New Media, New Control: The Expansion of Intellectual Property in the Digital Environment

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My paper today will be on the expansion of intellectual property, chiefly copyright, in the digital environment. I 'll be discussing the new level of control that is being granted over the new media by intellectual property laws such as the Digital Agenda Act.

I'll be arguing that copyright has expanded well past its traditional boundaries. Historically, it provided copyright owners with control of the commercial exploitation of their work, thus constraining competitors. It has now been expanded to cover control over actual audience use. And even beyond this to control over media of distribution themselves.

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I'll be dealing with this subject under the following headings. What is meant by the expression Digital is Different. Here I'll attempt to explain why so many intelligent people can arrive at such different conclusions.

Secondly I'll look briefly at the history of copyright, including the obligatory Statute of Anne reference. Then I'll move forward through time to show how copyright has adapted in a somewhat consistent fashion to adapt to new technology. Finally I'll end in the present, demonstrating that intellectual property is headed down the path of greatly expanded control.

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If we learnt anything from the long-running Digital Agenda saga, we learnt that digital is different. This idea was used by copyright owners as an argument for the non-extension of exceptions to the digital environment.

The digital duplication and transmission of copyright material is so simple that the market for copyright works can be destroyed in a short period of time. This is Crisis #1.

As the somewhat melodramatic billionaire Edgar Bronfman Jr of Seagram and now content giant Vivendi Universal, put it:

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The massive power of the Internet can permanently wipe out and shut down in one unthinking moment, a writer who may depend for his living on the sale of 5 or 10 thousand copies of his book. It can devastate a musician who sells a few thousand copies of a homemade CD to his fans in some small and little known community. And these would only be the first casualties. The rest would follow as the very basis of the New Economy was undermined.

Others speak of a 'crisis of intellectual property theft'. So in the minds of many, the digital environment is to intellectual property what the bubonic plague was to medieval Europe.

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And yet on the other hand there is no shortage of commentators (including myself) who insist that a considerable expansion of intellectual property is taking place as we increasingly move to the digital environment.

According to an equally melodramatic John Gilmore of the Electronic Frontier Foundation,

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'self-interested companies [are] shifting the balance of fundamental liberties, risking free expression, free markets, scientific progress, consumer rights, societal stability and the end of physical and informational want.'

This is Crisis #2.

Or as Professor James Boyle of Duke University put it: 'The difficulty is not in finding an example of intellectual property expansion, but in knowing which one to pick.

So how can these two perspectives, these two crises, be reconciled? How can we be in a time of ever increasing intellectual property protection at the same time that the Internet is threatening to snuff out creative types, permanently and without thinking?

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I would suggest that we are talking about two different though related issues. First we are currently faced with a crisis of intellectual property enforcement. Second we are faced with a historically unprecedented expansion of intellectual property law.

The former is a question of enforcement, the latter of substantive law and proposed practice.

Every new technology has been the occasion for an enforcement panic on the part of copyright owners: from the pianola to the photocopier to the VCR. (In the now famous words of Jack Valenti, head of the Motion Picture Association of America: 'The VCR is to the American film producer and the American public as the Boston Strangler is to the woman alone.")

But this time, they say, "we really mean it." Digital really is different. And there is undeniably some truth to this. No previous technology has anything like the digital capacity for instant perfect reproduction.

But the current Napster-based enforcement panic has something in common with previous scares. That is, there is a failure to recognise that a new technology is accompanied by a state of flux which eventually settles down into one or more stable business models.

The move from a stable system based around the CD to a stable system based on online delivery was bound to be accompanied by a degree of chaos. It is important to remember that this chaos will not be a permanent feature of the landscape.

Napster is a fire lit by history under the slow-moving rumps of the record companies. Today the record companies are finally adjusting to the new technology by co-opting the challenger, Napster.

But when the enforcement crisis is over in a few years, as I predict it will be, the grossly expanded IP laws and practices which have theoretically been created to deal with this crisis, will be with us still.

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To illustrate this expansion, we step back three centuries. Copyright grew out of the old Stationers Guild in England. Not only was the printing of specific titles controlled under this closed shop system but so too was the very printing of books themselves.

You could not print any book, not even one you had written yourself, without being a member. This was convenient for the Crown in controlling seditious material.

The mechanism of the Stationers Guild provided control over the exploitation of knowledge and the medium of its distribution.

