“Copyright is Effectively Dead”

That provocative statement comes from a January article in CIO Insight by Larry Downes, Associate Dean of the UC-Berkeley School of Information Management and Systems and the author of Unleashing the Killer App and The Strategy Machine. The article is the subject of a fascinating post at Slaw today on file sharing, and how the copywars are creating a generation of people raised on disobedience to what they see as unjust laws.

My attention was piqued when I read this:

So why can’t Johnny stop file sharing, even when he knows it is illegal?

The short answer is that the copyright system designed in the 18th century simply doesn’t work in the era of open standards, high-speed and low-cost data communications, and ever-cheaper and more powerful devices to store, transmit and play digital content. It’s intellectual-property law versus Moore’s Law. The winner is clear. Only the timing is in doubt.

Those invested in the old system, built around assumptions that creating, copying and distributing content requires expensive physical media, have reacted predictably, and badly. They have fought for, and won, new controls for copyright, including international enforcement, extended time periods and, under the Digital Millennium Copyright Act of 1998, a wide-ranging ban on technologies that can break or even reverse-engineer anti-copying technology introduced into media. They have sued their customers—your children.

They have also leveraged their legal control over content to tighten their hold on markets, demonstrating in the process the danger of giving so much power to so few. In 2000, for example, the major recording labels simply accepted a finding from the Federal Trade Commission that they had engaged in wide-ranging antitrust violations that forced retailers to sell CDs for “minimum advertised prices.” The labels later paid over $140 million to settle lawsuits brought by state attorneys general. Over the past few months, New York Attorney General Eliot Spitzer has wrung admissions of misconduct from Sony BMG Music Entertainment and Warner Music Group for pervasive “pay-for-play” schemes with radio stations—transgressions for which the companies were required to pay multimillion-dollar fines.

and later:

The model for such a compromise was there in the very first copyright law, England’s Statute of Anne (1710). On the one hand, this statute granted vast monopoly powers to creators of IP, but also made it a crime to charge prices deemed unjust and unreasonable—a principle which today finds partial expression in the concept of “fair use.” Legal scholar Wendy Gordon has long argued that “fair use” is a kind of safety valve for market failures caused by the granting of monopolies to creators of IP. But now consumers have taken over the operation of this safety valve and forced it open wide enough to wash away most of the system.

He had me, as they say, at “the short answer is”.

To the question “why can’t Johnny stop sharing files?”, I had a few comments at Slaw on the scope of the copyright monopoly, which I’ve copied below. I’ll note before I do that in my opinion, the current state of the principles of fair use and (in Canada) fair dealing are a pale shadow of any rule that would require a reasonable exploitation of that monopoly, certainly given the current state of technology and consumer demand:

………………

One of the issues that’s been troubling me lately is the scope of the copyright monopoly.

Content is being repurposed exponentially now. Films are seen in theatres, but they’re also on DVD, ripped into XVID and distributed online, encoded for viewing on iPods and distributed online – and so on, and ditto for other types of creative content.

All because the consumer wants this to happen. We have broken out of the model of being told what to consume, where to consume it, and when, and we are taking that show on the road. Literally.

But the content owners are far behind the consumer’s appetite for time / place / format shifting. Theatre chains refuse to show movies that are simul-distributed on DVD. Music labels battle Apple over iTunes pricing and resist efforts to release music at a higher bitrate, fearful of letting go. The DaVinci Code publisher delays releasing the paperback until the last possible second, squeezing as much coin as it can out of the more expensive hardback.

The problem is the scope of the monopoly.

One price of the patent monopoly is the patentholder’s obligation to license for a reasonable royalty. This ensures that progress is not thwarted. Knowledge advances – inventions are not forced to sit on a shelf.

But there is no equivalent in copyright law, AFAIK. Infringement of copyright entitles the copyright owner to an injunction and disgorgement of profits, not merely a reasonable royalty.

So, we can’t drag the content owners kicking, screaming and blinking into the daylight. At the end of the day, they can exploit their monopoly in as draconian a manner as they wish, and they can resist society’s appetite for innovation as much as they want, because the monopoly is absolute, and increasingly, they have terms of imprisonment as an enforcement tool.

But in the end, the consumer always wins, and the market will be bent to its will. The only issue is how far innovation and development will be sacrificed as we wait for that to happen.