Tuesday, June 26, 2007

The Great Copyright Debate

In case you did not see it in the commentary, Dismuke, an Internet radio webcaster and Objectivist offers some extensive thoughts on the issue behind my "Save Net Radio" post. While acknowledging the fundamental defects of the "Internet Radio Equality Act," he nevertheless supports the act.

Bills like the "Internet Radio Equality Act" present Objectivists with one of the classic conundrums of living in a mixed economy. The proposed bill fails to address the central problem, but if it doesn't pass, the status quo will certainly ruin net radio. In that light, I can sympathize with those who support the bill's passage as a desperation measure--albeit barely.

At the same time however, webcasters had to know they were operating on borrowed time when it came to the current system's grant of statutory licenses. It was (and still is) in their interest to lobby the government for a fundamentally better system and to my knowledge, Dismuke is the only Internet broadcaster to even attempt to properly address the issue before his fellow broadcasters.

So why then did Dismuke's colleagues turn him a deaf ear and ignore his proposal? In my view, it is because much of the debate over intellectual property is simply out of control. Judging by their actions, it seems half the people on the web don't even believe intellectual property exists as property and that anyone should be free to take it at will. Yet properly defining and defending the existence and scope of intellectual property is critical if we are to see the value of such property grow. Below is my contribution to the debate on an issue that I've been recently trying to process in my mind:

* * *
There is an aspect of copyright that I simply do not understand: the fact that copyrights expire. If I own a house, I can sell it, or I can transfer it upon my death to whom I choose and so on. If I abandon the property or fail to act as if I own it by preventing trespassers, others can come to posses it under the law. This is the legal doctrine of adverse possession.

Yet copyright, which protects intellectual property, is treated differently. Copyright expires after an arbitrarily set number of years after the death of the author. After this time-period, the work falls into the public domain; that is, it ceases to be protected as property and at this time anyone can claim the formerly protected property and develop it as his or her own. The idea is that this system protects the creator's property while simultaneously making older works available to those who value them when the creator is no longer on the scene to enforce his property right.

I don't see why an arbitrarily set number of years should serve as the trigger for the transformation of copyright-protected property into non-property. Why can't my heirs posses my copyright-protected as long as they choose to maintain it, or sell it to others and let them posses the rights to it? I define maintenance here as acting as if the copyright-protected work is still your property by registering your title to the work and protecting it from unauthorized copying, the same way you would put a fence around your yard to prevent unauthorized trespass. If an heir is unable to exercise his property right or chooses not to, only then would the work fall into the public domain. This way, intellectual property is treated no differently than other property.

At root, I see little reason to allow the government to convert private property into public goods just because so many years have passed since the death of the author. I freely acknowledge that I could be wrong and that my current view does diverge from Ayn Rand's essay "Patents and Copyrights" in Capitalism: the Unknown Ideal. In her essay, Rand argues that there is a fundamental difference between material property and intellectual property, the former representing "a dynamic claim on a static amount of wealth" and the later representing a "static claim on a dynamic process of production."

I'm still trying to wrap my head around just what that means, so accordingly, I ask my readers to recognize that my thinking is not fully formed and that I speak only for myself on this issue and not the Center. Nevertheless, I think a discussion over the shape and form of intellectual property is a discussion worth having, as the impending demise of net radio would indicate.

9 comments:

Greg said...

Hi, Nicholas. A while back, I wrote an article chewing on IP and Rand's stance regarding it (defending its legitimacy against anti-IP libertarians). Maybe it will help a little here: one section was dedicated to working over the issue of time limits and how they must exist -- i.e., that IP protection must be neither absent nor endless.

Don't Steal This Article!

Nicholas Provenzo said...

Hi Greg,

I remember that article and will be sure to look at it again.

Best,

Nick

sac said...

Greetings, Mr Provenzo,

The basic idea behind limitations on inheritability and length of copyright is that a claim to property must be delineated in concrete terms. A perpetual copyright is, in essence, a dynamic claim against wealth not yet produced. To make the claim static, one must put a time limit on ownership. This is a complex legal calculation, but one obvious point is that it must survive the owner if he dies tomorrow, to make the commercial production of IP practical.

(The preceding is from my notes, but is probably originally cribbed from CUI.)

Dismuke said...

Nicholas wrote:

"So why then did Dismuke's colleagues turn him a deaf ear and ignore his proposal?"