The Statute of Anne represented a change to this system. The Copyright Owner had the exclusive right to print their works and happily the exclusive right to print books was lost to the Guild.

And this remained as the basis for copyright for the next three centuries, even as new technologies came into the field. Copyright allowed the owner to control the commercial exploitation of his or her work. Copyright was therefore directed at your competitors, not at your audience. Users of books, sometimes known as readers, had no fear that they would fall foul of the copyright law; they had no need to understand it all.

Of course, the digital computer was not the first new technology to challenge the copyright system. It is interesting to look at one particular old new technology, the pianola.

In the US, at the turn of the century, the pianola began to erode the sheet music income of composers and music publishers. So they sought relief from Congress as Congress began to reform the 1870 Act. The composers and publishers did not, in 1905, seek an extension to copyright to cover the commercial exploitation of music by means other than sheet music.

They sought to control the new technology, the medium itself, and in the minds of some, to stifle it.

According to Goldstein, 'the composers and the publishers saw to it that among the proposed amendments was one that would give them an exclusive right against the manufacture or sale of "any appliance especially adapted" mechanically to record musical compositions.'

This amendment was never passed. Instead an amendment preventing unauthorised mechanical reproductions of musical compositions became law. This was accompanied by a statutory licence preventing any single technology owner from being the exclusive copyright distributor. This was a real fear. Without such a statutory licence the Aeolian Music Company would have had a monopoly on mechanical reproductions because of its connections with the music publishing industry. Thus Congress gave copyright owners the right to economically exploit their works but protected a new technological medium from control.

A similar battle was waged around about the same time over the right of the copyright owner to control subsequent uses of their work.

Bobbs-Merrill v Strauss concerned the right of a publisher to engage in resale price maintenance using copyright. The court found that a publisher could not dictate how his or her work was used (in this case how it was to be priced at retail) once it was sold. The Doctrine of First Sale was born and was later enshrined in statute in the 1976 Copyright Act.

This Doctrine plays a central role in limiting copyright to the sphere of control over commercial exploitation alone. Australia has no direct equivalent of this doctrine and it was not until 1991 in the case of Avel Pty Ltd v Multicoin Amusements that it was firmly established that the right to publish, the right to make copies available to the public, is exhausted after the first act of publication.

Even with this grey area, copyright owners have not, until now, attempted to control audience use. Bobbs-Merrill and Avel both concerned attempts to control distributors rather than consumers. It can be safely assumed that in the pre-digital environment, any attempt to control ordinary consumer use of copyright material is doomed.

Other rights have been added to the owner's suite of rights such as the performing right, the broadcast right and more lately the rental right. Each restricts what somebody might do with their copy of a copyright work.

But none of these restrictions is particularly unreasonable. They merely prevent someone from using their copy of a work to enter a commercial sphere that is not the territory of the ordinary consumer. I have read several articles, however, which suggest that the US Rental Right does curtail the Doctrine of First Sale.

There is of course also the right of parallel importation. This alone grants an owner the right, in some circumstances, to control the physical movement of actual copies of their work.

I don't want to get into a discussion of this most controversial of rights but it does confine itself to the sphere of commercial exploitation. Non-commercial importation does not infringe.

And exceptions to the rights of copyright owners further emphasised that copyright's space was the marketplace and not the home.

Copyright users are permitted to make partial or even entire copies for research or study, or for private use in some jurisdictions.

Fast-forward to the present. The rights of the copyright owner today appear deceptively similar to those I have just mentioned. However, their operation is radically different and allows a much greater degree of control.

Today, the right of reproduction, the basis of the Copy Right itself, permits so much more than simply controlling the commercial manufacture of copies. The right now covers temporary reproductions such as those made on the screen and in the random access memory of a PC.

Of course it's impossible to read electronically without making such reproductions and so the act of reading itself is now a licensable act.

It is difficult to imagine a more invasive expansion into the control of audience use.

Imagine if the Statute of Anne had granted publishers not only the right to control inked copies as they streamed from the printing press but also the tiny spherical copies reflected in the eyes of readers.

In this partially enlightened country, we have a partial exception. Temporary reproductions made as part of a communication, such as a material retrieved from a website, are exempt from the owners right and may be read freely.

Of course the communication to your desktop must itself be licensed for this to be the case. But the same document double-clicked on a hard drive requires a licence to be read.

