Re: [dvd-discuss] Thoughts on Posner and Landes (was Re: Eldred v. Ashcroft Accepted ...)

[microlenz(at)earthlink.net]

Skipping the less than rigorous mathematics or enlightened modelling 
PL have some interesting statements on terms. One is what they call 
the tracing problem (or the administration) The note that it is hard 
to keep track of copyright over long years but that is easily solved 
by doing what is done with real estate-register it in the copyright 
office. This is not really done under the Berne convention or the 
CTEA. (allowing someone to have 5 yrs after publication is ascinine). 
That assumption of their analysis is not being met currently 
therefore their arguments cannot be used to justify without 
reconsideration/derivation/argument anything.

They also state that "the prospect of royalties in one hundred years, 
however would have no effect upon author's incentives" That's a 
rather damning statement since the constitution charges the monopoly 
to the creator with furthering progress. The counter argument that 
the holders of the monopolies after death can dispense the profits to 
others to create does not hold up under the constitution either.

They also make the statement that "there is a strong argument against 
making increases in copyright term retroactive" The DoJ cannot be 
selective in their choice of PL. Furthermore, "...no benefit (yet 
potentially substantial cost) in perpetuating ownership beyond the 
period necessary to enable the author or publisher to recoup the 
fixed costs of creating the work"

ALso, in an indirect manner PL actually supports Eldred v Ashcroft. 
In disucussing bequests of copyright to heirs, they make the 
statement ""this feeling is attenuated with regard to remote 
descendants but the fifty year term after death cuts them off" 
Clearly PL have not considered that the descendants would get the 
terms increased. 50yrs ENDS the problem but 50+20+10+20+.......does 
not.

So....PL does not really support the DoJ position except when taken 
out of context. When in context the assumptions that PL based their 
conclusions upon are not met. PLs conclusions do not support the DoJ 
contention but infact reject them.


I might add that they do NOT consider in their analysis is the other 
aspect of real estate and that is taxation. If Real property does not 
have the taxes paid upon it, the state publically requests the taxes 
be paid and if not the property is SOLD to pay those taxes. In the 
case of copyright there are no taxes yet the government or citizens 
are expected to foot the bill when no body can establish 
ownership...Maybe the taxation of intellectual property should be 
considered as a revenue generating means but also a way of cleaning 
out the NONEXISTANT copyright archives.

Date sent:      	Thu, 21 Feb 2002 13:41:32 -0500
To:             	dvd-discuss@eon.law.harvard.edu, John Zulauf 
<johnzu@ia.nsc.com>
From:           	"Arnold G. Reinhold" <reinhold@world.std.com>
Subject:        	[dvd-discuss] Thoughts on Posner and Landes (was Re: 
Eldred v. Ashcroft
	Accepted ...)
Copies to:      	<dvd-discuss@eon.law.harvard.edu>
Send reply to:  	dvd-discuss@eon.law.harvard.edu

