Wednesday, June 29, 2005

Noninfringing Torrents

Monday, June 27, 2005

My Take on Grokster

As predicted in this space, the Supreme Court has ruled against Grokster, according to the AP. Says Justice Souter, "We hold that one who distributes a device with the object of promoting its use to infringe copyright, as shown by the clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties."

UPDATE: SCOTUS Blog puts it very nicely:

Given some ingenuity, both in software design and in marketing tactics, it is conceivable that digital file-sharing technology – available free -- may yet be quite legal. ...

The technology alone, Souter made clear, does not by itself run afoul of the copyright laws. ...

What counts most of all, it is apparent, is that a software developer promote the use of the product explicitly to stimulate computer users to use the product solely or at least primarily as a copyright - infringing mechanism. The Court, while not finally deciding that there was contributory infringement by the software developers in this case, found what it called "unmistakable" proof that an "unlawful objective" did exist.

(Scott Ott also hit on the irony of today's decisions in light of last week's Baathist takings decision.)

UPDATE: Information Wants to Be Stupid Dept.: This item on Boing Boing says the Supreme Court has invented a "new thought crime" by focusing on intent in deciding if a legal wrong has taken place -- a concept that is actually several millenia old. This is the kind of silliness that gives skulls full of mush a bad name.

Grokster Loses

No. 04-480, MGM Studios v. Grokster, reversed 9-0, in an opinion by Justice Souter. Justice Ginsburg concurred, joined by the Chief Justice and Justice Kennedy; and Justice Breyer concurred, joined by Justices Stevens and O'Connor

Grokster Posts from TechLawAdvisor

4/04/2005: Legitimizing P2P
4/02/2005: Music Industry Concedes Defeat in Grokster
3/29/2005: Scotus: Court conflicted over file-swapping
3/23/2005: At The Library
2/16/2005: Is simultaneous downloading theft?
8/26/2004: mgm v. grokster conversation view post
8/21/2004: MGM v. Grokster Opinion view post
8/19/2004: Ninth Circuit Affirms Grokster view post
8/05/2004: States Warn File-Sharing Networks view post
7/20/2004: VSDA joins Piracy Battle view post
7/12/2004: Is p2p going legit? view post
6/30/2004: Google bans Gmail swaps and illegal file-sharing view post
6/24/2004: Prelude to a Million Lawsuits view post
2/23/2004: Upgrading P2P view post
2/10/2004: Currently Listening to Grokster-MGM view post
2/02/2004: Grokster, Morpheus and the Future of P2P view post
12/04/2003: RIAA Lawsuits by the numbers view post
11/02/2003: 60 Minutes on Movie File Sharing view post
6/27/2003: Will the P2P crackdown send users underground? view post
6/25/2003: P2P Alert view post
5/14/2003: Apple iTunes Discussion view post
4/25/2003: Judge rules in favor of Napster follow-ons view post

Sunday, June 26, 2005

More on Compulsory Licensing Reform

As previously reported, Register of Copyrights Marybeth Peters testified before the House Subcommittee on Courts, the Internet and Intellectual Property and set forth a proposal to revoke the statutory compulsory license for making and distributing phonorecords of non-dramatic musical works.

The statutory compulsory license is a boon for recording artists, because it allows artists to record new versions of any previously recorded song for a set rate. Recording artists have the benefit of access to non-dramatic musical compositions and do not have to deal with a hold-out problem. Songwriters can not choose not to license their works and are precluded from attempting to extract a higher price.

The Register's proposal appears to still effectively eliminate the hold-out problem, but may allow a Music Rights Organization (MRO) to extract a price premium for licensing covers of especially popular songs.

Section 115(a)(2) of the Register's proposed statute reads:
A music rights organization that offers a license to perform one or more nondramatic musical works publicly by means of digital audio transmissions shall offer licensees use of all musical works in its repertoire, but the music rights organization and a licensee may agree to a license for less than all of the works in the music rights organization's repertoire.

