Thursday, November 30, 2006

Fair Use and Personal Copying Exemptions

In civil law countries, exceptions to rights don't take the form of fair use, but rather statutory provisions that spell out the permitted conduct. This approach has some problems, though, principally rigidity: if something is not specifically enumerated, it is usually deemed excluded at least with respect to the provision in question. The U.S. has such provisions too, like Section 108, but then we also have the safety valve of Section 107. Fair use is designed to (but doesn't always in practice) provide the type of flexibility that specific exemptions don't. Even other common law countries, like the UK, Canada, and Australia, have migrated away from fair use and toward fair dealing and specific provisions. A current debate on Australia is over whether to have a mix of fair use or instead fair dealing and exemptions.

Many U.S. copyright buffs have an antipathy to the civil law approach, believing it too narrow, and in particular cases, it may be. But not always. Civil law countries tend to have more generous personal use exemptions, and a more consumer-oriented attitude. In the absence of such provisions here, we fall back on fair use, which would be fine if courts took seriously the doctrine as an integral part of our copyright scheme. The Mp3.com case for example is one example of an epoch failure. That failure still haunts us, and what made me recall this failure is a posting by Fred von Lohmann below:

For any who missed the Walmart - Warner Bros deal announcement -- now
it's official, they want us to pay again for a copy on an iPod. And
here I thought they were going to just roll out "Managed Copy" and
let us have our personal-use copies for free. Silly me. They keep
this up, and mainstream consumers are going to start getting angry...

Stealing Fair Use, Selling It Back to You

"Apparently, Hollywood believes that you should have to re-purchase
all your DVD movies a second time if you want to watch them on your
iPod." That's what I said last week, commenting on the Paramount v.
Load-N-Go lawsuit, in which Hollywood studios claimed that it is
illegal to rip a DVD to put on a personal video player (PVP), even if
you own the DVD.

Well, this week the other shoe dropped. According to an article in
the New York Times:

"Customers who buy the physical DVD of Warner Brothers¹ ³Superman
Returns² in a Wal-Mart store will have the option of downloading a
digital copy of the film to their portable devices for $1.97,
personal computer for $2.97, or both for $3.97."
So you buy the DVD, and if you want a copy on your PVP or computer,
you have to pay a second time. Despite the fact that you bought the
DVD, and you have a DVD drive in your computer that is perfectly
capable of making a personal-use copy. Imagine if the record labels
offered you this "deal" for every CD you bought -- pay us a few
dollars extra, and you can have a copy for your iPod. And a few more
dollars, if you want a copy on your computer, too!

This latest bitter fruit from Hollywood is brought to you by the
DMCA, which treats "protected" content (like the encrypted video on
DVDs), differently from "unprotected" content (like every audio and
video media format introduced before 1996). Thanks to the DMCA,
Hollywood believes fair use personal-use copies simply do not exist
when it comes to DVDs.

Given that the Copyright Office has refused [PDF, see p. 71-72] to
recognize any DMCA exemption for space-shifting, claiming that
putting a DVD you own on your iPod "is either infringing, or, even if
it were noninfringing, would be merely a convenience," (excuse me,
Copyright Office, that's a decision for a court to make) the ball is
now in Congress' court. Let's hope Congressman Rick Boucher is
listening and will reintroduce his DMCA reform bill first thing next
year.

7 comments:

Crosbie Fitch said...

I'd stop tugging at that loose thread right now, no matter how irritating.

If you're not careful, the whole fabric of copyright will unravel in your hands and you'll end up a disillusioned abolitionist like me.

Perhaps you already are?

joshua wattles said...

The film industry is going through the awkward process of finding and defining markets for movies through new technologies and Internet-based distribution opportunities. Yes, there is a space shifting fair use application (and implication) when a consumer moves content from one device to another. But there is also a viable commercial opportunity to convince the consumer that for a few extra dollars the consumer should buy another version for a space shift instead of the consumer going to the trouble of making a new compatible copy with intermittently available tools.

It was the music industry that widely distributed unprotected digital files to enable consumers to space shift purchased music on a no muss, no fuss basis. The result has been quite damaging to the music industry’s entry into digital distribution through other avenues such as downloads. If you were advising the film industry, you would unequivocally suggest that its digital format releases of films preclude copying by whatever means were available. And you would expect the film industry to attempt to stage the release of its product through the various digital avenues now available and available in the future. Unlike the music industry, the film business has more than 40 years of experience in licensing the release of films into ancillary markets after the exhaustion of the primary theatrical release. It is well familiar with release windows, with multiple platform releases, with simultaneous multiple platform releases (e.g. a film can be on DVD, pay-per-view and on free television as well as available for download all at the same time) and with widely variable pricing structures in each different distribution context. Consumers are also very familiar with this distribution pattern for films.

There is one copyright law for all works. But there is decidedly not one business structure for them. To the extent that the copyright act incorporates fair use it should also respect viable and responsible distribution terms and patterns for copyrighted works. I agree it’s no business of the Copyright Office to determine the parameters of space shifting. But I would hope you would agree that region coding, macrovision, windows DRM and other unfriendly technological work-arounds to the consumers’ ability to make copies are fair business practices in the distribution of films - - and in any event, no business of the copyright law to change.

