MA CREATIVE AND MEDIA ENTERPRISES

MODULE: MANAGING INTELLECTUAL PROPERTY

ESSAY TOPIC: What are the practical and theoretical challenges to

intellectual property law in the age of the internet?

WORD COUNT: 4390

ABSTRACT

Intellectual property (IP) refers to creations of the mind: inventions, literary and
artistic works, and symbols, names, images, and designs used in commerce.
Intellectual property is divided into two categories: Industrial property, which
includes inventions (patents), trademarks, industrial designs, and geographic
indications of source; and Copyright, which includes literary and artistic works such
as novels, poems and plays, films, musical works, artistic works such as drawings,
paintings, photographs and sculptures, and architectural designs. Rights related to
copyright include those of performing artists in their performances, producers of
phonograms in their recordings, and those of broadcasters in their radio and
television programs(WIPO). Intellectual property is an instrument which sets the
ground for a right creative society and stands as an incentive for innovation(Lessig,
2004) and this is exactly why all kind of industries consider crucial to protect their IP
not only for their business success but also for the stability and harmonization of the
economy.

The unprecedented development of Internet which started from mid 1990s, the
Digital Revolution which came to establish Internet as the dominant communication
medium in late 2005, all the new ways of sharing, communicating and producing all
kinds of content and last but not least the new reality of copying exact copies of
online content with just one click created significant threats around the topic of
intellectual property in digital era(Hugenholtz, 1996).

The actual problem that we face when it comes to issues of IP and Internet is how to
balance artistic and entrepreneurial incentives with the interests of the larger
community of users in an unhindered exchange of ideas (Adam Thierer 2002).

The purpose of this paper is not to answer the dilemma of free or paid content. My
aim is to describe the threats that intellectual property is facing in the Internet age,
to present both sides of free content supporters and opponents (especially in the
field of online news distribution) and finally explain where the already voted
government legislations will lead us in near future.

INTERNET AS COMMONS, THE GIFT ECONOMY AND THE CODE

The Commons and the Gift Economy

I strongly believe that Internet is something all of us are still trying to discover so I
reckon that it is crucial to outline some of its main characteristics in order to simplify
how intellectual property is threatened (or not) by its existence. American Commons
include not only tangible assets such as public forests and minerals but also intagible
such as copyrights and patents and critical infranstructure like Internet. These
commons belong to citizens and protecting them from market enclosure is vital
about maintaining balance. Commons thrive in gift economies where the coin of
exchange is not money but freely given gifts and everything runs under the rule of
inalieability, which is the idea that nothing should be commodified. In this capacity
they can creat great wealth and in the same time they can thrive in most unlikeable
places. They are driven by people voluntarily coming together to give of themsleves
in order to maximize their self-interest. Value is based on personal, nonmonetary
principle and selling a piece of community property to “outsiders” is considered as
gross violation (Bollier, 2003).

The Cornucopia of Commons

By applying Internet news content in the gift economy theory, we are reaching to the
point that David Bollier names as the “Cornucopia of Commons”. Digital content on
the Internet is not depletable and can be replicated so this is exactly the dynamics of
Cornucopia which is run by the slogan of “the more the merrier”. Increasing
participation in Internet distribution and sharing enhances the value of activity and
that is the indispensable condition for a successful gift economy(Bollier, 2003).

Who Governs the Internet?

Another question which is usually raised and needs to get answered in order to
decode the complicating existence of Internet and its connection with IP is who owns
the global web and under which legislation it is run. In its essence, cyberspace is a
space of no control. It is not for making life easier but making life different and this is
why it is regulated through the code of cyberspace. Code is a regulator because it
defines the terms upon which cyberspace is offered. The problem with Code is that it
is not actual law but instead it is something created by programmers. Code has no
shame as Lawrence Lessig(Lessig, 2006) mentions and consequently laws which were
considered as standards like the fair use doctrine in actual world before digital
technologies have now perished. On cyberspace there are not only no national or
local boundaries, there are no clear cultural agreements on what a crime might be
and this is why code is not enforced by humans but by a machine. Humans have not
inhabited Cyberspace long enough to have developed a Social Contract that
conforms to the strange new conditions of that world. Unbounded IP is very
different from physical property and can no longer be protected as though these
differences did not exist. For example, if we continue to assume that value is based
on scarcity, as it is with regard to physical objects, we will create laws that are
precisely contrary to the nature of information, which increase in value with
distribution, the Cornucopia of Commons(Barlow, 1996).
The Emerging Threat

