Michael Scott points us to a short article/paper with the perfect title:Aiming at Copyright Infringers and Hitting the Digital Economy by William Dutton from Oxford. The key point, as you might imagine, is in challenging the various attempts at ratcheting up copyright enforcement around the globe in the mistaken belief that it'll actually slow down infringement. Like many other reports, he points to research that suggests that such laws do not have the intended effect at all. But the bigger issue is how this quixotic focus on ratcheting up enforcement has very serious costs to the rest of the economy:
Secondly, and most significantly, the measure could have unintended
negative consequences for the vitality of the Internet -- the network of
technologies, practices and people that are key to the digital economy. The
Internet is not built on a house of cards, but it is nested in an ecology of
policies and practices that make it difficult for legislators to change one key
element and not have repercussions throughout the larger ecology (Dutton et
Specifically, the strategy of copyright defenders could indirect consequences
on freedom of expression and access to the Internet. This stems from the
copyright protection measures placing the communication regulator into the
position of creating mechanisms to monitor users in order to identify those
violating restrictions on unlawful file sharing. Governments are moving from a
position of not regulating Internet content, to assuming responsibilities for
Internet content regulation. They are passing these responsibilities on to
regulators, to pass these responsibilities on to the ISPs, who then are able to
bring violators to the attention of the regulatory authority. By putting ISPs into
the role of monitoring users and disconnecting repeated offenders, the
initiatives change the role of the ISP -- moving it towards a more traditional
communication intermediary, such as a broadcaster, rather than the provider
of an end-to-end network.
A number of governments have been regulating Internet content via the ISPs.
China has used this approach, for example, to monitor chat rooms and
forums. However, once ISPs are put in the position of monitoring and
potentially regulating Internet content, by either blocking content or
disconnecting users, they become editors, and therefore open to many of the
same legal instruments as other edited media, such as the press. This can
subject ISPs to even greater risks, such as from being held responsible for
defamation. In such ways, as governments push ISPs into a new role as
intermediaries, they are on a slippery slope that could have a chilling effect on
both ISPs and Internet users.
Of course, plenty of people have been pointing this out for years, but I'm always glad to see more people recognizing these key points.
It's been an interesting few weeks on the research side of things, and it seemed like a recap was in order. Kicking it off, we had two separate research reports from two highly regarded organizations, both of which came to the same basic conclusions concerning strategies for dealing with copyright infringement online. First was the, rather epic, research report from the Social Science Research Council, which concluded that greater enforcement wouldn't work and wouldn't stop infringement in various countries around the world. Instead, it argued that the solution was better business models by the entertainment industry. Just a few days later, some research from the London School of Economics concluded basically the same thing, specifically in looking at the Digital Economy Act in the UK. It came up with three basic conclusions: the decrease in sales is due to many factors; providing legal, innovative and consumer friendly services is a much better strategy than enforcement; and focusing on enforcement that suppresses new technologies will not do much good. And, then, finally, late last week, we came across a study that also highlighted that the supposed "damage" done by file sharing appears to be exaggerated.
So... what does this tell us? It seems to support what many people have been saying for over a decade. Fighting what technology allows and what consumers want is not an effective strategy. File sharing, if combined with smarter business models, can allow music to flourish just fine, and (most importantly) focusing on greater enforcement strategies won't solve any of the industry's problems, but could actually harm new businesses and new opportunities.
So, given all of that... shouldn't we be rather alarmed that the key strategic effort by the entertainment industry these days, which is now the official policy of the White House is to focus almost entirely on "greater enforcement"? Of course, part of the problem is that the last time we ramped up our IP laws, with the ProIP Act (driven by the entertainment industry, of course), part of the law was to create an "IP Enforcement Coordinator." Note how short-sighted this is. It wasn't about creating an "IP Effective Coordinator." It wasn't about creating a role to determine the best or most appropriate levels of IP. It wasn't even to help content creators understand the economics of the markets they dealt with or to suggest new and innovative business models.
The role was to focus solely on enforcement.
