the entire point of copyright law is to benefit the public sector. This suggests, ridiculously, that the industry associations that signed this letter actually believe having artists get paid and "the public benefit" are in eternal conflict -- what's good for one must be bad for the other. That's ridiculous. There's a situation where the public benefit is maximized, and it's the same point at which content creators are creating good works for them that are accessible. Finally, if we want to "weigh" the losses from copyright exceptions, that's great, but that's never what the industry does. It most certainly doesn't seem to want to look at all of the revenue gains from fair use as well. The fact that more people can create by building on the works of others without having to pay, and without having to get permission, is a huge boon for creativity, including the creativity of new works. And, often, that will drive commercial benefit to the works used that way. Just as an anecdotal example, I've been listening to a bunch of mashups lately, and some of the really good ones created massive new interest from me for artists that I'd never even known about before. And that's only happening because of the "exceptions" to copyright law.

The statement by the industries is so out of touch both with economics and the realities of the creative industries, that if I were a creative person represented by one of these organizations, I'd be horrified.

Filed Under: copyright, economic growth, entertainment industry, exceptions, fair use, uk

Should There Be A Right To Copyright Exceptions?

from the something-in-the-air dept

Last month I wrote about how the Netherlands is looking to introduce new flexibilities into its copyright laws, based on some interesting research on copyright exceptions. There must be something in the air, because a wide range of other groups are contemplating exactly the same approach.

For example, the main document of the UK government's consultation on copyright (pdf) devotes no less than 65 pages to the area, proposing exceptions for private copying, preservation by libraries and archives, research and private study, text and data mining, parody, news reporting, and use by the disabled, among others.

On the other side of the globe, during the Melbourne round of the secret TPP negotiations, a group of high-powered tech companies have been urging the inclusion of copyright exceptions as part of that treaty. As Sean Flynn explains:

the Computers and Communications Industry Association (CCIA) -- representing tech companies like Google, Facebook, E-Bay and Yahoo -- has been circulating a new proposal for adding copyright limitations and exceptions to "permit the smooth functioning of the Internet." It is incredibly well researched and supported and includes some good ideas. My favorite among them is a proposal for mandatory flexible limitations and exceptions to copyright in every system:

"Such exceptions and limitations shall permit the utilization of works and other subject-matter to the extent justified by the purpose of free expression (including commentary, criticism, and news reporting), participation in the cultural life of the community, transformative use, teaching, research, scholarship, personal use, and the functioning of, and innovation in, the digital environment, provided that such utilization is consistent with fair practice."

Finally, and perhaps most surprisingly, the French copyright enforcement body, HADOPI, has released a detailed questionnaire on copyright exceptions (pdf in French) as part of its research into the subject. Here's the introduction explaining the thinking behind the move:

Exceptions to copyright and neighboring rights represent the search for a balance between the need to respect copyright and neighboring rights and that of allowing the use of works with areas of freedom for the benefit of users.

This balance seems challenged today. Indeed, the development of new technologies, leading to new uses of works, (internet, social networks, streaming, cloud, scanning ...) and blurring the line between private and public, calls into question a law developed in part for a completely different context, and insufficiently adapted to these new uses.

This challenge is twofold. First, from a legal viewpoint, the current texts on exceptions do not take into account these technical developments and current uses of works in a fully satisfactory manner. This results in an increasing reliance on rights other than intellectual property, in particular Community law, in order to circumvent imperfections (competition law, human rights ...). Secondly, in terms of use, the ease with which a work may be appropriated and transmitted seems to render meaningless the concept of exceptions and raises the question of their suitability for the current context.

It therefore seemed useful to Hadopi to undertake this project to take stock of the issues and, where appropriate, make recommendations to address shortcomings of the present system and attempt to define a more satisfactory balance representing a new consensus. This new balance would not be limited to amending and supplementing the exceptions to copyright and neighboring rights, it could aim to establish a "right to exception" or a "right of exception", including the development of an independent legal doctrine, enforceable before judges and on a par with intellectual property law.

That's pretty bold, and extremely welcome coming from this particular organization, which hitherto has seemed to be more aligned with the maximalist view of copyright. If even HADOPI can see the need for not just copyright exceptions, but a generalized right to exceptions, maybe there is hope after all.