On an academic level, I would be of the view that the anti-circumvention provisions of the DMCA are mis-placed within the copyright law and do violence to its integrity. Like many industry sponsored laws and regulations, they were and are overkill. I suspect that without those provisions, the film industry would be perfectly competent in finding generally effective ways to spike the copying of films by consumers. And I suppose having won the anti-circumvention rights, the film industry will need to deal with exemptions and exclusions to those rights at some point driven by political pressures perhaps from consumers and in any event considerably more robust than those that would come from the Copyright Office. But do you, Professor Patry, really support a copyright law that would require a copyright owner to enable consumer space shifting if the copyright owner chose technology for the distribution of its work that prevents it?

William Patry said...

Josh:

I think we agree. My view is this: there are legal issues and business issues and we shouldn't mix the two. As a legal issue, I do believe that consumers should be able to space shift from a lawfully purchased product. I also believe that as a business matter it is quite finer for copyright owners to try and sell space-shifted content, with consumers having the option to pay up or not. I assume that the decision to pay for space-shifted content would be based on a number of factors, including whether there is any value-added material, quality of the transfer, ease of the transfer etc.

I also think that copyright owners should be free to pursue whatever business model they want, including those that are consumer unfriendly or even hostile to consumers. Let the marketplace, not the government sort things out. Pre-DMCA that was possible. The problem post-DMCA is this, as I see it: efforts by consumers to do space-shifting can be stopped by the anti-circumvention provisions of the DMCA and that changes everything because it is no longer the marketplace that sorts things out, but the DMCA. I don't think that copyright owners should have to support space-shifting as a legal matter, but I do object to the DMCA making illegal consumers efforts to do so. I would be perfectly content to repeal the anti-circumvention provisions and let the market handle it, even if that means some copyright owners playing the better mouse trap game, while others experiment with new business models.

Fred von Lohmann said...

To the extent that the copyright act incorporates fair use it should also respect viable and responsible distribution terms and patterns for copyrighted works.

The trouble with this point of view is that it does not adequately recognize the value that disruptive innovation offers to both society at large and the copyright industries in particular.

Looking historically, I think it's fair to say that most of the value of copyrighted works is the result of disruptive innovations that ignored and deliberately upset the "viable and responsible distribution terms and patterns for copyrighted works."

This is the heart of Schumpeter's insight regarding creative destruction as the engine of economic growth in capitalist economies. So copyright law must be careful not to show too much respect to "viable and responsible distribution terms and patterns."

Your friendly transactional lawyer said...

For me the issue with fair use has always been the incentives. A user of copyrighted material has to be able to do the judical balancing of interests before they can say definitively "yes, this is fair use." I doubt whether that actually ever achieves a good result since there is always the threat of litigation by the owner even for those acts that clearly fall within fair use.

Moreover, unlike in the patent law, there is very little in the way of punishment for coypright overreaching. A copyright owner can almost always bring suit and would almost always have a decent legal argument that a particular use wasn't fair use, and any lawyer could construct an argument that such a suit wasn't frivilous regardless of the outcome.

I often think that this would be one of those situations where a user, if successful on a fair use defense, ought to be able to recover attorney's fees. I would even go so far as to say that bad faith suits against fair users ought to be subject either to loss of rights or significant punitive damages.

Among other things this would cause users with a legitimate fair use argument to actually defend (rather than simply cave) their rights, and it would deter overreaching.

joshua wattles said...

It is a critical mistake, set firmly in motion by the Betamax/Sony compromise, to conflate consumers’ personal rights with fair use among and between works using copyrighted content. Consumer rights are embodied in the first sale doctrine - - not in traditional fair use analysis. This notion that fair use relates to consumer uses and the fairness of consumer uses is a misdirected path and it prevents a real discussion of those rights consumers should enjoy in a variety of distribution settings involving copyrighted works. It serves the content industries to keep it all confused (although I would maintain that view is very shortsighted and the result of no one brave enough on their side willing to stand for substantive change that would help their consumers). It would serve the content users to split these two, frequently divergent, branches of the fair use doctrine and bring some considerable clarity to the process. I can accept the premise of the suggestion made by “your friendly transactional lawyer” as applied to the consumer-use-branch of fair use but find it completely inappropriate to traditional fair use conflicts surrounding the integration or use of copyrighted works into other works. Fred knows that I support disruption on principle, particularly constructive disruption. But the price of a really disruptive play is always the ire of those who are hurt or cast aside in the process. The law would need to be even more carefully crafted if the object were to insulate disruption instead of just encouraging it.

William Patry said...

Josh, the word "rights" as you seem to use, encapsulates part of what I was trying to get at in the post, although your use raises broader issues for me too. One way to approach all these issues is in terms of what conduct do we want to have subject to liability and which don't we? I don't think space-shifting should result in liability, and am happy to call it fair use or a personal exemption, and I would reagrd as unhelpful descriptions of things as consumers' right or not. "Rights" on either side of the equation tend to obscure the more central point about specific conduct.