Lessig

For the developing world, farm subsidies are slow-motion weapons of mass destruction. Yesterday's WTO agreement is the first multilateral deal in a decade that pledges reductions. If it holds, much could change -- but it could also mean new pressures for adherence to international IP laws.

Here's the hypothesis: Today's telecom and copyright laws often regulate similar subjects, but with a big difference. The telecom laws slightly favor market entrants, while the copyright laws favor the incumbent disseminators. The result is a "copyright gap" that grows larger every day.

Jack Valenti says goodbye in the LA Times today, rating his career "AE--always exciting." A few better and less-well known Valentisms from the King-Kong of lobbyists:

On the nascent cable industry, in 1974
"[Cable will become] a huge parasite in the marketplace, feeding and fattening itself off of local television stations and copyright owners of copyrighted material. We do not like it because we think it wrong and unfair."

On the dangers on media concentration, 1984 Op-Ed
"Will a democratic society allow just three corporate entities to wield unprecedented dominion over television, the most decisive voice in the land? There are now only three national networks .... There will never be more than three national networks."

I wasn't convinced that the broadcast flag was such a big deal. But this story about Tivo asking the FCC for permission to add new features is changing my mind. Creative destruction doesn't ask for permission. (Thanks to Jonathan Zittrain, Susan Crawford).

Last week I was chatting with a friend who now works on the House Ways and Means Committee. Talk turned to the Australia-US Free Trade Agreement, which Congress passed in July and which President Bush ratified yesterday.

"That DMCA and copyright term extension stuff," he said to me, "None of it was really seen as controversial."

"Some people consider it controversial" I said.

"I'm sure you're right, and that's what I thought" he said, "But we only got letters from the library people." A pause. "Its become a standard clause, and doesn't really get much attention. If people care about it, they need to do more."

He's right. Years of DMCA & term extension criticism can easily boil down to "not controversial."

Years ago, when I was a law clerk, I was impressed by how much Judge Posner could accomplish with one simple question. He would ask, "What exactly is the purpose of this law (or proposed rule)?" It was astonishing how often lawyers would stare or gasp, unable to answer this most basic of questions.

I think the least you can ask of government, whatever branch, is that it always have an answer to Posner's question. When acting on behalf of the public, it ought always have a clear reason for what it is doing, that it can articulate without shame, sloganeering, or reliance on non-existent evidence. Is that too much too ask?

Yet so often Government is failing this simplest of tests. Copyright, our favorite topic, is full of stuff that lacks what lawyers call a rational basis. If you really ask -- what does it accomplish to extend copyright on existing works by 20 years? How does that promote the progress of Science? There just isn't, and wasn't an answer.

Or this weekend, as the Adminstration put the nation in a state of fear with heightened terror warnings. We should expect a reason, and good reason. Fear is very expensive. But we read instead that years-old evidence justified the action? We're not in a position to know better, but why can't the Administration explain why it is doing what it does? Why can't it give reasons for its actions that don't insult our intelligence?

Or consider the Supreme Court, which in Blakely, seemed to strike the sentencing guidelines and created chaos in the district courts. Again, to what end? Can the Court even articulate what it thinks it is accomplishing?

I don't think Government by reason is too much to ask for. But it certainly isn't what we're getting.

The full text of Dan Gillmor's book "We the Media," about blogs and other things, is now online. (Thanks to fellow alper Cory Doctorow).

The FCC today tenatively concluded that most Voice-over IP providers will likely have to comply with a major federal wiretapping statute, the Communications Assistance for Law Enforcement Act (CALEA). This means companies like Vonage will probably soon have to provide law enforcement with some way to tap their service.

I don't consider the vote particularly surprising -- VoIP phones look like telephones, and who's going to vote against national security? But I nonetheless think the approach unfortunate.

Here's why. VoIP, despite the incessant hype, is still a baby. There has still been more said about VoIP than actually using VoIP. Yet this infant has already attracted more regulatory attention than many grown-up technologies. That kind of attention is not a good thing for a youngster: too much light makes the baby go blind. Its a bad thing to have startups spending their time thinking about regulatory compliance instead of better service. Having the the FCC and Congress as foster-parents is at best like being a child-star and at worst like being raised by alcoholics. Either way, stunted growth is a likely outcome.

