Tuesday, October 25, 2005

First Sale, Hard Copies, and Digital Copies

Here's an article from the October 23, 2005 New Jersey Star-Ledger. I confess to being baffled by it. It seems to misunderstand the issue entirely. Perhaps readers can point me in the correct direction. Here's the article in toto:

"Contrary to the opinions of a number of readers, I am not a law breaker.
At least, I don't think I am. In a recent column about my transition to an all-digital music collection, I mentioned a plan to sell my CDs after creating digital copies on my personal computer. Quite a few readers wrote to tell me this would be illegal. If you sell the CD or give it away, they informed me, you must delete the digital versions, as the rights to keep a copy of the song reside with the owner of the CD. Was this true? What if I have a 10-year-old CD, with a couple of songs I enjoy? Does that mean I am breaking the law if I keep those songs on my iPod after selling the CD for $1 at a garage sale? I decided to investigate. As is the case with many legal issues, a clear answer wasn't readily available. But at least it is now clear to me how hazy an issue it is. "The law is terribly unclear on this question," says Fred Von Lohmann, a staff attorney for the Electronic Frontier Foundation, a nonprofit advocacy group for consumers' digital rights. "It's very hard to give any kind of clear answer."

Courts might view the situation differently, depending on an individual's behavior, he says. Are you a "buy, rip, and return kind of guy," essentially making digital copies from CDs and then returning them? Or are you, like me, getting rid of physical CDs that you no longer use, simply because you have the music on your computer and you now buy songs from the iTunes Music Store? "The law gives precious little clarity to the average person," Von Lohmann says.
An academic specialist in cyberspace aspects of intellectual property echoed Von Lohmann's views. Whether you can keep digital music files on your PC or iPod after you sell your CDs is legally "untested," says R. Anthony Reese, a law professor at the University of Texas at Austin. Reese says he doesn't know of any court cases dealing with this scenario.
Given existing copyright law, he says, it is "not easy to predict how a test case would come out."
Yet the issue isn't a purely academic one. More and more people are facing this dilemma, as they have no use for the CDs taking up space in the bulky, archaic racks in their living rooms. They use their iPods to listen to music on their home stereos, cars, and elsewhere.
Do they really need to store their CDs in their attics in order to avoid breaking the law?
Yes, according to music industry representatives, though they were unable to provide any real legal backing for that view.

A spokesperson for the Recording Industry Association of America, the group known for filing lawsuits to stop digital-music swapping, pointed me to a document from the Copyright Office to support the idea that you aren't allowed to keep a digital music file once you sell the physical CD. But the document -- see for yourself, [DMCA Report Executive summary, my link]-- sheds little, if any, light on the issue. I e-mailed a top industry executive, whose assistant contacted me to say my rights to digital music would end when I sell the physical CD. But the executive was apparently wary of expressing that view in public, as his assistant suggested I refer to him as "an unnamed industry source." A spokesperson for Warner Music Group referred me back to the RIAA.

But the industry's message, that you must be wary about what you do with music you store on your PC, is clearly making it out there, judging from the e-mails from readers who were convinced that what I was doing was illegal. Don't expect to hear about a resolution to this issue anytime soon. The music industry is unlikely to press it in court, what with its other concerns. But if it is discussed, you will be sure to hear about it at LawMeme (research.yale.edu/lawmeme/), a Weblog covering the intersection of law and technology.
TECHscan Political news junkies have yet another source: C-SPAN's CapitalNews (www.capitalnews.org), a news operation that's designed for people who want to keep tabs, 24/7, on what's happening on Capitol Hill, the White House and the national political scene.
Allan Hoffman may be reached at netscan@allanhoffman.com or in care of The Star-Ledger,
1 Star-Ledger Plaza, Newark, N.J. 07102. "

Here's my reaction to the story: If one links on to the Executive Summary to the Copyright Office's DMCA report provided above, at pages 6-8 , you will find discussion of a proposal to amend the first sale doctrine in Section 109 to provide that where someone's lawfully made copy for 109 purposes was in digital form, that copy could be transmitted to a friend etc., so long as the "original" digital copy is deleted. The Office agreed that the current Section 109 is technologically neutral; that is it applies to lawfully made digital copies, but it declined to endorse the proposal both because of perceived differences in the way hard copy and digital copies degrade and because of doubts about verification of deletion.

