Helping Hollywood Help Itself

The agenda for last week’s Digital Media Hollywood Summit reads like a self-help guide for the content industry. Sessions on the economics of media convergence and “embracing the connected consumer” are indicative of an industry dealing with changes in technology and consumer behavior. Panels discussed technologies that package digital content in new ways.

Using technology protections for copyright instead of legislation to protect copyright is a worthwhile public policy discussion. Indeed, going forward, technology, and not legislation, should be the primary means for defining the consumer experience. Why? Technology applications—if not the result of a government mandate—represent a market solution that can help reward artists and provide consumers with innovative content.

Defining Digital Property Ownership – Intellectual Contract Law

Owning property is associated with the legal right to possess, use and enjoy it. Intellectual property law attempts to define the relationship between the rights holder and the consuming public and creates a continuing obligation on the consumer to obey the rights of the intellectual property holder. For instance, a music CD purchase gives the consumer unqualified ownership of the physical CD itself, but only limited rights to copy, distribute and play and copy the songs on the CD. Contrast digital property with real property or other more tangible goods—there is no continuing relationship with the seller of tangible goods that that dictates use parameters unless, for instance, by warranty.

Enter contract law to help further define digital property. “IC”—Intellectual Contract law—through digital rights management or other contractual forms—can characterize the continuing relationship between copyright owner and consumer. It won’t replace intellectual property law, but it can customize the consumer experience in ways that property law cannot.

Technological Self-Help and Digital Packaging

Using technology to package and protect copyrighted works is a form of intellectual property self-help. Self-help dominates our entire legal system, as influenced by Thomas Hobbes and John Locke. Self-help arrangements, either contractual or self-defense, occur everyday. Society permits, even encourages, self-help when the legal remedy is less available or less efficient. Copyright owners need to be free—indeed, even encouraged—to protect their digital content.

Digital rights management (DRM) is a form of self-help that can enforce contractual rights. As a part of the product itself, it addresses the product’s distribution, further redistribution and interoperability. Digital rights management could also be an enabling technology in addition to one that locks up and protects certain content. It can charge a price to the consumer for each play of a song or allow for unrestricted access to a properly paid for work.

DRM has the possibility of being a tailored solution such that it will not be over inclusive and indiscriminately trample on consumer preferences. Ideally, it will enforce consumer rights in addition to the rights of the copyright owner. The law should view a product that utilizes DRM as a contractual agreement between creators and consumers.

Addressing Intellectual Property Concerns—Fair Use & Orphan Works

Most consumers would welcome the benefit of a DRM contractual bargain, but only if they perceive that the agreement is fair. What is a fair bargain in the marketplace and what is “fair use” according to copyright law are much different, though not necessarily conflicting, concepts. The legal conception of “fair use” is a loose definition that is a defense to infringement, often associated with free speech such as for criticism or parody. Fair use, in a colloquial sense, is often used as a proxy for consumer expectations and preferences—the desirability for backup copies, transfer to different hardware devices, etc.

Consumer expectations of “fair use” that extend beyond criticism, news reporting, etc. should also be defined by contract, not property law. Competition in the market will dictate that consumer preferences be met. The market should decide the appropriate level of contractual digital rights, not Congress. Copyright law will ensure that fair use, as applied by the courts, exists.

Of course, many of our intellectual property concerns are only definable in property terms. “Orphan works” is one example. These are artistic works still under copyright but whose owner cannot be identified. For legal and prohibitive cost reasons, these works are not able to be used and society loses out on their creative utilization. The problem is that while Congress has strengthened property rights through multiple extensions of the copyright term and removing the renewal requirement, it has failed to introduce countervailing property law concepts that reward the efficient use of property. Borrowing property law concepts such as adverse possession and abandoned property would allow works to get into the hands of those that want to use them. The U.S. Copyright Office is currently accepting public comments on orphan works.

Avoiding a Property Rights Resolution to an Internet Governance Problem

The online intellectual property problems faced by copyright owners do not exist in isolation. They are rooted in the Internet’s (perceived) anonymity—but so are spam, cybersecurity, spyware, and authentication of transactions. Indeed, to a large extent, we don’t have an intellectual property law problem; we have an anonymity/authentication problem.

A policy goal of self-help applies well to the peer-to-peer (P2P) file sharing debate. It encourages intellectual property owners to use technology protections and contract. It reduces the need for new laws that would place liability on Internet service providers or file sharing networks. Enforcement efforts aimed toward primary infringement—instead of holding a person or network liable for the actions of another—lessens the potential for chilling effects on new technology development.

Intellectual Property Participation

The digital property model of the future incorporates both contract and property law. Current technology standards like the FCC’s “broadcast flag” and copy prevention technologies limit distribution. But the evolution of the digital marketplace will undoubtedly allow for consumer involvement in the rights process. It will allow a consumer to prove ownership and transfer ownership to someone else, or transfer copyrighted data with defined usage rights in ways referred to as superdistribution.

Many vocal critics of the current copyright regime maintain that content creators already have a leg-up on consumers, and that DRM will only exacerbate this imbalance. Indeed, a Hollywood victory in the Grokster case currently at the Supreme Court, a failure to meet consumers’ use expectations, and a continued orphan works problem may end up hurting copyright owners in the long run. Legislated fair use, compulsory licensing and restrictions on the right of creators to use DRM may be the price of “victory.”

The range of uses and expectations for intellectual property are incredibly complex. There is no single technological or legislative resolution to digital copyright ownership issues. If we want dynamic, consumer-driven results, we should prefer market solutions to government legislation. Digital rights management as a contractual bargain is a preferable, if not perfect, market response. Academics, consumers, technologists and others are free to weigh-in on digital rights management, but this is one “ownership society” issue that Congress should not address.