Well, in their defense, the vast majority of them have never seen my proposal and do not know who I am. Of those who did read the discussion board thread where I made my proposal, a few people responded positively and one broadcaster asked for my permission to republish my proposal on his website. And nobody said anything negative about it. Also there is a person associated with a college broadcasting network whose name I forget who put forth a proposal that sparked in my mind what a free market alternative to statutory royalties would look like - I simply took his idea and carried it a few steps further. Also, I heard from a man who runs a successful independent record label who said nice things about some of my blog postings.

But you are correct in that, on a philosophical level, the arguments put forth by the webcasters as a whole have been very weak and frequently counterproductive.

My view of the webcasters is that they not just victims of the RIAA but also of bad philosophy. Most are, sadly, too philosophically clueless to realize that the approach that they take to the issue gives sanction to the very same system that has led to and brought about our pending destruction. I have no doubt that more webcasters would advocate a free market if they had a better idea of what its implications would be. Under a free market webcasters would thrive and prosper. They are the wave of the future - a far better future for both artists and music fans. And, as I mentioned in my previous comments, a case could be made that under a fully free market, it might be very likely that it would be more common for copyright holders to pay webcasters for airing their material than the other way around. The RIAA, by contrast, would lose big time in a free market as it would only accelerate the process which is already leading to its eventual and inevitable demise. And, that of course, is why the RIAA has behaved the way it has.

Dismuke said...

"Judging by their actions, it seems half the people on the web don't even believe intellectual property exists as property and that anyone should be free to take it at will."

What you describe is a HUGE problem. But here too, I lay much of the blame at the RIAA and its Luddite-like behavior.

One could not write a better step-by-step instruction book for bringing about the emergence of a black market than what the RIAA did back during the 1990s in its attempts to ignore and kill off the emerging digital technologies. The general public was able to grasp almost instantly the many benefits of technologies such as mp3 - convenience, portability, ease of distribution, vastly lower cost, etc. Anyone who owns an ipod or other type of mp3 player knows how wonderful it is. It isn't surprising that the public wanted to be able to enjoy their favorite recordings in this wonderful new format as opposed to older formats with their various disadvantages. The RIAA labels' refusal to jump on the technological bandwagon and make legitimate and legal recordings available in the format that their customers wanted created a HUGE amount of unfulfilled demand and, therefore, a void in the marketplace. As the saying goes, nature abhors a vacuum and sooner or later someone was going to rush in and fill it. Since the independents were too small and diverse to be able do it themselves in a realistic period of time, it was the black market pirates in the form of Napster that rushed in to fill that vacuum.

Most industries threatened by new technologies have no choice but to immediately adapt or perish - for example, Kodak which has had to shed its film and photo chemical business and reinvent itself as a name in the field of digital imaging. The RIAA however, by virtue of its huge market share (which existed solely due to the limitations of the older technologies it sought to protect and preserve) and its copyrights had the economic power to at least try and push back for a while.

Yes, the RIAA labels had every legal right to use their market share and economic power to fight back against the new technologies - but it does not, therefore, follow that such a course of action was rational or in anyone's best interests, including that of the RIAA. What they got instead of putting the benevolent technological genie back in the bottle was to open a can of not-so-benevolent worms in the form of Napster.

Imagine if, back in the days when most people still did not even have dial up Internet, the record labels put up kiosks in record stores where one could choose from thousands of digital tracks stored on a computer in the kiosk and then purchase those tracks at a rate which reflected the enormous cost savings that technology made possible and have those tracks instantly burned onto a CD-R while they waited. As the Internet became more popular, they could have sold those tracks as instant downloads at an even greater savings off of their own websites - and for a very modest monthly subscription fee, allowed customers to stream at a low bit rate every song in their catalog as a form of free advertising for the downloads.

If such a scenario was what played out, do you think Napster would have developed to the degree that it did? Piracy has existed since the very early days of the recording industry when people used pantographs to copy wax cylinders - and piracy will always exist. But until the late 1990s, it was something that always existed on the fringes. Today, it is downright mainstream.

The problem is that an entire generation of teenagers who are now young adults who would not even for a moment consider stealing a stick of gum but don't think twice about stealing intellectual property. They grew up in an age where a wonderful and exciting new technology had just appeared on the scene - and they could not take full advantage of its many benefits without resorting to black market venues. It was a classic instance of what appeared to be a clash between the moral and the practical. And, since the notion that we should somehow forever stick with old, obsolete technology and not take advantage of the new was so obviously absurd from the get-go, it was morality in the form of intellectual property rights that took the credibility hit.