Yet now, as we learn that focusing on enforcement is a mistake, rather than backing off, it seems like those who created the role are simply doubling down. It's as if they don't realize how much harm they're doing to their own markets. It's really quite unfortunate. These are industries that should be thriving right now. After all, the expenses involved in almost everything they do has gone down. It's become cheaper to create professional content. It's become cheaper to package professional content. It's become cheaper to distribute professional content. It's become cheaper to promote professional content. It's even become cheaper to sell the content and ancillary products around the content. Every aspect of the business has become cheaper, and a much more massive audience has been opened up to these content creators. And rather than embrace it, they've whined and complained... and the US government's response is to support them in this? What a shame.
If the current content industries have been unable to take advantage of an amazing new world of content creation, promotion and distribution, it's their own fault. Having governments get in the game of cracking down on new and innovative technologies, just to protect a few legacy companies too slow and too confused to adapt is not a solution. It's the same story all over again. The political system is focused on bailing out the companies who failed to change with the market. We've seen it time and time again in other industries, and it always comes back to haunt us. We shouldn't be bailing out the movie industry and the recording industry right now. Both have had plenty of opportunities to embrace new business models. Plenty of content creators outside of the traditional system have done so, successfully. Governments around the world should stop focusing on protecting these players who are too resistant to change.
Just a couple weeks after the SSRC research report that goes into great detail about how the attempts to ramp up copyright enforcement won't actually help the entertainment industry came out, Boing Boing points us to another report, this one coming from the London School of Economics, which basically says the same thing.
The DEA gets the balance between copyright enforcement and innovation wrong. The use of peer-to-peer technology should be encouraged to promote innovative applications. Focusing on efforts to suppress the use of technological advances and to protect out-of-date business models will stifle innovation in this industry.
Providing user-friendly, hassle-free solutions to enable users to download music legally at a reasonable price, is a much more effective strategy for enforcing copyright than a heavy-handed legislative and regulatory regime.
Decline in the sales of physical copies of recorded music cannot be attributed solely to file-sharing, but should be explained by a combination of factors such as changing patterns in music consumption, decreasing disposable household incomes for leisure products and increasing sales of digital content through online platforms.
So now we have two separate, but thorough, research reports by extremely well-respected organizations saying the same basic thing: focusing on enforcement won't help and will almost certainly hurt. So why is it that our policy makers are still focused solely on enforcement?
Intellectual Property Enforcement Coordinator (IP Czar) Victoria Espinel has come out with the White House's recommendations on intellectual property enforcement and, as you might imagine, they involve the same strategy as always: ratchet up the punishment. Now, a lot of the proposal is very narrowly focused on things like selling counterfeit products to the military. In situations like that, I don't have too much of a problem with what's being said. Those are clear cases of likely harm and potentially putting people in serious danger.
The problem, of course, is that the recommendations don't stick to these situations and start to stray pretty quickly. So let's look at a few points in the plan that raise some concerns:
Increase the Guideline range for intellectual property offenses committed by organized criminal enterprises/gangs;
Of course, who's going to be against that? After all, we keep hearing about how infringement funds organized crime and terrorism. Except, we don't, really. There was basically one such report, from RAND, which conflated a few issues and has been mostly debunked (including in the recent SSRC report). But, even if we accept that there are organized crime groups involved in these sorts of things, the main fear here is how the government will define "organized crime enterprises/gangs." We've seen those terms stretched before in various contexts to include just a group of a few kids hanging out together. How long will it take until just some kids file sharing with each other are somehow labeled a "gang" for this purpose?
Increase the Guideline range for repeat intellectual property offenders.
Again, something that sounds innocuous enough until you realize that pretty much everyone is a repeat intellectual property offender every single day. As such just wait and see how the government uses trumped up infringement charges against people to show that they're "repeat offenders."
Ensure that, in appropriate circumstances, infringement by streaming, or by means of other similar new technology, is a felony;
Quite vague and potentially scary if it's not clarified. Streaming is a felony? Is that for the end user who does the streaming or the host? Does this mean someone who uploads to YouTube could risk felony charges? We've already seen how the government is prosecuting a guy for embedding streams. Think of how many felons this rule might create without clear guidelines. And the "similar new technology" clause seems vague too. Does the White House really want to criminalize technologies before they even have a chance to see if they can help the market? For a White House that has been banging the drum on "innovation," this makes little sense.