The main features of commons and gift economy I just described seem like a distant
dream by the time that market enclosure has infiltrated in Internet commons some
years before. By the time that copyright owners decided that it is urgent for them to
transform the exchange of digital artifacts into a marketplace, the propertization of
information commons was reality. By taking a step to the commercialisation of
Internet, the content industries completely altered the web DNA and neglected the
primary debt that all of us owe to the open end-to-end architecture of public
communication(Bollier, 2003). By abandoning the open source strategy, that until
then had worked miracles for the rapid development of Internet, we passed to a
phase where almost everything is controlled and fenced with electronic barriers. This
is the first phase where the actual debates for how IP should be treated begun to
occur accompanied with the questions “Who owns web content?”(Geach, 2009). If
we add the characteristics of Code to the capitalistic market which dominates the
worldwide web it is more than obvious that Internet by itself poses a lot of multi-
layered challenges to IP legislation.

Since we don’t have a solution

to what is profoundly new kind
of challenge and we are unable
to delay the galloping
digitization of everything wa
are sailing into the future on a
sinking ship.

(Barlow, 1996)

THE FRIGHTENING CAPABILITIES OF DIGITAL TECHNOLOGIES

By the time digital technologies have become the common use for every Internet
user the first thing that was remarked was that everyone had the power to make
exact copies of everything he wanted sourced by the worldwide web. This
tremendous virtue of digital technologies could be transformed to a tool against the
protection of copyright and patent so the content industries had to move quickly and
ask pressure to governments in order to regulate as far as possible the cyberspace.
In other words, they attempted (and managed) to alter Internet architecture before
Internet managed to alter the marketplace, the ethos of monetary transactions and
capitalistic cyber-economy.

Where Are We Now?

I should outline that this period of time is excellent for writing down the dramatic
changes that take place around the issue of Internet and IP. New government acts
are voted, Rupert Murdoch and Google are in the middle of a war for paid content
with various consequences, blogs of free content supporters try to break the chain of
cyberspace capitalistis economy, Cris Anderson –editor in chief of Wired- published a
book called “FREE”, which actually costs nothing but in the same time gives a lot of
other profits in his author like attention and online advertisement, British
government launches free data website in order to encourage innovation although
this is something totally converse with its new legislations I am going to analyze
later(Arthur, 2010). Consequently, it is actually proven what I already outlined in
previous chapter. Internet and IP have a long way to run together in order to find a
balanced- or not- final solution which will serve the needs of both online hippies and
media conglomerates.

The Dominance of Content Industries

I have already noted down that governments all over the world could not resist the
pressure of media companies referring to the protection of copyright and the
measures taken do not seem fair for everyone. There has never been a time in our
history when more of our culture was owned as it is now. We live in a world that
celebrates property (Lessig, 2004) and in the same time content owners are
inventing alarming new kinds of technologcal surveillance. They use trademark to
shut down web sites that openly criticize them and by equating intagible copyrighted
works with physical property they incorrectly portray copyright as an unlimited
permanent right to control access. They are planning to transform Internet into
gigantic pay-per-use vending machines and although they want their assets to be
abiquitous they do not want theem completely freely usable by culture(Bollier,
2003). I previously argued that IP is an instrument which sets the ground work for a
rich creative society but reamins subservient to the value of creativity.
Unfortunately, we have become so concerned with protecting the instrument that
we are losing the sight of value(Lessig, 2001). It is understandable for industries
threatened with new technologies to change the way they do business and look to
government for protection but it is also special duty of policy makers to guarantee
that protections are not deterrent to technological progress.

To kill a gnat, we are spraying

DDT with consequences for free
culture that will be far more
devastating than that this gnat
will be lost.

(Lessig, 2004)

The WIPO Copyright Treaty

The first legislation that needs to be analyzed is the World Intellectual Property

Organization Copyright Treaty, abbreviated as the WIPO Copyright Treaty. It is an
international treaty on copyright law adopted by the member states of the World
Intellectual Property Organization in 1996. It provides additional protections
for copyright deemed necessary due to advances in information technology since the
formation of previous copyright treaties before it. Furthermore, the Treaty mentions
two subject matters to be protected by copyright: computer programs, whatever
may be the mode or form of their expression, and compilations of data or other
material (“databases”), in any form. As to the rights of authors, the Treaty deals with
three: the right of distribution, the right of rental, and the right of communication to
the public(WIPO). 