But the moral IS the practical - and reality has slapped the RIAA in a very big way. In the face of wonderful new technological advances, the RIAA had the chance to lead the way, embrace the changes and find ways to become part of the new world that was ultimately inevitable no matter what it did. However, recognizing that such technologies would inevitably kill off the entrenched marketplace advantages they had enjoyed for 100 years and open them up to a flood of new competition, they instead decided to act like Luddites and fight the change. What they got was Napster. Today, a decade too late, they are now desperately scrambling to do what they should have done from the get-go with regard to digital technology. Unfortunately for them, CD sales are collapsing faster than expected and, while digital sales are growing, they are not enough to make up for it. Had they acted morally and rationally a decade ago, the market place for digital music would today be much more mature. And while the RIAA labels would not have the dominant position that they have managed to preserve for themselves, they would be in a far better position to face the future than they are today.

My attitude towards the RIAA's never ending battle against file sharing is similar to my attitude towards an attractive young woman who dresses up like a slut and goes into a bad neighborhood making suggestive and flirtatious innuendo to every seedy looking thug she runs into. Yes, when she is eventually raped, she is a victim of a crime. Yes, the person who raped her is a criminal and should be treated as such. But though she might be a victim she is hardly innocent. When it comes to illegal file sharing, the RIAA is, in my book, in the same category. Stealing intellectual property is wrong - but while the RIAA may be able to claim victim status (which it milks for all its worth in Washington), it is hardly innocent.

I would actually regard it as highly amusing if they were the only ones impacted by it. But independent copyright holders are also victims of piracy - and they ARE innocent. And, worst of all, we have an entire generation of young adults out there that has no understanding or respect for intellectual property - and that is going to be a huge problem for everyone in the long run. Just as Herbert Hoover damaged the cause of capitalism for decades, the RIAA's posturing as champions of private property has done enormous damage to the cause of intellectual property rights in an age when few people, even those who are otherwise basically decent and rational, are ill equipped philosophically to see through the mud that has been stirred up.

Dismuke said...

"I define maintenance here as acting as if the copyright-protected work is still your property by registering your title to the work and protecting it from unauthorized copying, the same way you would put a fence around your yard to prevent unauthorized trespass. If an heir is unable to exercise his property right or chooses not to, only then would the work fall into the public domain. This way, intellectual property is treated no differently than other property."

You have touched on something here that copyright reforms in recent years really should have taken into consideration but did not. Today, a copyright expires so many years after the creator's death. I understand the motive for such a reform and agree with it: with today's increased lifespans it is very possible for a successful young writer or composer to outlive his copyrights under the old system.

The problem with the new system, however, is it did away with the mandatory renewal requirement after 28 years. This is a problem because of the enormous amount of works that, for all intents and purposes, have been abandoned but which cannot be brought back to life because, according to our current copyright laws, there is no such thing as abandoned copyrights.

Back when it was necessary to renew copyrights every 28 years, the vast majority of copyrights were NOT renewed and, therefore, fell into the public domain. There are a number of reasons that they were not renewed. Very frequently the works had a very limited lifespan in terms of commercial viability - for example, portrait photographers whose studios went out of business years earlier. Sometimes it was because the owner died and the heirs were either not aware of the copyrights or had no interest in exploiting them.

The reason abandoned copyrights are a problem is because it is very risky for a person to revive an abandoned work. Suppose I found an old film in rather deteriorating condition of undetermined copyright status. I have no evidence that an owner exists for such a work - but, on the other hand maybe one does. Let's say I spend $25,000 out of my own money to restore the film and recoup by costs by having it distributed on DVD for the enjoyment of a niche audience. Suddenly, out of nowhere, an heir to the original owner appears and now claims that he owns the film. I would, of course, be potentially out $25,000 and perhaps more. As a result, I am going to think twice about taking on such an endeavor.

By the way, there is a realm where copyrights do not expire - sound recordings prior to 1972. Prior to 1972, there was no Federal copyright protection for sound recordings. In the very early days of recording, record companies relied on patents and when you purchased a record you actually purchased a license to use a patented product. In theory, at least, once the patents expired, one could do with the disc what one wished. The other thing they relied on was state and common law copyrights - which in most states exist in perpetuity. And the specifics of those laws vary from state to state.

