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April 30, 2003

Of Social Contracts and Government Sell-outs

Free Trade Area of the Americas Treaty

by: Richard Pitt

This article was inspired by the Intellectual Property section of the proposed Treaty.

In my readings recently there has been quite a bit about the fight between "rights holders" and their potential customers, including "the general public." The problem is the "disruptive technologies" used today to store, transmit and reproduce creative works such as text, music, photos, etc.

The market for "copies" has changed very quickly. The business that made its money by the fact that it controlled a copying facility (first a record pressing plant and now a CD duplication center) and distribution facility (wholesale CD distribution and/or retail outlets) now finds that the distribution facility is being bypassed (by the Internet) and the copying facility is included on virtually every PC sold today and is no longer unique.

What in fact has happened from an economic standpoint is that the public knows from firsthand experience the cost of production of a copy of a CD so they are "pushing back" at the publisher's prices by going around the old system and using the new one; they're making "private copies" in the terms of the Canadian Copyright Act. In other times the result would be a lowering of prices and a concentration on the benefits of purchasing a "real" copy (the liner notes, production quality, longevity of the pressed CD vs. the recorded one, etc.) At least some of this is happening - the prices for many records in large stores have come down by 30%+ recently.

Unfortunately for the general public and the cause of all the hoopla is that today the publishers have another potential way of enforcing their monopoly on copying and distribution - Digital Rights Management (DRM). The question is, will the use of DRM be a good thing or a bad thing in the long run? Of course the answer will depend upon whether you are a creator, a publisher, or a member of the general public.

When a rich sector of the business world is threatened with major problems, the first thing they seem to do is ask the governments of the day to help them stem the tide and keep them from "putting many people out of work", etc. The Digital Millennium Copyright Act in the US, its brethren in the European Union and now the FTAA are the result of intense lobbying by businesses that have been or think they will be affected by "private copying". So in fact are the changes to the Canadian Copyright Act instituting the Blank Media Levy.

King Canute couldn't turn back the tide and governments should understand that they can't either - and that in fact it is not in the best interests of the governed (i.e., us, the people who elect them) for them to try either. Unfortunately that doesn't stop them from trying. The balance seems to be swinging (back) towards the publishers - with the potential that a P2P (peer to peer) music copier might be put in jail despite the fact that the Canadian law in fact makes the creation of the copy legal and compensated for by the Blank Media Levy. The P2P sender (the person who puts their music into a shared folder for others to copy) is not specifically exempted from prosecution by the current Copyright Act but a case can be made that such sharing is the same as lending a copy; it just happens far faster than dealing with a physical copy. The point is that the FTAA would trump the Canadian law and make both lender and copier liable.

Somewhere we are missing the fact that there is a both an economic solution and a social impact that governments of the past have resolved.

The economic solution is already happening. Musicians are starting to self-publish (those who are not locked into long-term and onerous contracts with big publishers) and publishers are lowering the retail price of their wares. The musicians who are self-publishing are finding that there is a market for quantities of everything they play! This in contrast to the limited amount that the traditional publishers dribbled to the market to keep the prices up.

It appears that the music public will in fact purchase - at a fair price, and the creators can in fact make a living. Given these facts, there is no reason for government to step into the equation any more than it already has - by the fact that the Copyright Act exists.

A brief look at Copyright's Past

Somewhere back in the annals of time (see References for a pictorial list of the evolution), a policy was adopted by a government (1710 - the Statute of Anne)  that those who create an expression of art or culture or creativity should be protected from those who would take that expression (be it a song, a book, a drawing or later a movie or computer program) and represent it for their own and copy it (and sell it) for gain. In return for this "Copy Right", the rest of the population was given compensation in the form of a guarantee that this right was not "forever" (was initially 14 years with potential for extension by another 14 years) and that regardless of this overall Copyright, the public could comment on (fair dealing) and participate in the subsequent re-sale of a copy if they initially purchased one (first sale doctrine.)

That policy seems to have been deemed a "good thing" by subsequent governments and has been adopted in some form or other by all. The social contract, now enshrined in laws of the land, struck a balance between the right of a creator to benefit from their creation and the benefits to the general population of wider distribution of the works because of this.

At that time, creating a copy was not easy. Large-scale printing and publishing firms didn't exist and distribution was by horse-drawn wagon. Special businesses called publishing houses did most of the heavy lifting and paid the original creators a royalty.

Today's Digital Environment

Today, we have digital reproduction means on most computers that rival the abilities of facilities costing millions of dollars in decades past. This has the publishers up in arms over the potential (and in some cases real) loss of the need for their business.

Today we also have the means for a Copyright holder (or publisher) to prohibit fair dealing (abstraction of a portion of a work in order to critique it or comment on it or even aid yourself or others in deciding to purchase a copy) view the work (read a book or article) after a particular period, or even re-sell the legally purchased copy of the work.

In my mind, putting a work out in such a fashion is not "publishing" in the sense that the Copyright Act of Canada defines it or the Parliament of Canada intended it. It is more akin to disseminating a trade secret.

2.2 (1) For the purposes of this Act, "publication" means
(a) in relation to works,
(i) making copies of a work available to the public,
(ii) the construction of an architectural work, and
(iii) the incorporation of an artistic work into an architectural work, and
(b) in relation to sound recordings, making copies of a sound recording available to the public,
but does not include
(c) the performance in public, or the communication to the public by telecommunication, of a literary, dramatic, musical or artistic work or a sound recording, or
(d) the exhibition in public of an artistic work.

Hmmm... seems to me that a work with digital rights management attached to it is not "made available to the public" - it is made available to those who accede to the management infrastructure and any other agreements the artist or their agents (in this case you can't call them publishers) have tied to the work.

During my (ongoing) participation in the Blank Media Levy, I asked if there was any license attached to the sale of a music CD; whether there were any restrictions placed (other than in the Copyright law) on what could be done with that CD once it had been purchased. The answer was no, there was no other license. This means to me that the work had been published since the rights were solely those granted by the Copyright Act with no changes.

If "publishing" (in the context of when the copyright act takes effect for a work) were taken (by the courts for instance) to be defined only as that done without any rights management or extra contractual ties (End User License such as found in software purchases), then all works not so published would then become trade secrets (or something to that effect) and would lose (or never gain) the protection of the government via the copyright act; meaning the owners/publishers would have to go after civil damages for individual transgressors.

The consequences to the "rights holders" might be interesting. One consequence would be that they'd have to do their own enforcing instead of getting the government to help them.

This in fact might be the exact balancing necessary for the public's acceptance of DRM. "Restrict the public's rights to your work and you lose the public's protection."

I'm interested in your thoughts as this is an ongoing debate in many circles. You can of course contact me at richard@pacdat.net

References:

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