The opponents of WIPO Treaty argue that it may have moved a step further from
previous legislations but it proceeded as if the problem of protecting IP in
cyberspace was like the problem of protecting IP in real space. Lawrence Lessig
(Lessig, 2006) outlines that parts of the WIPO Treaty were wrong because back in
1996 we were not entering to a time when copyright was more threatened than it
was in real space. Instead, we were entering an era when copyright was going to ger
protected more effectively than ever and as a result the real question was not how
legislation could help to the debate about IP but whether the provided help was
enough. Richard Haynes (Haynes, 2005) also outlines that the WIPO Treaty viewed
the “indirect” and “temporary” copies of a work held within computer networks as
copyrighted material. This statement clearly intends to include digital copies within
the reproduction right. It does, however, make certain exceptions to infringement
because digital media producers benefited from this misinterpretation.

The Digital Millennium Copyright Act

The second legislation that raised a lot of controversy because of its stricter treaties
against copyright infringement was the Digital Millennium Copyright Act (DMCA).
The Digital Millennium Copyright Act (DMCA) is a United States copyright law that
implements two 1996 treaties of the World Intellectual Property Organization. It
criminalizes production and dissemination of technology, devices, or services
intended to circumvent measures (commonly known as DRM) that control access to
copyrighted works. It also criminalizes the act of circumventing an access control,
whether or not there is actual infringement of copyright itself (Office, 1998).

David Bollier (Bollier, 2003) considers the DMCA as one of the most aggressive
attempts to expand property rights over online information. It actually makes illegal
for anyone to overcome a technologic measure that restricts access to digital works.
It is also illegal even to share information about how to defeat technologic locks. The
latter is the worst part because it allows copyright holders to control later uses of
product. Lawrence Lessig (Lessig, 2006) moves further and points out the extinction
of the fair use doctrine. He outlines that DMCA contains anti-circumvention
provision and if the underlying use you would make of a copyrighted work is a fair
use the DMCA still makes it offense because of a simple reason. Fair uses require
judgmental thought about the user’s purpose and software cannot track that. In Free
Culture, Lawrence Lessig (Lessig, 2004) concentrates on another point of DMCA. He
argues that DMCA was enacted as a response to copyright owners’ first year about
cyberspace. The fear was that copyright control was effectively dead and the
response was to find technologies that might compensate them. This argument gets
completed by Tom.W.Bell (Adam Thierer 2002) points out the great power that
DMCA gives to media conglomerates. He supports that since the
Telecommunications Reform Act of 1996, we have seen an extraordinary
concentration of what they call content in the hands of a very few organizations.
DMCA gives media megaliths even more powerful tools for consolidation and
actually the new rights go well beyond providing defences against piracy and beyond
what is necessary to assure adequate compensation to the IP owner. A characteristic
example of the insanity that sometimes is produced by DMCA regulations is that
merely by digitizing something it is now possible to claim things that have been in
the public domain for decades. So for example if someone buys “Alice in
Wonderland” in e-book version he has to agree to a legal enjoinder from reading it
loud.

On the other hand, I reckon that that the anti-circumvention provisions of the DMCA
may not strike a perfect balance but they are a sensible effort to achieve protection
of copyrighted material given the new realities of digitization. Time will tell whether
DMCA is a success or a failure but in the meantime we should recognize that the Act
reflects an intellectual coherent effort to protect copyrights and enforce contracts in
Internet Age (Lucchi, 2006).

THE REVIVAL OF PIRATES

In the previous chapter I concentrated on presenting the legislations and the

arguments which have risen around the subject of the exact copies that digital
technologies can provide and which were the strategic movements of the content
industry. The next step of the ownership of online content is the distribution of it
and how the problem of online piracy can be solved. Copyright law regulates copies.
Digital networks function by making copies so there is no way to use digital network
without making copies. Thus, every single piece of creative work in digital
environment triggers copyright. The gap between normal and abnormal uses began
to close as the technologies for copying were democratized and by the word
democratization I mean the extremely easy ability to communicate and exchange
online content through the worldwide web.

http://www.perfspot.com/docs/doc.asp?id=1098

The chart above perfectly reflects the devastating consequences that piracy
(infringement of online content) acts upon all kind of corporations which deal with
Internet content. What worries more the industries is that piracy is a rapidly growing
trend among Internet users and conducted surveys geographically depict that
desperate times call for desperate measures.
http://www.aladdin.com/images/HASP/newsletter/software-piracy-study.gif

It is easily excluded from the both pictures that piracy and capitalistic cyberspace
economy cannot co exist even in the vast Internet frontiers so I consider vital to
point out some decisions from both the industries and the governments which have
already altered the online scene of piracy.