This has been a HUGE problem here in the USA for my fellow enthusiasts of vintage recordings. Most states regard the owner of a recording as the person who owns the master copy. The problem is that the masters to many vintage labels were destroyed. In other cases, nobody on the outside knows what the modern day successors of the vintage record labels have in their archives. For instance, I have heard rumors that when one of the old Victor Talking Machine/RCA factories was imploded back in the 1960s or 1970s, a bunch of old masters were secretly placed in the building at the last minute because the hippies in charge did not wish to pay the storage expense for old masters from an era which they held in contempt in the first place and which were not commercially viable. If this is true - well the legal status of any recordings on the 78 rpms of the masters thusly destroyed is a huge question mark, especially since nobody knows for sure WHICH masters were destroyed or IF they, in fact were destroyed. In Europe and Canada, the copyright law is much clearer: a sound recording falls into the public domain after 50 years. For that reason, most reissue labels are based outside of the USA. It is a rather sad situation because the legal gray area makes it unattractive for people to reissue vintage music here in the USA. Such reissues, at present, are mostly labor of love endeavors - and since the record labels have bigger fish to fry with piracy of modern day recordings and trying to kill off Internet radio, most turn a blind eye to such efforts so long as they content themselves to artists that are not otherwise commercially viable. Congress did pass a law a few years ago which will have Federal copyright law supersede the common law copyrights in the year 2067 at which time they will, by virtue of their age, fall into the public domain. Sadly, until then, most of the recordings from what I consider to be the most wonderful era in the history of popular music will continue to be in a sort of legal no-man's land.

Also, there are a number of movies from the late 1920s and early 1930s that the legal owners no longer have copies of but which still exist in private collections and archives. If you actually wish to ever watch such movies, sometimes your ONLY chance of being able to do so is to acquire a bootleg copy from one of the several vendors of such films on ebay and the Internet. That is a very sad situation for a vintage film fan to be in - and one reason why I have always been tempted to suggest that copyrights be considered abandoned if a work remains out of print for a certain extended period of time. But it is possible that there are implications to such a proposal that I have not considered. This much is true: with today's digital technology, there is little excuse for the owner of a book, recording or movie to allow it to fall out of commercial availability. In the past, keeping it in commercial distribution was expensive and required additional printings or pressings as well as storage costs. Today, all one needs to do is digitalize it - and storage in the form of server space costs as close to nothing as one can possibly get in the scheme of things.

Nicholas Provenzo said...

Dismuke talks about the problem of copyright expiration and the challenge in determining if a work has fallen into the public domain. I think that copyright should have to be renewed (or re-titled if you will) on the grounds that renewal is a reasonable process to establish whether the owner still intends to treat his creation like property or not.

Additionally, I also wonder if there is some potential in using things like registering copyrights to help transition from a government paid for by coercive taxes to a government paid for by fees in exchange for services. My understanding is that it costs very little to register a copyright in proportion to the value of the work (and the value of the government's role in protecting a person's ownership of that work.) While not all works have the same value, should the fee for registering the copyright of an obscure essay be the same as the cost of registering the copyright of a novel in the Harry Potter series? The value of the government's protection of the two works is certainly different—why shouldn't a system be devised that reflects as much in the fees charged?

While I don't think the government could asses such a fee at the copyright registration stage because the commercial value of the work is still highly speculative, it certainly could assess it at the re-registration phase.

Dismuke said...

"While I don't think the government could asses such a fee at the copyright registration stage because the commercial value of the work is still highly speculative, it certainly could assess it at the re-registration phase."

My initial reaction to your proposal was "has he gone nuts?" But on second thought, that actually might make sense but ONLY within the context of a properly limited government. To do that now, of course, when all the money would be thrown down various sewers would be a terrible thing to do to successful copyright owners.

If such a proposal were to be considered at the appropriate time, I think it would also need to be set up so that those who fail to renew would only forfeit the benefits of registration and not all copyright protections that would have continued to be available had the work not been registered in the first place.

Under current copyright law, you do NOT need to register a work to enjoy copyright protection. Such protection is automatic the very moment you create a work. Timely registration gives you significant benefits when disputes arise and it enables you to collect statutory damages and attorney's fees. But you still enjoy certain protections without it.

Personally, I don't have a problem with automatic copyright protection but do have a problem with the fact it enjoys the same life plus 70 years that registered copyrights enjoy.

The problem here is that this creates even greater possibilities for abandoned copyrights. Such is a HUGE problem for those who wish, for one reason or another, to preserve or revive one aspect of our cultural heritage.

