Monday, December 27, 2010

Freedom of Choice (The Copyright Kind)

I’m a lifelong musician and supporter of the arts, online and off.  Music led me to study copyright, which led me to study technology.  The three don’t always play nicely together as anyone who hasn’t had their head completely in the sand for the past fifteen years would acknowledge.  Recently, I attended an alumni event hosted by my undergraduate alma mater, Berklee College of Music.  I spent most of my night discussing copyright law with a fellow alum who works at a rights organization.  I mentioned my legal interests and inevitably we wound up discussing the role of Creative Commons (CC) in the current online ecosystem.  Once he said something along the lines of “Creative Commons is just an arm of Google, and has all the tech companies do their dirty work,” I knew this would be an interesting night.  The rights organizations have an essential role to play, I simply disagree with their litigation choices in a few recent matters and think there are more constructive ways of achieving their goals.1

To begin with, Google donates to CC.  In fact, so do lots of organizations and individuals.  While some of CC’s goals might align with Google’s or any other donor’s, I can’t imagine that CC adopts all of their respective values.   The argument is a good example of “Reductio ad Hitlerum,” a variation on the logical fallacy of Reductio ad Absurdum (those of you with siblings, take note!).  I also reminded him that YouTube is a leader in content identification technology2 and Google recently dedicated more resources to immediately responding to copyright issues.  I want my fellow musicians to get paid too.  A confrontational stance is simply not a constructive way to get there.  So, I tried to shift the conversation into something more productive by discussing a paper I wrote in 2009 about collective licensing possibilities and pointed out that EFF, among others, has advocated for collective licensing and alternative compensation schemes for years.  Also that the position of CC, and others such as EFF, is explicitly and implicitly pro-author.  Isn't that what ASCAP and BMI are supposed to be?

Obviously, not all authors’ interests are the same.  His response: If a creator doesn't enforce their rights, what's the difference if the work is CC-licensed or not?  Well, the difference lies in signaling to end users what can be done with the work.  This overlaps with the orphan works tragedy that Congress hasn't acted on yet, not to mention the rest of 20th century popular culture, locked up because of the “permission culture” we live in.3  In other words, the goal of CC and open licensing models is to reduce transaction costs; “promote the Progress of Science and useful Arts”; give creators a simple way to exercise their rights without hiring an attorney, leading to the thriving open content ecosystem and new business models flourishing online; support consumer participation in the creative process, e.g. “remix culture”; and countless related reasons.  The organization simply enables a choice that is often boiled down to the difference between "all rights reserved," which is the legal default, and "some rights reserved."

After a few minutes of broader discussion of the ways that online communities are formed and business models scale, my companion asked for an example of a situation where a rights organization went after an individual.  Oh boy.  I began by reminding him of common music industry contract provisions that leave the decision to file a lawsuit up to an administrator or agent, with or without the author's permission.  For example, I mentioned the RIAA litigation campaign against individuals (filed by the RIAA on behalf of labels, which have contractual rights to sue on behalf of creators, etc.), countless cases brought by record labels or publishers directly and In re Cellco Partnership (summary, order).  In Cellco, the court rejected ASCAP’s claim that Verizon primarily and secondarily infringed the public performance right, 17 U.S.C. 106(4).4  In addition, even when a ringtone plays in public, the court held that this activity “fits comfortably within the[] statutory exemptions” of 17 U.S.C. 110(4).  Then there’s the obvious point: why chase an individual when a precedent can be set at a much higher level?  I didn’t dwell on the difficulties of discovery, due process or litigation strategy, but he started to get the point that boiling things down to convenient soundbites doesn't go very far with nothing to support your position.

Finally, I brought up the very public (well, Internet public) spat this past summer when a number of ASCAP members were shocked by the baseless allegations in an ASCAP letter to its members that the “Copyleft” is out to undermine their “Copyright” ... so give us money for lobbying.  I’m ok with fundraising and lobbying; this is the good ol’ U-S of A, after all.  I also understand the importance of framing your argument.5  But at least be honest, and at the very least, accurate.  “Copyleft” is a very specific term.  Some of CC’s licenses have copyleft provisions, but not all.  To paraphrase Sun Tzu, “know your enemy.”  Professor Lessig’s response is worth a read.  It points out that CC relies on copyright law to function; undermining copyright law would undermine CC licenses.  He even offered to have a public discussion with ASCAP’s president to discuss the organizations’ differences.  ASCAP's president eventually responded, noting that his “priorities must be focused on songwriting and composing, and those interests that best serve ASCAP's members. Debating you will serve neither of those priorities.” Offering a clearer explanation of ASCAP’s stance and reasons for their fiery rhetoric wouldn’t serve members’ interests?   It’s also hard to see how an invitation for discussion is an effort to silence him.  Especially after similar misinformation was released in 2007, maybe it's time to clear the air.  I couldn't find anything on BMI's site about CC.  More important, I'm not aware of anything that would prevent an ASCAP or BMI-affiliated artist from licensing a work under a CC license, or licensing a work represented by ASCAP/BMI under a CC license.6  Many have.