I think the FCC and Congress do better to regulate what actually exists, not what is supposedly "on its way." Just think "Digital Television."

Last week I went to a Black Eyed Peas concert at the Avalon in Boston. It was a DNC event sponsored by the RIAA, and at the doors, big signs were posted everywhere: "Absolutely No Cameras."

The result: Chaos in the line, as people were sent home after failing cell phone inspection. The choice was to leave your phone / camera behind or leave the concert. People were mad. ("Where is the love?" they asked). So I asked the bouncer, "what's this about?"

And he said "It's not our deal. Its those guys [the sponsors]."

So perhaps this is becoming routine and I'm late to it. But can the idea really be (as this suggests) that cell phone pictures of a band are considered a competitive threat? There's controlling, and then there's obsessive-compulsive.

So today copyright scholar Joe Liu at Boston College asked a room full of law professors an interesting question. What did we think copyright would look like in 8 years? Here were some of the main categories of predictions (some contradict):

Every so often someone defends, with a straight-face, that which we think undeniably wrong. They say, for example, that the holocaust never happened, or perhaps that slaves actually liked slavery, or that some degree of torture is fine as government policy. Orwell called this ability "Blackwhite," or "a willingness to say black is white when party discipline demands this." In its advanced form it leads to "the ability to believe that black is white, and more, to know black is white, and forget that one has ever believed the contrary."

Here's the question: What would the Induce Act look like if it balanced the interests of copyright owners and technological innovators? Here's what: the Inducing Innovation Act.

Comments welcomed, and thanks to all those who helped work on this.

The Broadcast Flag regime is, I think, something of an embarassment for the FCC. Many of the commissioners came to the FCC to deregulate telecommunications law, not to regulate the electronics industry. Yet they find themselves in mission creep mode, issuing command-and-control rules for the design of consumer products, surely prompting some to wonder what exactly they're fighting for.

Evidence that the FCC's heart isn't really in this stuff comes from its approval this week of thirteen distribution technologies, without much fuss. It supports the sense that the Commission wants out.

Of greatest symbolic importance: Approval of Tivo's TivoGuard system. That's the technology behind the TivoToGo system, designed to let Tivo users swap shows they've recorded, within certain limits. The MPAA and NFL opposed it for the usual reasons - marginal threats to existing revenue streams. Classic rent-protection behavior, and supposedly what the new FCC exists to fight.

Others have said this before, but the FCC plays at copyright at its peril. As many know, the late 1960s was the last time the FCC played copyright cop, and it was perhaps the most embarassing episode in the history of the Commisison. Acting mainly on the advice of the Broadcast industry, the FCC did what it could to sabotage cable TV, in favor of the great technical wonder of UHF. The motto from the FCC's own Vietnam should have been "never again." Today, the FCC's back in the pseudo-copyright game, and it should be looking for a graceful exit strategy.

Here's another alternative to the Induce Act, and there are others out there.

P2PCongress' plan to provide access to easy P2P distributed archives of Congressional hearings is both useful and a killer example of non-infringing use. Others?

As Mark Frauenfelder and others have documented, the Guthrie family and probably Woody himself think the JibJab parody just fine. In the words of Grandaughter Cathy Guthrie (pictured here), "this parody was made for you and me."

But here's the thing: much of the JibJab Brouhaha was actually caused by a lack of author's rights....

I'm pleased to remind everyone that Congressman Rick Boucher will be running the Lessig Blog this week. Rep. Boucher is a hero to many for his opposition to the DMCA and authorship of the Digital Media Consumer Rights Act. And yes this is a Virginia conspiracy.

I will return next week, and special guest Judge Richard Posner will close out the month, starting August 23. Goodbye till then, and thanks for all the comments and feedback.

I have tremendous respect for the scholarship of Professor Larry Lessig, and I am honored to be asked to host his blog this week. I hope that over the coming 5 days, we will have a series of thought-provoking conversations. Your views and suggestions will be helpful to me as we consider a variety of matters that Congress is now debating or will take up next year.

Let's begin today with the hottest topic, the so-called Induce Act.