So, the MRO can offer rights to cover all musical works in its repetoire for a set rate, but exclude certain "premium songs" from that rate and set a higher rate for those works. A recording artist might be able to cover "Octupus's Garden" or "More than a Feeling" at the "standard rate," but be forced to pay a premium rate for "Yesterday" or "Since U Been Gone."

Is such price discrimination necessarily a bad thing? Not necessarily. After all, this is allowing a regulated market to develop. The statutory compulsory rate requirement prevents songwriters from capturing all the value in the copyright. Why shouldn't the writer of a popular song be able to charge a higher price?

The Register's proposal limits some of the harshest potential effects for recording artists. By requiring that a license is made available to any one artist on the same terms available to all others, this proposal should be sufficient to prevent a MRO from creating discriminatory access to songs.

Perhaps this proposal does not go far enough. It replaces a compulsory license with a highly-regulated market. But there is no quid for the recording artists' quo. Recording artists still have legislatively granted access to non-dramatic musical compositions, but there is no corresponding right to access to sound recordings for samplers and other artists who create music based on other recorded works. The recording artists have the benefit of the statutory scheme providing access, but have no corresponding requirement to grant access.

Other reactions and cross-blog discussions:
Cathy Kirkman, Silicon Valley Media Law Blog: More on proposed 21st Century Music Licensing Reform Act: "The legislation could be called the 'MRO Empowerment Act of 2005', as it benefits the music rights organizations (MROs) by legislatively entrenching them in the role of collective licensing bodies and eliminating their antitrust constraints. Licensees of music rights would benefit from one-stop shopping for licenses of digital audio transmissions, but they are severely disadvantaged by the elimination of the compulsory license and statutory rate ceiling."

Ernest Miller, The Importance Of: Forget Grokster? A Recording Industry Bombshell from the Copyright Office: "Wow. My jaw dropped when I read the announcement. Essentially eliminate 17 USC 115. Did I already say, 'Wow'? This would be a radical and, in my view, welcome change in copyright law. I have long been a critic of the mechanical reproduction compulsory."

The 463: Bigger than Grokster? "This is big because regardless of what comes out of all the sound and fury in the post-Grokster world, we're eventually going to need to come back down to earth and find ways for users to enjoy content and fairly pay for it. The Copyright Office may have started leaving bread crumbs for us to find this end goal."

Lawrence Lessig: The Register wants reform: "Apparently the Register believes performers no longer "need unhampered access to musical material on nondiscriminatory terms." What progress."

Ernest Miller: Lessig on the Proposed 17 USC 115 Reform: "And, maybe, more musicians (and record labels) might favor less copyright if they didn't have such easy access to making covers. They might be a bit more sympathetic to other artists who don't have similar privileges and might want to clear rights for snippets of audio in a documentary, for example. I mean, why should record labels care about copyright reform? They've got their mandatory license and complete copyright control over the rest. They've got the best of both worlds. They get to copy what they want and stop people from copying their stuff."

Joe Gratz: Lessig Gets It Wrong On Register’s 115 Reform Proposal: "The practical effect of the Register’s proposal is to force ASCAP, BMI, and SESAC (now referred to as “Music Licensing Organizations” or MROs) to offer blanket licenses for reproduction and distribution along with the blanket licenses they already offer for public performance. Access to all works licensed by the three MROs remains unhampered, and even becomes easier."

Lessig: Wow -- I said that? "My criticism was about the potential for discrimination. The Register is almost exactly right to say 'But in determining public policy and legislative change, it is the author - and not the middlemen - whose interests should be protected.' Almost exactly right, because in my view, we should be determining not just 'the author' but 'the authors' -- the ecology of creativity enabled by copyright's rules. The wonderful and powerful claim in the 1967 testimony is that granting fewer derivative rights to composers than we grant to, say, book authors, produces a wider range of music creativity. I find this argument to be compelling."

Miller: "Non-Discrimination in 17 USC 115 Reform: "One of the problems with 115 is that it creates a mandatory license for the composition, but no corresponding requirement for the sound recording to be similarly licensed. As I noted, the recording companies get the best of both worlds. Complete access to any composition and the ability to exclude similar use of their sound recordings. I would probably have a much different take on 115 reform if the record labels had a "share-alike" requirement to take advantage of the compulsory."