But nothing in the report, or the law I am familiar with, says that if you own a lawfully made hard copy, like a CD, and you then make, for personal use, a digital copy, you can't sell the CD. Of course you can. You can sell your lawfully made CD even if the making of your digital copying is illegal: absent some contract provision, the two issues are totally separate.

30 comments:

Bruce said...

If the sale of your physical CDs is what makes the digital copies illegal, then there's not much difference between that and saying you can't sell your CDs.

William Patry said...

Bruce said:
"If the sale of your physical CDs is what makes the digital copies illegal, then there's not much difference between that and saying you can't sell your CDs."

Why would the same of physical CDs make the digital copies illegal? The two acts are, I beleive, legally distinct, I can always sell a lawfully made CD regardless of whether I have used it to engage in infringing activity. As a practical matter the reason i may sell it is because i have made an illegal copy so think I don;t need it, but that still doesn't make the sale of a lawfully made CD illegal. (And I am assuming a worst case that the making of a personal copy is infringing).

D Conrad said...

I think the point the author is getting at is that when you sell a CD, you must delete your digital copy, because it becomes illegal.

Otherwise, why not just buy a CD, make a (probably) fair use rip to mp3, then sell the CD back? Ripping your CDs is more or less legal, but that seems to hinge on you owning a limited right to listen to the music(ie, a retail CD).

It doesn't seem that the author is claiming there is some sort of rule against him actually selling the CD, just about keeping his ripped copy after the physical media leaves his posession.

Of course, the more interesting problem is: do I have to delete digital copies of my CDs if they are stolen, destroyed, or just plain lost? If so, I might have to invest in a safe deposit box...

doug hudson said...

Here's my take on this issue, personally speaking and not on behalf of any client...

Assume you own CD A, and you rip the songs to your iPod, making a digital copy of A, call it A', for your personal use.

The real question is whether, when you later dispose of your CD containing A, how does that change the fair use analysis for your digital copy A'?

My view is this: it is really a question of time. If you immediately sell your CD after making the digital copy, then the fair use analysis really changes in ways that are obvious if you look at the factors in section 107, since you've essentially used the digital copy A' as a "free" commercial replacement for the CD you returned.

In contrast, if you sell the CD ten years later, the fair use analysis doesn't shift in favor of the copyright holder the same way.

And if you dispose of your CD, by throwing it out, microwaving it (not recommended) or tossing it because it is defective, after making the digital copy A', the fair use analysis shouldn't shift in favor of the copyright holder the same way either.

Of course, above and beyond this there is the question of how the AHRA applies via the 9th Circuit Rio decision, and whether if the digital copy was protected when you made it, could it retroactively become unprotected once you sell the physical media. That one is left as an exercise for the reader/blogger.

(This analysis is for digital song recordings. The analysis would be different for software, for example, which is not covered by the AHRA, which is not a commodity in the same way as song copies and which is usually sold with EULA contract terms.)

Tom said...

A friend of mine asked me this the other day and I was unclear on the answer.

The question was, "What are you buying when you buy a CD?" He was unclear whether he was buying a license to listen to that music or just a physical copy. (and, ahead of time, I apologize if my ignorance is appalling, and I just missed something).

At the risk of overusing a metaphor, I think music often act like Schrodinger's cat.

Some examples:

If I own an LP, can I go and download those MP3s to put on my Ipod?

Likewise, if I own CDs, and my apartment gets robbed, can I download the MP3s to replace what's been stolen?

If I have an implied license, I think I should be able to do both of those things. If I only own the tangible copy, I should be able to do neither.

I think the answer to question posed by the article depends on what I've purchased when I purchase a CD.

William Patry said...

There are two different relevant scenarios:

1. A fair use digital copy is made from a lawful CD. The CD is then sold.

2. An infringing digital copy is made from a lawful CD. The CD is then sold.

I don't see how selling the CD has any impact in either scenario.

In the first hypo, whether the digital copy is fair use has nothing to do with the subsequent sale of the CD. Whether the digital copy is fair use may well have something to do with the CD being lawful (as where I make a digital copy on to an iPod to listen to at the gym, as compared to copying from a pirate CD so I don't have to buy a CD in the first place), but it doesn't work the other way around.

