Collective Management of Copyright: Issues Emerging from the Google Books Program

March 4, 2011

By Jake Goldenfein

February 18th 2011 marks one year since the Amended Google Books Settlement (AGBS) fairness hearing, with Judge Denny Chin yet to issue a ruling. Though the Google Book Search program cannot be implemented without Judge Chin’s approval, both academy and industry are prodigiously analysing its potential ramifications. Establishing a collective management organisation (CMO) called the Book Rights Registry is one of the AGBS’s more provocative features. Very simply, the Book Rights Registry would collect and distribute revenues from the Google Books program to the rightsholders of digitised texts. As the specific issues generated by the AGBS fall to redoubled investigation, so do their corollaries for the institution of copyright. Accordingly, on January 28th 2011, the Kernochan Centre at Columbia University Law School in New York held its annual symposium on CMOs and their role in new licensing regimes. By way of introduction, June Besek, Director of the Kernochan Centre, noted the AGBS was one of the two fundamental reasons why CMOs are receiving more attention (the other being that collective management is a lesser institution in the US than the rest of the world), making the symposium extremely timely.

Google’s inclusion of collective management in the AGBS has reinvigorated the analysis of CMOs, as collective management may play a part in the AGBS’ controversial rights clearing process. To briefly summarise – Google began digitising the collections of major US university libraries, making available snippets of text for search engine enquiries. The US Authors Guild and Association of American Publishers brought a class action lawsuit against Google, claiming copyright infringement on behalf of rightsholders of the texts scanned and digitised. Google originally asserted a fair use defence based on the limited quantity of text displayed as search results, however the parties eventually settled, authorising Google to engage in activities more expansive than those inducing the original action. Google would be permitted to make available full, digitised texts on private and institutional bases, with revenues distributed to rightsholders through the Book Rights Registry. Controversially, the settlement used the ‘opt-out’ mechanism of class-action procedure to subvert the traditional requirement of permission from rightsholders. This clever piece of litigation strategy may enable Google to digitise and commercialise (actions within the rights reserved by copyright) the legacy of western publishing without undergoing the otherwise impossible task of clearing rights. Remarkably, this inversion of the default copyright position for a massive canon of information is achieved through private (settlement) action rather than legislative reform.

Many are familiar with the function of CMOs, such as APRIA in Australia, who license music performance rights from its repertory to users of all kinds. For example, if you operate a bar, you pay a fee to APRIA to lawfully play music to the public. The CMO determines the fee, then distributes revenues to rightsholders based on its usage data. While APRIA has its equivalent in the US, CMOs in other categories of rights are far less prolific. Perhaps this paucity is linked to the poisonous connotations of the term ‘collective’ amidst an American environment of strict economic rationality. Indeed the keynote speaker at the conference, Daniel Gervais, argued a purely economic approach to collective rights management makes those agencies’ role less compelling. He argued, in Europe comparatively, collective management is considered a preferred system rather than a necessary evil.

Gervais highlighted some central features of collective management including the lack of excludability. Any user may access any work within the CMO repertoire provided they pay the licensing fee. This reduces transaction costs, and highlights how, while industry actors often have a program of saying ‘no’, CMOs generally say ‘yes’. In this sense, CMOs may facilitate movement away from the permission culture that accentuates the conflicts of copyright in the internet age.

Schott Hemphill, an anti-trust and IP professor at Columbia Law School, discussed the competition issues regarding collective management – generally, and in reference to the AGBS. He highlighted the fundamental concern emanating from the horizontal relationship amongst rightsholders that enables setting higher licensing prices than if rightsholders were acting individually. The original Google Books settlement entitled the CMO to establish a profit maximising price. Of course, this smacks of cartelisation. However, the amended agreement clarified that the pricing algorithm enables individuals to price their works severally. Orphan works issues also emerge in an anti-trust analysis of the AGBS, with the US Justice Department contending that later entrants to the ‘ebook’ market will struggle to replicate access to orphan texts as those rightsholders (by definition) cannot opt-in. Naturally, within the massive envelope of materials digitised by Google, many rightsholders are not identified or located. By requiring absent authors to ‘opt-out’, the settlement grants Google a de facto monopoly over those works. However, Hemphill remarked Google’s substantial risks in commencing digitisation would increase access to orphan works from effectively zero, thereby obviating anti-trust liability because the cost of the product is not increased. Apart from contending the anti-trust complaint is not made out, Hemphill also declared problematic the inclusion of competition issues in Judge Chin’s fairness determination as Chin’s mandate considers legitimacy for settlement class-members only, not the public at large.

As a CMO, the Book Rights Registry utilises extended collective licensing (ECL) machinery. ECL operates by extending the relationship between rightsholders and CMOs, by virtue of law, to all individuals within that class of rightsholder. Consequently, as pointed out by Alain Strowel from the Facultés Universitaires Saint-Louis in Brussels, this model has vast utility in licensing mass digitisation projects (and orphan works). Extended collective licences are already legislatively prescribed in Europe for cable television transmissions and other communications, while Nordic ECL law has omnibus provisions facilitating application to all categories of rights (including those necessary for the Norwegian National Digital Library). Uniquely to the AGBS, the legal extension to ‘outsiders’ is by virtue of private law, not legislation, and the benefits flow to only one user – Google.

Berkeley Law School professor Pamela Samuelson objected to the AGBS for precisely those reasons, stating her preference that other parties also have access to the mass digitisation. She argued for legislation establishing a CMO with extended collective licensing of orphan works and out of print books only (although she cites preference for the limited liability model of the proposed US orphan works legislation). Rather than vesting this resource in a private company like Google, Samuelson endorses creating a national Digital Public Library along the lines of the Europeana project.

Finally, the last speaker at the Symposium, Séverine Dusollier from the University of Namur succinctly highlighted the spectrum of licensing options from individual management of rights to compulsory licensing, and canvassed the various legislative proposals including levies on internet use and devices, and commandeering ISPs as collection agencies, licensors and enforcers.