Digital Rights Management

Major entertainment companies are using "digital rights management," or DRM (aka
content or copy protection), to lock up their digital media. These DRM technologies
do nothing to stop copyright pirates, but instead end up interfering with fans' lawful
use of music, movies, and other copyrighted works. DRM can prevent you from
making backups of your DVDs and music downloaded from online stores, recording
your favourite TV program and much more(Foundation). Actually DRM refers to any
number of copy-protect techniques whereby content owners can encode their
products to protect them from unauthorized duplication. What it does is to entirely
replace copyright as the means of mediating the public access to and use of creative
expression. It is also important to outline that DRM is closely connected with the
DMCA whose regulations were previously analyzed. The anti-circumvention
legislation concentrates on the pirates’ efforts to unlock DRM mechanisms and what
is extremely worrying about the industries is that most locks have not prevented
anyone from infringing copyrighted works over the net (Rosenblatt, 2002). This is the
reason that conglomerates asked more pressure to governments in order to secure
their copyrighted or patented works and their profits. On the other hand DRM is not
going to put a stop to all copying because the realistic goal cannot be zero-piracy.
But if DRM is capable of thwarting the bulk of the unauthorized copying and can
allow copyright holders to charge for each use it is going to be a great plus (Adam
Thierer 2002).
Digital Economy Bill

The Digital Economy Bill implements aspects of government policy on digital media
set out in the “Digital Britain” White Paper published in June 2009. It sets out plans
to ensure that UK is at the leading edge of global digital economy. It aims to support
growth in the creative and digital sectors and includes measures aimed at tackling
widespread online infringement of creative copyright. It also regulates some
obligations to Internet Service Providers which actually take the role of online
policemen. Its providers’ obligation to notify subscribers of reported infringement, to
provide infringement lists to copyright owners and at last to ban internet access
after the 3 strikes rule (UK Parliament). The same rule was voted by the French
Senate and the legislation is commonly known as Hadopi Law.

It is easily excluded that content industries managed again to fence their copyrighted
works with electronic wires and this time the wires are of high voltage and can lead
to “internet death”. The ISPs have been transformed in order to keep balanced
relationships with the governments and consumers will find themselves wander
around a fully controlled place, with price tags hanging out of every kind of online
content. The people who are opposed to Digital Economy Bill argue that policy
makers will have power to make up as many new penalties and enforcement
systems as they like. They are planning to appoint private militias financed by rights
holder groups who will have the power to kick you off the internet, spy on your use
of the network and have the power to invent any penalty, including jail time.
Meanwhile, they claim that there is anything about stimulating the actual digital
economy. Nothing about getting Britain's poorest connected to the net. Nothing
about ensuring that copyright rules get out of the way of entrepreneurship and the
freedom to create new things (Doctorow, 2009).

FUTURE AND THEORETICAL THREATS

I reckon that I have presented all the aspects of the practical threats that Internet
has posed to IP legislation. But all of us should care about some theoretical threats
that may occur in the future or they may have already occurred and we cannot
realize them.

I strongly believe that the consequences of the war between free content
supporters/pirates and content industry will have detrimental effects in 3 different
sectors. At first, the phenomenon of constraining creators will be extremely
developed. Never in our history, has a painter had to worry about whether his
painting infringed on someone else’s work; but the modern painter using Photoshop
has to worry. Secondly, the building of a permission culture, rather than a free
culture is the first important way in which changes will burden innovation. The
uncertainty of the law is one burden on innovation. The second is the effect of many
to use the law to directly regulate Internet technology. Furthermore another threat
is that overregulation corrupts citizens and weakens the rule of the law. When
millions of people download content from Internet the first question is not how to
involve FBI. The question should be whether this prohibition is necessary in order to
achieve the proper ends (Lessig, 2004). Last but not least, all of Internet users have
to recover an ethos of commonwealth. We are so accustomed to thinking about the
individual and so “focused” on property that we have trouble understanding that
some wealth is collective(Bollier, 2003).

