Closing the Video Pipeline, Part 2

TechLawAdvisor points to an appeals decision regarding Video Pipeline; however, it’s an appeals decision regarding the preliminary injunction by the District Court, not the summary judgment. In the third footnote, the court chides both sides for pursuing this action without alerting the District Court. See my other post for more.

Couple things of interest:

The first factor is treated a bit better with more details. It makes a decent distinction comparing the clips to a movie review, which has more transformative informational content. Given this analogy, I understand  why it’s not a greatly transformative work in the court’s opinion.

The court distinguishes Kelly because the previews are unauthorized copies whereas the thumbnails link to the Kelly’s displayed images. I’m not quite sure that the distinction is as stark as the court tries to make it. In the end, the function in both cases is similar. If you’re searching for a movie/image and you want to see if it’s one you potentially want to see more of, you look at the abridged version first. Had Kelly created his own thumbnail images, I don’t think the case would have come out differently – Arriba’s purpose in putting the thumbnails in the search engine would still have been a different sort of information acquisition than Kelly’s use. In any case, this court’s explanation here is superior to Simandle’s.

Still, this court also compares the clip previews to Disney’s own trailers, not just the original movie. Again, I believe that this is a poor basis for comparison and should have been left for the fourth factor. The first factor does not require determining if the fair use will supercede all current and possible derivative uses. Why should this case come out differently if Disney had not made the trailers first?

To put it another way: Let’s say that Disney had created clips of nearly infinite permutations, covering all the scenes in the films in separate chunks.  Should the basis for deciding whether re-use of a particular scene will supercede or complement the copyrighted work be whether that scene has already been put in its own separate clip?

Or another way: let’s say you use a sample from a song for a dance remix of a rock song. Now, under the fourth factor, you’re probably going to lose. But under the first factor, it would be odd for the court to say your remix shares a similar purpose as the copyright holder’s because copyright holders typically make their own licensed dance remixes. That shouldn’t end the analysis.

How about a little broader and scarier: Amazon provides short, downgraded previews of songs  and movies to help sell them. Should Amazon have to pay a copyright holder everytime it makes and distributes one of these previews? Maybe, maybe not. As the prelim injunction ruling notes, Quality King Distribs. v. L’anza Research Int’ and 17 USC 109 might allow people to advertise works they resell under the first sale doctrine. I wonder how far Amazon would be protected under 109(c), particularly since it only deals with display. [added:] Judge Simandle states that transmission online would probably not qualify for this exemption, so they’d have to argue it under fair use. Given Video Pipeline, I’m not sure how clear cut that sort of case would be. [added:] For music, 17 USC 110 (7) should also help, though it depends on how it’s mapped to the Internet and whether a court says it covers derivatives (the sound snippet).

Regardless, the court said that first sale doesn’t apply here because Video Pipeline is not the retailer. No matter if it’s first sale or fair use or any other exemption, how important is this distinction between Video Pipeline and retailers in practice? Like in many other cases, including and Kinkos (and, most likely, the DVD redistributors in the Clearplay cases), making a fair use on behalf of someone for a profit is not ok.  Is this a reasonable distinction?  It seems odd that Amazon’s previews could be ok but Video Pipeline’s aren’t. It all depends on how you conceptualize fair use.

(See my post below for more explanation about the first factor.)

Interestingly, this court says that Video Pipeline wins on the third factor because the clips use small portions of the film and “do not go to the ‘heart’ of the movies.” This is why fair use is like flipping a coin.

Open Access and/or e2e Requirement?

At a used-book store, I picked up a copy of What’s Yours is Mine: Open Access and the Rise of Infrastructure Socialism, from the Cato Institute and its friend, the Regulatory Blob Monster.

This book presents the overall anti-regulation argument for so-called “natural monopolies” and “essential facilities”, including case studies of the electricity grid, phone network, broadband, must-carry mandates, and software applications. As far as broadband goes, they favor letting cable and DSL do whatever they want with their lines and, naturally, point to the potential competition from wireless, satellite and other forms of broadband. They believe that broadband providers need control over their wires to recoup their investments and that providers will voluntarily allow others access.

Though I always feel like there is a degree of exaggeration in these libertarian rants, many of the economic arguments seem rather sound. If you want this side of the argument, the book’s definitely worth checking out – it’s a succinct, well-written read. For the other side, see Lessig and Lemley’s The End of E2E. To them, there is plenty of reason to believe that broadband providers will regulate the content Internet users can access. Even though cable providers might not discriminate, the possibility will discourage innovation.  Because providers have shown little willingness to voluntarily provide access to other ISPs, Lessig and Lemley argue that it’s worth regulating now to avoid future harms.

I was disappointed that the Cato book didn’t address an alternative to open access mandates that could be a decent compromise – a rule mandating the preservation of e2e. As Lessig and Lemley point out, there is a lot to be gained from competition between ISPs through an open access requirement; but, if the principle we’re trying to protect is e2e, why not target it directly? Broadband providers could recoup their investment through monopoly prices and bundled ISP access so long as they preserve the Internet’s architecture.  Lessig proposes this towards the end of The Future of Ideas. This plan would constrain business models to an extent, but it seems far more mild than open access.

This seems to be the direction of the new coalition seeking further cable regulation.  Lessig links to an interesting example of how such a neutrality principle could work.