The collective licensing options discussed at the conference have been subject to varying amounts of analysis and implementation. Clearly, the importance of developing adequate and appropriate licensing regimes is not escaping academics or policy makers, and the quantity and complexity of those options is only expanding. However, convincing established content industries continues to suffer for their preference of Digital Rights Management technologies over licensing innovation. For that reason, many eagerly await Judge Chin’s determination. Those opposed to the AGBS often cite Google’s ‘end-run’ around copyright law and the danger in privatising of such a phenomenal resource. However, considering US Congress’ inability to even pass necessary orphan works legislation, it is questionable whether the US Government has the political, let alone technical means to bring such a valuable public asset into fruition. In addition, recent US copyright reform focuses predominantly on term extension and fiercer enforcement, leading some to prefer Google’s vision of copyright to that of the US Government. No doubt whether or not the AGBS is approved, the concept will remain a substantial influence on the progress of digital licensing in times to come.

Video of the symposium is available on the Kernochan Centre’s website here.

Jake Goldenfein is a PhD candidate in Law at the University of Melbourne

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Spycatcher and Wikileaks: history repeats

February 17, 2011

By Dr Katy Barnett

Who enjoys reading spy fiction, or watching spy movies? I do. There’s something interesting about espionage. Perhaps it’s the secrecy which makes it so fascinating. People love to know secrets: it reflects the broader idea that if something is scarce, it must be good. In his book Influence, Robert Cialdini describes the following experiment at pages 246–7:

One Virginia-based study nicely captured the terrible twos style among boys who averaged twenty-four months in age. The boys accompanied their mothers into a room containing two equally attractive toys. The toys were always arranged so that one stood next to a transparent Plexiglas barrier and the other stood behind the barrier. For some of the boys, the Plexiglas sheet was only a foot tall–forming no real barrier to the toy behind, since the boys could easily reach over the top. For the other boys, however, the Plexiglas was two feet tall, effectively blocking the boys’ access to one toy unless they went around the barrier. The researchers wanted to see how quickly the toddlers would make contact with the toys under these conditions. Their findings were clear. When the barrier was too small to restrict access to the toy behind it, the boys showed no special preference for either of the toys; on the average, the toy next to the barrier was touched just as quickly as the one behind. But when the barrier was big enough to be a true obstacle, the boys went directly to the obstructed toy, making contact with it three times faster than with the unobstructed toy. In all, the boys in this study demonstrated the classic terrible twos’ response to a limitation of their freedom: outright defiance.

If you want to make something attractive, make it secret…then everyone will want to know about it.

The other reason we find spying interesting is because of the vicarious thrill of the chase. Basically we are hunter-gatherers who have an inbuilt love of chasing things down and collecting things. Getting information from another person without them knowing about it is a chase extraordinaire. There’s also a clever problem-solving aspect which is attractive to people like myself, who love a puzzle (the only thing I regret about cancelling my various newspaper subscriptions is that I no longer get the cryptic). In addition, one is spying on the Other Side, and therefore, nefarious and tricky techniques are allowable.

Spy fiction as a genre arose in the 19th century, with its roots in the adventure genre. Novels such as the Prisoner of Zenda, which I love, are precursors of the genre. It is related to detective fiction, and some of the Sherlock Holmes stories straddle the two genres. Public interest in spying was also roused by incidents such as l’affaire Dreyfus, where a young French Jewish Army officer named Dreyfus was convicted of treason after it was alleged that he had leaked French military secrets to the Germans. Later evidence indicated that Dreyfus had not leaked the information and that an Army officer called Ferdinand Esterhazy was in fact the culprit. However, top ranking army officials suppressed the evidence, and engaged in a cover-up. After author Emile Zola wrote a letter in the newspaper, the case had to be reopened, and Dreyfus was eventually exonerated.

The various World Wars, followed by the Cold War, meant that international spy agencies were established and were naturally then the subject of fiction. The Cold War and the Soviet threat provided fruitful grounds for authors, particularly after a number of high profile double agents were uncovered in the 1950s and defected to the Soviet Union: Donald Maclean, Guy Burgess and Kim Philby.

James Bond is a romanticised fictional spy from that era, a dashing hero who seduces women and overthrows the villain every time. There is no doubt as to who is right with depictions of Bond: Bond is the Good Guy, up against guys who are indubitably Bad. Perhaps these novels seek to deal with the anxiety that, despite double agents and the like, the Good Guys are winning. Subsequent spy fiction has more complex portrayals: for example, Le Carré’s fictional spy George Smiley is of a bureaucrat who has to maneuver to get what he wants from the various government departments. Le Carré’s novels are more equivocal about the unethical and unpleasant aspects of the job. Many authors of spy novels in fact had worked in spy agencies themselves, including Ian Fleming, John Le Carré, and Graham Greene (who was a friend of Philby).

In Le Carré’s A Perfect Spy, featuring his anti-hero, Magnus Pym, two threads can be discerned. First, there is the oxymoronic nature of spying: one is breaking the law on behalf of the state, in the name of the safety of the state. One character observes about spying at page 324:

‘Hell…we’re licensed crooks, that’s all I’m saying. What’s our racket? Know what our racket is? It is to place our larcenous natures at the service of the state. …’

The other aspect which comes through is the ‘boy’s own fun’ aspect. There is an account of Magnus’s training at pages 533 – 4:

“Imagine Pym’s enjoyment of this… The fun of it. The free-wheeling unreality. He has chased Buchan’s ghost across the moors of Argyll. He has messed about in rubber boats, made night landings on sandy shores, with hot chocolate awaiting him in the vanquished enemy’s headquarters. He has fallen out of aeroplanes, dipped into secret inks, learned Morse and tapped scatological radio signals into the bracing Scottish air. He has watched a Mosquito aeroplane glide a hundred feet above him through the darkness, dropping a boxful of boulders in place of genuine supplies. He has played secret games of fox-and-geese in the streets of Edinburgh, photographed innocent citizens without their knowledge, fired live bullets at pop-up targets in simulated drawing rooms, and plunged his dagger into the midriff of a swinging sandbag, all for England and King Harry…

…

Then back to base camp. Somewhere in Scotland to resume the red thread of violence that has been spun into every new thing he is learning. This violence is not only of the body. It is the ravishment that must be done to truth, friendship and, if need be, honour in the interest of Mother England. We are the chaps who do the dirty work so that purer souls can sleep in bed at night. …”