The Senate has under consideration a bill ( S. 2560 , often referred to as the Induce Act) that makes it unlawful for anyone to "intentionally induce" the infringement of a copyrighted work. By creating a new cause of action based on a subjective test, the legislation would overturn, or at least make irrelevant, the Supreme Court's objective test in the Betamax case ("capable of substantial noninfringing use"). The effect on device manufacturers, including computer manufacturers, would appear to be self-evident: They could not bring new multi-purpose devices (including software) to market without facing the threat of crippling litigation. They would either have to withhold from the market useful new technology or agree in advance to restrictions on the functionality of the equipment, perhaps even agreeing to specific technical mandates sought by content owners.

Out of concern that the Digital Millenium Copyright Act went too far in restricting fair use in the digital era, I have drafted and introduced along with John Doolittle of California H.R. 107, the Digital Media Consumers' Rights Act. Among other objectives, the bill would confirm that a person would not be deemed to have illegally "circumvented" technical protection measures guarding access to copyrighted works under Section 1201 of the DMCA as long as he or she had no intent to infringe the copyright in the work. Our bill also embodies the Supreme Court's Betamax standard to insulate from liability hardware and software that is capable of substantial noninfringing uses. We also create a broad scientific research exemption to the DMCA to address the "Felton" circumstance. Our bill would do nothing to change the definition of fair use or to address the scope of its protection, as defined by the courts. We would simply assure that traditional fair use privileges continue with respect to digital media. Nonetheless, copyright owners have asserted that the bill would essentially legalize all hacking and all hacking tools.

When disruptive new technologies have emerged that changed the way in which consumers have gotten access to news and entertainment (e.g., radio and cable television), the existing legal structures of the Copyright Act often could not accommodate the challenges posed by the new technology. In the early case of piano rolls and later with radio and cable television, for example, Congress adopted compulsory licensing legislation as a means of appropriately compensating content owners while simultaneously encouraging widespread use of the new technologies.

With P2P music file sharing, we have witnessed a range of dramatic responses from the content owning community: massive lawsuits against individuals, including innocent children and grandparents; invasive efforts to get customer information without the intervention of a judge through misuse of administrative subpoena provisions of title II of the DMCA; and now the Induce Act in the Senate.

Fred von Lohmann and his colleagues at EFF have suggested an innovative alternative to litigation and traditional compulsory licenses. Their approach, described as a "voluntary collective licensing" system, is aimed at compensating artists while ensuring that new technology will flourish. I would welcome your thoughts on whether this is the kind of approach we in Congress should implement or whether there are other alternative means of moving beyond the unproductive debates of today to a new legal regime for music file sharing.

Next year, Congress will begin the difficult process of rewriting the Telecommunications Act of 1996. As a Member of the House Energy and Commerce Committee (as well as the Judiciary Committee), I see this exercise as an enormously valuable opportunity to fashion new federal guidelines for the era of Internet-based communications.

In anticipation of this debate, I have joined with Representative Cliff Stearns of Florida in drafting H.R. 4757, the Advanced Internet Communications Services Act. The legislation would stimulate investment in, and encourage the rapid deployment of, Voice over Internet Protocol (VoIP) and other Advanced Internet Communcations Services. We begin from the premise that VoIP is neither a pure telecommunications service nor a pure information service, as defined under current law. We would write new rules for it.

With its packet-switched architecture, VoIP offers a far more convenient and less costly means of making telephone calls than the currently used circuit-switched technology. Internet-based telephone calling will bring digital clarity, greater flexibility of service offerings and substantial consumer savings over the analog circuit-switched technology now widely in use.

Whenever I speak with librarians about fair use or the Copyright Act more generally, I inevitably hear them express concerns that we run the risk of becoming a pay per use society, one in which content is available only for a fee. I am concerned that the bookmobiles we all grew up with and their modern day equivalents will go the way of the eight track and the reel-to-reel, replaced by a world in which access to information will depend on the ability to pay and, worse, a world in which a payment gets you only a license to view or listen to something, not to actually own it. But I know it is said by some technologists and economists that this is the way it should be, if only because it is the most efficient means of allocating something in a market economy.

In thinking about the future of my information availability in our society, am I right to be concerned about the emergence of pay per use as the norm?