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Filed Under: copyright, exceptions, fair use

Dutch Government: Make European Copyright Exceptions More Flexible

from the didn't-see-that-coming dept

Well, here's a turn-up for the books. At a time when the European Commission is insisting that the copyright ratchet should be tightened up a few notches by bringing in ACTA, with its perilously vague terms that potentially criminalize even low-level acts of online sharing, here's the Dutch government planning to go in the opposite direction:

The Dutch government wants to change copyright law so new media users can continue to do "creative remixes" of protected content. [It] will no longer wait for the European Commission to find a compromise.

The Dutch government made that clear at a conference it had organized, entitled "Towards Flexible Copyright," where one of the speakers was Bernt Hugenholtz of the Dutch state committee on copyright law. On the subject of YouTube, he said:

"Many of the videos we find there are creative remixes of material protected under copyright. They're mostly for laughs or political commentary, or they're simply absurd. If we applied the law today strictly, we would not be allowed to do these things."

Also speaking at the conference, Netherland's Deputy Justice Minister Fred Teeven said he was exploring "a more flexible system of copyright exceptions that would also work in a European context." One solution would be to replace the limited set of European exceptions to copyright, which are laid down by law and allow no flexibility, with a system more akin to US fair use, which gives courts a certain leeway to determine what exactly is permissible.

Of course, that's an eminently sensible thing to do, not least because it wouldn't require a radical overhaul of European copyright, just some tinkering at the edges. Despite that, the idea is likely to meet stiff resistance -- and not just from the industry dinosaurs that reflexively resist any change that might reverse the copyright ratchet by even a few degrees.

At a time when the European Commission is hell-bent on getting ACTA ratified by the European Parliament, it won't take kindly to national governments going their own way on exceptions. That's particularly the case since the Commission is also drafting a new directive specifically designed to harmonize EU copyright law.

The Dutch government will be well aware of all those countervailing pressures, which makes this unexpected move all the more bold. Let's hope it inspires other EU countries to lend their weight to this much-needed initiative to make European copyright laws fit for the digital age.

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Filed Under: copyright, exceptions, flexibility, government, netherlands

UK Publishers Moan About Content Mining's Possible Problems; Dismiss Other Countries' Actual Experience

from the why-bother-looking-at-the-evidence? dept

One of the recommendations made by the Hargreaves Review in the UK was that a text- and data-mining exception to copyright should be created, with the following explanation of why that made sense (PDF):

We therefore recommend below that the Government should press at EU level for the introduction of an exception allowing uses of a work enabled by technology which do not directly trade on the underlying creative and expressive purpose of the work (this has been referred to as “non-consumptive” use). The idea is to encompass the uses of copyright works where copying is really only carried out as part of the way the technology works. For instance, in data mining or search engine indexing, copies need to be created for the computer to be able to analyse; the technology provides a substitute for someone reading all the documents. This is not about overriding the aim of copyright – these uses do not compete with the normal exploitation of the work itself – indeed, they may facilitate it. Nor is copyright intended to restrict use of facts. That these new uses happen to fall within the scope of copyright regulation is essentially a side effect of how copyright has been defined, rather than being directly relevant to what copyright is supposed to protect.

Who could possibly object to that? Certainly not the UK government, which accepted the recommendation (PDF):

The Government will therefore bring forward proposals in autumn 2011 for a substantial opening up of the UK’s copyright exceptions regime on this basis. This will include proposals for a limited private copying exception; to widen the exception for noncommercial research, which should also cover both text- and data-mining to the extent permissible under EU law.

Nonetheless, the UK Publishers Association, which describes its "core service" as "representation and lobbying, around copyright, rights and other matters relevant to our members, who represent roughly 80 per cent of the industry by turnover", is unhappy. Here's Richard Mollet, the Association's CEO, explaining why it is against the idea of such a text-mining exception:

If publishers lost the ability to manage access to allow content mining, three things would happen. First, the platforms would collapse under the technological weight of crawler-bots. Some technical specialists liken the effects to a denial-of-service attack; others say it would be analogous to a broadband connection being diminished by competing use. Those who are already working in partnership on data mining routinely ask searchers to “throttle back” at certain times to prevent such overloads from occurring. Such requests would be impossible to make if no-one had to ask permission in the first place.