The other thing is that spies are constantly acting a part. It is hard to know when they are telling the truth and when they are lying, and what the nature of the real person is. In The Perfect Spy, Pym tells various people totally contradictory things at different times, and at the moment he says them, he believes what he says entirely. It is as if he is a functional sociopath. Le Carré’s The Little Drummer Girl also plays with this, when the Israeli secret service use an English actress, Charlie, to entrap a Palestinian terrorist. The Israeli chief operative tells Charlie at 136 – 7:

“Do not confuse our play with entertainment, Charlie,” he told her earnestly. “We are not speaking of some enchanted forest. When the lights go down on the stage, it will be night-time in the street. When the actors laugh they will be happy, and when they weep they will very likely be bereaved and broken-hearted. And if they get hurt–and they will, Charlie—they will surely not be in a position, when the curtain falls, to jump up and run for the last bus home. There’s no squeamish pulling back from the harsher scenes, no days off sick. It’s peak performance all the way down the line. If that’s what you like, if that’s what you can handle–and we think it is–then hear us out. Otherwise let’s skip the audition right now.”

What struck me again was that Charlie’s character genuinely believes the part she acting while she is in it – she does not allow herself to think of the deception she is undertaking. She feels sympathy for the people she is with and empathises with them, all the while deceiving them.

Spy Autobiography – Spycatcher

Spies, and spy books, are fascinating. No wonder, then, that autobiographies of spies are big business. If novels are interesting, one would think that an account from a real spy would be far more interesting, particularly if the government is trying to ban people from reading it. Spycatcher was such a book: a autobiography written by Peter Wright, a former Assistant Director of MI5.

In 1987, Spycatcher was No. 1 on the US hard-cover non-fiction book list. The initial print run was 50,000, but this later rose to 760,000. It was apparently a surprise hit: but if one bears in mind the experiment with the toddlers recounted above, the success really shouldn’t have been a surprise. If you want to make something popular, there’s nothing like a bit of scandal to fuel that popularity. Here was an insider’s account of MI5, one that was so scandalous that the British government had attempted to ban its publication in Britain, Australia, New Zealand and Hong Kong (with noted lack of success in Australia and New Zealand). Litigation drew attention to the book, and the British government was largely unsuccessful in achieving the remedies it sought.

After reading the various Spycatcher cases, of course I couldn’t resist reading the book either. My father had it on his bookshelf, and professed that I was free to take it. When I looked at the book, I was interested to see that there was a faded, dog-eared bookmark about one third of the way through. The bookmark apparently dated from around 1988. Dad had never finished the book. And I confess that I had great difficulty finishing it as well. I had to flog myself to read the final chapters.

I have a theory about books. There are two things that make a book enjoyable:

  1. A “hook” to pull you through – that is, a plot line which instils in you the need to know what happens; and
  2. Good writing that is not clichéd or grammatically incorrect.

Some books possess the first aspect in spades, but entirely lack the second aspect (the example I always use is Dan Brown’s The Da Vinci Code). Some books have exquisite writing, but one hates the characters and as a consequence, one doesn’t care what happens to them (the example I use of this is Patrick White’s The Eye of the Storm, which I failed to finish with about 70 pages to go – I just couldn’t be bothered any more).

Wright’s book is written in grammatical English. I’m sure it’s fascinatingly interesting if you happened to work in that area, and know the people of whom Wright is speaking. But there is a real lack of a “hook” to pull you through the book. I think it would have been a more exciting read if Wright had said at the outset, “Little did I know that I was to be working  with some people whom I believe were traitors, although the British government still denies this.” Then I would have spent the book wondering who the traitors were.

As it was, the main parts which interested me were the parts that deal with the oxymoronic nature of spying – one is trusting people who are paid liars and breakers of the law, and the parts which recounted the fun bits of spying.

  • Pages 31-2: “…MI5 operated on the basis of the 11th Commandment — “Thou shalt not get caught” — and…in the event of apprehension there was very little that the office could do to protect its staff.”
  • Page 45, on the initial interview with double-agent Kim Philby, in which Philby was cleared: “I realized for the first time that I had joined the Looking-Glass world, where simple but unpalatable truths were wished away. It was a pattern which was to be repeated time and time again over the next twenty years.”
  • Page 52: “It was boyish fun chasing Russian diplomatic vehicles through the streets of London, up and down one-way streets and through red traffic lights, secure in the knowledge that each driver carried a Police Pass to avoid tickets.”
  • Page 70: “But in the main, the 1950s were years of fun, and A Branch a place of infectious laughter. As Hugh Winterborn always said: “MI5 is a great life, if you can stand the excitement!”

The controversial part of the book seems to have lain in the allegation which arises in the latter part of the book: namely, that the former Director-General of MI5, Roger Hollis, was a Russian double agent. However, as was noted in the various Spycatcher trials, this was not a new allegation, and it had previously been published in a variety of other books and television programs. Indeed, the powers that be were so worried about the possibility of Hollis being a double agent that, as Wright recounts, they pulled him in to interrogate him once again after his retirement.

A book I found rather more interesting is Malcolm Turnbull’s account of the trial, entitled The Spy Catcher Trial – The Scandal Behind the #1 Best Seller. Perhaps I’m strange. I bought the book for the princely sum of 1¢ from Amazon, so evidently no one else is much interested in it anymore, but I enjoyed it vastly more than Spycatcher itself. Turnbull’s book explains precisely why the Thatcher government was desperate to suppress Wright’s book, something I had not really understood with the benefit of hindsight. I had always thought that surely it would have been a better course for the British government to let the book sink into ignominy than give it loads of free publicity?

The British government did not want its mistakes publicly known. It had already faced embarrassment with the exposure of Anthony Blunt, another of the “Cambridge Five” spy ring of which the defectors Philby, Maclean and Burgess were also members. Blunt was Professor of the History of Art at the University of London and Surveyor of the King’s Pictures. He was also a Soviet double agent. He was only exposed in 1963, and the Spycatcher book describes a number of interrogations of Blunt. However, Blunt’s double agency only became public knowledge in 1979 when a book called Climate of Treason was published which outlined the activities of “Maurice”. Blunt sued to prevent publication of the book which immediately drew attention to him. Margaret Thatcher, then Prime Minister, revealed Blunt’s treachery in the House of Commons.

