Category Archives: Intellectual Property Rights

Copyright Law And The Assault On Innovation

New legislation currently pending before the Senate would greatly expand copyright law in an effort by the music industry to stifle yet another area of innovation:

Satellite and Internet radio services would be required to restrict listeners’ ability to record and play back individual songs, under new legislation introduced this week in the U.S. Senate.

The rules are embedded in a copyright bill called the Platform Equality and Remedies for Rights Holders in Music Act, or Perform Act, which was reintroduced Thursday by Sens. Dianne Feinstein (D-Calif.), Lindsey Graham (R-S.C.), Joseph Biden (D-Del.) and Lamar Alexander (R-Tenn.). They have pitched the proposal, which first emerged in an earlier version last spring, as a means to level the playing field among “radio-like services” available via cable, satellite and the Internet.

By their description, that means requiring all such services to pay “fair market value” for the use of copyright music libraries. The bill’s sponsors argue the existing regime must change because it applies different royalty rates, depending on what medium transmits the music.

But the measure goes further, taking aim at portable satellite radio devices, such as XM Satellite Radio’s Inno player, that allow consumers to store copies of songs originally played on-air. The proposal says that all audio services–Webcasters included–would be obligated to implement “reasonably available and economically reasonable” copy-protection technology aimed at preventing “music theft” and restricting automatic recording.

“New radio services are allowing users to do more than simply listen to music,” Feinstein said in a statement. “What was once a passive listening experience has turned into a forum where users can record, manipulate, collect and create personalized music libraries.”

Excuse me, Senator Feinstein, but I’m pretty sure you were alive in the 1980s. Back then, we used cassette recorders to, effectively, accomplish the same thing that XM’s Inno player would — record songs off the radio so we could listen to them on our portable music players. What the heck is the difference today ?

Perhaps I’m being cynical, but I think the only difference is the amount of money the RIAA is contributing to political campaigns.

For Discussion: Property Rights in Virtual Markets

I’m no expert on this, so I’m offering it for your consumption. How do you define property rights for a virtual store, selling virtual wedding gowns, to virtual people, in exchange for virtual money?

Veronica Brown is a hot fashion designer, making a living off the virtual lingerie and formalwear she sells inside the online fantasy world Second Life. She expects to have earned about $60,000 this year from people who buy her digital garments to outfit their animated self-images in this fast-growing virtual community.

But Brown got an unnerving reminder last month of how tenuous her livelihood is when a rogue software program that copies animated objects appeared in Second Life. Scared that their handiwork could be cloned and sold by others, Brown and her fellow shopkeepers launched a general strike and briefly closed the electronic storefronts where they peddle digital furniture, automobiles, hairdos and other virtual wares.

“It was fear, fear of your effort being stolen,” said Brown, 44, whose online alter ego, Simone Stern, trades under the name Simone! Design.

Brown has reopened her boutique but remains uncomfortably aware that the issue of whether she owns what she makes — a fundamental right underpinning nearly all businesses — is unresolved.

My knee-jerk reaction would be that these virtual markets are the “property” of the software designers who create the software, and they can define their own property rights for their users based upon their license agreement. The cost of entry and exit from a virtual marketplace is a lot different than, say, a physical one, so the idea of competing governments and property rights structures seems to me to be ideal.

As a whole I don’t know that I support government getting involved in regulating virtual property rights. But given that I’m wholly unfamiliar with these sorts of games, never having played any of them, I’m not sure that I’m qualified to offer an opinion.

What are your thoughts?

(random snark below the fold)
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Britain To Say No To Copyright Hogs

In a move that could send shock waves through the music industry, Britain is set to reject demands by the music industry to extend copyright protection on music from 50 years to 95 years:

LONDON, England (Reuters) — When British finance minister Gordon Brown stands up to make his pre-budget speech next week, aging rockers Cliff Richard, The Beatles and The Rolling Stones might do well to tune in.

Not normally the stuff of rock’n’roll, Wednesday’s address looks set to reject music industry calls for an extension of copyright on sound recordings to 95 years from 50, meaning veteran acts’ early hits could soon be free for all to use.

The government commissioned Andrew Gowers to review all areas of intellectual property law, including challenges thrown up by the consumption of music and film over the Internet, and he is seen as unlikely to recommend a copyright extension.

His conclusions are expected to be published next week as part of the chancellor’s annual pre-budget report.

Official sources say the Labour government appears more swayed by the right of consumers to access music cheaply, or, if it is 50 years old, essentially for free, than by old performers seeking protection.

Thus, it seems, the British will be resisting doing what Congress did when it extended copyright protection in the United States beyond the original 75 year term after lobbying by the recording and movie industries. More importantly, though, it points out something I’ve always believed; patents and copyrights are purely creatures of the state, not the manifestation of natural law.

There is, I would suggest, no such thing as a natural right to intellectual property, because the very nature of ideas is such that they must be shared to be worth anything. Imagine what the state of scientific research, for example, would be if there was something equivalent to copyright protection for scientific ideas. In science, the arts, and liberal arts such as history, advances only occur when someone builds on what someone else did, often borrowing from what was done in the past.

In the United States, patents and copyrights are purely a creature of the Constitution, which grants Congress the power:

To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;

Two points need to be emphasized. First, the purpose of the patent and copyright laws is to “promote the progress of science and useful arts.” At some point, a balance needs to be struck between protecting inventors and artists to allow them to create and creating an atmosphere that promotes innovation. Copyrights and patents that exist for a limited period of time arguable do that, extending those rights for a nearly unlimited period of time does not. Second, the Founders clearly intended that the time of protection by “limited.” While Article I is silent on what this means, an argument can be made that any protection that exists beyond the lifespan of an individual inventor or artist is per se unreasonable.

There are high stakes involved in the British decision to be announced next week. It may be true that the first artist to be impacted is someone I had to look up on Wikipedia, but there are big names whose 50 year time periods aren’t too far away:

More significantly for record labels who do a lucrative trade in remastering and repackaging old hits, The Beatles catalogue could be up for grabs from 2012 and 2013, including early hits like “Love Me Do” and “I Want To Hold Your Hand.”

Then come The Shadows and The Rolling Stones, to name but a few.

The question is whose interests are more important, the artists, or the consumers ?

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