June 1, 2004

Crawford on Legal Ecosystems [7:34 am]

The Biology of the Broadcast Flag [via Derek and Ernest] — note that while most point to her abstract, it’s her conclusion that includes the most compelling point — the dangers of an inflexible policy in the face of a demonstrated inability to predict the future — a failure to incorporate discretion in a policy of control (a defect of many "architecture-based" policies)

The encouragement of innovation has long been a goal of intellectual property law. Achieving this end is now complicated, however, by the fact that law and code need to be looked at together for their effects on innovation. The challenge for the next generation of intellectual property policymakers is to design and implement rich background code/law environments that allow for continued evolution.

From this perspective, the MPAA s use of code/law to instantiate their particular vision of copyright law (and assure a controlled, successful digital future for their products) looks unattractive. A heavy reliance on technology mandates makes sense if today’s decisionmakers are both capable of predicting which innovations are likely to be most beneficial to the overall state of the world and correct in striving to impose one regime’s view of copyright law on the future. But neither proposition makes sense, either as a descriptive or normative matter. We have very weak powers to predict the future, and the one thing we do know is that a more interesting future (in a biological sense) will be more resilient and adaptable.

There is reason to suspect that instead of helping us to achieve progress, the broadcast flag, plug and play, and analog hole proposals now under discussion may cause legal and technical problems for later innovators and consumers. Members of the present MPAA may need to conclude that their conception of "survival of the fittest" will have to change, because their creatures (i.e., their business plans) may become extinct in light of the realities of the digital world. Instead, the best strategy may well be to adopt private DRM solutions, with the hope and expectation that new forms of content and new privately-ordered marketplaces will arise. Hollywood may have to abandon the illusion that they have some natural right to preservation that can be implemented by restricting the choices of future generations. Their successors in business will thank them. Loss of resiliency and adaptability, both in innovation and in law-creation, may not be worth trading away.

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Derek on DMCA "Bluntness" [7:28 am]

The DMCA, Is-Oughts, and Piracy Rhetoric

As I said before, I don’t doubt Brad Hutching’s point that the iTunes-iPod tie has some offsetting social welfare benefits. iTunes prices could be lower and it could have motivated them to invest in the biz in the first place. In this case, I would argue that that does little to offset the benefits we could derive from a non-DMCA world: more vigorous competition from current parties not having to compete essentially in both markets at once; more vigorous competition from more players in general; innovation and competition not dictated by incumbent players; lower prices from more competition; network effects from the elimination of format fragmentation; and more.

But that in some sense is beside the point (one Ernest made, too), which is that the law would typically deal with this issue in a much more complex, nuanced, and balanced fashion. We have anti-trust and misuse. We have patents, copyrights, trade secrets, contract. And yet the blunt instrument of the DMCA is presumptively so clearly right? Why?

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A Rapidly Evolving Norm? [7:07 am]

Textbook piracy takes toll in Mexico [pdf]

Unlike in Asia, where book piracy is a well-established industry, the practice is a recent phenomenon in Latin America. Even in a relatively well-off country such as Mexico, people read an average of just half a book a year.

The bulk of losses are in college textbooks, which can range in price from $10 to $200 — as much as many Mexicans make in a month. By far the biggest threat to publishers in the region is the unauthorized photocopying of college textbooks.

In Mexico, students photocopy an estimated 5 billion to 10 billion pages of copyrighted textbooks each year, often in copy shops located on university campuses, according to the US publishers’ association. The result is an estimated 50 million books that CeMPro estimates would otherwise have been sold, costing authors $48 million in lost royalties and publishers $550 million in lost sales. In comparison, Mendoza estimates that pirated textbooks cost authors $10 million in lost royalties and cut publishers’ sales by 10 percent.

However, she notes that few in Latin America view book piracy — and in particular the unauthorized photocopying of texts — as an offense worthy of legal action, not even the authors whose rights she is fighting to defend.

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