The government was concerned that there would be a similar hoohah when revelations emerged that Hollis had been suspected of being a double agent. In 1981, Chapman Pincher published a book called Their Trade is Treachery in which the allegations against Hollis were revealed. Pincher’s book was based in part on conversations with Peter Wright, and Wright had been flown out to England to talk to Pincher, and had been paid for his services. A week after Pincher’s book had been published, Mrs Thatcher told the House of Commons that Hollis had been cleared by an independent inquiry and that all evidence against Hollis related to events which could equally be attributed to Kim Philby or Anthony Blunt. Turnbull recounts at page 32:

Wright told me Mrs. Thatcher had misled the House of Commons. “The evidence against Hollis was all post-war. It couldn’t have been laid at the door of Philby or Blunt. The Prime Minister was given a misleading brief by MI5.”

Importantly, the government did not object in the least to Pincher’s book, even though it covered very much the same material as Spycatcher. In part, this was because the tenor of Pincher’s book was different: he noted that the secret services had had a problem with Soviet double agents, but concluded that the present day secret services were in the clear. By contrast, Wright’s book alleged that there were still double agents in the service, and that more questions had to be asked about the operations of the secret service. Turnbull’s book argues that the only reason why the government didn’t mind Pincher’s book is because they actually wanted Pincher to bring the Hollis allegations out into the open in the most uncontroversial manner possible so that they could be tidied up and swept away. Nor did Thatcher want her statement before the House of Commons questioned. The inference from Turnbull’s book is that the orders to persist with the case were coming straight from Thatcher herself.

Turnbull gives an electrifying account of his cross-examination of Sir Robert Armstrong, Thatcher’s Secretary of Cabinet, who attempted to justify in cross-examination why action had been taken in the case of Wright but not in the case of Pincher. Suffice to say, Turnbull took Armstrong to pieces. After reading the book I now understand precisely the flavour of the New South Wales Supreme Court case at first instance (Attorney-General (UK) v Heinemann Publishers Australia Pty Ltd (1987) 8 NSWLR 341). Powell JA found that the information contained in Spycatcher was no longer confidential because it had been published in a number of other publications to which the British Government had authorised or at least acquiesced. He said acerbically at page 378 of his judgment, ‘it must have been apparent to anyone who had cause to consider the matter, that, as a result of the acquiescence, or inaction of the British Government, the Service has, for years, leaked like a sieve.’

Wikileaks

This provides a nice segue into modern times. Have things really changed so much since Spycatcher? I suspect that they have not, and Turnbull agrees. On 9 December 2010, Turnbull wrote a column drawing parallels between Spycatcher and Wikileaks. He noted that the British government would have done far better in the Spycatcher debacle if it had not relied on the law of breach of confidence but had simply let Wright publish and ignored the book. In this context, Turnbull said of Wikileaks:

“Mr Assange should make sure that any further documents published do not contain information that would impact on current operations and especially in a way that would put lives at risk. We are engaged in a global struggle with Islamist fundamentalist terrorism and any material which assists our opponents should not be published. Any material which puts the lives at risk of those who help us in that struggle should not be published and to do so is morally reprehensible whatever its legal character.

Governments and politicians should be very careful not to make a martyr of Mr Assange and fools of themselves. Julia Gillard’s claim that Assange had broken Australian laws when it is clear he has not, only demonstrates how out of depth she is in this as in so many other areas.

And one may well ask whether her denunciations would be so shrill if instead of the documents being given to Mr Assange they had been handed to a powerful newspaper group.

If The Australian had received that file and its contents were being dribbled out by News Corporation newspapers would she be accusing Rupert Murdoch of high crimes and misdemeanours? I don’t think so.”

I suspect secrecy just encourages people to want to look, like our toddlers at the start of this post. I’m no different – I’ve been fascinated with the revelations arising from Wikileaks, although like Turnbull, I worry about leaks which might harm operatives or society generally. I would be very careful of how I handled Assange. It seems that most Australians support his actions. Government never looks good if it comes down heavily on people like Wright or Assange.

When I was younger, I confess that I had dreams of being a spy. My A-Level History teacher snorted, “You!?! You couldn’t keep a secret for five seconds!” “Ah ha!” I said. “I bet that if I were a spy, I would run around shouting ‘I’m a spy, I’m a spy, I’m a spy!’ Would you believe me? Of course you wouldn’t. You’d think I was a foolish voluble buffoon. I’d be the best spy ever.” She laughed but said, “Maybe you’re on to something”. I think these are the principles I operate on. If I were trying to hide something, I confess that I’d probably hide it in plain sight, amongst all kinds of other totally irrelevant items. Secrecy makes people curious. Still, secrecy makes for interesting stories.

Dr Katy Barnett is a lecturer at the Melbourne Law School

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The Livid World of Harry Potter Litigation

February 17, 2011

by Thomas Vranken (introduction by Vicki Huang)

Did JK Rowling’s “Harry Potter and the Goblet of Fire” plagiarise the obscure children’s book “The Adventures of Willy the Wizard: Livid Land” by Adrian Jacobs?

His estate seems to thinks so, having launched copyright infringement suits against Rowling and her publishers in the US and the UK.

On January 7, 2011, the US case was dismissed. In the dismissal (Allen v. Scholastic, 10-5335, U.S. District Court, Southern District of New York (Manhattan)), Judge Scheindlin held that the works were “distinctly different in both substance and style”.

Meanwhile, the £500 million case in the UK is set to go for trial. (Click here for coverage by IPKAT). In dismissing an application for summary judgment, Justice Kitchens held that the claim “may succeed but that it is improbable it will do so”. Paul Allen (trustee of Adrian Jacobs, deceased) v Bloomsbury Publishing and JK Rowling [2010] EWHC 2560 (Ch) (Chancery Division, England and Wales).

Are there similarities between the two works? The Fortnightly Review scoured the world for a copy of “Livid Land” so Thomas Vranken could take a closer look.

