Is a copyright consensus, or at least compromise, possible?

Author: Russell McOrmond

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Copyright is one of the key laws that will define the shape of our participation in the knowledge economy. Traditional copyright law enables, or can harm, various methods of compensation for creators. When we add concepts such as Digital Rights Management (anti-circumvention) and ISP liability we are determining what types of technologies will be allowed in the future, and who will ultimately control and benefit from them.

This makes Copyright law a very large and important conversation that is not possible to have in only a few short months if left broadly as "copyright". I have given several presentations lasting an hour for what amounts to a single clause in the 1996 WIPO treaties. The format of this consultation doesn't allow us the ability to discuss at this level of detail, but only very broadly.

I watched the tail end of the Montreal Town Hall meeting streamed online, using a direct link that was published on Twitter (Consultation website said Microsoft Windows only, and I use Linux <> on my desktops at work and at home).

One of the things that I noticed is that while far more people are participating than during the 2001 consultations, some of the rhetoric hasn't advanced in the last few decades. There are two extreme views that were often articulated that can not be reconciled: that any unauthorized usage (commercial or otherwise) of a copyrighted work is analogous to "theft" vs. the suggestion copyright holders shouldn't need permission or payment (non-commercial or otherwise).

As someone who doesn't agree with either of these extremes, I see a reasonable position that is somewhere between. One problem is that, along with similar debates in other areas, the language (theft vs fat cats, deniers, pro-life vs pro-choice) has become a barrier to people actually listening to the concerns of all the participants. This disables us from coming up with ideas that can address all our legitimate concerns. Another problem is that these extreme views are harmful not only to those people that are considered political opponents, but also to the interests of those who hold them.

Note: While I could have easily/cheaply attended the Montreal Town Hall, I didn't attend because at the time I thought I was specifically invited to a different event <>. It turns out I was only invited along with all other Canadians to the Toronto Town Hall. Given how that event turned out (dominated by the legacy recording industry -- talk about the tail wagging the dog) I am glad I didn't try to spend the hundreds of dollars it would have taken to attend.

One extreme: claims that Copyright infringement is analogous "theft"

I have written a longer essay called the Jefferson Debate <> on the problems with the analogy of copyright infringement to "theft", or of otherwise comparing intangible knowledge with physical/tangible property. It needs to be understood that as a worst case scenario, copyright infringement is an unlawful reduction of the value of a copyright. The comparison to "theft" is invalid as the actual thing that could be claimed to be "owned", the copyright, is still held by the copyright holder. The other is that knowledge, different than tangible goods, has a zero marginal cost to the producer. Infringement does not cause direct financial loss, only the potential or theoretical loss of additional revenue.

The comparison is also harmful to the interests of copyright holders as it limits their thinking on ways to be compensated for their creativity. Thinking of infringement as "theft" leads copyright holders to want to exert more "control" over their creativity. Control and compensation are not the same thing, and in what I believe is the majority of cases an increase in control over what copyright holders already have under Canadian law will reduce compensation.

Some representatives of copyright holders recognize this flawed thinking. In 2007 Jeff Raikes, then President of the Microsoft Business Division , said "If they're going to pirate somebody, we want it to be us rather than somebody else". <> This is a recognition that while being directly compensated for a use of a copyrighted work is ideal, that infringement is better for the copyright holder than people switching to alternatives.

You will never hear a manufacturer or reseller of a tangible good say "If you are going to steal from someone, we want it to be us rather than someone else". The reason is simple: intangible zero-marginal cost knowledge is nothing like non-zero marginal cost tangible goods, and copyright infringement is nothing like "theft". All our conversations about modernizing our copyright law must start from this basic understanding.

Invalid Statistics

The comparison to "theft" brings people to incorrectly believe that any unauthorized usage represents a loss to the specific copyright holder, leading to statistics that are not helpful for understanding reality or better compensating creators.