Authorize DHS (including its component CBP) to share pre-seizure information about, and samples of, products and devices with rightholders to help DHS to determine whether the products are infringing or the devices are circumvention devices; and
Yeah, because that worked so well in these earlier domain seizures in which DHS shared songs that were being offered on websites and the RIAA mistakenly claimed they were infringing, despite being sent by the copyright holders -- even claiming one song by an artist not affiliated with an RIAA label was infringing, despite having no right to speak for that song. The government already relies way too heavily on extremely biased parties in these situations. Allowing them to lean even more heavily on them rather than independent third parties seems extremely dangerous.
Give law enforcement wiretap authority for criminal copyright and trademark offenses.
Considering that the government now considers linking to infringing files as a criminal offense, this seems like overkill again.
There's also a big section on dealing with counterfeit drugs. Here, again, there isn't necessarily an issue with trying to stop counterfeit drugs that are serious health risks. But, too often, the US and other countries have lumped counterfeit drugs in with perfectly safe grey market drugs imported from other countries. Not separating those things out is a problem.
Finally, there's one bit of oddity. Right at the very bottom, there's this:
Finally, we recommend creating a right of public performance for copyright owners for sound recordings transmitted by over-the-air broadcast stations
We've debated the performance rights tax for quite some time here. It's nothing more than a bailout for the record labels by taxing radio stations for advertising music. In what world does it make sense to force someone to pay for advertising someone else's work. Anyone familiar with the history of payola would know that such a performance right is completely anti-market. When left to their own devices, the record labels have always wanted to pay radio stations to play music, knowing that it helps promote the music. But the performance right tax flips that equation over, and says that radio stations now have to pay.
But, really, the bigger question is what does this have to do with enforcement? I'm fine with Espinel going beyond just focusing on enforcement, if she's going to look for ways to actually help IP live up to its Constitutional mandate of promoting the progress. But this recommendation seems completely out of place in a document focused entirely on enforcement with this one non-enforcement issue tossed in at the end.
The thing is, every time the government ratchets up IP laws in ways that don't match with the way most people view the world, the less respected those laws become. Rather than actually increasing enforcement, these moves decrease respect for those laws.
Isn't there a term for doing the same thing over and over again and expecting different results? In a Congressional hearing that was more for show in preparation of a new push for the COICA censorship bill, the acting Register of Copyrights, Maria Pallante, told the hearing that the way to stop foreign websites that link to infringing content is to "starve" their revenue, by having credit card companies cut them off and having advertisers not be allowed to run ads on their sites (things found in COICA, of course). Amusingly, her claims come just a few days after a massively detailed research report suggested exactly the opposite was true. Not like one would expect the Register of Copyrights to actually pay attention to what the research says, I guess.
Furthermore, Pallante's argument makes no sense for a variety of reasons. First, as we've pointed out repeatedly -- including to many entertainment industry officials directly: if these sites are really making so much money, why not start your own sites? Surely people would prefer to get the content from legitimate sources. All these sites are really doing is highlighting how the industry has failed to serve a consumer need. Second, for well over a decade, we've seen that the vast majority of unauthorized file sharing is done for entirely non-commercial reasons. You'd have to have not been paying attention at all to think that everyone setting up these sites is doing it for the money. Third, the idea that these sites would just go away if you blocked payment from these sources is again laughable. Every time these sites are taken down or blocked in some manner, they or other similar sites pop right back up. Continuing to pretend you can stop them, rather than trying to compete with them, simply doesn't work.
At the same hearing, Paramount's COO apparently did his usual song-and-dance where he showed how searching for stuff on Google could lead you to infringing material. He and another speaker, Daniel Castro, of ITIF, both suggested that censorship without prior adversarial hearings was not a problem. Sure, it's not a problem for the businesses they represent. It is a problem if you believe in the fundamental tenets of the Constitution, of course. Castro went to ridiculous extremes, suggesting that the government needs to blatantly censor the web through a "blacklist" filter that ISPs and search engines would be required to block. Anyone who thinks that won't be abused hasn't been paying attention. Thankfully, at least a couple of Congressional reps -- Zoe Lofgren and Mel Watts -- found these proposals extremely troubling. Unfortunately, many others on the panel are just itching to move forward with COICA, anyway. So, expect this fight to move on along similar lines. Hopefully enough of our elected officials recognize that there are existing ways to deal with infringement, and blatant censorship without serious due process is not even close to the right way to handle these things.
