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November 10, 2005

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» Google Print, Aerospace & Property Rights (cont.) from IPcentral Weblog
Doug Lichtman has further thoughts on the debate that has sprawled out of the discussion of Causby and Google Print (here and here), focused on the issue; "All that has led me to a question to which I do not... [Read More]

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Paul Gowder

Doug: one sort of wonky point to consider is the difference between preexisting works and new works when unanticipated technology arrives.

I assume that our fundamental purpose in porviding intellectual property protection is to provide an incentive for the production of new works, and not to endorse some kind of moral principle of propertization of ideas. (That is of course a whole 'nother debate.) If that's the case, we should not give creators a tax on new technologies using their previously created works, because the incentive is not necessary. ("But wait," you say, "wouldn't a prospective creator consider the likelihood of future technological advances when anticipating the profit from a work?" Well, no, not for sea changes like the internet. I seriously doubt that the authors of any of the pre-cyberspace books that google print will be scanning anticipated that anything like the internet would happen.)

As for subsequently created work, it seems like the first question is whether there's any need for more incentive. Is there any empirical evidence about change in production patterns as a result of the internet? Is there any reason to characterize the previous or subsequent levels of production as sufficient or insufficient? Do we have any idea whether the marginal gain in production from assigning the rights to the original author exceeds the marginal loss in subsequent productive use of those works that would be obtained by assigning the rights to the public domain? (Assuming transaction costs are significant enough that those things can't just be coaseishly reassigned -- and note that one of those transaction costs will be wealth effects, to the extent that any royalties google would have to pay would get passed onto end users.)

In the absence of such evidence, it seems like the beneficial effects of permitting non-directly-harmful new technology to function without paying a previous-creator tax are significant enough to support Lessig's position. First, the distributive effects of permitting new technology use without royalties appear generally to be positive, at least in the case of the internet. (For example, there is no evidence that I'm aware of that anyone other than the record companies has lost an appreciable amount of money from filesharing, and the technology has permitted small artists, etc. to thrive. A similar point could be made about knowledge distribution to the masses via google print.) Second, there is also a virtue to providing an incentive for the new technology itself. To what extent do we risk technological progress by stripping creaters of new technologies of royalty-free revenue?

Paul Gowder

p.s. one interesting idea that just crossed my mind is that in choosing between encouraging technological production and encouraging creative production, via financial incentives, we should take into account the non-financial incentives in each case.

My sense is that, for the most part, technological production is more sensitive to financial incentives than the kinds of creative production that we want to encourage. People write books, paint pictures, sing songs, etc. for a whole host of reasons totally unrelated to direct financial profit: fame, tenure, self-expression, catharsis, etc. On the other hand, few people engage in the difficult business of getting a new technology produced and available to the public except in anticipation of profit. So it would seem to be wiser to prefer technology over creativity for our financial incentives. (Perhaps I don't hang around with enough technologists and I'm just wrong here?)

Kevin Bryan

I think Paul is right on both counts - if we assume that copyright exists to provide incentive, and not to create a new form of property (and I think "incentive" aptly describes the American, if not the French, position), then, in fact, our current system goes two far in two relevant ways.

First, copyright shouldn't hold over to unforseeable new technology, as it doesn't affect the original investment decision. When Star Wars was released, the home market and DVD did not exist. Granting Lucas copyright for DVDs doesn't make economic sense.

Second, a huge proportion of copyrighted goods were created for non-economic reasons, such as the ones Paul listed above. Again, there's no particular reason to grant a limited monopoly in this case. People won't voluntarily give up copyright because it's like leaving free money on the table, but if copyright isn't granted to works created for non-economic reasons, the works are still created. How to separate the two - there's the dilemma, isn't it?

One last question: Why do we grant periodicals copyright of longer than one "period" (day for newspaper, month for a monthly magazine, etc.)? It seems to me to be economically wasteful.

BTD Venkat

I disagree. I'm probably missing something but I don't really see why it's a question of who gets to enjoy the monetary benefits of a new technology. That's not the issue. The issue is who gets to enjoy a new way to monetize a copyright, and I can't see why this should be anyone other than the copyright owner. At least under the current rules.

It's not as if the creator of the technology will be left hanging out to dry if it's not able to exploit the copyrights. Many of the technologies, including napster (e.g.) have a variety of uses, including those that do not *infringe* on copyrights. Maybe they developed in the form they did because they shortcutted the copyright rules? (Maybe Napster would have never been developed if they didn't think they could have infringed for a while.) I'm not sure.

I don't really see this scenario as pitting the rights of copyright owners versus societal interests in developing new technologies. The policy arguments in that scenario *may* be different. But I don't think that's really the case in the majority of situations -- DMCA issues aside.

Paul Gowder

BTD: your analysis assumes the creator of the new technology is monetizing a copyright, as opposed to simply monetizing a method of distribution that doesn't rely on copyright protection. That isn't true. Consider Napster: to the extent they had a revenue model at all, it was selling ads on their distribution network, not exercising rights over some kind of copyright. Ditto, I believe, w/ google print (although they might make deals w/ book sellers too, those deals wouldn't directly depend on exploiting copyright interests).

Google, Napster, etc. are monetize the technologies, not the copyrights.

Cory Hojka

Besides economic consideration, a copyright also provides other incentives for the creation of new works. One that I think is fundamental to many artists, and especially playwrights, is the ability to control how the work is presented. Even if movies are economically beneficial to playwrights, for example, they have many reasons for objecting to unlicensed film adaptations of their works.