One of the most interesting examples also comes from the software sector. The self-called "Canadian Alliance Against Software Theft" <> , the Canadian branding of the Business Software Alliance, commissions a yearly study from IDC called "The Global Software Piracy Study". The methodology they disclose in the report to justify the alleged losses to their members from software copyright infringement has many serious flaws.

Their study uses indirect methods to estimate the amount of copyright infringement. They take the number of computers which ship in a region and multiply that by their "wishful thinking" demand for their member software. They subtract from this the actual shipments of their software, as well as their "wishful thinking" demand for competing Free/Libre and Open Source Software (FLOSS) <> . The remainder is declared their estimate of infringed software.

Think for a moment about what Jeff Raikes said, putting this in the context of this methodology. An organization made up of members that see people switching to alternatives as a greater threat than copyright infringement is going to over-estimate the demand for their own software, and under-estimate the demand for those alternatives. IDC is well known for under-estimating the demand for FLOSS in the marketplace, often using pre-installed software as a primary measure. FLOSS has a royalty price of zero, and can be legally shared and installed on multiple computers royalty-free. This has meant that most FLOSS is installed after the purchase of the hardware, rather than pre-installed.

The BSA/IDC study then goes further. They start with the invalid presumption that every infringing copy was a lost sale for their members. As Jeff Raikes suggested, there is a third option of people switching to alternatives (legal or otherwise), as well as people not using that type of software at all. People taking the option of infringing BSA member software is actually more harmful to the interests of those offering the alternatives. It is hard for legally free FLOSS to compete with illegally free BSA member software, and all this illegally free software usage closes the various commercial support markets that these software alternatives depend on. While I believe there are commercial losses caused by people using illegally free software, it is quite likely these losses are felt more by competitors than the specific copyright holders.

The BSA/IDC study goes further into secondary markets, such as retail. The problem with claiming that using illegally free software hurts retail markets is that another trend, switching from the sale of shrink-wrap software to legal software downloads and software as a service, is nearly equivalent. The trend in the productivity software marketplace is away from selling boxes in retail outlets, and retailers that were partly dependent on this revenue will need to switch to other revenue sources. This downward trend for retailers cannot be attributed to software copyright infringement. The same can be said of the retail sales taxes and other alleged losses in secondary markets.

One of the most interesting (comical?) claims the BSA/IDC study makes is at the country level, confusing a correlation with a causal relationship. They note that in more financially wealthy countries that software copyright infringement is lower than in poorer countries. They then make the amusing suggestion that it is the lower infringement that makes the country more wealthy, rather than the far more likely suggestion that those with less money are more likely to infringe copyright. In countries where software licenses cost many months (or sometimes years) wages, the only options are infringement, using legally free alternatives, or doing without the software - paying the royalty fees requested by BSA members is simply not possible for what is easily the majority of the worlds population.

Similarly amusing studies with similar methodologies come from other copyright sectors. The self-called International Intellectual Property Alliance (IIPA) is made up of seven member associations: the Association of American Publishers (AAP), the Business Software Alliance (BSA), the Entertainment Software Association (ESA), the Independent Film & Television Alliance (IFTA), the Motion Picture Association of America (MPAA), the National Music Publishers’ Association (NMPA) and the Recording Industry Association of America (RIAA). Similar studies to the BSA are pooled by the IIPA to make claims about how these copyright sectors are affected by copyright infringement. These questionable studies then form the basis of other "studies", such as the one that the Conference Board of Canada withdrew after it was disclosed that it was plagiarized from the IIPA. <>

No matter which specific copyright sector study you look closely at you will see similar claims: that in markets being transformed by new technology that any observable negative impacts are attributed to copyright infringement rather than legal competition, and that any infringement represents a lost sale to the copyright holder.

Other extreme: No compensation for creators

I strongly believe creators should be compensated for their creativity. Not all of this compensation comes in the form of money as can be seen in the various sharing based creative communities, and these other forms of compensation that motivate creators must also be protected. If we don't protect the moral and material interests of creators, as articulated in article 27 of the UN's Universal Declaration of Human Rights <> , we as a society will be poorer.