It's really amazing, in this day and age, that some of our elected officials honestly seem to think censorship is the answer to anything.
Joe Karaganis, from the Social Science Research Council was kind enough to reach out to me last week and send me an advance copy of the (somewhat epic) report that SSRC just released this week, exploring "Media Piracy in Emerging Economies." It's a rather massive 440 pages of research into a variety of issues having to do with infringement, specifically focused on emerging markets. While it was nice of Karaganis to send it to me, I was a bit disappointed to find out that they're not releasing the report for free (for most). Instead, it's released under a "Consumer's Dilemma" license, where they want people in developed countries to pay $8 for the report, but will offer it for free to those in less developed countries (though, it looks like Canadians can get it for free). Though, to their credit, at the end of the license info, they do note:
For those who must have it for free anyway, you probably know where to look.
Unfortunately, that's right under the warning that "non-compliance" with the license in the US could subject you to five years in prison and $250,000 in fines. That's an unfortunate exaggeration, as most non-compliance wouldn't result in criminal copyright infringement. For a report on the subject that seems so insightful in many points, it's disappointing that this report chose to reinforce this type of thinking. Update: Clearly, I missed that this is pure satire by the report's authors. Such is life when I'm so used to seeing such things that are real.
That said, much in the report is extremely forward-looking and thinking. It goes into great detail how fascinating and innovative new business models are appearing around the globe where "piracy" is rampant, and suggests that we really need to rethink the idea of "piracy" in those markets. It highlights how almost all of the policy discussions in the west concerning infringement focuses on "enforcement," but that may be the wrong way to go about it. The research, instead, points out that a better focus may be on setting up the structures for successful business models to emerge -- which include local firms who can compete on price:
Invariably, industry groups invoke similar arguments on behalf of stronger enforcement:
lower piracy will lead to greater investment in legal markets, and greater investment will lead
to economic growth, jobs, innovation, and expanded access. This is the logic that has made
intellectual property a central subject of trade negotiations since the 1980s. But while we see
this mechanism operating in some contexts in emerging markets, we think that other forces
play a far larger role.
The factor common to successful low-cost models, our work suggests, is neither strong
enforcement against pirates nor the creative use of digital distribution, but rather the presence
of firms that actively compete on price and services for local customers. Such competition is
endemic in some media sectors in the United States and Europe, where digital distribution
is reshaping media access around lower price points. It is widespread in India, where large
domestic film and music industries dominate the national market, set prices to attract mass
audiences, and in some cases compete directly with pirate distribution. And it is a small but
persistent factor in the business software sector, where open-source software alternatives (and
increasingly, Google and other free online services) limit the market power of commercial
It also points out that focusing just on enforcement is a key mistake by western nations, when they might be much better served in enabling these markets to emerge to "compete" with infringement:
The centrality of pricing problems to this dynamic is obvious, yet strikingly absent from
policy discussions. When it comes to piracy, the boundaries of domestic and international policy
conversation are exceedingly narrow. The structure of the licit media economy is almost never
discussed. Instead, policy conversations focus on enforcement--on strengthening police powers,
streamlining judicial procedures, increasing criminal penalties, and extending surveillance and
punitive measures to the Internet. Although new thinking is visible in many corners of the
media sector, as companies adapt to the realities of the digital media environment, it is hard
to see much impact of these developments on IP policy--and most particularly on US trade
policy, which has been the main channel for the international dialogue on enforcement.
In our view, this narrowness is increasingly counterproductive for all parties, from
developing-country governments, to consumers, to the copyright interests that drive the global
enforcement debate. The failure to ask broader questions about the structural determinants of
piracy and the larger purposes of enforcement imposes intellectual, policy, and ultimately social
costs. These are particularly high, we would argue, in the context of ambitious new proposals
for national and international enforcement--notably ACTA, the Anti-Counterfeiting Trade
Agreement recently finalized by the United States, the European Commission, and a handful
of other countries.