Livid Land (The Adventures of Willy the Wizard: No.1) is a strangely erratic book. On one level the plot is simple enough: Willy enters a wizard contest, the instructions to which he reads on an electronic screen while he sits in a bath. But, nothing seems quite able to hold its author’s attention as he flits from one thing to the next with every new sentence. One minute we’re with Willy’s ‘magic earring’ (which once saved the life of ‘Fatty Fairy’ when it ‘eliminated [her] greedy taste-bud’); the next, that ocker Australian ‘Angry Sam’ (half man, half kangaroo) is thrust before us. Indeed, given the diversity and sheer number of Jacob’s literary inventions, it would almost be more surprising if Rowling hadn’t stumbled upon at least one of them.

Qualitative assessments of literature are often hard to substantiate. However, this is not the case with Livid Land – particularly when it comes to the question of intended readership.

While no Shakespeare, the author of the Harry Potter series always seems very aware of her audience. Though she has attracted the odd more-mature fan, her books are clearly aimed at young readers. Just who Adrian Jacobs is writing for is less clear.

A sixteen page picture-book, one might at first assume that Livid Land is aimed at an even younger audience than Rowling’s. However, several elements within the book seem to confound this expectation. For one thing – in stark contrast to the Harry Potter series – none of the characters in Livid Land are actually children. Indeed, we are told that Willy’s main motive for completing the contest is to ‘receive life membership of Stellar Land. Every wizard’s dream of retirement’. As if to further highlight this oddity, Jacob’s characters seem to be constantly consuming intoxicating substances – whether beer, Champaign (‘champbrew’), liqueur, the ‘finest Havana’ cigars, or ‘intoxicating sorbets’.

Similarly, while much of the language in the book is relatively simple, there are also moments when the terminology is bizarrely complex – one wonders how many children young enough to be reading a picture-book also include the phrase ‘alluvial mining’ in their vocabularies.

Finally, and perhaps most disarmingly in this respect, there are the moments of quasi-sleaziness. We are repeatedly told that the helpless prisoners Willy must rescue are female (‘the women were loaded in’). Moreover, in rescuing them Willy seems to have few qualms in making use of the talents of ‘Apprentice Delight, his pretty new female recruit’ who ‘works her charms’ on the guard – an ‘Italian sailor … who invariably flirted with any female who encouraged him’. Hardly the most child-friendly of material.

That Livid Land is a rather odd book is not hard to see. Ultimately, for all of its chaos, it seems rather soulless too.

Thomas Vranken is a literature student at The University of Melbourne.

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New Models for Book Publishing

February 17, 2011

By Kwanghui Lim

Traditional book publishers have been increasingly challenged by e-books and other digital technologies. We decided to organize a public seminar with industry participants to learn about new opportunities in this area.

A common theme among our speakers was of the growing fault lines between those who create content and those who distribute it. From the point of view of content creators, digital technology is not a bad thing. It presents new ways to reach customers. To a firm like Lonely Planet, printed books, e-books and apps are alternative and useful delivery mechanisms. The heterogeneity is a good thing since each delivery mechanism has its strengths and weaknesses. For example a map-based application on your mobile phone may be useful for navigating the streets of Melbourne, while a printed travel book might be preferred if you are travelling the Australian outback (books are more durable than electronic devices; they also require no electrical power).

Authors are beginning to explore new pricing schemes. For example several authors are trying to sell a larger volume of e-books at lower prices (around $2.99 – $3.99) instead of a small number of regular books at higher prices (say, $10). Other authors are trying “pay what you want” schemes. Our guest speaker Max Barry will be selling his next book as a real time electronic serial, distributing it directly from his website in small chunks and for an attractive price ($6.95). It is too early to know which of these will work well and for whom because the book industry has many different segments of customers with different needs. Furthermore, there are concerns with e-books around the issue of digital piracy. However, we were reminded by one of the speakers that for many authors, obscurity is worse than piracy.

Besides, piracy has long been a threat even with printed books: you will of course remember the photocopy machine which has existed for quite awhile, as well as those suspiciously inexpensive textbooks printed on poor quality paper brought in from various developing countries. It seems to me at least that in the digital world, selling a large volume of e-books at a low price makes a lot of sense. In this context, the serialized e-book has an added advantage because it builds a repeated interaction between the reader the author. Over time this may help create loyalty towards the author.

I see three areas of opportunity and these arise along the fault lines described above.

The first opportunity is with “apps”. It crossed my mind earlier this month that simply repackaging a book as an app gives the author tremendous freedom. With books, the author is stuck with publishing delays, parallel import laws and other legal impediments, not just the need to physically deliver products. With apps, all that is gone. Re-purpose a book as an app and it morphs into a software program, so different rules apply. If you go one step further and make the app exciting to use, you can counteract the myth that printed books are superior. Those who have tried The Elements on an iPad will find it hard to go back to a printed Periodic Table. Similarly, having compared both this app and the book version, I much prefer learning about photography using the app version which is more interactive and has built-in videos.

A second opportunity lies in offering new skills combinations. In order to serialize his next novel, Max Barry combined his computer programming expertise with a passion for writing: he is essentially selling each subscriber a private RSS feed as a separate product. Most people do not have this combination of skills, especially the generation of authors that went to journalism school and did not acquire a technical background. An opportunity exists for people who can bridge this divide and provide new tools and services to help content authors to craft their products and reach customers easily. For example, Graeme Connelly spoke to us about the new “expresso printer” at Melbourne University Bookstore which produces small print runs that were uneconomical in the past. I believe this is only a starting point, e.g., we don’t yet have the equivalent of WordPress for creating books with existing tools being either too complex or too amateurish.

The third opportunity lies in further disaggregating the value chain. I learned from the session that one of the benefits to authors of going with traditional book publishers is their expertise in editing. Publishers convert the messy raw material that is a manuscript into a curated experience that is proof-read, edited and checked. I suspect that the editing activity will split apart into a distinct industry segment, just as has happened in other industries such as semiconductors, which used to be vertically integrated but which now has some firms focusing exclusively on system development and others on chip design or manufacturing. This is pure speculation on my part, but I don’t see why the editing process, while valuable, needs to be tied much longer to the manufacture and distribution of physical products.

It is hard to predict how things will work out and I don’t think the traditional book will completely disappear. This industry is definitely going to be interesting to watch over the next few years.