And the new right of communication to the public also greatly expands the owners' rights. As I have stated, a copyright owner had only very limited rights to control the movement of atoms arranged in the shape of their copyright works. They could control only the first emergence of their atoms into the public sphere and then sometimes across borders.

Whereas an owner has little ability to control the movement of atoms, he or she has much greater ability to control the movement of bits.

In the digital environment, any movement of movement of bits is a 'communication to the public'. It would appear that bits cannot be lent or cannot be on-sold without the permission of the owner.

This would spell the death of the Doctrine of First Sale if it weren't dead already. As someone put it, what we enjoy in the digital environment is the 'Leased Life'. We no longer purchase copies to keep; we merely buy access. When the meter runs out, we are left with nothing.

This is not to say that there are no advantages to a pay-per-view system. Why pay to own a copy when all you want is to read a work once? But there are distinct dangers also. And regardless of the merits of such a system, it undeniably represents a level of control over audience use that has never been possible before.

And such legal control is now enhanced by technological protection measures. The technology itself will now not permit you to do things that the law does not allow, as well as a number of things that it does.

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Here is a model of the Open Digital Rights Language, a Digital Rights Management tool, currently enjoying the attention of the World Wide Web Consortium. Who would have guessed you'd need permission to make margin notes.

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And the Digital Agenda of course provides protection for the protection. The Act features civil and criminal provisions against the importation, manufacture and dealing in circumvention devices.

Similar laws are currently being challenged in the United States. An Amicus Curae Brief from the ACLU, on behalf of a number of clients, contends that they are an imposition on free speech as well as a radical expansion of copyright liability.

The following image compares copyright liability before Judge Kaplan's decision against DeCSS to that after his decision.

I won't go into this in great detail now but you can see how copyright liability has expanded considerably.

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Moreover as I foreshadowed, not only does digital copyright now extend control over use in a way that copyright never did, so it also extends unprecedented control over the medium.

The humble book, like most types of pre-digital technology, is open source. It is not proprietary. The knowledge of how to make one is available to everyone. No one has a patent on bookbinding for example. No one is going to sue you for unlawful reverse engineering of a book if you rip the spine to see how it hangs together.

The electronic book is different, however. So far the cost-savings of an electronic book versus its paper equivalent have not yet been realised. But one day it is hoped, when the technology is more mature, such e-books will be far cheaper than their print equivalent. But what if the costly physical vehicle for knowledge is replaced by a similarly costly digital vehicle?

I understand that the Microsoft e-book division employs 350 people. It has released its attempt at an e-book standard. The Microsoft Reader can be downloaded free.

Microsoft is not the only one investing substantial resources in e-book technology. Of course Microsoft's investment is no guarantee of success. The company has pursued false leads before.

But the point is, if giant software houses are investing large sums of money in e-book applications they must be expecting back something over and above the value of the content. Such an application may well be proprietary. If you are an independent publisher or self-publishing author outside the corporate group that owns the technology, you may have to pay to use the e-book format that customers demand, putting you at a price disadvantage.

You may not have access to certain specials features built into the application. The reading application may simply work better on hardware produced by that corporate group.

Even the humble web browser is not a neutral device. As the head of IBM's Internet Technology Division observed last week, 'just as Ma Bell was in the midst of each phone call [in the C19th], so browser makers' brands are front and centre in every experience on the Web'. It is a medium that has a vested interest in the content it displays.

None of my fears may come to pass, of course. The standard reading application may be an open technology like the Linux Operating System. But my point is simply that copyright law enables one party to control reading technologies in a way that was simply not possible in the world of paper books.

In closing, I give the final word to Jessica Litman:

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"At the turn of the century, U.S. copyright law was technical, inconsistent, and difficult to understand, but it didn't apply to very many people or very many things. …ordinary consumers could go about their business without ever encountering a copyright problem.

Ninety years later, the U.S. copyright law is even more technical, inconsistent and difficult to understand; more importantly, it touches everyone and everything. In the intervening years, copyright has reached out to embrace much of the paraphernalia of modern society. The current copyright statute weighs in at 142 pages. Technology, heedless of law, has developed modes that insert multiple acts of reproduction and transmission - potentially actionable events under the copyright statute - into commonplace daily transactions. Most of us can no longer spend even an hour without colliding with the copyright law. "

In conclusion, copyright law has expanded beyond mere control of exploitation to cover control of use and control of the medium.