To be more concrete about these limitations, we have seen little evidence--and indeed
few claims--that enforcement efforts to date have had any impact whatsoever on the overall
supply of pirated goods. Our work suggests, rather, that piracy has grown dramatically by most
measures in the past decade, driven by the exogenous factors described above--high media
prices, low local incomes, technological diffusion, and fast-changing consumer and cultural
That last paragraph is a key point that our current policy makers seem to miss entirely. On top of that, the report notes that nowhere in the discussions about enforcement is any discussion found of connecting enforcement to figuring out "how to foster rich, accessible, legal cultural markets in developing
countries." Of course, that's because most policy makers don't care about that.
The report kicks off with a piece by Karaganis on the importance of "rethinking piracy." It notes that the industry claims on "piracy" are not exactly credible or trustworthy -- and not very productive towards coming up with solutions, since all they've done is "undermined confidence in the industry research enterprise." In fact, it goes through a rather complete debunking of the overall industry claims, suggesting that they're somewhat meaningless -- and then points out that all of these reports that count "ripple effects" seem to ignore the ripple effects in the other direction: the kind that benefit consumers, especially in developed nations:
But in extrapolating losses beyond the affected industries, these studies also
introduce new problems. Fundamentally, they all misrepresent the relationship between piracy,
national economies, and international trade. Consistently, none of them model the other side
of the transaction--the consumer surplus--in describing overall economic impact. Two basic
accounting problems have become emblematic of this approach.
First, domestic piracy may well impose losses on specific industrial sectors, but these are
not losses to the larger national economy. Within a given country, the piracy of domestic
goods is a transfer of income, not a loss. Money saved by consumers or businesses on CDs,
DVDs, or software will not disappear but rather be spent on other things--housing, food,
other entertainment, other business expenses, and so on. These expenditures, in turn, will
generate tax revenue, new jobs, infrastructural investments, and the range of other goods that
are typically cited in the loss column of industry analyses.
The report is chock full of other insightful points, such as noting that, "Predictably, raids scale more easily than due process." Later it goes through the various "education campaigns" that industry and governments have invested in, noting that they appear to have done "very little" to actually slow down the rate of piracy:
Our inquiries (mixing survey, focus group,
and interview methods) found a remarkably consistent cluster of attitudes on piracy: (1) that
it is often regarded with ambivalence by consumers, (2) that pragmatic issues of price and
availability nearly always win out over moral considerations, and (3) that consumers know
what they are buying. The classic scene of developing-world piracy--the kiosk or street
vendor selling DVDs--produces very little misunderstanding on the part of consumers about
the nature of the transaction. Consumers weigh tradeoffs between price and expectations of
quality, but within a context of explicit black-market negotiation in which notions of fraud or
deception—often borrowed from anti-counterfeiting discourse—generally don’t apply. The
price gap between licit and pirated media provides a clear signal of the origins of goods.
On top of that, the report responds to the regular claims by the IFPI and others that piracy is linked to organized crime and terrorism, by noting that they could find "no evidence" of any such connection. Similarly, it mocks policy makers who conflate counterfeiting with media piracy.
And that's all just in the first chapter! From there it first looks at the ongoing effort -- mainly driven by the US and the USTR -- to "harmonize" enforcement efforts, followed by a country-by-country look at the state of "piracy" in various developing nations, highlighting many of these issues in a more localized fashion. The whole report is really fascinating, and an incredibly useful read for policy makers who are so focused on things like ACTA, enforcement and industry claims of "losses." It really is a huge contribution to the research on these topics -- and something that I hope gets delivered to policy makers. I'd send copies to various politicians myself... if it weren't for that license that tells me I could face five years in jail for doing so. So, as a final note, I'll just suggest that Karaganis and the others behind this really excellent research report reconsider their license choice on the document (see update above), and instead encourage sharing of the document -- and maybe take a page from what they're seeing themselves in setting up creative new business models to cover any costs.