Kwanghui Lim is an Associate Professor at the Melbourne Business School

This article was cross posted here at Core Economics http://economics.com.au/?p=6702

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Law and Literature: Mark Twain’s Autobiography, Volume 1, Mark Twain Foundation, 2010

December 9, 2010

By Thomas Vranken

‘No happy phrase of ours is ever quite original with us … [being] old, mouldy, antique, and smelling of the breath of a thousand generations’ proclaimed Mark Twain in a 1904 instalment of his recently published Autobiography (2010, 226) – some fifty years before postmodernists expressed similar sentiments about the impossibility of originality. Here lies one of the Autobiography’s central features. For, even when denouncing originality as an historical construct that history itself undermines, Twain’s distinct voice comes through. At the same time, the memoir which looks back over Twain’s life and beyond is also remarkably forward-looking.

In terms of content, this prescience is most apparent in the Autobiography’s political views. Twain is an author known for his progressive opinions including on race, colonialism, gender, treatment of animals, general humanitarianism and religion. If one of the great advantages – to Twain’s mind – of publishing his Autobiography posthumously was that he could enlarge his copyright term until even longer after his death to provide for his children than the law currently allowed for material published in an author’s lifetime, another was that it freed him from the necessity of self-censorship.

Quite often the Autobiography’s revelations are less than sensational – as when Twain permits himself to present, unedited, the letters of his bad-spelling mining friend as they ‘will not see the light of day until Higbie and I are in our graves’ (445). However, there are also some passionate passages, including one wherein Twain rails against the massacre of Filipino civilians by America’s colonial army (‘Christian butchers’, 404). Regardless of his opinion of originality, such sentiment could hardly have been the norm in the times in which Twain was writing.

Peculiarly, while Twain may have believed that what one expressed at least in terms of language could never really be original, there were other elements of a book that could be new. In a moment of (mock) arrogance he declares that:

The form of this book is one of the most memorable literary inventions of the ages … I am the only person who has ever found out the right way to build an autobiography. (29)

As it turns out, this ‘right way’ is to ‘talk only about the thing which interests you at the moment’ (220). The result is a rather rambling book which indulges in frequent diversions and digressions. Indeed, it is a text which reads a little like a more coherent form of the Surrealist’s automatic writing: fragmentary and flagrantly non-chronological, it seems to prefigure the modernism already beginning to emerge in the period 1906-1910 when the book was being written. Similarly, in its smatterings of nihilism – ‘what is it all for[?]’ (419) – there lies an anticipation of post-War malaise.

Mark Twain was sceptical when it came to prophesies – as he wrote in one sketch, ‘there are not books enough on earth to contain the record of the prophesies Indians and other unauthorised parties have made; but one may carry in his overcoat pockets the record of all the prophesies that have been fulfilled’ (‘Burlesque Biography’ in Writings of Mark Twain, Vol 24). However, in this large volume of his Autobiography - the first of three, the droll grandfather of American literature captures something of the despair that would be shared by many authors in the decades to come.

Thomas Vranken is a literature student at The University of Melbourne.

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Food Fight – Who Owns “My” Chilli Crab?

December 9, 2010

By Vicki Huang

The Australian cookbook industry seems totally immune to the tendrils of the GFC.  Sales over the past 2 years are reported to have grown by over 35%. By the end of this year, Australians will have spent $90 million dollars on cookbooks which represents sales of 4.5 million titles annually. At least 10% of these sales are spinoffs from the Masterchef juggernaut. For example, 2009 winner Julie Goodwin has sold $3.7 million worth of her book “Our Family Table”.

There has also been an explosion in food blogging. (Click here for Paul Best’s summary in The Age). Food bloggers themselves can become as famous as celebrity-chefs.  For example, net-sation Julie Powell’s blog (which outlined her efforts to cook Julia Child’s “Mastering the Art of French Cooking”) was turned into a film starring Meryl Streep.

Our own net-sation “Not Quite Nigella” has recently reported that her blogging exploits have been optioned into a book. The Australian Association of Food Professionals in their Food literati awards have begun to award prizes for the best food website and the best food blog. There are also websites that review both cookbooks and food blogs! See www.cookmybooks.com.au

The food revolution in Australia and the food writing it produces shows no signs of slowing down.

But just as there are only “seven stories”, are there only a handful of ways to roast a loin of pork? What kind of copyright issues come up with cookbook writing and food blogging?

Earlier this year the saga of the Seinfeld v Lapine “You stole my recipes!!” case came to an end in the US 2nd Circuit Court of Appeals. In the case, Jessica Seinfeld (wife of Jerry) published “Deceptively Delicious”, a celebrity (by proxy) cookbook that was hugely successful (i.e. was shown on Oprah) that tricks kids into eating vegetables.

Missy Chase Lapine claimed that Seinfeld had infringed the copyright of her book “The Sneaky Chef”. Both books share the central idea of using vegetable purees for use in children’s food. The Federal Appeals court rejected the claims that Seinfeld infringed the copyright and trademark in Lapine’s book, upholding the lower court’s decision. The court held “…Stockpiling vegetable purees for covert use in children’s food is an idea that cannot be copyrighted”.

Having read both the Seinfeld and the Lapine cookbooks, I would say that had the case been in Australia, the outcome would be the same. They look nothing alike, and there don’t appear to be any images or recipes reproduced in Seinfeld’s book. In Australia, as in the US, there is only very thin copyright over recipes and certainly no copyright over ideas. A recipe is also not patentable under s50(1)(b) of the Patents Act which precludes claims that are a “mere mixture of known ingredients”.

The fight over the ownership of recipes goes beyond the courtroom and can have can have geo-political significance. Last year the Malaysian Tourism Minister started a major food fight when she claimed that Singapore staples – Chilli Crab and Hainese Chicken Rice, were indeed “Malaysian”. Singaporeans who are probably the world’s biggest foodies (this comment may start its own food fight) were naturally outraged. The statements caused a flurry of comments in the press across the region.

So what copyright can exist in a cookbook, and relevantly to bloggers, what copyright exists in a recipe that is reproduced online?

A recipe in its written form is likely to be protected by copyright. However, to infringe the copyright, you would probably have to copy and reproduce the recipe verbatim. This is because there is no copyright in a list of ingredients. Nor is there copyright in ideas. There is also no copyright in the expression of a method of preparation unless it qualifies as a literary work i.e. it has to be more than just a list of steps.

Artistic works such as the photographs and illustrations are a different issue and are likely to be separate copyrighted works.

