March 24, 1998

THE GIFTS THAT KEEP ON GIVING—COPYRIGHT REVENUES

by Andy Oram
American Reporter Correspondent

CAMBRIDGE, MASS.—I don’t think Bill Clinton ever met a movie mogul he didn’t like. No, I’m not talking about the White House’s generosity in furnishing a continuous stream of racy material, true or false, suitable for exploitative Hollywood films. What more grievously characterizes his administration is a policy of handing more and more intellectual property (IP) rights to large companies that sell entertainment, software, and information. These give-aways could impoverish new artistic endeavors and researchers for generations to come.

One can surmise that the large donations Clinton has accepted from the movie industry—as well as other companies big in IP production, like software—have inspired his administration to help them extract more and more of the public’s discretionary income. Many members of Congress are equally eager to surf the wave, dredging up the following gallery of horrors:

Each of these initiatives has a story to tell, rich in both plot turns and character development. While each gives a short-term boost to a particular industry and addresses a potential abuse of the new digital distribution media, they band together to threaten the benefits which the public hopes the media will bring.

All the initiatives play out another underlying theme: panic and overreaction on the part of companies in the IP arena. When testifying for each initiative, companies claim that electronic copies will cut down their profits so much that they’ll be discouraged from producing new material; but for no initiative have the companies been able to offer reasonable substantiation of their fears.

Let’s illuminate the themes by focusing for a moment on the “No Electronic Theft” act, signed into law late last year and now before the Sentencing Commission.

The law prohibits people from offering electronic property, such as computer programs, to other people without permission. This practice is simple copyright infringement, of course, and can already be adequately addressed by suing the infringer. But the “No Electronic Theft” act turns it into a crime, thus imposing jail terms and committing the government to paying for the prosecution of those who are newly swept up in its purview.

But even as passed by Congress, this bill is not rabid enough to satisfy the Clinton Administration’s IP bloodhounds. In determining a suitable sentence for infractions, Congress called for consideration of the “retail value and quantity” of the material. According to Shari Steele, Staff Attorney of the Electronic Frontier Foundation, the Justice Department is trying to raise the stakes even further by allowing courts to consider “lost profits, value of infringing items, and injury to the copyright owner’s reputation, in addition to the value of infringed items.”

While I don’t like people who deliberately violate copyright, I find the whole premise of “No Electronic Theft” a fit subject for Theater of the Absurd. Even the name is a legal travesty. Copyright infringement cannot be considered theft because the original property remains safely in the hands of its owner.

This law was allowed to come into its wretched existence because of a single incident: an MIT student named David LaMacchia provided a file-transfer site where people could leave software and others could freely copy it. When software companies realized how many copies were being downloaded day after day, they naturally became alarmed. However, a single phone call to the administrators of the MIT site, informing then of how their systems were being used, would probably have been enough to shut down the operation and end the story.

Instead, the companies went for the jugular. They decided that a civil suit wasn’t worthwhile because an MIT student wouldn’t have deep pockets. So they dragged him into criminal court for wire fraud and required a level-headed judge to tell them there was no law criminalizing the behavior.

So three years later we have “No Electronic Theft.” The abuse that led to it hardly exists, and the companies that wanted it are rolling in dough. But its overly general approach to criminalizing commercial and non-commercial distribution alike could lead to a chilling effect.

Currently, thousands of people on mailing lists and newsgroups post interesting articles from newsfeeds and online journals; this sharing provides invaluable input to discussion and is usually felt to be mandated by the fair use provisions of copyright law. The “No Electronic Theft” act allows a publisher to claim that it has lost income because of such postings and to extract massive penalties—especially if the Justice Department has a say.

Similar difficulties rack every IP proposal under discussion, particularly the “Collections of Information Antipiracy Act” (H.R. 2652), a perennial favorite issue in the White House and now currently in the same House Judiciary Committee that approved copyright extension.

Since a collection could be anything holding information—a phone book, a Web site—and since the wording deliberately leaves it up to the court to decide how much copying would be infringement, this bill instills fear in researchers and professional associations across the country. But press coverage ranges from minimal to non-existent.

Even content producers should oppose the current Administration and Congressional actions. An artistic, journalistic, or scientific creation is like maple syrup; you need to collect 50 times as much raw material as you have at the end to sell.

And everybody finds reasons to reuse pre-existing IP. Just look at the title of this article, which plays on an old advertising slogan. Is it trademarked? I have no resources to find out, but I know my article would make less of an impact were I constrained from using it.

Beware, Americans: our cultural common ground is being fenced off and parceled out to the high bidders. The thought—to paraphrase a song by Tom Paxton that I believe is still under copyright—will no longer stay free. And like the big publishers with which the Justice Department is so concerned, we will lose more than the immediate value of the copyrighted material. The loss will be measured in the creations that never see the light of day.


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