Large-scale academic content mining is a pretty new and specialized field, so it's hardly likely that there is going to be a sudden mass attack of crawler-bots taking down sites. Publishers would have ample time to expand their infrastructure to handle demand as it developed, which would be to their advantage: the more their holdings are mined, the more they are likely to be cited and read. And if content mining did take off suddenly, that would suggest there is a huge pent-up demand that the current system of licensing has stifled - one more reason why it should be abolished.

Then there is the commercial risk. It is all very well allowing a researcher to access and copy content to mine if they are, indeed, a researcher. But what if they are not? What if their intention is to copy the work for a directly competing-use; what if they have the intention of copying the work and then infringing the copyright in it? Sure they will still be breaking the law, but how do you chase after someone if you don’t know who, or where, they are? The current system of managed access allows the bona fides of miners to be checked out. An exception would make such checks impossible.

This makes no sense. Infringing uses are either easy or hard to find using search engines. If they are easy to find, they are easy to pursue. If they are hard - internal uses, for example - then even miners with "bona fides" will be able to use copyright material in exactly these ways, and the publishers won't know.

Which leads to the third risk. Britain would be placing itself at a competitive disadvantage in the European & global marketplace if it were the only country to provide such an exception (oh, except the Japanese and some Nordic countries). Why run the risk of publishing in the UK, which opens its data up to any Tom, Dick & Harry, not to mention the attendant technical and commercial risks, if there are other countries which take a more responsible attitude.

The fact that some countries are already allowing content mining ought to be a hint that the other two fears are groundless. Instead, these inconvenient facts are dismissed out of hand as if the experience of "the Japanese and some Nordic countries" somehow doesn't count for UK publishers.

But as it turns out, there's actually a simple way to allay all of Mollet's fears at a stroke. At the beginning of his post he writes:

In coming to its recommendation on content mining, the [Hargreaves] Review drew heavily on the views of various strands of academia, most of which claimed that their vital research was being hampered by the lack of such an exception. The process of requesting licences of publishers was too time-consuming, it was claimed, and so an exception would make life easier.

This confirms that the text-mining issue is only being considered in an academic context – it's about giving scholars the ability to extract extra information from academic articles by performing analyses on their texts.

Now, most of that academic research is funded by the public through government grants to educational institutions and researchers, both in the UK and elsewhere. The open access movement has been pointing out for a decade that it would therefore not be unreasonable if the general public had free online access to the results of all this research it paid for - the articles published in academic journals. It would also allow many more scholars to access such publicly-funded work – including those who wanted to carry out text mining.

This would answer Mollet's fear that publishers' "platforms would collapse under the technological weight of crawler-bots." Since the papers could be freely downloaded from any one of the servers holding copies around the Internet, and then analysed on the researcher's own machine, there would be no crawler-bots involved at all. Open access would also eliminate the commercial risk: after all, what's the point in pirating material that is already freely available?

As for that competitive disadvantage Mollet is worried about, moving their academic titles to open access would actually give UK publishers a big advantage, since open access continues to sweep through the academic sector. It would mean that UK publishers were leading the way, rather than dragging their heels at the back.

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Filed Under: copyright, data mining, education, exceptions, uk

Once Again, Using Industry's Own Methodology Shows That Copyright Exceptions Contribute More To The Economy Than Copyright

from the using-their-methodology dept

The Copyright Industry absolutely loves to trot out its "numbers" about how much copyright contributes to the economy in terms of both dollars and jobs. The problem, as we've discussed, is that these studies have a counting problem. They simply list out every industry for which you can get copyright, then sum up all the revenue... and pretend that all of that revenue is because of copyright. This is, frankly, ridiculous and stupid. And yet, because Congress and reporters don't bother researching this, they take the numbers at face value. What pisses me off about things like this is that it automatically counts my own revenue as being in support of copyright laws today, when I'm obviously anything but that. Even worse, the industry uses this argument to claim that they need more and stricter copyright laws, as if there's any causal relationship between that and the revenue in those industries.