2. If a digital copy is illegal, that can't impact on the legal status of the CD: its legality stems from its authorized sale by the copyright owner and from my purchase of it from the copyright owner or agent.

The NJ news article was noteworthy to me because it confused an entirely different issue: a situation where the first sale copy was digital and theowner of that copy wanted to transmit it to others. On that I have no view, and instead refer people to the Copyright Office's study.

Thos said...

Rather than the lapse of time in itself, I'd suggest that it's the intention with which you make the copy that is the deciding factor. As with contributory liability, the issue of intention (or assent) is highly relevant to the lawfulness of what is done. One has lawful possession of a rental copy during the period of rental (sufficient, indeed, to support an action for trespass against a third party), but the making of a copy is clearly unfair. If at the time of making the copy you intend it to be a substitute for the licensed disc, which you intend to sell, that looks like an unfair use. This idea of retrospective loss of the exception is statutorily expressed in sections 108 and 112 in relation to the specific exceptions there provided.

Anonymous said...

I concur with Prof. Patry's analysis. The ultimate question is the legal status of the digital copy after the CD is sold . . . . if the CD was the subject of a lawful first sale, 109(a) pretty clearly authorizes subsequent sales of that particular item. Whether the lawful purchaser made legal, illegal, or no copies of the item is immaterial to the 109(a) analysis.

My Q&D thought is that the "fair use" status of the hypothetical digital copy of a lawfully purchased CD is not something that is immutable . . . a particular copy might have been fair use at one time, under certain circumstances, but might not be subsequently if the circumstances have changed.

Ergo, the hypothetical digital copy of a lawfully-purchased CD might be fair use when made for using on your computer or Ipod so long as you don't sell the CD. However, once you sell the CD the circumstances have changed, and the calculus shifts to make that digital copy no longer a fair use. Similarly, if you do not sell or give away the CD, but simply destroy it (or it otherwise becomes unusuable), then I suspect that the calculus would still treat the digital copy as a fair use (although this raises all sorts of interesting proof issues).


LKB in Houston

William Patry said...

I would like to try and tease out a bit more the basis for why it is believed that selling a CD matters. LBK said:

"The hypothetical digital copy of a lawfully-purchased CD might be fair use when made for using on your computer or Ipod so long as you don't sell the CD. However, once you sell the CD the circumstances have changed, and the calculus shifts to make that digital copy no longer a fair use. Similarly, if you do not sell or give away the CD, but simply destroy it (or it otherwise becomes unusuable), then I suspect that the calculus would still treat the digital copy as a fair use (although this raises all sorts of interesting proof issues)."

Is that you are making money off the sale of the CD that determines the issue? Why should that matter if the digital copy was fair use? After all, the fair use nature was presumably predicated on being made from a lawfully made copy, which is still true if the CD is sold.

Maybe there is a principle that first sale is intrinsically predicated with parting of all copies, not just the purchased one, but one doesn't find that expressed in the statute. Perhaps it is one of those extra-statutory fairness things,that courts would consider implicit in the statute as reflective of its purpose. (I expect Scalia fans to take the opposite view here).

It should be noted too that the definition in Section 109 refers to "lawfully made," not to "authorized by the copyright owner," and the legislative reports indicate this includes fair use copies.

Reallyanon said...

Is that you are making money off the sale of the CD that determines the issue? Why should that matter if the digital copy was fair use? After all, the fair use nature was presumably predicated on being made from a lawfully made copy, which is still true if the CD is sold.

Because the DMCA and AHRA aren't clear about digital personal copies, Betamax time shifting (sort of space shifting) fair use analysis gets you to the copy's legality at the time it is made. When the originating version, lawfully acquired, is no longer in the possession of the "shifter" then there is a question whether a "shift" is taking place or whether it's become a substitute "copy" and potentially infringing. It’s like a springing executory infringement!

But it doesn't matter. In the Grokster oral argument, counsel for the RIAA conceded that consumers may make personal copies off of CD's and place them on iPods and never said "only if they retain the original purchased version forever." RIAA executives testified in the Induce hearings and elesewhere to the same effect. Since the RIAA writes the law in this area (LOL) their high priced talent should know what it says - - or more accurately, what it will say if it doesn’t exactly say it yet.

