Kirtsaeng decided by Supreme Court

Today, the Supreme Court decided the Kirtsaeng case. The Court held that the first sale doctrine limits a copyright holder’s ability to control distribution of copies lawfully purchased by the defendant, even when the defendant lawfully obtained the copies outside the United States. In so ruling, the Court clarified questions left behind by cases such as Quality King v. L’Anza, which many thought stood for the proposition that the first sale limited the right of distribution only for copies originating within the United States.

The 6-3 majority opinion, written by Justice Breyer, relies primarily on a textual analysis. The Court also noted that the plaintiff’s interpretation of the Copyright Act would, if accepted, lead to a number of unacceptable results such as libraries needing to get permission to circulate copies of books purchased overseas. The Court acknowledged that its ruling would make it hard for copyright holders to engage in price discrimination, stating that it could find nothing in the statute of the Constitution amounting to a preference in favor of “market division.”

As an academic, I’m particularly curious about effects of this latter statement in the future interpretation of para-copyright provisions. To the extent that the Copyright Act has been interpreted in ways that support the use of Digital Rights Management to limit free use of copyrighted works for the purpose facilitating price discrimination, it’s possible that the Supreme Court has sent a signal that these interpretations stand on shaky ground. Of course, we can’t know that until the proper case makes its way to the Court, but Breyer’s opinion at least opens the door to the possibility that the Court is making its opinion about these issues known.

Some thoughts on Julie Cohen’s new book Configuring the Networked Self: Law, Code, and the Play of Everyday Practice

Cross-posted at Concurring Opinions for a symposium on Julie Cohen’s important new book, Configuring the Networked Self: Law, Code, and the Play of Everyday Practice (Yale University Press 2012).

Julie Cohen’s book is fantastic. Unfortunately, I am late to join the symposium, but it has been a pleasure playing catch up with the previous posts. Reading over the exchanges thus far has been a treat and a learning experience. Like Ian Kerr, I felt myself reflecting on my own commitments and scholarship. This is really one of the great virtues of the book. To prepare to write something for the blog symposium, I reread portions of the book a second time; maybe a third time, since I have read many of the law review articles upon which the book is based. And frankly, each time I read Julie’s scholarship I am forced to think deeply about my own methodology, commitments, theoretical orientation, and myopias. Julie’s critical analysis of legal and policy scholarship, debate, and rhetoric is unyielding as it cuts to the core commitments and often unstated assumptions that I (we) take for granted.

I share many of the same concerns as Julie about information law and policy (and I reach similar prescriptions too), and yet I approach them from a very different perspective, one that is heavily influenced by economics. Reading her book challenged me to confront my own perspective critically. Do I share the commitments and methodological infirmities of the neoliberal economists she lambasts? Upon reflection, I don’t think so. The reason is that not all of economics boils down to reductionist models that aim to tally up quantifiable costs and benefits. I agree wholeheartedly with Julie that economic models of copyright (or creativity, innovation, or privacy) that purport to accurately sum up relevant benefits and costs and fully capture the complexity of cultural practices are inevitably, fundamentally flawed and that uncritical reliance on such models to formulate policy is distorting and biased toward seemless micromanagement and control. As she argues in her book, reliance on such models “focuses on what is known (or assumed) about benefits and costs, [and] tends to crowd out the unknown and unpredictable, with the result that play remains a peripheral consideration, when it should be central.” Interestingly, I make nearly the same argument in my book, although my argument is grounded in economic theory and my focus is on user activities that generate public and social goods. I need to think more about the connections between her concept of play and the user activities I examine. But a key shared concept is that indeterminacy in the environment and the structure of rights and affordances sustains user capabilities and this is (might be) normatively attractive whether or not users choose to exercise the capabilities. That is, there is social (option) value is sustaining flexibility and uncertainty.