> At 5:47 PM -0500 2/20/02, Scott A Crosby wrote:
> >...
> >Isn't 'progress' usually considered fulfilled when you maximize the
> >economic output from a work. When the most money is made on a work? In
> >that case, as per Posner and Ladner (I believe), it may be that that is
> >true with these obscenely restrictive laws.
> >
> ...
> 
> 
> At microlenz' suggestion, I've read the Posner and Landes paper*  and 
> I have lots of comments.  To begin, there is a lot in Posner and 
> Landes that we can use to support our arguments.  For example, Posner 
> and Landes:
> 
>    o agrees that more copyright protection increases the expense of 
> creating new works.
> 
>    o warns against the danger of copyright protection leading to rent 
> seeking (this is a technical term in economics referring to excess 
> profits, not what you pay for your apartment).
> 
>    o emphasizes the importance of fair use.
> 
>    o urges economic analysis be performed in considering questions 
> about application of copyright.
> 
> Proponents of stronger copyright protection cite Posner and Landes to 
> claim that a reduction in the cost of copying should be matched by an 
> increase in the level of copyright protection to maximize social 
> good. Posner and Landes is taken particularly seriously because it 
> appears to prove this mathematically.  Since everyone seems to agree 
> that the Internet lowers the cost of copying, the proponents say any 
> measure that increase copyright protection is justified.
> 
> The problem with the math in Posner and Landes is not that there are 
> errors, but that it doesn't say anything quantitative at all.  The 
> analysis is equivalent to saying lack of exercise is bad for you and 
> too much exercise is bad for you, so there must be an optimal amount 
> of exercise.  While that argument is commonsense, it can also be 
> dressed up in a rigorous mathematical exposition (with a few 
> assumptions, of course). But all that the math will not tell you how 
> much exercise to do nor how to do it (running vs swimming vs golf vs 
> lifting the channel-changer).
> 
> There is the old joke about the physicist who is hired to advise the 
> dairy industry. After months of work he is ready to present his 
> recommendations to the assembled industry leaders.  He gets up, walks 
> to the blackboard and begins by saying "Assume a spherical cow." 
> Posner and Landes is full of spherical cow assumptions. Perhaps the 
> biggest is representing the entire corpus of copyright protection 
> level by a single real variable, z in their notation. Other aspects 
> of the creation, distribution and consumption of literary works are 
> similarly condensed into a single variable or function.
> 
> Once set up in this manner and with the right assumptions on the 
> slope of the functions, the result that z should go up as the copying 
> costs go down is almost tautological. It adds nothing to the common 
> sense analysis, logically identical to the exercise example, that 
> when copying is very expensive, you don't need copyright protection 
> and when copying is free, most people will do it rather than buy from 
> the author, so there must be a an optimum that shifts with the cost 
> of copying. Looked at more closely there are serious problems, 
> however.
> 
> 1.  Posner and Landes say nothing about which copyright protections 
> should be increased.  It's all lumped into the spherical cow z. There 
> are many aspects of copyright protection, including:
> 
>     o Duration of copyright protection
>     o Level of penalties (actual damages, statutory damages, criminal)
>     o Coverage
>     o Requirements for renewal
>     o Requirements for marking
>     o Enforcement (e.g. FBI copyright budget level)
>     o Extent of exemptions (fair use, compulsory licensing, etc.)
>     o Standards of proof
>     o Procedural issues (standing to sue, right to injunctive relief, etc.)
>     o Ability to enforce rights in other countries
>     o Assignment of court costs
>     o Anti-circumvention laws
> 
> 
> Many of these (duration, statutory damages) are already quantified. 
> Others could be quantified (e.g. mean time to obtain a copyright 
> injunction, mean cost of obtaining an injunction, mean damage award, 
> FBI copyright expenditures in constant dollars, percentage of world 
> population/GDP in countries that have signed a copyright treaty). It 
> should be possible to build a mathematical model and evaluate the 
> economic effectiveness of different protection measures. Posner and 
> Landes would approve of a more fine grained analysis of these 
> measures.
> 
> 2. We have to look more critically at the notion that computers and 
> the Internet merely reduces the cost-of-copying term in the Posner 
> and Landes equations. The Internet is a broad technological 
> revolution, much more so than other improvements in copying 
> technology such as the Xerox machine or photo-offset printing. It is 
> vital to realize that computer technology and the Internet affect 
> *all* terms in the Posner and Landes equations, not just the cost of 
> copying. This means that the effect of this technology on the 
> copyright balance is not so obvious and cannot be deduced by the 
> simple analysis of Posner and Landes.
> 
> For example, cost of authorship is also significantly reduced. 
> Traditional typesetting is a thing of the past. Word processors are 
> nearly universal and publishers expect manuscripts in machine 
> readable form.  Scientific journals expect camera ready copy. 
> Writers, editors, and production staff communicate via e-mail. 
> Digital technology is also transforming motion picture production. 
> Anything a director can imagine can now be rendered as convincing 
> moving imagery.  Film itself is about to be supplanted by reusable 
> digital media. Digital editing will soon be able to correct errors 
> that, in the past, would have required reshooting a scene.
> 
> New technology reduces the cost of advertising. Consumers can obtain 
> reviews and word of mouth recommendations almost instantly. Motion 
> picture trailers -- "previews of coming attractions" are now 
> downloaded over the Internet by avid fans.
> 
> The risk of publishing, which is a major justification for copyright 