Joe Gratz said...

If the acts are truly separate, then there should be no problem copying your personal CD collection into your iPod (obviously a lawful copy), selling your CDs (obviously allowed by section 109), then selling the iPod full of music (a lawfully made copy, so freely alienable under section 109). If you prepared the iPod intending to sell it while full of music, the copy would probably become unlawful, popping the personal-fair-use bubble. I imagine it's similar to selling copies privileged by section 1008, and would likewise probably depend on the intent of the person making the copy at the time they made the copy.

On the other hand, does it make any sense for an entire infringement action to turn on the subjective intent of the copier at the time of the copying?

Anonymous said...

Prof Patry:

My musing was that a digital copy could have been a "fair use" when made, but that subsequent events (e.g., selling the original CD) might then render that copy no longer a "fair use copy." IOW, you can get different answers to the question of whether the copy is a fair use or not depending on the circumstances at the time of the analysis. The guts of this theory is that the fair use status of the digital copy is not fixed at the time it is made, but depends on the current circumstances.

However, if the legislative history supports the idea that the first-sale doctrine also applies to copies that were considered "fair use" at the time they were made, then that probably mean that the "fair use" status of a particular copy is in fact fixed and not immutable. In such case, my theory is probably invalid. However, it probably also means that under the rather disturbing hypo Joe Gratz raises, yes, it would be legal to sell an Ipod full of "fair use" copies . . . which seems utterly incorrect.

If 109 applies to fair use copies, then what of the following hypo:

Student makes a copy of a copyrighted poem as part of her research for her discertation analyzing the works of that particular author. (Such would almost certainly be deemed fair use.) Years later, ex-student gives her copy to a dealer who then sells that "fair use" copy over the explicit objection of the author.

Under my theory, the determination of whether the sale was infringement or a fair use would include consideration of current cirsumstances that might not support a finding of fair use; i.e., the fact that the copy was originally a fair use is not dispositive. On the other hand, if 109 applies to copies that were a fair use when made, then the changed circumstances are irrelevant.

LKB in Houston

Max said...

I think you're (Patry) overthinking the matter. The reporter who wrote the article isn't used to nuanced legal thinking. The RIAA's website includes a clear example of fair use: copying your own CD to listen to on your tape-playing walkman (http://www.riaa.com/issues/music/downup_faq.asp#upload).

The original reporter's question was, "what if I later sell the CD, am I allowed to keep the recordings I made?" Or, written another way (as non-lawyers aren't always as precise as lawyers) "Does selling a CD invalidate my fair use right in recordings I've made of it?"

That's the question each lawyer has answered differently. Since I'm not a lawyer myself, I'm not sure what the correct response is, although my best guess would be that "fair use" is a one-time question, not a right that needs constant upkeep. If it was legal to make the copy at a particular point in time, then you don't have to justify keeping that recording in the future. If that is correct, then the intent at the time of making the copy would be an issue, and courts would likely try to divine the intent from such factors as the length of time between making the copy and selling the CD.

But, I would be interested in Patry's opinion on the matter. Is it possible to lose fair use rights to a copy in your possession? Which cases *could* trigger such a loss, and *do* they?

Max said...

OK, rereading things, it looks like Patry was understanding the original post clearly.

I think the reason us lay people are confounded here is that we undertand our license to use the copyrighted content on the CD transfers during the sale.

That's why anonymous expected destroying the CD to keep the license intact, where selling it wouldn't.

But thinking about this post, fair use is, by definition, copying that's acceptable without a license. So even if the license transfers, the fair use recordings are acceptable.

Now on to a hypothetical. Making copies of software in order to reverse engineer the software has been considered fair use in certain circumstances. If, after using the copy for that purpose, I chose to do something naughty with it, would I lose my fair use defense to it?

William Patry said...

Here’s the relevant section from the House Report on Section 109:

To come within the scope of section 109(a), a copy or phonorecord must have been ''lawfully made under this title,'' though not necessarily with the copyright owner's authorization. For example, any resale of an illegally ''pirated'' phonorecord would be an infringement, but the disposition of a phonorecord legally made under the compulsory licensing provisions of section 115 would not."