For a few years now, CCIA has countered these claims from the copyright industry with its own study, using the exact same methodology, but counting up how much "exceptions to copyright" contribute to the economy, and showing that it's actually much larger than copyright. It's not hard to figure out that they're doing this to point out just how ridiculous the numbers from the copyright industry are. What's really funny is when totally clueless copyright maximalists, such as the folks at The Copyright Alliance, attack the methodology of the CCIA fair use/exceptions report, not realizing that they're attacking their own methodology at the same time. Amazingly, after having been called out on this, the Copyright Alliance still tosses out its own version of the study with the methodology that its own "founder" debunked when it was in a different report. In fact, despite the fact that we totally mocked the Copyright Alliance for this last year... this year they're right back at it mocking the CCIA's methodology. And, it looks like the MPAA has joined them in whining about the methodology. Apparently both groups are so clueless they don't even realize they're mocking their own methodology.

To drive this point home, the MPAA complains that the CCIA's report includes the movie industry as part of its "fair use industries." Indeed. But the studies that MPAA uses includes the exact same methodology, and includes companies like my own as a "copyright industry." The whole point -- which the MPAA and Copyright Alliance are apparently too clueless to recognize -- is that both methodologies are totally bogus and significantly overcount, but why is it that the MPAA gets to continue using its totally bogus study results, while slamming CCIA for using the identical methodology? It would be funny, if politicians didn't repeatedly fall for this crap.

Thankfully, not all of them do. When CCIA released its latest version of this copyright exceptions report showing, yet again, just how much exceptions to copyright law contribute to the economy and jobs using the exact same methodology as the famed "copyright" report. And, once again, if we use this methodology, copyright exceptions contribute more to the economy. The numbers are also growing really rapidly. So, based on the Copyright Industry's own logic... shouldn't we be adding more exceptions to copyright law?

The other good news is that Rep. Jared Polis showed up at the event where CCIA released the report and noted how it was important, and spoke out against PROTECT IP. We keep hearing from supporters of the law that only Rep. Lofgren and Senator Wyden are worried about PROTECT IP, but we're learning that a growing number of our elected representatives are, indeed, concerned about the law.

Honestly, I think that any time the Copyright Industry tosses out its numbers, it should be required that people point out CCIA's numbers as well. If you see anyone repeating the Copyright Industry's claims about how much copyright "contributes to the economy," demand that the same politicians and reporters also use CCIA's exceptions to copyright numbers which, again, result from the identical methodology.

Filed Under: copyright, exceptions, fair use
Companies: ccia

Copyright Holders Claim That They Should Get To Decide Any Copyright Exceptions

from the are-they-serious? dept

It's really getting ridiculous that copyright holders continue to insist that copyright is designed solely to benefit them. That's been the standard line for ages, but it's simply not true. Copyright law is supposed to be about benefiting the public. Yes, a part of that is that it's supposed to benefit copyright holders also, but the defining factor is benefiting content creators such that the public is most likely to benefit. That's why it's simply not accurate to claim that copyright holders are stakeholders in the debate. Unfortunately, however, many people seem to think that they're the only stakeholders, and the public isn't even involved in the discussion. In fact, a recent discussion put together by WIPO of copyright holders had them claiming that not only were they the sole stakeholders, but that they, alone, should be the ones to determine copyright exceptions:

Copyright is necessary to allow authors to live from their trade and to guarantee their independence, and exceptions should be decided by authors and publishers, according to panellists on a copyright dialogue held at the World Intellectual Property Organization this week.

That's simply crazy. That's like saying we should let alcoholics determine driving-while-drinking laws. It puts those who would abuse the laws the most in charge of laws that are designed to protect others and to limit the damage they can do. It doesn't make any sense. If anything, it seems to show the massive arrogance of some copyright holders:

The very idea that "exceptions should be decided by authors and publishers" betrays the deep-seated arrogance and contempt that both of these now have for their readers. And that's all part and parcel of the publishing industry's problems: it sees readers as the enemy, something that must be fought and vanquished in order for it to be forced to buy books on the terms of authors and publishers - forced, if necessary, by ever-more Draconian laws that criminalise willy-nilly.

Certainly not all copyright holders feel this way, but can you imagine what copyright would look like if the "exceptions" like fair use and safe harbors were designed solely by the copyright holders? I don't think many people would be happy under such a regime... including the copyright holders themselves, once they realized what parts of culture they had locked up.

Filed Under: copyright, exceptions, fair use

Fallacy Debunking: Successful New Business Model Examples Are The 'Exception'

from the debunker's-forum dept

I've been meaning to start to put together a series of posts that debunk the common "criticisms" we get that are all too often based on logical fallacies. I end up spending way too much time in the comments responding to people posting those same logical fallacies over and over again, and it would be nice to be able to point to posts that "answer" the complaints quickly. I'm still not sure if I'll ever really get around to it, but sometimes someone else does such a nice job of it, that I might as well highlight it with a post here.