Of course, if President Obama were serious about improving American innovation and creative output (and living up to the Constitution), he would have put together intellectual property effectiveness committees, rather than enforcement committees. By this point, you would have to willfully ignore all of the studies highlighting how today's intellectual property laws tend to cause plenty of harm to think that the laws are "effective." That doesn't mean there can't be effective intellectual property laws, just that what we have today clearly does not qualify. Those laws do serve to help some parties, no doubt, but that's not the same thing as benefiting society. The Constitution makes clear that the purpose of patent and copyright laws is to promote the progress of science and the useful arts. And yet, at no time has the government ever stopped to look at the question of whether or not these laws actually do promote the progress of science or the useful arts.
It seems, then, that the only reasonable move would not be to ramp up enforcement of the current laws -- which have been shown to be problematic -- but instead to commission a look at what would actually be most effective in promoting the progress. Unfortunately, that doesn't seem to be in the cards at all. Too bad.
We had serious questions from the beginning about Senator Patrick Leahy's "ProIP" bill, which was pushed very strongly by the lobbying group, the US Chamber of Commerce, using widely debunked stats to claim that there needed to be an "IP Enforcement Coordinator" in the White House. Yet, as we explained, such a position makes absolutely no sense. Even "pro intellectual property" folks noted that the law was anything but "pro intellectual property." Instead it was pro-legacy business structure. So giving a role in the White House to someone whose sole job is to protect legacy business models is the very definition of regulatory capture. And while the IP Enforcement Coordinator, Victoria Espinel, has been kind enough to personally reach out to us multiple times since taking on the job, in the end she still sees her role to be protecting legacy industry jobs, rather than (as the Constitution requires) making sure that intellectual property promotes the progress.
The U.S. Government must ensure that intellectual property laws keep pace with changes in technology and the practices of infringers. As part of a process initiated by the IPEC, Federal agencies reviewed existing laws to determine if changes were needed to make intellectual property enforcement more effective. The initial review began shortly after the release of the Joint Strategic Plan and was completed within 120 days. The IPEC will include legislative proposals identified in that review in a White Paper on legislative recommendations that the IPEC expects to submit to Congress in the near future.
It's not difficult to read between the lines. Considering that it was US Chamber of Commerce lobbying that created this role in the first place, and now she's discussing new laws, to then see the Chamber of Commerce immediately announce it was "ready to work with Congress and the administration" on increasing IP laws, you can bet that the laws in question have already been written mostly by such lobbyists, and we should see them soon. Protectionism, protectionism all around.
That's not how to create innovation. It's how you prop up obsolete businesses at the expense of innovation.
The rest of the report, which is embedded below, just shows the sad state of affairs of industries who won't adapt and can't compete, abusing the legal process to put up barriers to new technologies, abuse the free speech and due process rights of those who actually innovate, and celebrate stagnation as a strategy for innovation. It's a depressing document all around. It celebrates the international joke that is the Special 301 report from the USTR. It mockingly celebrates "increased transparency" from an administration that supported the massively secretive process behind ACTA (which the document also cheers on), which only now we've confirmed was always about holding back developing nations rather than increasing innovation. Not surprisingly, the report cheers on the illegal seizures of domain names, despite the likely prior restraint and due process violations those seizures entailed. It ignores the international incidents created by seizing domains of sites declared legal in their home countries. And, of course, nothing in the report discusses new business models or how decreased IP enforcement has resulted in greater creative output, more opportunities for content creators, and new innovation throughout the world.
In other words, the report is a complete joke. Reports like this are incredibly frustrating, because they simply highlight how our government has been taken over by special interests who have no desire to actually improve the country, but merely to protect a few powerful lobbyists and the corporations that support them.
What bothers me the most, frankly, is that nowhere does the report make even the slightest attempt to support any of its assertions that greater IP enforcement is actually good for the economy. There are tons of evidence that this is not true, and yet Espinel repeats the claim as if it's proven fact. This is unfortunate because she does know better, but I guess appeasing special interests is more important than actually working to promote progress and improve the economy.
In what looks like a big round of political theater, US IP Enforcement Coordinator Victoria Espinel presented to a Congressional committee her plans for fighting copyright infringement overseas, and it seems to boil down to "blame China." Apparently, all of the elected officials were on board with that, and then asked what to do... to which Espinel provided the same answer that US officials have always given: put pressure on the Chinese to respect US intellectual property. How's that been working so far? Exactly. It's a plan for handwaving -- which, honestly, might really be the best thing. China really doesn't care what the US has to say about IP policy, and US lawmakers know this. They also know that the US needs China more than China needs the US right now. That's why suggestions made by some politicians -- such as Rep. Ted Poe about blocking visas for Chinese students and tourists -- was dismissed out of hand by others:
Rep. Bill Delahunt... responded to Poe's argument that we should reduce the number of student visas for China by pointing out this would harm people in his state.