Regardless, numerous fair dealing exceptions to copyright infringement exist, in particular, fair dealing for criticism or review. In this context a user can reproduce the cookbook or recipe so long as there is genuine criticism or review of the work.

So what is a cookbook author or blogger to do?

If taking a “substantial” part of a work, then permission from the copyright owner is required. However, it is arguable whether taking one recipe from a cookbook is going to be considered taking of a substantial or essential part. Moreover, if the recipe was slightly modified e.g. the method re-worded, then the “new” recipe may not be considered a taking at all, rather a new literary work in itself.

It seems however that an attribution protocol has emerged amongst food writers online. I would have to say it is a conservative and polite approach that is probably going to keep most food writers out of trouble. Perhaps this is an example of moral rights applied defacto in cyberspace?!  Here is what I see as the netizen rules of food writing:

1.      When in doubt, seek permission;

2.      If reproduction of the recipe is for criticism or review then it is “fair dealing” but always give an attribution;

3.      If you slightly modify a recipe, then preface your version with “adapted from” and add an attribution;

4.      If you modify the recipe significantly i.e. about 10% of it, then it’s likely that the recipe can be called your own.

Copyright protection on cookbooks and especially individual recipes is very thin. Despite this, cookbook publishing is reaching a high point. This is probably because production values have improved to meet discerning customers who understand the beauty in a coffee table cookbook.

At the same time, food writing is having its own “salad days” and with the plethora of food blogs there has been a lot of recipe reproduction on line. To keep food writing on the Internet at its interesting pace, it’s probably a good thing that recipes attract little copyright protection.  The copyright gods have probably got the balance right.

Vicki Huang teaches at the Melbourne Law School

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Media, Communications and Public Speech: The 2010 Conference of the CMCL

December 9, 2010

By Amanda Scardamaglia

Melbourne Law School’s Centre for Media and Communications Law hosted its annual conference, Media, Communications and Publish Speech on the 25-26 November, 2010. The conference was well attended by over 100 local and international participants from various backgrounds including academics, PhD students, researchers and those working in industry, including media lawyers and publishers. Please click here for conference notes.

The conference had three keynote speakers. The first keynote speaker was Professor Peter Yu, Kern Family Chair in Intellectual Property Law at Drake University Law School and founding director of the Intellectual Property Law Center at Drake University Law School. Yu is also a Wenlan Scholar Chair Professor at Zhongnan University of Economics and Law in Wuhan, China.

The second keynote speaker was Associate Professor Lisa Austin from the University of Toronto Law School.  Researching and teaching in the area of property, privacy and legal theory, Austin’s publications include the co-edited Technology, Privacy and Justice (2007) and Information Sharing and the “Reasonable” Ambiguities of s 8 of the Charter (2007). Austin has also co-authored the report Model Policy for Access to Court Records in Canada (2005), in collaboration with Judges Technology Advisory Committee for the Canadian Judicial Council.

The third keynote speaker was Professor Eva Hemmungs Wirtén, Professor in Library and Information Science and also an Associate Professor (Docent) in Comparative Literature at Uppsala University, Sweden. Her area of research is international copyright and the history of the public domain, writing extensively on the area, including her books, No Trespassing: Authorship, Intellectual Property Rights and the Boundaries of Globalization (2004) and Terms of Use: Negotiating the Jungle of the Intellectual Commons (2008).

The conference was opened by Professor Peter Yu, who gave an entertaining and fascinating presentation on Internet Freedom and Intellectual Property Rights. Yu’s paper highlighted how although Internet freedom and intellectual property rights are complementary in nature, they can also conflict with each other.

Yu positioned this discussion in light of countries that heavily restrict information, where there is a greater potential for conflict between Internet freedom and intellectual property rights. In describing the difference between high content and low content cultures, Yu explained that as a consequence of this conflict, high controlled societies have to communicate through parody, satire, euphemisms, literary allusions, vague, coded phrases and graphics, providing some entertaining visual examples of this in China.

Yu concluded by foreshadowing some ways to resolve the tension between Internet freedom and intellectual property in information regressive societies including by providing limitations and exceptions such as fair use, the right to parody, compulsory licenses and the use of open content/creative commons.

Lisa Austin closed the first day of the conference, with her engaging paper on Privacy: Rights, Risks and the Rule of Law.

The second day of the conference was led by Professor Eva Hemmings Wirtén who gave a keynote paper titled Scandal, Slander, and Science: Duelling over Marie Curie, 1911. Wirtén, who is currently writing a biography of intellectual property through Marie Curie’s career entitled The Intellectual Properties of Marie Curie (due for publication in 2013), presented an outline of what is to be the second chapter of her book. She focussed on the year 1911, which Wirtén called Marie Curie’s annus horribilus.

Wirtén gave a compelling and insightful account of the scandal of the Langevin affaire, and the five duels that ensued as a remedy to slander, even featuring some archival reel footage of those duels, much to the amusement of the audience.

Several panel sessions were conducted around these keynote papers, covering a wide range of topics, including politics and power; arts, texts and broadcasts; defamation reform; defamation and public debate; social comment, as well as a panel considering new commerce issues.

The second day’s panel sessions included discussions on freedom of information and expression; user generated content; government information, Internet; privacy, secrecy, publicity. There was also a panel dedicated to the issues surrounding the National Broadband Network and another on extreme speech.

This was one of the most successful conferences to date with new frontiers in media and Internet law well canvassed. Speakers from the EU and China also served to bring valuable insights into this dynamic area of law. Selected papers will be published by the Media and Arts Law Review.

Amanda Scardamaglia is a Teaching Fellow and PhD Candidate at the University of Melbourne Law School.

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Copyright: The Next Generation

December 9, 2010

By Matthew Nicholls

The rise of the Internet, and in particular peer-to-peer file sharing has had a significant impact on the incidence of copyright infringement, particularly in relation to works such as sound recordings and films.

Importantly, in Australia, a person who authorizes the infringement of copyright is treated as if they themselves directly infringed copyright: Roadshow Films Pty Ltd v iiNet Ltd (No 4) (2010) 269 ALR 606 [iiNet] (note the appeal in this case was heard by Full Federal Court in August; judgment is still reserved). Click here for earlier FR post on the case.