(also posted at IPTAblog)

Saturday, June 25, 2005

Grokster Reader's Guide

Friday, June 24, 2005

Hollywood Reporter Covers History of Politics vs. Entertainment

From Cinemocracy:
In “Fast Forward,” Boliek examines the two seminal Supreme Court cases that concern new technology and the threat of copyright infringement. The first, of course, is the Betamax case of the early 1980s, Sony v. Universal, in which Jack Valenti famously compared the VCR to the Boston Strangler. Boliek discusses the internal deliberations of the Court, which was evenly split until Justice Sandra Day O’Connor, the only judge sitting on the fence, found herself hesitant to ban a device “capable of substantial noninfringing uses.” The second case discussed is the impending MGM v. Grokster, sent from the 9th Circuit to the Supreme Court this very term, argued in March and to be decided any day now.

Monday, June 20, 2005

Copyright Office on Music Licensing Reform

On Tuesday, Jun. 21, at 10:00 AM, the House Subcommittee on Courts, the Internet and Intellectual Property will hold an oversight hearing about Copyright Office Views on Music Licensing Reform with Register of Copyrights Marybeth Peters.

Update (6/21): Statement of Marybeth Peters:
the present language of Section 115, with its compulsory license to allow for the use of nondramatic musical works for the making and distribution of physical phonorecords and digital phonorecord deliveries, is outdated. Reform is necessary, and I am pleased that you have asked me for my recommendations on how to amend Section 115 to facilitate the licensing of nondramatic musical works in a way that will serve the interests of composers and music publishers, record companies and other providers of recorded music, and the consuming public, especially with respect to digital audio transmissions of music.
Peters proposes eliminating the statutory license in favor of "marketplace collective administration," which will remedy today's problems and "provide a workablee solution for tomorrow's issues."

"Compulsory licenses should only be instituted as a last resort, when the marketplace has failed. We cannot say that the marketplace has failed with respect to reproduction and distribution of nondramatic musical works because the marketplace has never been given a chance to succeed."

The proposal would eliminate the section 115 compulsory license and replace it by a voluntary collective licensing scheme. Draft legislation set out the rights and obligations of music rights organizations. Performing rights organizations ("PRO") would become music rights organizations ("MRO") and would have the authority not just to collect royalty on behalf of songwriters, but to set terms for licensing the public performance, reproduction and distribution rights of nondramatic musical works.

More from Joe Gratz: Register of Copyrights to House: Repeal The Mechanical Compulsory, Restructure Music Rights Collectives
One major concern that any repeal of the section 115 compulsory raises is the issue of “cover” versions of songs. The fact that songwriters are compensated for, but do not control, new recordings of their songs has led to a flourishing of creativity — look, for example, at Seu Jorge’s versions of Bowie songs or Nouvelle Vague’s bossa nova renditions of 80s New Wave classics. The Register’s proposal cleverly avoids this problem by forcing songwriters who license their works for public performance through a PRO (which is pretty much everybody) to license “cover” versions through the same PRO.

Cathy Kirkman, Silicon Valley Media Law Blog: Register of Copyrights advocates repeal of compulsory licensing under Section 11
This proposal needs careful review. Peters indicates in her testimony that: "As always, my focus is primarily on the author. The author should be fairly compensated for all non-privileged uses of his work." However we hope that the public interest side of the copyright equation is being considered by the Copyright Office in this proposal.

Update: 6/22. Derek Slater, A Copyfighter's Musings: Register of Copyright Proposes Revision to Section 115 Compulsory:
Peters wants to dispose of the compulsory license for numerous reasons, but particularly because free market negotations would be preferable.  But she doesn't view the free market in a wholly simplistic way, in which efficient outcomes would be reached if only we granted broad entitlements and got out of rights holders' way. Rather, in her proposal, she recognizes that carefully structuring and allocating rights can be crucial to achieving efficiency.