He said many of those would-be students from China attend schools in New England. Not only that, but the families of these students visit, which helps Massachusetts' business people.
The fact is that waving arms about China ignoring IP isn't going to do anything. It's all just a big political exercise, and it's pretty meaningless. The supposed "harm" has been seriously overblown by companies, and the ability to do something about it is miniscule. If we really wanted to "respond" to Chinese disrespect for US intellectual property, we should be helping companies (1) compete better and (2) adapt to use the situation to their advantage. Instead, we get political grandstanding that won't help anyone.
"We used to have a problem in this town saying this," Biden told reporters Thursday at a press conference in Washington D.C. "But piracy is theft. Clean and simple. It's smash and grab. It ain't no different than smashing a window at Tiffany's and grabbing [merchandise]."
Except, it wasn't "a problem" saying it. It was people recognizing that theft and infringement are very, very different. The Supreme Court has made this clear for centuries, going all the way back to the Wheaton ruling, and more recently in the Dowling case, where Justice Blackmun stated explicitly:
Since the statutorily defined property rights of a copyright holder have a character distinct from the possessory interest of the owner of simple "goods, wares, [or] merchandise," interference with copyright does not easily equate with theft, conversion, or fraud. The infringer of a copyright does not assume physical control over the copyright nor wholly deprive its owner of its use. Infringement implicates a more complex set of property interests than does run-of-the-mill theft, conversion, or fraud.
But why let the actual details get in the way of protecting your friends in Hollywood? However, as you start to dig into the full report (pdf), it looks like Espinel actually did consider at least some of the concerns that many of us presented in our filings. Again, this is a bit surprising since her initial request for comment seemed to pre-suppose that the industry's position was entirely fact-based, rather than faith-based. Below is the full report.
The report definitely still leans towards stronger and stronger enforcement and protectionism -- despite all of the evidence suggesting this doesn't actually help to "promote the progress." But there are some hopeful signs that they at least realize that there's more to copyright than simply protecting the entertainment industry's business model. Thankfully, it talks about "effective enforcement" rather than just "more" enforcement. It discusses "promoting innovation" rather than just "strengthening protections." There is plenty in the report that is problematic as well, but there is, at least, some recognition that only strengthening copyright has costs as well. For example:
By the same token, fair use of intellectual property can support innovation and artistry. Strong intellectual property enforcement efforts should be focused on stopping those stealing the work of others, not those who are appropriately
building upon it.
While it's not much, at least having a nod to fair use and the importance of creativity inspired by building on the works of others is a small step in the right direction. It's not often you see any such admission in government discussions on copyright law.
There are numerous challenges to meeting these goals of predictability and enforceability. Our effort must be coordinated, efficient and comprehensive. Solutions will require strong and decisive government action, transparency and cooperation from rightholders, importers, exporters and entities that currently benefit from infringement.
Again, perhaps it's subtle, but the admission that there should be transparency, and that any discussion should include stakeholders, who also "benefit from infringement," at least recognizes that this isn't as one-sided as the entertainment industry makes it out to be. While the industry goes on and on about "losses" from infringement, it never admits that other parts of the industry actually benefit quite a lot. Still, notice who is missing from that list? Consumers. You know, the public, whom copyright law is supposed to serve. What about them?
The Administration supports improved transparency in intellectual property enforcement policy-making and international negotiations. As such, the U.S. Government will enhance public engagement through online outreach, stakeholder outreach, congressional consultations and soliciting feedback through advisory committees, official comment mechanisms such as Federal Register notices (FRN), notices of proposed rulemaking (NPRM) and notices of inquiry (NOI), as appropriate for the relevant process. In the context of trade negotiations, the Administration will pursue these objectives consistently with the approaches and considerations set out in the President's 2010 Trade Policy Agenda, including consideration
of the need for confidentiality in international trade negotiations to facilitate the negotiation process.