A friend who is very perceptive asked me:

“My impression is that a purpose of the AHRA was to permit people to make use of their own songs and share them with their immediate family. Taken to its limit, however, it does raise the question whether it authorizes people to buy, make a copy, and sell again so that one CD ends up giving many people the same songs. Ultimately if the CD changes hands enough times it raises the same problems as online file sharing. I'm not sure the letter of the law prevents this even though it seems abusive, at least in some cases.”

I have written before about my embarrassment over the drafting of Section 1008 and let me now add that I am embarrassed by the drafting of the legislative report on that Section in the House report on the AHRA, which I wrote. Here is the discussion in its entirety:

“Section 1008 covers one of the critical components of the legislation: exemptions from liability for suit under title 17 for home taping of copyrighted musical works and sound recordings, and, for contributory infringement actions under title 17 against manufacturers, importers, and distributors of digital and analog audio recording devices and recording media. In the case of home taping, the exemption protects all noncommercial copying by consumers of digital and analog musical recordings. Manufacturers, importers, and distributors of digital and analog recording devices and media have a complete exemption from copyright infringement claims based on the manufacture, importation, or distribution of such devices and media.”

This doesn’t say anything of help, and is irresponsibly short. I think it is not clear that someone who makes a personal copy and then sells the CD later is engaging in a commercial copying within the meeaning of Section 1008, after all there is no selling of the digital copying. A stronger case might be presented when one makes a copy with the intent of then selling the CD but even there you are still not selling the digital copy, and it should be recalled that the scope of 1008, apr├Ęs the Diamond Rio case is narrow and Section 1008 does not of course, take any a fair use argument.

Mayx asked about doing something naughty with reverse engineered software.I don't know what that might be, but if it is a fair use copy, under my intepretation of Section 109 you can sell that copy.

Bruce said...

William Patry said: "After all, the fair use nature was presumably predicated on being made from a lawfully made copy, which is still true if the CD is sold."

You could have a theory of fair use that the making of a limited number of copies for personal use is fair use, so long as they are kept in common possession with the original; but if those copies are distributed to different owners, the reproduction no longer qualifies as fair use. I think this is what the original columnist's correspondents were assuming, and I don't think it's entirely off-the-wall.

William Patry said...

Bruce said:

"You could have a theory of fair use that the making of a limited number of copies for personal use is fair use, so long as they are kept in common possession with the original; but if those copies are distributed to different owners, the reproduction no longer qualifies as fair use."

I think that is possible, but I read the New Jersey article as talking about something quite different: selling the original, not the copy and that was what I was pointing out was a fundamental flaw in the article (along with mis-citation to a Copyright Office study that dealt with a digital original being transmitted as referring to selling of CDs).

But I think 1008 could even be interpreted to reach your situation though: If I make copies for two or three friends, and those copies were permitted under 1008, if my friends later decide to sell their copies, why isn't that permitted under 109?

Max said...

I later answered my own question (about using a copy for a fair use and an infringing one). The answer is quite simple -- copy no longer means what the dictionary says, but use is pretty clear.

If I've got a copy that I used fairly that's great. If I later use it for infringement (say massive redistribution), I don't get any brownie points for my previous fair use.

My hypothetical, however, was simply an attempt by a non-lawyer to think up a potential situation where a person could lose a fair use defense.

William Patry said...

Max: They were good questions, and spurred good discussion.

Fred von Lohmann said...

I suspect an increasing number of music fans will be wrestling with this issue.

As I see it, the interesting question (and the one the columnist was driving at) is whether subsequent disposition of the physical CDs can retroactively change the fair use analysis with respect to any prior personal use copies. (There is a distinct question whether an intention, at the time of copying, to immediately sell the CD might influence a court in applying the initial fair use calculus, but leave that aside.)

I agree with Prof. Patry that the two events are entirely distinct. If it's a fair use copy when made, the answer cannot change later (springing infringement liability!). But I stand by my view that there is no clear authority that settles the question.

Anonymous said...

For better or worse, the 109 legislative history seems to indicate that a "fair use copy" can be freely sold w/o interference from the copyright owner, insofar as it was "lawfully made" at a specific point in time. That pretty well cooks my theory of a mutuable determination of fair use.