In this case, it's the commonly claimed fallacy that all these new business models don't really matter because of two things: (1) so much money is still going to the "big players," and (2) there are only a "few" examples of these models working, so they're outliers.

One example of this kind of thinking was seen in the comments to our recent post about the developer of the game Minecraft making $100,000 per day, without any distribution or retail deals or really any outside help. Yet, one of our commenters said this was nothing, because Halo made $200 million on its first day. Of course, that's a pure apples to oranges comparison. Halo is from Microsoft, and involves a giant team, a huge budget, massive advertising and distribution deals. I would guess that if you compared the two in terms of profitability per developer, Minecraft would win by a wide, wide margin.

Anyway, it's a meaningless comparison. Setting an artificial level as determining what counts as a "success" makes no sense. What we're interested in when we're looking at new business models and new strategies is how these compare to how a similar person would have done without those models. Without the internet and the ability to distribute Minecraft the way Markus Persson is doing so, he wouldn't be making anywhere near $100,000 per day. More likely is that he'd be working for a much larger gaming company, one piece in a cog, and bringing in something closer to $100,000 for the year, and not working on projects nearly as interesting.

Another example of this occurred earlier this year, when a Billboard reporter, Anthony Bruno, attacked the concept of "CwF+RtB" by arguing that I've only "cherry picked" the success stories, and many who have tried it failed to become successful. But, that makes no sense. No one guaranteed that using a smart business model automatically makes your band a huge success. What we said is that if you do it right, it's likely you'd be more successful than otherwise -- but that still might involve only a minor improvement if under the old system you wouldn't be successful at all. And if the CwF+RtB concept doesn't matter because some artists who have used it haven't become big stars, then wouldn't that mean that the "traditional" model of big record label/sell CDs has always been a dreadful failure since so few artists become successful that way? After all, pointing to the success of Led Zeppelin or Pink Floyd or the Beatles under the old model, is certainly pointing to the cherry-picked "exceptions."

Andrew Dubber points us to a fantastic blog post by Rich Huxley, of the band Hope & Social, who ran into this sort of "criticism" after writing a blog post (similar to many we've written) reminding everyone that the big record labels are not the "music industry." In the comments, a guy named Tim London challenged that by claiming that since the big record labels still take in a ton of money (in aggregate), and many of these new business models appear to be artists making much smaller amounts, the record labels still are the industry. One sentence from his comment should give you the general summary:

I know you're wrong because the music industry as represented by the majors is still coining it and the music industry as rep'd by you is getting by, struggling, working part time or making music as a hobby.

There's that apples and oranges comparison again. Thankfully, Huxley decided to write an entire (brilliant) blog post debunking the idea that the total amount of money some record labels make is indicative of the overall value of a particular model. First, he goes through some basics to show how many musicians there are out there, and points out that money made isn't always an indicator of quality ("That Van Gogh was a penniless artists does not diminish the greatness of his work.")

But then comes the real point, explained eloquently. The critics like this highlight the huge earners in the existing industry, but ignore that the overwhelming majority of the folks who try to go the old route end up making $0. They mock the person embracing new business models for "only" making a decent living, ignoring the fact that so many who went the way they prefer were drummed out of the industry making no living at all. Here's the way Huxley explains it:

Less than 10% of signed artists recoup. Take Maximo Park for example. They have by their own admission never made a penny from record sales and make their money from DJ sets in the main. An example I have first hand knowledge of, Embrace, have sold millions of albums, they were a genuinely massive band; they performed from Glastonbury main-stage to Top Of The Pops and everywhere in-between. When they split from Virgin, they owed their label three quarters of a million pounds. I guess my point is that if we promote the Trad Music Biz's model as "The model" then the message we'd be sending is:

• less than one percent of musical artists are part of the music business
• only a tenth of those will recoup and make money from their record sales, and that's good
• an artist should be saddled with debt, the rate at which they pay that back is equivalent to a credit card with a 900% interest rate

Basically, the problem is that those who cherry pick just the biggest artists ignore all the ones who made nothing at all from a record label deal, thanks to the fun of RIAA accounting. In other words, those artists are the true "exceptions." They're the ones who got the winning lottery ticket, but you can't ignore all those who got nothing. If you were to put all of the musicians who went the "traditional" route into a set, and all of the musicians going the "new" route into a set, and took the median, I'd guarantee that it would be higher in the new set. And that's the point. Embracing the new ways makes it much more likely that you'll make some money. It improves your chance of being able to make money making music. And that seems like a good thing, right?