One possible reason to consider is that unrestricted and unlicensed film adaptations could considerably weaken the ability of the playwright to control how the play appears on the stage. As a result, a playwright could end up with conflicting economic incentives and artistic disincentives to create new works. If Oliver Stone, for instance, can freely adapt someone’s charmingly simple play into a monstrous movie tale of conspiracies, intrigue, and bad acting, then that playwright might be forced into licensing their play only according to Oliver Stone’s twisted interpretation to still receive an income. Thus, the playwright might have an added economic incentive to create plays due to the new medium, but all economic incentive ceases to exist if, for artistic reasons, they wish to ignore the influence of the new medium.

Consequently, I’d argue that besides the economic harm or benefit that a new medium presents to copyrighted works, we should also examine how unrestricted use (or statutory licensing) of copyrighted works in a new medium alters copyright holders’ ability to retain creative control over their protected works.

Bruce

I'm late to this party (sorry, interviewing), but Doug, in your hypo, there's one harm that the book owners would unquestionably suffer -- the ability to sell the motion picture rights. Of course, that harm presumes that they have those rights to begin with, and that leads quickly to a variation on the infamous "circularity" argument in footnote 19 of Williams & Wilkins. In any event, I see practical difficulties with an argument that the right to exploit the work in a new medium (what counts as new? Is digital film different than celluloid?) should depend on whether it undercuts the market for the work in pre-existing media (at what time? When the new medium first arises, or at every point thereafter?).

Gus

Prof. Lichtman-

Some hasty thoughts.

How are you seeing the old technologies helping to make the new ones possible? ("Would copryight holders have a good policy argument in favor of sharing in that extra revenue that their work made possible?") I assume that this is not in the context of derivitive works (because the right holders do have share in that revenue); and I'd be interested to hear an example of existing copyright holders affirmatively helping to advance the technological status quo.

Perhaps more importantly, why should we insure artists against their failure to predict market changes? It seems that this is what we're talking about. The model isn't static--this isn't the first time that a new technology has displaced an old--and it isn't limited to technology, either. Should we shift profits from the Britney Spears to the Rolling Stones to Bill Haley to Count Basie; from cubists to impresisonists to realists? I think the answer--no matter how much I love Count Basie--is clearly no. MP3 displaced CDs displaced tapes; radio displaced sheet music; home theatres are displacing movie theatres displaced dance halls. I see no reason that we should expect artists to cater to a future society's preferred content any more than they should cater to a future society's preferred media. They're prescient in neither case; I see no reason we should insure them in one but not the other.

But this response is mostly to the comments. I assume that your question is more directly tied to derivitive works- and Google Print-like cases. I write a book, which I'm selling into a target market; you create a new market for that book, without affecting the size of my target market. I've not lost anything; you've gained something; it's pareto effecient; let's go home. But you're 106(1)ing and 106(3)ing my work! The law says you can't do that, even if you're not positively harming me.

One important thing to note about this example: it doens't necessarily involve new technologies. I don't know that we need "new technologies" to factor into this discussion; just new markets. The only complicating factor that the "newness" adds is whether the author's decision only to capitalise in one market establishes some license for the use of his work in other markets. If it does, then we might need some similar demonstration of intent not to enter the new market (I'm thinking Roy Orbison here; how important was it whether he had previously refused to let artists remix or rap his songs). But even then the focus is on newness, not on technology.

This focus on newness suggests that we should reconsider the uncertainty of the marketplace that I started with. If we're not going to insure authors against detrimental market changes, we can't tax them for positive changes, either. Perhaps the market for cubism as art was ephemeral; but perhaps, too, one day cubist wall paper will be all the rage and everyone in the country will be buying hundreds of square feet of the stuff.

It seems that the calculus here must depend primarily on three things: the value of the old work to the new, the ease of negotiation, and your suitability as the person to create the new market. Do you depend on my specific work in creating your market? Or, if I told you not to use it, could you seamlessly replace my work with that of another? And if you did need my work, how difficult is it for you to contact me? Clearly, if a market worth $500 requires $300 worth of negotiations and $300 worth of other costs, we don't want to require the negotiations. But that doesn't mean that we want to just give you the rights to my work, either. The authors themselves can probably negotiate with lower costs (they don't need to "negotiate with themselves," after all); Google can probably digitise and index more efficiently than authors.

But the question isn't whether the law goes through this calculus--it's whether the law properly forces Google and the authors (and others) to go through it. The answer there seems to be in the first order yes. Indeed, this is why I am worried that Google is going to lose: there are so many other ways that they could have gone about doing GP, that it really looks like they didn't bother with this type of analysis.

--Gus

D Conrad

I don't agree at all that the law requires an economic style analysis of transaction costs and market value. The question at issue isn't "does GP affect the market for the work", it is "Does GP appropriate the IP of the author in direct competition?".

The recent emphasis on copyright holder control over a work has overshadowed the long-standing purpose of copyright, in effect awarding them some set of rights that they didn't have before. We're not protecting markets, we are protecting that intangible association set that comprises a creative work -- thus market considerations are irrelevant except when considering if an appropriation directly competes (GP does not; searchability is not the same as expressing some creative idea, and is not protectable).

vectorx

Regarding Google, the referenced site has a report "Unbreakable Google Monopoly" that claims Google Search is a sole source for "high quality search", that barriers to entry prevent any current or future competition in this arena, that "high quality search" is an increasingly necessary function, and that the situation is only going to get worse.

Is there any truth to this? If so is there any remedy?

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