So, how are the courts going to come out on all this? As a copyright litigator, I think courts are going to be *extremely* squeamish about adopting arguments that would give legal blessing to the practice of "buy, rip, burn, return," or that would allow the widespread selling of alleged or arguable "fair use" copies.

If I had to guess, I suspect that courts would try to solve the problem by monkeying with the determination of whether the initial home copying was a fair use. E.g., for home copying of CD's, etc., to be fair use, (1) the home copyist (or someone in his household) must own the legitimate CD (i.e., an authorized copy), and (2) fair use includes some sort of implied obligation not to sell or give the legitimate CD away (or to delete the copies in such event). Again, this is pure but educated speculation on my part.

As Professor Patry points out, such an implied obligation could not affect the legality of selling / giving away the CD -- 109 covers that -- but would instead solve the problem on the front end.

Of course, projecting what a court might do -- especially in an area like this -- is guesswork. I have to confess that this question is a lot more pithy that I first thought.

LKB in Houston

joshua wattles said...

Maybe the default theory should be one of property law. While section 109 would permit the sale of a lawfully made copy, it does not define the rights acquired in that sale - - it simply suggests that the sale itself would not be an infringement of exclusive distribution rights. When a purchaser takes possession of a fair use copy, maybe its like taking possession of a prescriptive easement. That easement can pass with the land without objection as to title. But when it passes, the easement doesn't become something greater - - for example, a permanent estate. It remains a prescriptive easement and once the need for the easement is taken away, then the right dissipates. Also, as is the case for many easements, they run with the land - - here, with the original copy. Using this approach, one could sell the original and the fair use copies at the same time to the same person. But perhaps one could not sell the fair use copy on its own - - not because of a prohibition in section 109 but because it isn’t otherwise authorized by statute with respect to digital copies and the fair use copies rely on the original for their status; just as in the case of an easement.

Anonymous said...

What if I sold the CD... and then bought it back?

Or bought a different copy?

Or what if I sold only a share of the CD so that myself and the buyer become joint owners?

Anonymous said...

I'm not a lawyer nor do I know anything of detail about section 109, but personally, I take the following view - right or wrong.

To me, "Fair Use" has always meant a legal copy of a copyrighted work that I own where the copy is for my own personal use. This implies to me that my "Fair Use" copy is only valid for as long as I own the copyrighted work (either physically or by license). As soon as I transfer/sell the original copyrighted work, I no longer have the right to claim "Fair Use" and any copies of such work become illegal copies.

The scenario where I purposely detroy or lose my original copy is a black hole. How do you prove (unless you are lucky enough to have detailed receipts) that you ever owned the legal copy?

If the RIAA came to your house, raided your PC and found a few thousand songs but no physical media or receipts to support them, where do you think you would end up?

Keith Irwin said...

I think that the fundamental problem is that there are two ways to approach the issue of selling copies of a work. Not necessarily two ways in which it is -proper- to approach it, mind you, just two different logically consistent ways of viewing what happens when a copyrighted work is sold. The first is to simply say that you're selling a copy and that the owner of that copy may then exercise some set of rights which they are legally allowed to exercise with any copy of anything to which they have access. The second is to say that you are selling a copy and a license to use that copy in certain ways.

Now, the second way of looking at things way well have no legal foundation, but it is the way of looking at things which is being pushed by the RIAA, the MPAA, and, most of all, by the BSA (Business Software Association) and its member companies. Consider, for example, the issue of EULAs. If I go download a piece of software from the internet, I am frequently prompted with an end-user license agreement which I must agree to in order to use the software. The theory being promoted by the company which has given this copy to me being that meerly possessing a copy of software does not give me the right to run it. That is, I only have the rights to the coopyrighted work that the copyright holder issues me.

In this way of thinking about things, it becomes clear that if rights come from licenses, there must be some rights which are sold with a CD, DVD, book, et cetera which allow us to make use of it in the ways to which we are normally accustomed. So the CD comes with a license to listen to the music on it. If we view things in this way, then questions occur both about the terms of this license and in what events it is transferred. Which is where the confusion sets in, because although the RIAA clearly is a promoter of this theory (see their comments in the article), they don't actually want to nail down the terms of the implicit license that they claim to be selling. I think that they avoid this because they don't want to concede any rights to the consumer, possibly out of general pig-headedness, but more likely out of fear that whatever right they concede to the consumer will later become something for which they would like to charge. For instance, they would be happier if they could charge a tariff any time you loaned a CD or DVD to a friend. So they don't really want to tell you that you have the right to do it.

