Two Bits

1.  Lawrence Solum has a nice post on copynorms, summing up what might come of the RIAA’s recent tactics.


2. Apparently, MPEG-21 DRM stuff is moving along. Chuck Hamaker passed along the media release to the digital copyright list: “The vision of a multimedia framework took another giant leap forward with completion of Parts 5 and 6 of MPEG-21, the Rights Expression Language (REL) and its associated Rights Data Dictionary (RDD). The REL and the RDD, together form a powerful tool for managing the consumption rights of all forms of content.”


I can’t seem to find the actual media release. Here’s the page it should be, and here’s a white paper I dug up.

Today’s Mysteries: International Copyright News, Fair Competitive Use, and Tertiary Liability

1.  Mary Hodder’s back with a bunch of good links.  Definitely check out the Pew Internet report.  They say 37 million people in the US have downloaded.  Where does the EFF’s 60 million figure come from?  Is that worldwide or is it US but from a different study?


2.  Lawmeme has the scoop on the Australian Sony mod-chipping reversal.  Awhile ago, an Australian court said that Sony’s Playstation regional coding is not a technological protection measure under Australian law and thus does not violate their version of the DMCA.  US courts have found otherwise.  Today, the Australian ruling was reversed. The full opinion is not online yet.


Australia’s consumer commission has been investigating the use of region coding in DVDs as an antitrust issue.  Unlike in Nintendo’s case, I don’t think any action was taken directly against copyright holders. However, Australia did relax restrictions on “parallel imports” (links to FAQ about similarly relevant New Zealand law).  That means people could commercially import from other regions without going directly through the copyright holders.


So, a couple of lazyweb questions:
     1.  Has any further action been taken against Nintendo?
     2.  Has any further action been taken by the ACCC?
     3.  Has any country gone past allowing parallel imports and actually a) outright banned regional coding of DVDs or b) fined the MPAA for anti-competitive practices?


3.  I hope you didn’t miss this post by Kevin Heller the other day.  Do check out this similar post, and this paper by Kevin about the DMCA (and the whole “right of access” issue.  It’s a very tough argument, which I’ll try to get back to some other time).


His general point relates to some of what, for me, came out of reading the Glynn Lunney fair use article.  There are many different conceptions of fair use in the caselaw.  Sometimes fair use is merely a means to fill in for where the market fails (eg, because of transaction costs). From this sort of idea come the line of cases that prohibit people from commercially making fair uses on behalf of others. Think of MP3.com. If you think about that as far as consumer fair use, it’s legal. But, if you look at it as MP3.com as the copier, it’s a different picture.  In the Berkeley Clearplay debate, the laywer defending the DVD player companies noted that this is one way that what seem like contributory infringement cases have become direct infringement ones.  (And this is why, for the companies that actually edit the DVDs, the case is a real uphill battle.)


In other cases, fair use means transformative or “productive” use.  This principle comes out in cases like Acuff-Rose.


In Sony, the principle was public interest balancing as Lunney calls it.  This is where the historical background Kevin and Lunney discuss is key.  If copyright infringement and fair use analysis has typically focused on competitors, not consumers, file sharing looks a lot different.  The whole market effects prong of fair use looks a lot different.  Moreover, if copyright is supposed to be cost-based (as Lunney calls it) rather than value-based, making sure copyright holders can capture value from every possible derivative market is preposterous.


I wonder how consciously these deviations and potential conflicts were constructed.  The mess of fair use is not just statutory – the mess comes from judging, from the caselaw.  Fair use as a test might mean one thing, but as a principle it means many. Certainly, fair use was more about fair competitive use and had far less to do with consumers.  But even the principles of fair competitive use aren’t necessarily applied in their intended ways. Maybe the tests have been kept the same, but the principles have varied – or maybe they just appear in conflict. I wonder when the next time will be that we see the SC weigh in on fair use. 


I am not quite ready to say Lunney’s approach specifically should be employed by courts. I know it is a lot closer to copyright’s roots.  But I’m not sure how practical it is for courts to employ his analysis, unless he means it be deference to Congress by default.  Maybe that’s not such a bad thing, particularly if Congress actually went back to copyright’s roots (hah). But I’m not sure if Lunney’s direction is proper. 


Something for me to think over a bit more.


4.  Today’s fun read for the night is the brief for Bertelsmann in the suit against them for funding Napster.  Courts don’t tend to like arguments with no definable limits – a good example of this in the IP context is the recent Dastar decision, in which Justice Scalia asked if the movie distributor would have to give attribution to absolutely everyone who made any contribution to Fox’s films (“We do not think the Lanham Act requires this search for the source of the Nile and all its tributaries”).  The court should respond to the record labels’ claims against Bertelsmann in a similar fashion. (BTW, an interesting note that comes up in the brief is that the suit against Hummer Winblad is the record labels’ second attempt. The first failed in Katz v. Napster.)


If you thought this suit sounded completely silly, then you’ll enjoy reading the brief. It makes a total mockery of the record labels’ claims about Bertelsmann’s involvement.


The brief also makes a couple important points about secondary liability.  First, if you take it out of the copyright context and just think about it in terms of corporate law, it’s a terrible idea to hold every investor liable for the actions of whatever corporation ends up with that money.  Relatedly, there has to be some clear connection (or, as in the brief, a “nexus”) between the illegal actor and the company.


Second, Bertellsman spells out the capacity to act requirement that is part of the knowledge prong (even though it probably fits better with contribution). In addition, there’re some nice bits about what the contribution prong in contributory infringement means.  It’s got to involve some sort of direct relationship and thus  more than a “but for” causal relationship. Hopefully, the court will spell this out a little to build on Grokster. Grokster, I think, leaves the door open for contribution had Streamcast and Grokster done more to help people infringe, even without controlling the system’s. If that’s the case, the contribution requirement must be set sufficiently high to not cast too wide a net.



“Should any venture capital firm that provides start-up, or life-saving, capital to a new technology company be placed at risk of joint and several liability for any conduct by the new technology company subsequently held to be infringing?  What about firms that contribute know-how or equipment essential to the functioning of accused technology?  Or investors in or lenders to such contributing firms?  As these hypotheticals suggest, the functioning of the capital markets could be significantly hindered if, pursuant to a “but for” theory such as that advanced by the plaintiffs, the provision of any significant assistance, whether direct or indirect, to an accused infringer were actionable.  Such an undesirable result militates strongly against approval of a dramatic departure from existing copyright law.”