Excess Copyright? Towards a full spectrum of business models for published works

by Russell McOrmond

I am an independent Internet creator, and a creator of software related to the Internet. When I joined the ongoing policy discussions around copyright in the summer of 2001 I assumed I would be sitting across the table from Microsoft (and its Canadian Alliance Against Software Theft), the recording industry (Canadian Recording Industry Association ... of America), and other similar industrial interests. What came as a shock was the fact that groups claiming to represent creators such as the Writers Union, Access Copyright and the Creators' Rights Alliance were also strongly opposed to the Internet and forward-looking reforms.

Both groups of organizations appeared to have something in common: they were not there to protect the rights of creators or other citizens, but to promote a single business model. Their business model involves collecting royalties, what lawyers call monopoly rents, for any possible uses. I am a proponent of and businessperson using a full spectrum of business models, and thus on the opposite side of the table from those groups who feel their model as the only model. They are so convinced of their beliefs that they are quite willing to lobby against creators rights and copyright itself to impose their business model on all creativity.

While the interim report on copyright from the parliamentary Heritage committee was full of attacks against the Internet and a full spectrum of business models, I will focus on two linked recommendations to illustrate my point. I argue that not only are these recommendations an unnecessary rewrite of the constitution of the Internet, but that this rewrite is inconsistent with recent supreme court rulings, and that such a rewrite would be harmful to the interests of the majority of creators.

The Internet is a new medium

When I speak of the constitution of the Internet I am not talking about culture or etiquette which discusses how humans interact with each other, but the underlying structure of the Internet as it is codified in the software rules that define the different parts of the Internet. The Internet can carry voice traffic, broadcasts like Internet radio and Internet Television, and electronic mail but it is not only a telecommunications carrier, broadcast medium or mail carrier like the post office. The Internet offers all of these features as well as new features we did not see in old media. In supporting this variety of services the Internet can never be claimed to be only like some old media.

Heritage Report recommendations

The Committee recommends that the Government of Canada amend the Copyright Act to allow for extended licensing of Internet material used for educational purposes. Such a licensing regime must recognize that the collective should not apply a fee to publicly available material (as defined in Recommendation 5 of this report).
The Committee recommends that publicly available material be defined as material that is available on public Internet sites (sites that do not require subscriptions or passwords and for which there is no associated fee or technological protection measures which restrict access or use) and is accompanied by notice from the copyright owner explicitly consenting that the material can be used without prior payment or permission.

The first recommendation addresses educational purposes, but it is other purposes that most concern me. If educational institutions will be levied then this means that the uses are claimed to be infringing when done outside of these institutions. We must never allow ourself to be distracted and think of this radical rewriting of copyright will only harm educational use of the Internet.

The flawed thinking has its roots in the second recommendation. If the recommendation had stopped its definition before the "and is accompanied by" it would be correct. In order for the public part of the Internet to function there needs to be an assumption that royalty-free verbatim copies can be made without further permission from the copyright holder who published the work. The act of authorizing a work to be published on the public part of the Internet is itself authorization of royalty-free verbatim distribution, just as the authorization of the publication of a book is itself authorization of royalty-free reading of the book by any number of readers, any number of times. In the digital world, reading is copying, and it is impossible to get information from a website onto the screen of a computer without many copies being made.

When I refer to royalty-free verbatim distribution I mean it in the way Creative Commons defines the Attribution-NonCommercial-NoDerivs license. If someone wants to change the work then they must obtain additional permission. If someone wants to include the work in another medium such as a book, CD or broadcast, this is considered a commercial use that requires permission even when no money is being made. It is important to remember that we are only talking about the pre-authorization of royalty-free distribution under certain conditions. The same work may be royalty-bearing when distributed under different conditions, using one of the business models that harness the fact that the work is being widely distributed on the public Internet.

Important features like search engines and long-term archives rely on the royalty-free status to crawl the Internet and make copies for indexes and archival purposes to remember our history. The dividing line between what is defined as royalty-free and what may not be must be as simple as asking if a person (or robot crawler) can access the information without any password or other "membership required".

Forms of content on the "no membership required" Internet

Materials on this public "no membership required" part of the Internet can come in 4 forms:

  1. Material intended to be royalty-free by the author, but where the author did not use a legalistic copyright license agreement.

    This represents the vast majority of the material on the Internet. As you browse websites or look at discussion groups you will most often not see a link to any license agreement. As someone who has been publishing works on electronic media since the early 1980's I know for a fact that everyone rightly assumed that nobody would ever attempt to charge a royalty for verbatim noncommercial distribution. It was further understood that you should not have to consult a lawyer or put up a license agreement in order to assert this intention.

    While those familiar with the medium know these facts, this is one of the major areas that Access Copyright now wishes to levy. The chill on creativity and innovation that this will represent cannot be underestimated. Nor can the practice of charging royalties for uses of works that Access Copyright does not own, circumventing the business model chosen by the creator and encoded in their license agreements, be clearly differentiated from commercial piracy.

  2. Material intended to be royalty-free by the author, where a legalistic copyright license agreement is used.

    There are now organizations like the Creative Commons which offer easy to use license agreements that can be used without needing to consult a lawyer. While these groups are important, this represents a small minority of the documents on the public Internet intended to be royalty-free. These licenses are primarily used in situations where there is a need to clarify rights outside of the public Internet where royalty-free status is not already understood, or to authorize uses beyond royalty-free verbatim distribution such as derivative works or commercial redistribution.

  3. Material published by the author where a royalty was expected.

    In this case, the copyright holder is incorrectly using the public Internet. In order to charge a royalty they must use a "membership required" system to authenticate members and then charge these members based on whatever business model they have chosen.