For ASCAP, perhaps being reminded of the boundaries of their consent decree and having a judge question their litigation strategy will open their stance a bit.  Earlier this year, BMI suffered a similar loss that they recently appealed.  DMX is a background music service that made arrangements with copyright owners to pool their works for inclusion in a blanket music licensing product, similar to what ASCAP and BMI offer.  When DMX sought licenses to include ASCAP and BMI repertoire in their blanket license product, DMX argued that it should be allowed to deduct the fees it already pays directly to copyright owners, rather than double paying for direct-licensed works already in ASCAP or BMI's respective repertoires.  Although the arguments and cases were a bit different, the courts sided with DMX in both disputes.7  

I can’t imagine CC is making too much difference considering ASCAP’s 2008 revenue totaled $933 million ($817 million of which it paid out as royalties).  2009 clocked in at $995 million ($863 million of which it paid out).  BMI's revenue has been steadily increasing over the past few years as well (2004-08 figures, 2009).  We’ll see what the 2010 numbers hold: hopefully more such good news for artists.  Looking at the record label side of the equation shows similar promise, with royalties from digital performance of sound recordings skyrocketing from $6.4 million in 2004 to $155.5 million in 2009.  (I realize that CD sales have been declining for years, but that isn't a performance rights issue and opens a whole other can of worms.)   It just takes time and litigation...

At the end of the day, it's not about ASCAP or BMI.  The rights organizations have been innovating by granting licenses in new areas and finding new income streams, as they must.  With acknowledgment of all the facts and without trying to stretch the law so much, let’s hope that cooperation, competition and experimentation prevail in 2011.  Resorting to litigation or spreading misinformation to demonize the other side merely reinforces the notion that making progress is a zero-sum game.  Let's keep the focus where it should be: making music and making it available, however the copyright owner wants.

1.  Of course, my new friend wasn't speaking in an official capacity and I'm not out to get him.  Hopefully he walked away from our conversation with a more nuanced and thorough understanding than his positions revealed.   In the interest of full disclosure, I worked as a legal intern at Creative Commons.  I've also worked at the Harry Fox Agency representing music publishers.  As always, the views expressed here are mine alone.

2. Notice that Viacom's pending lawsuit against YouTube only claims infringement based on pre-May 2008 activities.  Although we don’t know which companies, YouTube now reports that “Hundreds of partners are making six figures a year.”

3. A rant and rave about the effectiveness of fair use as a solely ex post determination, and other exceptions and limitations under U.S. or international law will have to wait for another blog post.

4. BMI filed an amicus brief supporting ASCAP's position.

5. For a great history of framing and the (mis)use of rhetoric, check out William Patry’s Moral Panics and the Copyright Wars, especially the discussion of master rhetorician and former MPAA president Jack Valenti.

6.  A look at Creative Commons' most permissive license confirms this view.  See Section 3, which does not grant the licensee the right to publicly perform the work alone.  The licensee can, however, publicly perform its "Adaptations" of the work (Section 3.d.) or publicly perform the work if it's included in a "Collection" (Section 3.c.) which the license defines to exclude the work on its own (Section 1.b.).  The tricky language comes in Section 3.e.iii. which basically states that the licensor cannot collect royalties from a voluntary collective rights organization (e.g. ASCAP or BMI) for those uses of the work by the licensee.  Thus, an ASCAP or BMI-affiliated licensor would still get paid for the public performances of their song collected by ASCAP or BMI, and if their CC-licensed song gets remixed by a licensee and played on the radio, for example, the licensor waived the right to collect further royalties from the remix via ASCAP/BMI.  Of course, this is a choice for an artist to make.  They can also choose a non-commercial CC license and then license the song directly to the remix artist and/or share in the new copyright that arises in the remix.  Derivative works and the definition of "commercial" are another story.

7. ASCAP operates under an antitrust consent decree requiring it to allow members to directly license their works.  They can only receive nonexclusive licenses from composers and publishers to represent their works.  On the other side, ASCAP must grant licenses to any party seeking one.   If a licensee wishes to dispute the rate offered, it may bring a rate court proceeding to determine a reasonable fee.  BMI's decree is separate but similar.  For background on ASCAP’s consent decree, see Broadcast Music, Inc. v. Columbia Broadcast Systems 441 U.S. 1, 12 (1979) – that’s page 12 of the opinion for the non-lawyers.  The case held that blanket music licenses were not categorically forbidden price-fixing under the Sherman Antitrust Act, over a very convincing dissent written by recently-retired Justice John Paul Stevens.  An overview of BMI's consent decree can be found on pages 1 and 3 of its proceeding against DMX