> protection, has been reduce by lower editing, production costs and 
> increased advertising efficiency. On-demand short run printing 
> significantly reduces up-front investment and inventory carrying 
> costs, while at the same time meaning that books no longer have to go 
> out of print.
> 
> In addition some aspects of copyright protection are enhanced by the 
> new technology. The same search engines that consumers use to find 
> unauthorized copies on-line can be used by publishers to track down 
> these sources. Cease and desist letters (e.g. under 17 USC 512) can 
> be and are generated automatically and delivered in seconds via 
> e-mail.  E-mail can also be used to collect tips on unauthorized 
> copying and distribution inexpensively from anywhere in he world, 
> with rewards for information paid electronically.
> 
> The new technology also affects the costs of distribution. Motion 
> pictures can now be distributed to theaters by fibre optic cables 
> instead of bulky reels of film. Not only does this save money, but it 
> will allow simultaneous release and shorten the window of opportunity 
> for pirates. Movies realize a substantial of their revenue in the 
> first few weekends. In colonial times, it took longer than that to 
> ship a book from Philadelphia to Boston
> 
> 3.  Posner and Landes is weak on the question of what would happen if 
> there were no copyright protection. I am not suggesting that there 
> should be none, but an understanding of what such a world would be 
> like is vital for Posner and Landes' argument to hold. This is the 
> analog of the "no exercise is bad for you" datum. If a copyright-free 
> world works, then the case that there is some optimal level of 
> copyright has to be proven by a different argument. One must show the 
> the social benefit (W in Posner and Landes' notation) is greater with 
> copyright than without it.
> 
> Posner and Landes dismisses the fact that works were created before 
> the existence of copyright, citing the difficulty of copying prior to 
> printing and the monopoly on printing in England prior to the first 
> copyright law. They ignore the rest of the world, however. Copyright 
> protection has become widespread only in the last century and many 
> cultures have vibrant literary traditions despite its absence.
> 
> There are also some particular examples in living memory.
> 
> o  When the technology for recording a musical performance first was 
> developed with the player piano, courts in England and the U.S. 
> rejected the notion that piano rolls were subject to copyright.  Yet 
> the player piano industry thrived until the invention of the 
> phonograph.
> 
> o  In the early years of the computer industry, the legal status 
> software copyright was in question (because software can be 
> considered functional) and few attempts were made to enforce software 
> copyrights, yet vast amounts of software was written. Arguably, 
> stronger copyright and patent protection have slowed development in 
> this field. Seen any killer apps lately?
> 
> o There is a whole class of works that are deemed functional and do 
> not receive copyright or patent protection, such as building designs. 
> Yet these fields thrive.
> 
> o  Some functional areas have received protection only recently, e.g. 
> integrated circuit masks and ship designs, but they were filled with 
> creative work before being so protected.
> 
> o  There is also the likelihood that very different forms of 
> expression might flourish in a copyright-free world. A good example 
> is the Talmud, which combines the work of numerous authors, 
> representing hundreds of years of collective dialog, on a single 
> page.  See http://www.ucalgary.ca/~elsegal/TalmudPage.html The 
> Talmud's format anticipates the Internet and is arguably a better way 
> of encapsulating knowledge than the shelf filled with volumes by 
> individual authors that copyright laws demand.
> 
> o  My favorite example of a thriving copyright-free community is the 
> law itself. Laws, legal decisions and forms, (and briefs ??) are not 
> subject to copyright. Lawyers lift text from other lawyers with 
> abandon.  Imagine the chaos that would ensue if all this material 
> were subject to the strict copyright protection that many in the 
> legal community wish to impose on the rest of society.
> 
> One can also question Posner and Landes' assumption that creation of 
> new works to society is driven by expected market value. Maslow's 
> Hierarchy of Needs 
> http://chiron.valdosta.edu/whuitt/col/regsys/maslow.html is widely 
> accepted by social scientists and is a better explainator of authors' 
> behavior than Adam Smith. A proof case is poetry.  The Writers Market 
> lists numerous outlets for publishing poetry. The payment offered is 
> almost invariably one or two free copies of the volume that includes 
> the authors poem. That's it. Yet these publications receive a flood 
> of submissions.
> 
> Self help
> In the absence of copyright, authors and publishers would take 
> measures to protect their investment in creating works.  They might 
> alter their distribution patterns, for example. Movies might be 
> introduced simultaneously throughout the world, at least in the 
> original language. DVD's might be held back a few months to insure 
> that maximum revenue was derived from theatrical release.  Fixed 
> media might be replaced entirely by direct transmission to home 
> screens that were designed to preclude copying.  (Any studio concerns 
> about losing post theatrical sale revenue should be tempered by the 
> fact that the studios fought tooth and nail against this market 
> developing in the first place during the Sony Betamax litigation. 
> They would no doubt would have cited Posner and Landes if it had been 
> written. Only a 5-4 Supreme Court majority saved them from 
> themselves.)
> 
> Another important form of self help is increasing the information 
> content (entropy) of works to make copying more difficult. DVDs can 
> contain more background material, music videos, out-takes, 
> biographical material on artists, etc. Eventually full three 
> dimensional views can be provided allowing viewers to choose camera 
> angles and even enter the action.  Increasing the content to 