    Without a membership it is properly understood that the material is royalty-free. It should be understood as dishonest to induce people to look at pages believed to not require an additional fee, and then attempt to charge them a fee. This practice should not only not be supported in the copyright act, but it should be being investigated by the Competition Bureau and the Office of Consumer Affairs as a consumer rights issue.

  4. Materials published by other than the copyright holder when this publishing was not authorized.

    This is a clear case of copyright infringement where the infringing material should be removed. These materials should not be levied or authorized by Access Copyright.

    Contrary to the allegations of groups like Access Copyright, infringing works do not represent a large amount of Internet content. When I have informally asked I have not been given actual examples of infringement. If it were common, it would still be far less harmful to Canadian creativity and new media to use copyright law and the courts to have this infringing material removed from the public part of the Internet. Levying the public Internet is a case where the suggested cure is far more harmful than the disease.

Membership required Internet services

When a site requires a membership, they can charge whatever they wish for access to works for their members using a full spectrum of business models. They can charge a flat fee, or deny access to a document unless the member agrees to specific fee and license agreement.

Many existing on-line media such as newspapers offer royalty-free access to members where they require membership for tracking purposes and to ensure that external mirrors or archives are not made. Members who pay money then gain access to older archives of articles and other pay services. In this case it is obvious that no extended license is required as the copyright holders have an easy way to manage their rights when interacting with members.

It is offensive to the marketplace for these "membership required" sites to be effectively shut down by Access Copyright. If all publication on the Internet (with or without passwords) becomes levied and authorized, there is no way for these "membership required" sites to impose their particular licenses or business models. Once the marketplace understands this proposal from Access Copyright, existing large copyright holders will appropriately oppose them.

It should be copyright holders, not third parties like Access Copyright or audiences, that determine the business model used to exploit a work. It is not the place of the government to be bypassing license agreements and imposing business models on creators, but this is exactly what Access Copyright is asking and the Canadian government has thus far seemed willing to offer.

Circumventing competitive business models.

The recommendation to create a levy is aimed at the public Internet, in other words, levy that part of the Internet where you should assume that content is available without additional cost. This radical rewriting of the constitution of the Internet is being done to protect a single legacy business model from competing with modern business models.

A wide variety of business models exist to fund creativity, and these business models are encoded in license agreements which authorize different uses at potentially different rates. In my case the most common contract is one where I am paid once up-front for the development of the work which is then openly licensed for royalty-free use. I charge different rates primarily depending on the conditions for the creation of derivative works. My major competitive advantage is the fact that my customers can trivially budget for my work as it is paid once up-front, and they never have to count the number of users or "copies" of any of my work. I can also help organize a group of customers to each pay part of the costs of development since these groups will then be able to freely share the results of that work. I often work collaboratively with other peers all over the world in what is known as an open collaborative development model, thus further reducing expenses relating to knowledge development for my customers.

Access Copyright then comes along with the claim that they will "help" my customers by offering a blanket license for the use of any work. Access Copyright uses statistics to determine not only which of their members will receive royalty payments, but also the amount of the levy that my customers will be charged. This means that my customers have to present evidence which Access Copyright will fight given they actively challenge the very existence of competing business models. This is a double-whammy for my customers who now not only have to record statistics of all the usage of my work, but aggressively and expensively fight Access Copyright at the Copyright Board and possibly the courts over the trustworthiness of Access Copyright and other statistics.

It then appears easier for the customer to bow to the anti-competitive pressure from Access Copyright, no longer hiring me or other suppliers using modern business models or development methodologies. Not only has my business been destroyed by Access Copyright, but my customers are never able to harness the competitive advantages that my business model has over competitors like Access Copyright. The fact that Access Copyright wants to "help" the educational community is frustrating as I strongly believe that the educational sector would be one of the greatest beneficiaries of open collaborative development models. These development models and the business models that support them are far more compatible with a sector that has a mandate to share knowledge.

Old media opposing the constitution of the Internet.

In a letter to the editor of the Toronto Star from Marian Hebb, legal counsel for The Writers' Union of Canada, she wrote:

The committee specifically recommends that "a licensing regime must recognize that the collective should not apply a fee to publicly available material." However, the committee also says that users of the Internet cannot assume that all material posted on the Internet is meant to be "free" in the sense of being available without cost.

Lets pretend for the moment that Ms. Hebb's and the folks from Access Copyright's understanding of the public "no membership required" part of the Internet was valid. This would mean that any of the automated robots that make copies of public web-pages would be infringing copyright. Most people recognize these search engines and archives to be a necessary part of the basic functioning of the public part of the Internet.

Recently the Supreme Court ruled on "Society of Composers, Authors and Music Publishers of Canada v. Canadian Association of Internet Providers" which included discussing the question whether SOCAN could levy ISPs because they provide a web-cache for more efficient access to the public content on the Internet. The court ruled partly that those providing features such as caches which only provide "the means of telecommunication necessary" are deemed not to be communicators of works. This means that these caches were not to be considered copies for the purposes of the copyright act, and thus could not be considered infringing or levied.

I believe that if the Supreme Court were to be asked to rule on mirrors used by search engines and Internet archives, they would come to a similar conclusion: that because services like search engines and archives are understood as a critical part of the basic infrastructure of the Public Internet that these mirrors would not be considered copies for the purposes of the copyright act. The court would likely recognize that it would be inappropriate to declare specific vendors like Google and Archive.org to be privileged, and would recognize that the entire of the "no membership required" part of the Internet must facilitate verbatim distribution of works that are not themselves considered copies for the purpose of the copyright act.

And if these are not copies, how can Access Copyright and the Writers Union possibly defend their demand that they should be able to levy these non-copies?

Creative Commons License
This work is licensed under a Canadian Attribution-ShareAlike Creative Commons License.