06 March 2007

Copyright Catfight

Thomas Rubin, Microsoft's Associate General Counsel for Copyright, Trademark, and Trade Secret, delivered a speech today to the Association of American Publishers. His address is being widely-reported as a broadside at Microsoft's rival Google and is the source of much comment in both the legal and technology-interested portions of the blogosphere. The full text of Rubin's speech is available online in the "Press Pass" portion of Microsoft's web site.

Rubin begins by saying, "Thank you, Jack [Romanos, President and CEO of Simon & Schuster], for that kind introduction. Good morning." After that, there's probably very little that Google would not like to rephrase, recharacterize, or flatly deny. In all fairness, though, while it contains several very pointed criticisms of Google's Book Search project, the focus of the address is not only an offensive against Google (or any other rival), but is also a defense of Microsoft's business model with respect to online publishing. All in all, Rubin makes some excellent points which are worthy of further discussion:
  • "[T]hree simple principles can help us make the right choices. The first principle is that new services that expand online access to content should be encouraged. The second principle is that those new services must respect the legitimate interests of copyright holders; put conversely, we must forcefully reject any business model that is based on the systematic infringement of copyrights. The third principle is that even as we follow the first two principles, we must all work together to find consumer-friendly and cost-effective solutions to our shared goal of expanding online access to copyrighted and public-domain works."
  • "To accomplish its book search goals, Google persuaded several libraries to give it unfettered access to their collections, both copyrighted and public domain works. It also entered into agreements with several publishers to acquire rights to certain of their copyrighted books. Despite such deals, in late 2004 Google basically turned its back on its partners. Concocting a novel “fair use” theory, Google bestowed upon itself the unilateral right to make entire copies of copyrighted books not covered by these publisher agreements without first obtaining the copyright holder’s permission.

    "Google’s chosen path would no doubt allow it to make more books searchable online more quickly and more cheaply than others, and in the short term this will benefit Google and its users. But the question is, at what long-term cost? In my view, Google has chosen the wrong path for the longer term, because it systematically violates copyright and deprives authors and publishers of an important avenue for monetizing their works. In doing so, it undermines critical incentives to create. This violates the second principle I mentioned. Google has also undertaken this path without any attempt to reach an agreement with affected publishers and authors before engaging in copying. This violates both the second and third principles."
  • "From the perspective of [the publishing] business, Google’s approach is troubling for another reason. It assumes, in effect, that Google is the only game in town. Google argues that authors and publishers should simply notify Google if they want to preserve their rights in their works. But what if, as is inevitable, other companies around the world start taking the same approach? Should copyright owners be obligated to track down everyone engaging in unauthorized copying in order to preserve their exclusive rights in their works? Presumably, the desire to preserve these rights is why they asserted copyright in the first place. This approach would be absolutely unworkable in practice, which is probably why Congress in enacting the Copyright Act placed the burden on those who want to copy to get the express consent of the copyright owner, rather than the other way around.

    "In essence, Google is saying to you and to other copyright owners: “Trust us - you’re protected. We’ll keep the digital copies secure, we’ll only show snippets, we won’t harm you, we’ll promote you.” But Google’s track record of protecting copyrights in other parts of its business is weak at best. Anyone who visits YouTube, which Google purchased last year, will immediately recognize that it follows a similar cavalier approach to copyright. Since YouTube’s inception, television companies, movie studios and record labels have all complained that the site knowingly tolerates piracy. In the face of YouTube’s refusal to take any effective action, copyright owners have now been forced to resort to litigation. And Google has yet to come up with a plan to restrain the massive infringements on YouTube."
  • "[I]t is important for content owners and technology companies to work together and invest the resources to overcome obstacles that impede the realization of this great opportunity. Briefly, there are several key challenges that remain.

    "First, in order to promote innovation and online access, we need to figure out ways to reduce transaction costs of negotiations between online service providers and copyright owners.

    "Second, we need to preserve the benefits of the Internet’s global reach. While online service providers must be mindful of the territorial rights of publishers, we all need to recognize that enforcing these rights in an online environment adds enormous complexity and cost. We need to work together to reach solutions to this problem that are simple and efficient.

    "Third, we need to address the orphan works issue, an important issue that I have supported in testimony before the U.S. Senate Judiciary Committee. Online providers should make diligent efforts to locate copyright owners, but when they cannot locate the owner, there must be a process or a safety net by which they can move forward without risk of liability beyond payment of a reasonable royalty if the copyright holder later makes herself known.

    "Fourth, and critically, we need to understand and address consumer expectations. For example, most consumers now expect to preview content before they buy it, and this needs to be taken into account in the digital world. DRM tools and other technical restrictions need to be adopted carefully so that they do not frustrate consumers’ legitimate experiences and expectations, or else you risk losing the vast new market that’s before you.