> compensate for the rise in consumer available bandwidth is a 
> potential counter to the predictions of doom from Hollywood.
> 
> Similar techniques could be employed by the recording industry. Fans 
> would buy a package that included music videos, fan material, videos 
> of recording sessions, discounts to concerts, access to special fan 
> fan sites  and even personalized messages generated by synthesizers 
> programmed to the recording artists voice. In such a market place MP3 
> files would be free advertising.
> 
> A free market in protection technology would develop.  The Content 
> Scrambling System used in DVDs was broken by a high school student. 
> Left on their own, market forces would insist on much better 
> cryptographic designs. Economic doctrine says this process should be 
> allowed to find an equilibrium and not be truncated by government 
> fiat. Consumers could choose between works sold in formats that 
> prevented copying and other works that were could be more freely 
> copied.  Posner and Landes' analysis suggests the later set will be 
> smaller or of poorer quality. Why not test that theory in the 
> marketplace? The market would tell us if the value of the new works 
> incentivized by copy protection was worth the cost.
> 
> 4. Copyright threshold
> 
> There are already areas where copyright protection exists in law but 
> is completely unenforceable.  Consider the question of jokes. An 
> original joke is clearly a literary work and subject to copyright. 
> However, with the advent of e-mail, good new jokes are copied and 
> spread around the world within hours of first being told in 
> performance. Yet comedians are still working (a few even making a 
> living) and new jokes are still being told.
> 
> Posner and Landes does not distinguish between commercial copying and 
> peer-to-peer transmission. Society has long tolerated non-commercial 
> peer-to-peer transmission of works. People have always borrowed 
> books. The shape of the modern book was dictated by the size of 
> middle age saddle bags. Ben Franklin himself invented the public 
> literary to institutionalize this practice.  Office walls are covered 
> with xeroxed clippings of cartoons and articles.
> 
> Again there is an entropy/enforceability  tradeoff. One practical and 
> compelling justification for fair use is that it avoids embarrassment 
> from wide spread flouting of the law. The situation goes beyond fair 
> use. One good example is the song "Happy Birthday to You." It is 
> copyright 1935 by Mildred J. Hill and Patty Hill and controlled by 
> ASCAP.  http://www.ascap.com/press/songs-122799.html  Anyone who has 
> hired a performer to sing this tune at a child's birthday is 
> presumably subject to $50,000 in statutory damages.
> 
> One could make a mathematical argument very similar to Posner and 
> Landes' that there is an optimal threshold where cost of enforcement 
> balances the gain to rights holders in short works. It may be, for 
> example, that society will soon be unable to protect recorded 
> performances of short musical works, no matter what laws are passed. 
> The recording industry will either have to find something of greater 
> entropy to sell or disappear.  If the choice is that or severe 
> restrictions on new technologies' ability to let people exchange 
> information on a peer to peer basis, with all the economic benefits 
> that will bring, it is may be acceptable price. After all the 
> recording industry has only existed since 1886. Like all industries, 
> it must adapt to technological change or die.
> 
> 5. Copyright may have been out balance before.
> 
> The PL paper assumes that the copyright balance was about right, but 
> use only the most qualitative arguments to support that claim. It is 
> entirely possible that the level of copyright protection was too high 
> and the new technology has corrected that balance. Nothing in Posner 
> and Landes speaks to this question. Even more likely is that the 
> individual components of copyright protection are poorly balanced and 
> need to be redressed in light of economic changes:
> 
> o  Works have a shorter economic life than, say 20 years ago.
> o  There is greater variety in types of work (movies, songs, books, 
> newspaper articles, ephemera,  computer software) yet one size is 
> supposed to fit all.
> o Greater social and economic mobility means there is increased 
> danger of copyright orphans -- works where the cost of finding the 
> copyright owner exceeds their worth.  Publishers merge or go out of 
> business. Author die and their heirs can be difficult to locate 50 
> years later.
> 
> 6. Increasing cost of maintaining the copyright status quo
> 
> Attempts to maintain the copyright status quo in the face of 
> technological change will require ever more Draconian measures:
> 
> Restrictions on publishing research results
> Consumer bandwidth limits
> Bans on unbreakable encryption
> Compensatory taxes (q.v. American Home Recording Act)
> Requirements for technical protection measures in all new computers
> Bans on upgrading old computers
> Requirements that personal computers be sealed against tampering 
> (q.v. scanner laws)
> Confiscation of older computers
> Restriction on availability of computer development software (q.v. 
> chemical supply regulations)
> Making large portions of the population felons
> 
> Such measures will burden the courts with the enforcement of 
> unpopular laws and carry a social cost that is not figured into the 
> Posner and Landes equations.
> 
> Conclusion
> 
> There is no support in Posner and Landes for expanded copyright laws 
> that goes beyond the plain English argument that since copying is 
> easier, copyright holders should get better protection. But at least 
> the plain English version allows the rejoinders "but why this 
> particular measure?" and "don't they have too much already?" 
> Translating broad, qualitative arguments into mathematical equations 
> should carry no more weight than translating them into Greek. 
> Unfortunately, integral signs do seem to impress the uninitiated.
> 
> 
> Arnold Reinhold
> 
> 
> * "An Economic Analysis of Copyright Law," William M. Landes and 
> Richard A. Posner, Journal of Legal Studies, Vol. XVIII p. 325 (June 
> 1989), University of Chicago Press