I am beginning a long-awaited weeklong break today, and I will be in a place which has no telephone access. Therefore, I will not be interacting with those who post responses during the course of today. I look forward to reading all of the postings in the blog archive upon my return.

This has been a most enjoyable and informative experience for me. I thank Larry Lessig for asking me to host this week. I have concluded that his brilliance is almost matched by that of his regular blog contributors. Each of you is invited to stop by my office for a visit when your travels bring you to the nation's capital.

Whether you like him or he drives you nuts, John Perry Barlow is incapable of being boring. From his interview with Reason, on reality TV, intellectual propetry, and his decision to leave the Republican party:

"If all ideas have to be bought, then you have an intellectually regressive system that will assure you have a highly knowledgeable elite and an ignorant mass."

"I think he’s [Kerry] been in the U.S. Senate long enough to have his backbone dissolved. ... But I think Kerry will be somewhat better than Bush, if for no other reason than he is not on the same side in the culture war. Kerry’s a Deadhead. He inhaled."

An interesting question raised by comments: What do self-proclaimed libertarians say about intellectual property laws nowadays, and have things changed since the 1990s?

Ongoing August chatter: what should the Telecom Act of 2006 look like? Below are 6 items and some of the papers making the rounds.

Take the pledge here.

If it is true, first, that widespread piracy at some point diminishes the incentives for industry to invest in new works;

And if it is true, second, that piracy is limited to a demographic, say, 15-25 year-olds (perhaps because people older than that are lazy or value their time more);

Won't the eventual response of industry be to simply begin investing in films like "On Golden Pond," and music like "Air Supply, Greatest Hits part 6?"

In other words, doesn't piracy carry its own punishment? (And conversely, doesn't paying brings its own rewards?) That's how the rest of the market works -- products follow willingness to pay. And if this is right, what are the arguments for government supplementing the punishment?

So how often do you actually visit sites in other countries? How about in other languages?

If you're like many users, the answer may "not that often" (apologies to the foreign readers of Lessig Blog). Its a small sign of the Balkanization of the Internet, a process that is happening faster than anyone is noticing. What we once called a global internet is becoming, for many practical purposes, a collection of nation-state networks, still linked by the internet protocol, but for many purposes, separate. Some of the evidence:

"A lot of people would like to think of whales as philosopher-poets swimming around the oceans thinking deep thoughts, and that is not true," said Dr. Roger Payne. "But for some reason, people are deeply, deeply impressed by these animals. It may be their size, and grace has something to do with it. But there really is an air of mystery about them."

Economists who study government (public choice theorists) have since the 1970s been interested in the "Loser's Paradox." Can it help explain the content of our copyright and telecommunications laws?

Witness the Copyright Gap in its full majesty. In the UK, Digital Radio has been live at the BBC for about three years now. As the BBC says, "Digital Audio Broadcasting gives you far greater station choice, better reception & clarity of sound with no re-tuning."

Yet meanwhile, in the country that invented both the radio station and the transistor, digital radio is stuck. Among other problems, the FCC is contending with the RIAA's arguments that, absent proper controls, digital radio would be "the perfect storm" for the music industry. Digital radio, the RIAA believes, must be prevented from causing the "enormous damage wrought by peer-to-peer piracy." On Monday, the RIAA filed a new letter reiterating that the “threat" from digital radio is "real and imminent."

In addition, anyone who wants to run a digital radio-station through the network as opposed to broadcast is at an immediate disdvantage over those who stay analog or terrestial. A 1995 Act mandates that digital broadcasters pay an additional license fee (for sound recording copyrights) above and beyond the usual fees due ASCAP or BMI. That puts network radio, the technology of the future, at a cost disadvantage. And who gets those extra fees? You guessed it -- the RIAA.

So next time you’re wondering why radio isn't any better: its not the technology that's the problem.

As my colleague Glen Robinson wrote in the 1990s, the transformation of the FCC from the 1960s-to 1990s was “one of the stunning achievements of modern public policy," accompanied by "the transformation of a staid and stagnant industry into the most dynamic and rapidly growing industry in the modern economy.” As he argues, it “did not come about through technology alone; it came about by rethinking notions about natural monopoly, economies of scale and scope--concepts near and dear to the ancient regime.”