As a part of that, of course, is that all of the costs have gone down with the new ways of doing things. The reason why people needed the old gatekeepers to fund stuff in the past was because there were no cheaper options. The only way to actually get this stuff done was to go through them. But these days, everything is cheaper. As Huxley notes with his band:

Hope and Social believe in and benefit from Pay What You Want. We go on about this here, but also... As musicians, we all have the ability to take advantage of the same channels that H&S have:

• dramatically reduced costs of recording
• a zero cost of distribution (should we choose to make mp3s available on the internet then there's no cost to us. This is miles away from the Trad model where the cost of recording and manufacture made it nigh on impossible to record and release independently)
• reduced cost of promotion (CD's don't need to be sent to reviewers, press etc at the cost of a quid per CD, and half again on postage)
• and by building relationships with people, they become our PRs, our evangelists (to coin another religious term, man I've got to stop doing that)

Also, there is a value in making your music available for free. If someone downloads an album of ours and shares it with a friend, copies the CD, plays it at a party, then that's how we share and have our music heard by more people. This results in:

• higher gig attendances
• better paid shows
• more sales of our music
• more sales on other merchandise and art that we, and our fans make.

Finally, I'll make one final debunking point that Huxley didn't cover: London seems to have confused absolute revenue with the change in revenue (delta). If you look at those embracing new models, it may be smaller (now), but it's growing quite quickly. If you look at the big record labels, they're declining in size. Which trend is a better bet? It's really a version of the Innovator's Dilemma where the new growth trend is ignored because it's not "as big" as the legacy business. Ignoring the deltas is dangerous.

And there we go. If you're claiming these new model success stories are the "exception," then it's only fair to admit that those who succeed under the traditional models you claim are so good were actually much bigger "exceptions." Can we now consider this argument debunked, and just link back to this post any time people bring up an argument like this?

Filed Under: business models, exceptions, fallacies

How ACTA Exports Worst Of US Copyright Law Without Corresponding Exceptions

from the despite-the-assurances dept

All along defenders of ACTA have insisted that it will not change US copyright law. In fact, the argue that, since it's an executive agreement and not a treaty, it cannot change US copyright law. However, the devil is always in the details, and the details are not good. Earlier this year, we noted that the real problems were not in what was included in ACTA, but what was left out. That is, ACTA technically includes stuff that is (mostly) already in copyright law... but leaves out all sorts of exceptions and consumer protections. On top of that, some of what it seeks to do is to "lock in" areas of copyright law that are still very much in flux -- such as aspects like "inducement" that have only recently been determined by case law, but have not been discussed or reviewed in Congress itself. ACTA would prevent such changes, because if Congress later decides -- for example -- that it did not intend for there to be an "inducement" standard for copyright infringement (as the courts have created) it would not be able to do so because of ACTA.

With the official draft of ACTA finally released, Jonathan Band alerts us to a filing (which I'm guessing he played a large role in drafting) from the Library Copyright Alliance (along with CCIA, CEA, NetCoalition, EFF, Public Knowledge and a few other groups) that carefully and with great detail highlights the many serious problems with the released ACTA draft, detailing how it is not, in fact, in line with US copyright law, and how at different points it seeks to lock in areas of the law that are still very much in flux. You should read the whole thing: It notes that the "official" version leaves out what countries are supporting what -- and points out that there are certainly parts of the text that are still up for debate that clearly go against current US copyright law. However, with many of those, the letter gives the USTR the benefit of the doubt that it will not agree to those phrases that are clearly outside the scope of US copyright law. Instead, it focuses on the parts of the released text that do not appear to be in dispute or negotiation any more, but which still appear to go against current US copyright law:

These comments will focus on the language in the Consolidated Text that we believe the U.S. government has endorsed. While the United States probably could comply with these provisions of the Consolidated Text without amending the U.S. Copyright Act, these provisions are inconsistent with U.S. law in several significant, troubling respects. The common thread of these inconsistencies is that the Consolidated Text does not reflect the balance in U.S. copyright law. This lack of balance is at odds with the Obama Administration's policy concerning balanced international copyright law