    "Finally, all of us need to be open to adjusting our business models to add value for the book customer."
Granted, many others have addressed these issues over the past few years. It seems, however, that we're reaching a point where the intermingling of technology, art, and law has become so familiar to us that a meaningful and general dialogue about these issues can finally occur -- at last everyone is ready to have an opinion!

The press' takeaway from Rubin's presentation is the "Microsoft versus Google" angle and probably misses the point for the most part. At the publishers' conference, Rubin's audience was a friendly one -- a group desperate to maintain control of their traditional business models in the internet age and receptive to anyone who can offer them a light at the end of the tunnel. The real criticism of the issues raised in today's speech hasn't really begun.

If I were to handicap that coming debate, I think that the weakness in Rubin's plan will prove to be its reliance on digital rights management, or DRM. As Rubin framed the issue, "DRM tools and other technical restrictions need to be adopted carefully so that they do not frustrate consumers’ legitimate experiences and expectations . . . ." That's much easier said than done and touches on two distinct challenges.

One of these is technical in nature -- how do you construct a DRM method which is at once transparent to a consumer, impenetrable to a copyright pirate, and feasible for a businessperson? The will is certainly there -- there's enough money involved to pique anyone's interest, but there's not been a solution yet discovered which satisfies producers, consumers, and regulators all.

Incompatible DRM schemes have plagued consumers of downloaded music for years. Ironically enough, Microsoft's "Plays for Sure" compatibility scheme isn't compatible with its own Zune music player. A similar problem tripped-up Sony a couple of years ago when it launched a Walkman phone that didn't work with its own online music store. Apple's iTunes DRM is compatible only with its own iPod players; its DRM scheme is a legal and profitable one . . . for now. While the profits this closed-system generates are celebrated in Apple's shareholder meetings, those restrictions are broadly reviled in the European Union and proposed legal changes there may herald the end of Apple's iTunes golden age in some respects.

The second challenge is a legal one -- how do we prevent the DRM abuse which restricts our legitimate use of media under existing copyright laws. DRM has the capacity to unfairly shift control to producers just as piracy has the capacity to unfairly shift control to consumers. The objective here shouldn't be to emphasize either consumers' fair use rights or producers' rights to protect and monetize their works; rather the aim has to be to balance those interests in accordance with applicable laws. It's not a purely hypothetical concern; examples abound of questionable DRM restrictions, including (again picking on the Zune) Microsoft's decision to DRM-protect all music transferred between Zune devices, which fails to give any regard to much-greater fair use rights in many if not most of those transferred songs. Consumers who see their use rights whittled away tend to loudly rebel and even governments which are slow to react to reason do tend to react to volume. Regulation begets overregulation very quickly.

Microsoft's Rubin has highlighted several copyright-related challenges in our digital age and, to his credit, has put some skin in the game by championing an approach to solving those challenges. I'm interested to hear what William Patry, an acknowledged expert in these issues, has to say about Rubin's address in the coming days. I'm not speaking figuratively when I say that Patry wrote the book on copyright (all seven volumes of it); he was formerly copyright counsel to the U.S. House of Representatives Committee on the Judiciary and Policy Planning Advisor to the Register of Copyrights; he's also a very highly regarded blogger on copyright issues at The Patry Copyright Blog. All that aside, I think we can safely assume that he'll have an interest in this particular scrap -- he's currently the Senior Copyright Counsel at Google.


Mobile Phones said...

The DRM issue is just too complex right now in my opinion. I don't think a suitable answer for this is really going to be found very soon. Firstly, consumers and businesses need to try and get used to what technology is able to do. Business needs to somehow find new and creative ways to make money out of what is available. Consumers need to understand how to use things correctly so that business is able to make money off of them.

Putting books in an electronical form put books in a place they really haven't been before – able to be copied and pirated. While its true people in the past could photocopy books, they wouldn't photocopy the entire work. It's not so much that Google is able to show you the book on-line, but that even when people purchase e-books they're able to send that copy to their friends etc. In the past, books were not effected by this kind of thing. Now they are.

Mobile Phones said...

I'd also be interested in seeing where the debate between Microsoft LiveSearch (for books) and Google BookSearch is going to go. They both seem to be wanting to achieve the same goal. If they could come up with some sort of 'pay-per-view' system I think you would have something new and exciting that would work very well. The only thing is curbing piracy – I download the book, and I copy it for my friend. As I mentioned earlier, books have been free from this sort of piracy and now they could enter the same dilemma as music and some other art forms are encountering with the digital age.

Oil painting portrait said...

Wow! Rubin’s straightforward use of Google as a specific example in his speech is truly amazing. Although I’ve heard and read lots of materials that specifically pinpoint a specific name or company in some instances or issues, this one is rather the most timely.