Where are we today?

Speaking of balkanization and translations, this is what appears to be a double translation of Lessig blog. From English to Japanese and back again, as in:

"If it will not be able to bear to like him, John Perry Barlow is the man who does not separate only in tedious existence."

"Thierer, The Next Telecom Act - What does Cato want?"

"After [ a cyber-ethics champion ] paddle."

So here's how this week's topics connect. In response to the Balkanization point, people in commentary have been writing on the need for a better way to overcome language barriers. As Jeff Licquia put it: "One word: Esperanto."

Believe it or not, the P2P VoIP program Skype happens to offer Esperanto as a language choice.

Skype lets you search for other Esperanto speakers. Do so and you will find listed none other than the great Chris Libertelli, senior legal advisor to Michael Powell.

Result: You can use P2P VoIP to speak to the FCC in esperanto about its approach to digital audio. Isn't technology wonderful?

Grokster has won MGM v. Grokster. (By Grokster I mean "Streamcast & Grokster," hereinafter)

Analysis

The Ninth Circuit has decided that, on the facts developed, Grokster-style P2P technology is an easy case under Sony. For those unfamiliar with Sony, that decision held VCR manufacturers are not liable for copyright infringement practiced by owners of VCRs. The Court ruling recognized, in other words, that the P2P filesharing technology in programs like KaZaA falls into the same category as typewriters, photocopiers, VCRs, and pencils. All are tools that whose usage is not supervised by the manufacturer, that can be used for both legitimate and illegitimate purposes. All are tools that do not attract copyright liability for the manufacturer.

The opinion turns on facts rather than law. Two crucial factual findings accepted by the Court are basically the case. First, the court concludes that P2P is “capable of substantial non-infringing use”:

"A careful examination of the record indicates that there is no genuine issue of material fact as to noninfringing use. Indeed, the Software Distributors submitted numerous declarations by persons who permit their work to be distributed via the software, or use the software to distribute public domain works. [Example of popular band Wilco, who became successful via the P2P music distribution] ... In short, from the evidence presented, the district court quite correctly concluded that the software was capable of substantial non-infringing uses and, therefore, that the Sony-Betamax doctrine applied."

The second factual matter is whether Grokster "contributed" to infringement by its users. The Court found that Grokster does not provide the "site and facilities" for infringement:

"[Grokster et al.] are not access providers, and they do not provide file storage and index maintenance. Rather, it is the users of the software who ... create the network and provide the access." This, of course, is the major factual distinction from the Napster case, as Napster did provide an index and servers that were the "site and facilities" for infringement.

With these two factual findings in place, victory under Sony follows directly. The design of KaZaA with Napster in mind, and the successful development of these facts by Grokster’s lawyers at the EFF (Fred von Lohmann among them), is why Grokster won.

The court writes with a self-consciousness of the effects of copyright for innovation policy. It, in other words, writes in Silicon Valley language rather than Hollywood. The word “piracy” is not in the opinion, nor is “stealing.” Instead, words that could have been penned by Schumpeter: "the introduction of new technology is always disruptive to old markets, and particularly to those copyright owners whose works are sold through established distribution mechanisms.” Does it matter in the long run if the recording industry is hurt? Not really, suggests the court: “history has shown that time and market forces often provide equilibrium in balancing interests, whether the new technology be a player piano, a copier, a tape recorder, a video recorder, a personal computer, a karoke machine, or an MP3 player.”

The opinion is not without its weaknesses, particularly with a view to Supreme Court review. The most obvious weakness relates to the “blind eye” or “willful blindness” issue. On one account, Grokster escaped liability because it deliberately created a P2P network over which it had no control over specific file transfers. If it is trivially easy to create a network that makes it easy to stop copyright infringement, cannot Grokster be accused of trying to make an “end run” around the law, or making itself “willfully blind” to the infringements it is contributing to? This is the more important of two crucial differences with the Aimster decision penned by Judge Posner. Posner said in dicta that “One who, knowing or strongly suspecting that he is involved in shady dealings, takes steps to make sure that he does not acquire full or exact knowledge of the nature and extent of those dealings is held to have [knowledge sufficient for copyright infringement.” Arguably – constructing a system that deliberately left Grokster uninformed and incapable of stopping infringement – is what Grokster did here.