This is a clear statement on the concerns that many commenters raised about ACTA. While this report and Espinel's role are not directly related to ACTA (yet), ACTA is definitely on a lot of people's minds and they made that clear in their filings. It's good to see Espinel point out that these negotiations need to be a lot more transparent and be willing to bring in stakeholders.
The next part is the part that I'm most happy about. It actually admits that the data on infringement is bunk and that the government should make policy based on actual data:
There is no known comprehensive study that attempts to measure the economic contributions of intellectual
property-intensive industries across all U.S. business sectors. Improved measures of intellectual property linked with measures of economic performance would help the U.S. Government understand the role and breadth of intellectual property in the American economy and would inform policy and resource decisions related to intellectual property enforcement.
To assess the feasibility of improving measures of intellectual property and linking those measures to economic performance, the Economic and Statistics Administration (ESA) within DOC, in coordination with the IPEC, will convene an inter-agency meeting with relevant agencies to establish a framework for conducting this work. Once that framework is established, ESA will test the feasibility of developing improved intellectual property measures and, if those measures can be developed, they will be linked to measures of economic performance. The resulting analysis and datasets will then be made public.
I do have some fear as to how this will be conducted, but it's nice to see the government admit that it needs real data, even if elsewhere in the report it relies on faith-based processes currently in place.
Of course, there's still a ton in the report that is troubling. It regularly refers to infringement as "theft." Even the name of the report claims that infringement is theft, despite that not being accurate at all. On the more questionable side, we've got things like the following:
Strong intellectual property enforcement supports American jobs, protects American ideas and invigorates our economy. Intellectual property laws provide not only legal protection for creators and consumers, but incentives to encourage investment in innovation.
Where is the actual evidence for this? There is none. The actual evidence has suggested otherwise. It has shown that weaker IP enforcement has actually resulted in greater creative output and greater opportunities for creators, consumers and investors.
Included in USTR's annual Special 301 report is the Notorious Markets list, a compilation of examples of Internet and physical markets that have been the subject of enforcement action or that may merit further investigation for possible intellectual property infringements. While the list does not represent a finding of violation of law, but rather is a summary of information USTR reviewed during the Special 301 process, it serves as a useful tool to highlight certain marketplaces that deal in infringing goods and help sustain global piracy and counterfeiting.
USTR will continue to publish the Notorious Markets list as part of its annual Special 301 process. Additionally, USTR, in coordination with the IPEC, will initiate an interagency process to assess opportunities
to further publicize and potentially expand on the list in an effort to increase public awareness and guide related trade enforcement actions.
This is too bad. The USTR Special 301 report is a joke. It is not evidence-based at all. It's entirely based on what the industry claims is a problem. It's too bad that the IPEC would suggest that this plan makes sense and should be continued. We were hoping the IPEC would move to a more evidence-based process, but this is not that.
It is critical that we station overseas personnel in countries of concern to ensure intellectual property is made a priority.
This is another problem. The US has been pushing its own IP laws on other countries for far too long. And the real problem here is that it's actively locking in other countries to rules that have not been shown to help promote progress or creativity, but really are to prop up a few specific companies with big lobbying budgets. We should not be continuing that practice.
The use of foreign-based and foreign-controlled websites and web services to infringe American intellectual
property rights is a growing problem that undermines our national security, particularly our national economic security. Despite the scope and increasing prevalence of such sites, enforcement is complicated because of the limits of the U.S. Government's jurisdiction and resources in foreign countries.
To help better address these enforcement issues, Federal agencies, in coordination with the IPEC, will expeditiously assess current efforts to combat such sites and will develop a coordinated and comprehensive
plan to address them that includes: (1) U.S. law enforcement agencies vigorously enforcing intellectual property laws; (2) U.S. diplomatic and economic agencies working with foreign governments and international organizations; and (3) the U.S. Government working with the private sector.
Yes, this is the "we must shut down The Pirate Bay" part of the plan.
All in all the report isn't nearly as bad as we expected, but it's also pretty vague. What may be interesting is what comes out of the review of regulatory needs (to be completed in 120 days) or seeing how other aspects of this plan are actually implemented.