The biggest concern comes in the form of statutory damages. Again, the text of ACTA does not currently go beyond US copyright law, but it does tie the hands of Congress on an issue that has constantly been debated (and over which there are some ongoing lawsuits challenging the legitimacy of current statutory rates). Locking those in would be a massive problem. When you then combine that with a lack of prominent exceptions to copyright law -- such as fair use (which is in US law, but not elsewhere, and is not required by ACTA), you create a situation that could present massive liability problems to US companies operating abroad:

Although the existing statutory damages framework has a chilling effect on innovation and follow-on creativity, its negative impact in the U.S. is somewhat mitigated by the existence of strong exceptions such as the fair use doctrine. Other countries, however, do not have these exceptions. And the U.S. in ACTA has not demanded the adoption of these exceptions. In other words, the U.S. seeks the export of our strong enforcement mechanisms but not our strong exceptions.

This asymmetric export of our laws could be particularly harmful to U.S. Internet companies as they attempt to expand their operations overseas. For example, U.S. courts have treated the copying of copyrighted material by search engines as permitted by fair use. In contrast, courts in Europe have found Google and other search engines liable for copyright infringement for engaging in similar activities. If ACTA is adopted, and European countries enact statutory damages, the potential exposure of U.S. search engines will increase exponentially for conduct considered lawful in the U.S. They will be liable not just for the actual damages they cause, but the level of damages set by statute. Under current U.S. law, if a company is held liable under a direct or secondary liability theory for infringements by thousands of consumers, the resulting damages (up to $150,000 multiplied by thousands of works deemed infringing) could easily bankrupt the company. Raising the possibility of similar, ruinous damages for conduct considered lawful in the U.S. would simply hinder U.S. businesses' ability to operate abroad.

Along those lines, the letter notes that US law contains the right to decrease statutory awards in the case of "innocent infringement." Once again, this does not show up in ACTA, so we are, yet again, exporting the draconian parts of copyright law, without any of the important strong exceptions.

The letter also highlights the attempt in ACTA to not just lock in third party liability when it comes to copyright (a concept that has been determined by case law, but not in Congress -- and, in fact, was rejected by Congress when a law creating such liability was proposed a few years ago), but also appears to redefine third party liability, by expanding the definition to cover three different things, when current US law does not do that:

There are numerous problems with these two clauses of footnote 47. First, they suggest that inducement is a different test from contributory infringement; that is, they imply that there are three theories for third party infringement under copyright -- vicarious liability, inducement, and contributory infringement. However, Grokster makes clear that inducement is not separate and distinct from contributory infringement.

And, of course, once again, it looks like in the issue of third party liability, ACTA makes it much stronger and removes the balance found in US copyright law:

Finally, article 2.18.3 lacks the balance present in U.S. third party liability law. Article 2.18.3 makes third party liability mandatory. In contrast, exceptions to such third party liability are only permissive: "the application of third party liability may include consideration of exceptions or limitations...."

Notice the pattern? This does a variety of problematic things. First, it creates serious problems abroad for all other countries that sign onto ACTA, giving them all the limitations of copyright law without the important exceptions (which, it's been shown, are more important when it comes to economic activity). Second, should the US ever adapt its own copyright law, which has been going on pretty much non-stop, it locks in the limitations, but not the exceptions. That means that US law will only be able to take away the exceptions, but not ratchet down some of the problematic aspects of copyright law. That's downright scary.

And, of course, the rationale for all of this? It's based on studies that our own government now says were bogus.

It's even worse when you realize that if the point of copyright law is to promote the progress of science and the useful arts and there's no real evidence of a causal link between any particular copyright policy and greater societal progress, then it makes no sense at all to harmonize copyright laws in lockstep. Instead, it makes sense to do the exact opposite. It makes sense to let different countries experiment with different types of copyright laws so that we can actually build real evidence for what works and what does not work. Locking in a particular set of laws across much of the developed world, without any evidence as the basis is downright scary. It's faith-based policy making, pushed almost entirely by a small group of businesses who stand to benefit. It's an incredible shame that the USTR seems totally taken in by them.

Filed Under: acta, copyright, exceptions, fair use, laws