It’s a weakness because the Ninth’s circuit treatment of this issue is cursory: “There is no separate ‘blind eye’ theory or element of vicarious liability…” If this case makes it to the Supreme Court, I would expect everything to turn on this issue. Grokster, of course, can argue that making itself “willfully blind” is actually a better P2P design, and not just a ruse to get around copyright infringement.

But let’s return to the end result. The sale and design of P2P filesharing technology has just been legalized in California. Whether legalizations spreads depends on Supreme Court cert. policy (more on this latter), and that place called Congress and its Act called Induce.

So the question on Grokster-watchers' minds: Cert? (For non-lawyers: will the Supreme Court hear this case?)
My guess is yes, for 7 reasons, ranging from the more to less legal:

1. These is a stated legal conflict on the Sony standard as between the 7th and 9th Circuits;
2. The 7th and 9th Circuits disagree (albeit in partially in dicta) on the relevance of willful blindness to secondary liability;
3. The Court has these matters in hand: it has granted cert. in many similar cases historically (Sony, 1980s, White-Smith (the Piano Roll case) 1909, Teleprompter and Fortnightly (Cable / Broadcast, 1960s & 1970s);
4. The Court has a vague sense that some far-out stuff is going on in the field of "Computer Law" that maybe it should check out;
5. Law clerks use P2P technology to plan basketball games;
6. JJs. Stevens and Breyer deeply dig this stuff;

And most importantly,

7. The Court loves to be the center of attention, and this would make it so.

So will MGM v. Grokster fasttrack the Induce Act, as many (here Seth F.) think?

Hard to say, but there are some reasons, both from theory and history, to think that it won't. First, the Grokster decision, by creating a Circuit split, actually creates legal uncertainty that may slow down settlement. Both sides now have a chance to win outright in the Supreme Court. This probably matters more to the electronics industry-- with a chance to get everything they want through the Supreme Court, the attraction of settlement decreases.

Second, the story of Sony itself was similar in some ways. During the litigation, both sides had proposed legislation that would have settled Sony with one a various royalty schemes. After Sony came down from the Supreme Court, Sony stopped wanting to negotiate, and the MPAA reevaluated its stance and decided to take a softer line. Now history may not necessarily repeat itself, and Sony the company is a much more reputable player than KaZaA, but that's the closest parallel.

Third, and finally, particularly if the Court grants cert., Congress may be reluctant to act in the midst of ongoing litigation. Congress likes reversing decisions, as opposed to deciding them itself -- that has too much of a "bill of attainder" feeling.

In other words, much in my opinion turns on whether cert. is granted. See previous post.

I'm Dick Posner; I'll be Larry's guest blogger next week (week of Aug. 23). If you don't know anything about me, you can check my home page: Richard A. Posner

Technologists are divided in some ways, but united by a common faith. Stated simply, we worship innovation. Openist, deregulationist, libertarian, or cyber-anarchist all take innovation as deliverance. Our battles are mostly internecine warfare, fights about how best to achieve that common goal.

But how often do we ask ourselves: Why? What is the “end” importance of innovation? Is it more than just liking new stuff? How, if at all, does innovation connect with, say, human happiness?

Are certain members of the federal judiciary actually highly intelligent robots?

Doug Lichtman is an information law scholar at University of Chicago and one of the best of our generation (I recommend in particular his information platforms piece). He and I agree on many things, but disagree on some too. And when you boil things down, the differences come down to something simple: our views on timing.

This is the end of my stewardship of the Lessig Blog. It has been a pleasure to meet many of you and I thank you for reading the web-log in Larry's absence.

For the rest of the year you can find me either on the 7th floor of Columbia Law School, where I am a visiting professor, or back in Charlottesville/Washington DC. My email address can easily be found using a google search, which is probably why I get so much junk mail. I also have a lousy web site which stores much of my written work and other information.

Our next guest is Richard Posner. Mr. Posner works for the federal government, and enjoys writing, oral argument, and demolishing fields of study. He is fond of animals of most stripes and once owned a horse named "King." Mr. Posner's favorite film is the critically-maligned comedy Eight Heads in a Duffel Bag. He lives in Chicago.