I have heard the sentiment that creators don't need to be compensated expressed a number of times over the last near-decade I have been active in this area of policy. It comes in the form of a broad suggestion that copyright should be abolished, as well as the form of a copyright exemption for the specific activities that the individual is carrying out (unauthorized P2P, educational institutions, etc). While some copyright holders abuse the term "thieves" to discuss people who have this belief, I do not agree with their suggestion that there is some sort of moral decay being demonstrated.

We need to ask ourselves how Canada can have many grocery stores with "self serve" checkouts where possibly poor and starving people can be trusted with goods that costs the store money to replace, while more wealthy Canadians with access to computers supposedly can't be trusted with some music, movies, television or software.

Why are we seeing less respect for the fundamentals of copyright?

At the Montreal town hall, photographer André Cornellier told part of the story. At a copyright conference, likely one of the CopyCamp's that we both attended, he was talking to someone who thought all uses of creative works should be free. André then asked him what he would do if some of his own work had was taken by some big corporation who made a large profit without offering him anything. This young person said they would sue, at which point André asked what law he would use to sue given this person had already asked that any uses of copyrighted works be allowed without permission or payment.

I say that this is only part of the story, because I believe this story is a symptom and not the cause. We have created an environment where a vast majority of citizens think of themselves as passive consumers of culture rather than active participants. This environment is perpetuated by the same people who then complain when passive consumers are unable to put themselves into the shoes of creators in order to protect our common interests.

Mr Cornellier's own copyright proposals are an example of the problem. He appears upset that professional photographers aren't granted first copyright in some extremely obscure situations such as commissioned photography (similar to "work for hire" in many ways, where employers rather than creators hold copyright) as well as photography when the photographer is using someone else's equipment. He suggests that his proposals will offer professional photographers the "same copyright" as everyone else.

Photography is an exceptional area for a number of reasons. Unlike audio recordings where the performances of subjects have their own copyright, the subjects of photographs are not granted any copyright related rights (note: privacy and publicity rights are separate non-copyright related rights that should be protected). While sound and video recordings are quickly catching up, photography is an activity that is dominated by amateur and automated (surveillance, etc) rather than professional or artistic activities. Mr. Cornellier's proposals seek to treat photography as if is were only or even primarily a professional activity, which is entirely inappropriate. These inappropriate proposals make that vast majority of photographers feel as if they were outsiders, which will inevitably be harmful to Mr. Cornellier's own interests.

I believe it is critical for the future of Canadian creativity that we have Copyright law which enables active participation in culture, not passive consumption. This will mean putting a priority on clarification and simplification of copyright law such that it can be respected and seen as respectable by average citizens.

Most of the revisions to the Canadian copyright act since we created our own separate from British law in 1921 have been done in the context where the technology involved was expensive, and the activities which copyright regulated were commercial in nature. Modern technology has changed this, and we appear to have two very different directions we can take.

I have been a strong opponent of the NII policy direction, which was passed as the USA's Digital Millennium Copyright Act (DMCA) in 1998. I believe this will ultimately be disastrous to the interests of Canadian creators. We need to take the opposite approach and try to transfer some of the control currently exerted by large content industry intermediaries and put that control back into the hands of creators (as it relates to their creativity) and average citizens (as it relates to the technology which they own). The more citizens consider themselves participants in culture, and the more the law allows and encourages them to be participants, the more they will respect the moral and material rights of fellow cultural participants. The suggestion that fellow creators should not be compensated for their creativity will fade into a memory as we turn our minds to finding better and better ways to achieve both full participation and fair compensation.

Summary of Policy Proposals

With the previous commentary as background, there are some specific proposals that I wish to promote or reject, with additional clarification as necessary. Many of these same proposals were discussed in my Section 92 review submission in 2003 <> as well as the copyright related policy summary for CLUE: Canada's Association for Open Source <> . Others were articulated in the context of discussions of a WIPO treaty for the visually impaired <>.

Submission to 2009 Copyright consultation from Russell McOrmond <> Page 8