For example, had such laws existed 100 years go, it would be a very risky endeavor for me to publish a collection of interesting old snapshots I picked up at various antique stores of early 1900s street scenes. An amateur photographer who took a snapshot 100 years ago could VERY easily have been alive within the past 70 years. Since such an unregistered photo isn't very likely to contain a copyright statement of any kind, it would be impossible to track down the name of the original owner and search for his heirs. This leads to the same problems with abandoned copyrights that I mentioned in my previous comment. As a result one would be taking a risk in publishing the photo. Small time "labor of love" projects might take that risk, but no major commercially viable publishing house would. The result is the preservation benefits that arise from republication and renewed commercial viability would not be available for such a photo - and it is very possible that the image it contains and all of the information and value that can be obtained from it could end up being lost forever as the sole surviving copy either deteriorates or is lost through other means. Today, publishing such photos is not a problem at all as anything prior to 1923 is without question in the public domain.

This is an issue that kind of strikes me close to home. I have an intense dislike for today's popular culture. So outside of technology and keeping up with the news in a general sort of way, I simply do not participate in it at all and instead immerse myself in the popular culture of earlier eras that better suit my tastes. If the future of our culture is to deteriorate and not get better, count on the fact that there will be increasing numbers of people like me in the future who get through it all by focusing on the remnants of previous eras that are available to them. Old writings, photos, paintings and recordings that have long lost any commercial viability might very well be valuable contributions to a renaissance that might have to take place someday. We won't be around to see it (such a decline would likely mean that someone does not come along and invent that wonderful pill I am waiting for that will enable us to live 140 or more years) but it is something that people today need to keep in mind when they are talking about very lengthy periods of copyright protection.

My thought is that automatic copyright protection ought to exist but last for a period of something like 40 years, during which, a person may register it at any time. After 40 years, unregistered copyrights would fall into the public domain. Registered copyrights would need to be renewed after 40 years and at other reasonable periods during the life of the copyright.

Nicholas Provenzo said...

Dismuke writes:

>My initial reaction to your proposal was "has he gone nuts?" But on second thought, that actually might make sense but ONLY within the context of a properly limited government.

Heh. I imagine many people's knee-jerk reaction will be that I am promoting a new tax or something. I'm not. I'm brainstorming on a possible way for a property owner to pay a just price for the value of the property protection that they receive from the government in lieu of coercive taxation. For example, my proposal has the virtue of not requiring that people pay for the government's property protection if they do not wish to use it; it would always remain strictly up to the individual.

Dismuke mentions that currently one need not officially register their copyright in order claim copyright protection under the law. This of course is true and perhaps therein lies a solution to how a scheme like mine would work. The government could provide free copyright protection for IP, but only for a limited time. After that, a property holder would have to register and re-register their copyright if they seek continued protection of their proerty. Absent registration and re-registration, the work would cease to be property and the copyright would expire. This protection could be passed on indefinitely, but since there is a fee associated with renewal, it would only make since to re-register the work if the owner continues to treat work like their property. In my mind, that means most IP owners would continue to make copies of the work available for commercial sale, or some other means of treating the work as property.

I think my copyright scheme would solve the seeming arbitrariness of the current copyright expiration provisions and would give IP that has real value to its owners continued property protection. As such, I think my proposal conforms with a key observation in Rand's examination of material property. In "Patents and Copyrights," Rand observes that material property "can be left to heirs, but it cannot remain in their effortless possession in perpetuity: the heirs can consume it or must earn its continued possession by their own productive work." I agree.

After all, why should Mickey Mouse or the text of Atlas Shrugged cease being protected as property if the works have real commercial value and the legal heirs of their creators continue to treat them as such? For example, if a corporation owns a copyright and the corporation is a perpetual legal entity, why should the corporation's copyright expire so many years after the death of the work's individual author?

Of course, Rand herself argues against my position and I would be remise if I did not note it. She writes again in "Patents and Copyrights": "Intellectual achievement, in fact, cannot be transferred, just as intelligence, ability, or any other personal virtue cannot be transferred. All that can be transferred is the material results of an achievement, in the form of actually produced wealth. By the very nature of the right on which intellectual property is based -- a man's right to the product of his mind -- that right ends with him. He cannot dispose of that which he cannot know or judge: the yet-unproduced, indirect, potential results of his achievement four generations -- or four centuries -- later."

But this I do not understand: a man can assign his heirs, and they can assign their heirs. I'm not seeing how it is parasitism to treat a work of IP like valued property anymore that it would be parasitism for my great-great grand-children to treat whatever portion of my real property that is passed down to them like valued property. At root, I am arguing that any property ought to remain property as long as it is treated like property, and that includes the ability to transfer it to other generations. And if title to the property is not renewed, only then does the work cease to be treated like property.

I continue to solicit feedback and criticism on my musings here. I'm especially interested in any philosophic shortcomings in my argument and the practical problems that would be caused by such a copyright-protection scheme.