Please join me in welcoming our guest to what promises to be a very interesting week.

Tim having vacated the premises early, I thought I should accelerate my entry, especially to correct his statement that "Eight Heads in a Duffel Bag" is my favorite movie. It was my favorite movie, but that was before I saw "The Matrix," which is my current favorite (though just the first of the three Matrix films), and which seems to me a portent of one of the directions in which technology is moving us. The social and legal impact of technology is going to be the principal theme of my week as Larry's guest blogger.

Sad to say, there are two things that, as a judge, I can't talk about in public (and this is in public). One is pending cases, which means (in any court, not just mine) cases in which all possibilities of further proceedings, such as an appeal to the Supreme Court, have not yet been exhausted. Oh I can mention a case, e.g., Grokster, which Tim discussed and linked to, or even talk around it a bit, but I can't comment directly or indirectly on the merits of the decision. I can, though, point you to a case, related to Grokster, that I wrote and that the court in Grokster mentioned in footnote 9 of its opinion: the Aimster case.

Larry Lessig from time to time flagellates himself about losing the Eldred case in the Supreme Court. He shouldn't; it was unwinnable for a host of reason (the lopsided vote--7-2--is a clue). Yes, Congress can confer copyrights only "for limited Times," but what's "limited" is a matter of perspective. If the Sonny Bono Copyright Term Extension Act had been in force in Shakespeare's time (there was no copyright then, in fact), then, since Shakespeare died in 1616, his works would have entered the public domain in 1686--more than 300 years ago. So Larry focused on the retroactive feature of the law (that it extended existing copyrights), but that carries the issue away from "limited Times"--the extended works were extended for only a liimited time--and ignores the fact that there social benefits from "propertization"--from the fact that a property owner has an incentive to conserve his property; that is why toll roads are less congested than "open access" highways; and why poor old Mickey Mouse would be even less free if anyone could employ him without compensation. Then too, if the Supreme Court had invalidated the Act, Congress could have retaliated by allowing states to grant copyright--perpetual copyright, if they wanted, which was the regime for most unpublished works until 1976.

All this said, the net effects of the Act and therefore of the Eldred decision are probably bad. But the worst of them should be remediable fairly easily. Stay tuned.

The conventional economic objection to copyright and other IP propertization is that it limits access and by doing so causes a misallocation of resources: making and distributing another copy of some piece of software might cost nothing (well, virtually nothing), and yet if the copyright owner charges a price of say $100 for the software, people who value it at more than zero but less than $100 will be deflected to substitute products that may be more costly or of inferior quality; and that's inefficient. Of course, limiting access may (or may not) be the least objectionable way of incentivizing producers of IP, but, as critics of Eldred and the Sonny Bono Act correctly point out, tacking on years at the end of an already long copyright term has only negligible effects on the incentive to create a copyrighted work in the first place. Who would refuse to create a work unless he could count on his heirs' receiving income from it more than 50 years after his death?

But, contrary to appearances, limiting access because copyright enables copyrighted works to be sold at prices in excess of marginal cost (the cost of one more copy) is not the main problem created by the Sonny Bono Act. Very few works of art, literature, or entertainment retain significant value 50 or 70 years after the death of their author. As Lessig's brief in the Supreme Court pointed out, the problem for people like Eldred who want to publish old works (works that would have entered the public domain by now were it not for the Act) is transaction costs, not license fees: the costs of locating and negotiating with the current copyright owner. Those costs may well exceed the modest commercial returns from publishing a public domain work (which anyone can copy). The beauty of the old (pre-1976) copyright system, with its requirement of renewal beyond a shortish initial term (like 28 years), was that most copyrights, lacking commercial value by the end of their initial term, were not renewed, and so fell into the public domain, and so licensing costs fell to zero.

The old system is gone, perhaps forever. What to do? Fair use to the rescue (next).

