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[dvd-discuss] Thoughts on Posner and Landes (was Re: Eldred v. AshcroftAccepted ...)
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
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,
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 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
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
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
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
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
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.
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.
* "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