Anyway, my overall point is that people are buying into this framework and using this as the basis for their reasoning. What you're saying, in contrast, is that this second way of looking at things does not have a legal basis and that the first one is correct.

Personally, I'm rather glad to hear this because I quite perfer the first way of looking at things to the second, but until now I simply did not know which was the legally correct way to consider these things and had often wondered.

Keith Irwin

Nicholas Bentley said...

Doesn’t this whole discussion just show that the current state of copyright law can’t handle the changes inflicted on it by the digital world and the sudden ease, even necessity, to make copies? Dose this not suggest that it is time to take a new approach to copy-rights where rights take precedence over copies? See Indicare for more of this idea.

Anonymous said...

From what I know of copyright law. You only purchase a licence to listen to the music on the CD. You do not own the music. You only own the physical medium not the content on it. You can make a copy of it for personal use (Although I am sure the RIAA would say otherwise and circumventing copy protection is another matter). But if you sell the CD you are selling not only the physical medium but your licence to listen to that content. Would not this be illegal? As you are then profiting from it's sale. Regardless of whether you made a copy of it or not. I've never really understood this aspect in fact I've never really understood how secondhand record stores exist as they give nothing back to the artists or industry. Not that I am on the RIAA's side or anything. I just think that copyright law is a farce and a complete mess. It's so vague in reality and so much of it has yet to be tested in a court of law.

Anonymous said...

"From what I know of copyright law. You only purchase a licence to listen to the music on the CD."

Wrong.

jayce1983 said...

REVOLUTIONALIZE THE MUSIC INDUSTRY

It seems these days that the laws for copyright are moving slower than the industry is. It also seems there is so much left open ended in the courts that one doesn't really know if they are even breaking the law (or they have enough loop-holes that they can bypass them anyways). I am no lawyer but I do have an idea that I think might solve many problems and create many new opportunities for artists and Canada as a country in general. This is why I have started this group. For discussions about my idea and possible tweaks that may be added, in hopes that one day it may come to fruition (givin the fact that enough people join this group and spread the word/idea).

1) A Database would need to be kept. Lets call them Global Musical Artists Database or GMAD. One similar to the patent offices. All artists wishing to receive revenues would need to register their songs on the database. These songs would then be assigned serial numbers and subsequently reserve a limited amount of serial keys for that particular piece of work.

ex. Play It By Ear registers a song called "Marching Chipmonks". It is assigned serial # AbCD 1234 EfGH 5678 IjKL and has a limited quantity reserved for it.

2) When Records are pressed (or sold digitally ie: iTunes) they are each sold with a portion of the rights based on a government regulated flat fee (for sake of ease we'll use $10). The owner of that CD receives the assigned serial # with the CD (in digital plain text document format).

ex. A CD is purchased by a consumer (Jayce) at full price from an outlet for $10 and he receives 100% rights to it.

3) a)Any person wishing to sell their entire set of rights may do so at any time provided they transfer the serial numbers along with it. A transaction as such would not require any contact to GMAD.

b) Any person wishing to divide their share of the rights may do so at any time provided they register with GMAD as a reseller and properly update their copy and any subsequent copies with new serial #'s.GMAD would then provide the rights holder with one of the reserved serial numbers which degrades their portion of rights to correspond with the sale amount. An additional serial # would also be provided to unlock any subsequent copies.

ex. Jayce buys Play It By Ear "Marching Chipmonks" and then decides to sell half his rights to Steve for $5 (pro-rated from the full purchase price). Each copy now has 50% rights. (Keep in mind he is not making a profit, the artist has already received his royalties the first time it was sold thus preserving the artists livelyhood).

4) A minimum of 10% of rights must be held in order for a copy to validate/warrant a new serial # (as a set amount of serial #'s have been assigned for that particular media).

ex. Steve sells Mike a copy with 20% rights for $2, a copy to Ryan with 10% rights for $1 and a copy with 10% rights to Errant for $1 and keeps the remaining 10% rights for himself. These would all be registered with GMAD and they would assign new serial #'s which Steve would distribute with the copies. He too would receive a new serial # as his old one would be invalid. Of these friends only Mike and Jayce have the ability to sell their rights (or make copies so to speak), as they have more than 20% or more rights retained.