"Fair use" is a doctrine of copyright law (with counterparts in patent and trademark law as well) that allows a degree of unauthorized copying of copyrighted works. Shocking! Squatters' rights! Can a teenager take my car for a joy ride and when he's caught plead "fair use"--that I wasn't using my car and didn't miss it for a second! But there's a big difference between physical and intellectual property. Only one person at a time can use my car, so, in general if not in every instance, someone who takes it interferes with my use of it. But if someone copies my copyrighted book, that doesn't interfere with anyone else's use of the book, or prevent my publisher from continuing to sell copies, though it may reduce his and my income. That's why "theft" of intellectual property, and such synonyms as "piracy," are merely analogies, and often misleading ones. It's hard to see how I could benefit from someone taking a joyride in my car without my permission, but easy to see how I could benefit if a reviewer of one of my books quoted a paragraph of the book in his review without having to get my permission (which would undermine the credibility of the review).

Bill Patry, a distinguished copyright lawyer and treatise writer, and I have written an article soon to be published in the California Law Review in which we advocate an interpretation of "fair use" that would solve the major problem that extending the copyright term creates. We argue that it should be considered fair use to copy an old work if the copyright owner hasn't taken reasonable steps to provide notice of his continued rights, as by entering his name and address in a copyright registry. Given such a rule, such registries (which have counterparts in the case of works of visual art) would spring up overnight. Then if an Eldred wanted to publish some old work, he would consult the registry or registries and if no owner was listed (which would usually be the case, because most old works have no commercial value and so their owners won't bother to try to keep them from falling into the public domain), he could publish it without a license.

I've received some interesting comments on my last posting. One of the commenters asked me to explain the fair use doctrine; here goes.

The doctrine, which has close counterparts in patent and trademark law, permits a degree of unauthorized copying of copyrighted works. Shocking! If a teenager takes a joyride in my car and is arrested, can he defend by arguing that it was a "fair use"? No, but the example points up an important difference between physical and intellectual property, a difference obscured by the use of words like "theft" and "piracy" to describe unauthorized copying. If someone takes my car, he deprives me of its use. If he copies my copyrighted book, I still can read, use, and sell the book, although my publisher's and my income may be less because one fewer copy will be sold. But maybe not--maybe the copycat wouldn't have bought the book if he'd had to pay the retail price. And if instead of copying an entire book, a book reviewer quotes a paragraph from it, I may well be better off (in contrast, say, to someone who doesn't want to drive my car but just store stuff in the trunk); and if he had to get my permission to quote, I might be worse off, especially since reviews would lack credibility if reviewers needed the author's permission to quote. Unauthorized quotation by book reviewers is an example of fair use.

The fair use doctrine originated as a judicial doctrine, and like many judicial doctrines was general in terms, setting forth a standard rather than a set of precise rules. Congress put a clumsy thumb in the pudding in 1976, when it "codified" the doctrine. It wasn't really codification, because Congress did not set down a legislative rule to supplant the judicial one; it just listed four factors for courts to consider, and it made clear, as is sometimes overlooked but as I tried to make clear in my opinion in one of my court's countless (and fascinating) "Beanie Baby" copyright cases, Ty, Inc. v. Publications Int'l Ltd., that the four factors are neither exclusive nor mandatory.

Where does that leave us? The general view, which you find in advice to authors, as in "Copyright and Fair Use," is that fair use is very vague: "The only guidance is provided by a set of fair use factors outlined in the copyright law. These factors are weighed in each case to determine whether a use qualifies as a fair use. For example, one important factor is whether your use will deprive the copyright owner of income. Unfortunately, weighing the fair use factors is often quite subjective. For this reason, the fair use road map is often tricky to navigate."

That's certainly true if fair use is applied on a case by case basis, using either the four factors or some more general--and more accurate--standard such as that unauthorized copying is permissible when it does not seriously infringe the legitimate interests of the copyright owner. But that isn't the right approach; it's much too vague. The right approach is categorical. Book reviewers can quote from the books they're reviewing. Period (unless, perhaps, the book is so short, and the review so long, and the review quotes so much of the book, that the review becomes an actual substitute for the book--but I've never heard of such a case). Parodists can copy a big swatch of the parodied work--otherwise it won't be recognized as a parody. And so on--and, Patry and I believe, copying of old copyrighted works should be permitted if the copyright owner has not taken minimal steps to place copiers on notice of his interest.