The value of online

content has been
undervalued; It’s now at
the lowest level in
history. But the reality is
that all of us know that
our content is valuable.
We deserve to be paid
and it is time for us to
get control of our
content.

Tom Curly, Associated

Press CEO(Jarvis, 2009b)

Why information is different from other online content?

I previously outlined that I want to concentrate all my previously developed

arguments in the online information ownership and distribution and I reckon that
the battle between Rupert Murdoch and Google is characteristic. In a few words,
Rupert Murdoch considers web search engines as kleptomaniacs by the time they
aggregate content from his media companies (in this case newspapers) without
permission and they make it available, in its whole context, to every user destroying
the fair use doctrine (Kirby and Engelhart, 2010). On the other hand, Google backed
up with thousands of free content supporters argues that information wants to be
free (Barlow, 1996), everyone has the right to get informed and last but not least
increases the number of visitors by the time the user is automatically linked to the
original page. So who is right?

I reckon that in order to come up with a final decision, it is vital to refer to the
difference that information has in comparison with other data. John Perry
Barlow(Barlow, 1996) argues that an understanding of information may emerge in
the abstract congruence of its several different properties that are described as: i)
Information is an activity, ii) information is a life form and iii) information is a
relationship. This vivid character of information and the new medium in which
information was entered creates the need to analyze this debate from all aspects. At
first, I am sure that in 2010 is more than obvious that online news have become a
commodity and this in conjunction with the explosion of content that digital
technologies have permitted creates the urgency to media conglomerates to
distinguish themselves from simple blogs (Boorstin, 2009). As a result, Rupert
Murdoch’s argument about paywall into famous newspaper websites is not irrational
but in the same time we should not forget the right to link that Internet users have.
Jeff Jarvis (Jarvis, 2010) points out that the right to link is the basis of freedom of
speech online. Linking is a fundamental right as it enables fair comment. Linking is
not some kind of digital theft, it is perfectly legitimate use but what search engines
have done is that except from the right to link they provide the whole body of news,
something which extends the fair use doctrine. Consequently, although Google
previously protested that it is not afraid of Murdoch’s sayings changed some of its
formats and added new options for publishers like Google providing only the first
paragraphs of a page (Parr, 2009). But again, one question leads to another. If
Google is so illegal and Rupert Murdoch so right, why does he continue to display his
newspapers’ pages into Google although he can stop that only with one click of a
button? The truth is that Google and News. Corp do need each other for a simple
reason. Murdoch needs Google because it attracts a lot of thousands visitors in his
pages and at the same time Google cannot take for granted its role as primary hub
for online content, consumers and commerce (Pfanner, 2009). I believe that
Murdoch’s sayings are part of a plan by which he searches for an exclusive rights
arrangement with a news search engine machine like Bing (Shafer, 2009). Last but
not least, it is important to shed some light on the business models that occur
through this constantly altering story. Jeff Jarvis (Jarvis, 2009a) outlines that neither
Google nor News Corp understands the new collaborative economy which takes the
place of post-scarcity economy. In the last one all kind of blogs and unofficial news
sites were considered as oversupply but in the collaborative economy all those
extras add new value and efficiency and actually this is how sites like Wikipedia and
Craigslist create value.

CONCLUSION

Instead of a conclusion I reckon that it is better to make some predictions about the
future of Internet and copyright because as it was previously mentioned their
relation is a field of constant rivalries and transformations. My opinion is that we are
moving to an era where everything online will be protected by copyright and fenced
by paywalls. Piracy which gained a lot of popularity at the end of our decade will be
eliminated either by enhanced DRM either by new technological means while in the
same time protestors of free online content will gain other kind of income like online
advertising and fame. In my opinion, the chance for the Internet to get ruled by an
open source and commons regime was lost because of the indecisiveness of
governments in front of the power of content industries. As far as the future of
intellectual property is concerned I strongly believe that copyright has never felt
more secure in human history. All creative works have been carefully fenced in such
an exaggerating degree that creativity and innovation motivation, which should be
our priority, comes after the economic profit.

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