Like Julie, I have been drawn to the Capabilities Approach (CA). It provides a normatively appealing framework for thinking about what matters in information policy — that is, for articulating ends. But it seems to pay insufficient attention to the means. I have done some limited work on the CA and information policy and hope to do more in the future. Julie has provided an incredible roadmap. In chapter 9, The Structural Conditions of Human Flourishing, she goes beyond the identification of capabilities to prioritize and examines the means for enabling capabilities. In my view, this is a major contribution. Specifically, she discusses three structural conditions for human flourishing: (1) access to knowledge, (2) operational transparency, and (3) semantic discontinuity to be a major contribution. I don’t have much to say about the access to knowledge and operational transparency discussions, other than “yep.” The semantic discontinuity discussion left me wanting more, more explanation of the concept and more explanation of how to operationalize it. I wanted more because I think it is spot on. Paul and others have already discussed this, so I will not repeat what they’ve said. But, riffing off of Paul’s post, I wonder whether it is a mistake to conceptualize semantic discontinuity as “gaps” and ask privacy, copyright, and other laws to widen the gaps. I wonder whether the “space” of semantic discontinuities is better conceptualized as the default or background environment rather than the exceptional “gap.” Maybe this depends on the context or legal structure, but I think the relevant semantic discontinuities where play flourishes, our everyday social and cultural experiences, are and should be the norm. (Is the public domain merely a gap in copyright law? Or is copyright law a gap in the public domain?) Baselines matter. If the gap metaphor is still appealing, perhaps it would be better to describe them as gulfs.

Technology and Business Models

Here some thoughts prompted by the Q&A for Panel 1 at Southwestern’s Copyright Reform Conference.

One idea that came up was the way in which law and technology intersect. Nimmer claimed that the 1976 Act would have addressed DeCSS. Fred von Lohmann said no, Betamax and other cases would have said non-infringing uses mean DeCSS is allowed.

The part that I am not sure worked was when FvL ceded that DVDs would not have been offered had it not been for the DMCA, but that now we don’t need that protection. In other words, the DMCA was necessary in 1977, but not needed for continuing success of the DVD market today. DVDs would still be in play with or without the DMCA.

When I followed up with him he said that the point was that incumbent copyright industry often if not always overstates the way disruptive technologies will impact creation. That point makes more sense to me.

Yet, by ceding that at some point in time one had to have the DMCA to encourage the industry to pursue DVDs, a bigger point comes to the fore. One does not know what technology will or won’t be disruptive. Furthermore, because we don’t know we should allow for more open systems to see what happens. Nonetheless, at least with DVDs we may find that certain technologies will not be pursued without the law agreeing to protect an existing business model.

Put differently, I suggest that if the law is protecting a business model, it should do so for a limited time (and I think that is what FvL was trying to say). This explanation explains the seeming inconsistency with DVDs and the DMCA. One may have to offer protection to stimulate the incumbent or new endeavor. Once that model is flourishing, however, one should cease to offer that protection. Of course as a practical matter, once an industry has that protection, it will not give it up easily. The best question then may be: How do we assess when protection is necessary and when to remove that protection? Simply saying that industry in hindsight overstates the problem or is incorrect about the effects does little to help the system move forward. More on that in follow-up posts about the conference.

To Rent or Own? SpiralFrog Closes; Customers Lose Access to Music

CNET reports that SpiralFrog, a company that was, yes was, in the online music game is closing its doors. If one was a customer, music covered by SprialFrog’s DRM software will be unusable 60 days from the closing date which seems to have been on March 20, 2009. This problem looks a little like Zittrain’s concern about tethered devices and perfect enforcement. For me Spiral Frog’s shut down and resulting denial of access is part of the problem with cloud computing and what I call technological mediation in my paper Property, Persona, and Preservation. As more and more material is mediated or put at a distance, the more one must navigate second and third party software, hardware, and contracts just to access and use information and material that one ought to be able to reach directly.

SpiralFrog highlights the problems of the DMCA and DRM approaches to protecting information. The access to knowledge movement and commentary on the DMCA specifically examine these questions. I suggest that online storage poses additional issues. Material that was once on one’s computer is now stored elsewhere. So even if one had the key for the software, one cannot get to it. In SpiralFrog’s case, the material seems to be on one’s computer but inaccessible unless some new company buys SpiralFrog’s assets and unlocks the RM once more.

In addition, as this article points out, the company’s demise does not necessarily show that ad-supported music is a dead business model. Spiral Frog had management, funding, and deal problems. Now, it may also be that it was pursuing DRM solutions when others were moving away from that model for music. Nonetheless, as the FTC notes DRM “is expected to become increasingly prevalent in the U.S. marketplace in the coming years” and it must address “the need to improve disclosures to consumers about DRM limitations.”

Ah understatement, the lifeblood of press releases.