6) Any original copy aquired from an authorized GMAD outlet has a maximum of 10 subsequent copies.

So basically instead of the artists going to a company to press their album they would go to GMAD instead and register a set amount of copies/serial #'s for that album. They may also at a later date if so desired, register the same piece of work provided they hold the original copyright to the piece in question. (This also creats a culture for collectors as certain serial #'s will be 1st issue and worth more potentially in the aftermaket resale (ie: 20 years later as an antique or classical piece of music). Vendors like HMV would then need to purchase albums from GMAD's website. They are then given the serial #'s or an authenticaiton code that can be passed to the first user along with the 100% of rights. For a fee a customer can have an authorized GMAD outlet (similar to HMV) download and create a copy from GMAD in a storefront setting.

This would make music limited and an artist could then release more copies by reregistering an album every 20 years (or as desired) to the public. If all the copies are sold and the market demands more, the artist can wait 20 years (or as desired) to let the anticipation grow.

Fees would be set up so that GMAD could maintain its website (government funded to start up). Ie: printing materials for hard copies (shipping extra), server costs, employee costs.

++++ THE MATH (bear in mind these are round numbers for sake of ease)++++
(minimum of 10 copies maximum of 10,000 per purchase. Once sold out, the artist may buy another, or if not sold out you may reregister to keep the rights from going public or your rights expiring).

Step 1: Artist registers song and pays for 10,000 copies to be released for the amount of $50,000.

Step 2: GMAD sells all copies each at $10 to authorized outlets receiving a total of $100,000.
$75,000 goes back to the artists upon sale and a tax of $25,000 stays with GMAD for operating costs.

Senario 1, The artists buys a maximum of 10,000 copies but doesn't sell all of them within the 20 year limit, but he doesn't want other people using his music. So he may purchase a minimum of 10 copies through GMAD in order to keep his rights up-to-date. The benefit here is largely for the government who received payment for his first batch, of which he did not sell all of them. These surpluses could be used to pay off the national debt, or put back into other parts of the system (ie: Helath Care).

Senario 2, The artist buys a minimum of 10 copies and they don't sell. He doesn't have to dump a whack load of cash to find out it's a poor investment and he still gets to keep his rights for the 20 year time period. If one day down the road he becomes popular and fans grab his first album of 10 copies within the 20 year limit, he may then register another set.

In the end, each consumer that purchased one set of rights equivelant to 100% per copy is unable to make a profit reselling or distributing the material. The artist made $25,000 and the government run program makes $25,000 (or rather continues to operate with it). The consumer may then go about his business with his rights as he sees fit (much in the way things go now).

Conclusion: Yes there will always be people getting free copies but this takes Digital Media Rights to another level of regulation. As it stands the law states that you may own a hard copy and make a digital copy for yourself, but then what if I lose my hard copy or it gets damaged? Do I need to delete my digital copy if I don't have a recipt to prove I orignally owned a portion of the rights? No more wondering. It would be regulated like car licenses. The average Joe would know that if he wants to make copies or share it he can do so legally and that he only needs to logon to do it (or go to a govenment office or authorized outlet to have them do it for him).

Here's a couple of links related to the current issues at hand which got me to thinking. Is there a better way?
http://www.digital-copyright.ca/
http://williampatry.blogspot.com/2005/10/first-sale-hard-copies-and-digital.html
- Jayce Cameron
Facebook Groups: N.E.T. (New Era Technology)

Anonymous said...

I'm from India and I have a different take: there's a famous singer of ours who passed away a couple of decades back. I bought his records [vinyl]. Then I bought his cassette tapes - I could have recorded from radio or vinyl but, being technically challenged didn't. Now my record player has been trashed and I need to buy CDs of the same music / same singer.

So, selling the same song 2 or 3 times on different media because of technology changes is fair? The music industry has the legal right to do this? I still have my records but can't play them - though record players are making some sort of a comeback. I still have my tapes but they've degraded.

If they can sell us multiple copies because of "technology", why can't we make multiple copies because of technology [i-pod, pc, cd-player, etc.]?