[Ecommerce] copyright and the law (economist.com)

[Manon Ress]

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Copyright and the law

Rip. Mix. Burn.
Jun 30th 2005
 From The Economist print edition


Media companies are jubilant at a Supreme Court judgment, but
Congress should take them on



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AS USUAL, America's Supreme Court ended its annual term this week by
delivering a clutch of controversial decisions. The one that caught
the attention of businessmen, and plenty of music lovers, was a
ruling concerning the rampant downloading of free music from the
internet.

Nine elderly judges might have been forgiven for finding the entire
subject somewhat baffling. In fact, their lengthy written decisions
on the case betray an intense interest, as well as a great deal of
knowledge. Moreover, they struck what looks like the best available
balance under current laws between the claims of media firms, which
are battling massive infringements of their copyrights, and tech
firms, which are keen to keep the doors to innovation wide open (see
article).

This case is only the latest episode in a long-running battle between
media and technology companies. In 1984, in a case involving Sony's
Betamax video recorder, the Supreme Court ruled that technology firms
are not liable if their users infringe copyright, provided the device
is =E2=80=9Ccapable of substantial non-infringing uses=E2=80=9D. For two de=
cades,
this served as a green light for innovations. Apple's iTunes, the
legal offspring of illegal internet file-sharing, is among the happy
results. But lately, things have turned against the techies. In 2000,
a California court shut down Napster, a distributor of peer-to-peer
(P2P) file-sharing software. It had, the court decided, failed to
stop copyright violations (though the firm relaunched as a legal
online-music retailer).




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Innovation and intellectual property =EF=BF=BC
Jun 30th 2005
Peer-to-peer =EF=BF=BC
Mar 31st 2005


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United States


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The internet

Intellectual property

Music


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The Supreme Court publishes its decision on the case. See also Napster.



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In its ruling this week, the court unanimously took the view that two
other P2P firms, Grokster and StreamCast, could be held liable if
they encourage users to infringe copyrights. The vast majority of
content that is swapped using their software infringes copyrights,
which media firms say eats into their sales. Although the software
firms argued they should not be responsible for their customers'
actions, the court found that they could be sued if they actually
encouraged the infringement, and said that there was evidence that
they had done so. On the other hand, the court did not go as far as
media firms demanded: they wanted virtually any new technology to be
vulnerable to legal action if it allowed any copyright infringement
at all.


Turning customers into pirates
Both the entertainment and technology industries have legitimate
arguments. Media firms should be able to protect their copyrights.
And without any copyright protection of digital content, they may be
correct that new high quality content is likely to dry up (along with
much of their business). Yet tech and electronics firms are also
correct that holding back new technology, merely because it
interferes with media firms' established business models, stifles
innovation and is an unjustified restraint of commerce. The music
industry is only now embracing online sales (and even experimenting
itself with P2P) because rampant piracy has demonstrated what
consumers really want, and forced these firms to respond.

The Supreme Court tried to steer a middle path between these claims,
and did a reasonable job. But the outcome of the case is nevertheless
unsatisfactory. That's not the court's fault. It was struggling to
apply a copyright law which has grown worse than anachronistic in the
digital age. That's something Congress needs to remedy.

In America, the length of copyright protection has increased
enormously over the past century, from around 28 years to as much as
95 years. The same trend can be seen in other countries. In June
Britain signalled that it may extend its copyright term from 50 years
to around 90 years.

This makes no sense. Copyright was originally intended to encourage
publication by granting publishers a temporary monopoly on works so
they could earn a return on their investment. But the internet and
new digital technologies have made the publication and distribution
of works much easier and cheaper. Publishers should therefore need
fewer, not more, property rights to protect their investment.
Technology has tipped the balance in favour of the public domain.

A first, useful step would be a drastic reduction of copyright back
to its original terms=E2=80=9414 years, renewable once. This should provide
media firms plenty of chance to earn profits, and consumers plenty of
opportunity to rip, mix, burn their back catalogues without breaking
the law. The Supreme Court has somewhat reluctantly clipped the wings
of copyright pirates; it is time for Congress to do the same to the
copyright incumbents.




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