Justice Cowdroy at first instance in the iiNet case re-affirmed the traditional approach that:

  • providing Internet access is not the same as “providing the means” to infringe copyright. In that case, the “means” by which the applicants’ copyright was infringed was not by the iiNet Internet service, but by the iiNet user’s use of the BitTorrent system;
  • having regard to the factors set out in section 101(1A) of the Copyright Act, iiNet had not authorized the users’ infringements. Specifically, his Honour found that a scheme for notification, suspension and termination of customer accounts was not a relevant power to prevent copyright infringement pursuant to the Act; nor in the circumstances was there a failure to take reasonable steps within the meaning of the Act; and
  • an ISP in iiNet’s position could not be said to formally or officially “sanction, approve or countenance” the copyright infringement.

The National Broadband Network

The Australian Government’s proposed National Broadband Network (the “NBN”) should it proceed, and Australia’s growing digital economy pose significant challenges to our system of copyright law.

The NBN will create unimagined opportunities for the infringement of copyright.  Emerging digital technology and increased broadband capacity mean that the marginal cost of reproducing and disseminating exact copies of protected digital works is rapidly moving towards zero.

As the cost of reproduction moves towards zero, the cost of enforcement of copyright escalates. With sites such as YouTube boasting 24 hours of new video footage being uploaded every minute, the problems with identifying and pursuing individual copyright infringements make the value of copyright seem hollow. Click here for an earlier posting on Viacom v YouTube).

International Responses to Copyright Infringement – “Three Strikes” System

How Australia deals with online copyright infringement may be referred to the ALRC, but how have other jurisdictions dealt with this issue?

In recognition of the inability of traditional mechanisms of copyright enforcement to address peer-to-peer copyright infringement, several countries, including France, the UK and New Zealand have implemented (or have attempted to implement) a “three strikes”, or graduated response system. Essentially, the three strikes system shifts some of the onus of the enforcement of copyright onto Internet service providers (“ISPs”). (Click here for an earlier report on the UK three strikes system).

However, the three strikes system is highly controversial and has consistently been opposed by interest groups such as the IIA (the Internet Industry Association) and ISPs (such as TalkTalk, the second largest ISP in the UK).

In the Australian context, commentary surrounding the NBN has emphasized the fundamental importance of Internet access. In light of this, the question arises as to whether severance of a person’s Internet account is a proportionate response to copyright infringement.  Note, for instance, the Australian Minister, Senator Conroy’s frequent references to the Internet as being as important as electricity.

Certainly, it is strongly arguable that disabling Internet access is not a proportionate response when one considers the impact that Internet disconnection may have on:

  • students (where many resources are online or where studying by correspondence);
  • the elderly or disabled (who use the Internet for services such as online grocery shopping and banking);

The issue is further complicated in cases of shared living or families where the entire household is disconnected, so it may not only be the person who commits the copyright infringement who is punished.

Does a 3-strikes system fit with iiNet?

Finally, the three strikes system does not sit comfortably with the Federal Court decision in Roadshow v iiNet.  The IIA argues that

“The recent iiNet case established the principle that an ISP who is merely providing the means of access should not be liable for the acts of their users where those users abuse facilities to breach third party rights.  ISPs believe they should not be required to act as enforcer of those rights.”

Is legal intervention the appropriate response?  Changing business models and commoditization

“Commoditization” of copyright works refers to a phenomenon whereby the industry’s mode of competition moves away from innovation of the underlying product (the copyright work) and towards alternative methods of building value.

Under this analysis, as the market matures and barriers to entry erode, competition intensifies and prices for the underlying product are pushed down.  As a result, rights holders look for new ways of leveraging the value work itself to create new revenue streams.

The IIA stresses the need to ensure that policy does not damage Australia’s capacity to innovate and compete in the global digital economy.  It says, “to the extent that Internet users, mainly the young, engage in infringing activities, we suggest the causes may be rooted in market failure more than they are in any regulatory shortfall.”

A recent report by the UK Intellectual Property Office found that, “digital technologies have altered the value chain.  Authors can publish directly in the online world: commercial rights holders can sell product in new ways, and consumers have an enormous quantity of legitimate content at their fingertips, both free and paid for.  For many creative businesses, the changing value chain is making the situation more complex as it is more difficult to realise economic benefits with digital technology, but there may be new opportunities to do so.”

The IIA states that it, “supports the development of new models to facilitate maximum access to content and innovative content based services.  Possible examples include; revenue sharing arrangements with ISPs, ‘hyperdistribution’ where, for example, advertising is embedded in the content, and arrangements like those between YouTube and Warner Music which now permit users (who now number in the tens of millions) to upload self created video content with commercial soundtracks, owned in this case by Warner, in return for a revenue share arrangement on advertising.”

Examples of commoditization of digital content

Not surprisingly, then, business models have emerged which allow the user to use a copyright work for free and rely on advertising, or generating a massive, loyal following (rather than the worth of the product itself), to create revenue.

These models may be contrasted with traditional revenue-generation models, such as buying a CD, or downloading songs from iTunes.

Google (including Gmail, YouTube, etc.) and Android phone technology

Essentially, under the Google model, advertisers pay to be the top hits (“sponsored links”) in any combination of search words (this is done through auction every time a search is conducted) as well as paying for ads in side bars.

This has proved to be a highly effective model, to the point where an estimated 60% of Internet users use Google. This has earned Google billions of dollars in annual revenue and being declared “an economy unto itself”.

And Google has taken the concept further with its Android technology, which is offered as “less than free” to phone companies. That is, Google actually pays phone manufacturers to use the Android operating system, because Google potentially makes money from every click on Google (as advertising is sold on every click).

Guvera – “paid for” (by advertisers) music downloads

Guvera is an Australian initiative (it is an unlisted Queensland-based public company).

Under the Guvera model, advertisers create channels for specified groups of consumers, and then pay for music on behalf of targeted consumers. The initiative is still in its infancy, but Guvera hopes that its website will be “a piracy killer”, emphasizing that its Website was designed in recognition that a whole generation of Internet users believes that downloaded music should be free. (Click here for AFR reportage).

Radiohead – free music downloads

In 2007, British alternative rock band Radiohead offered the entire album In Rainbows through their website: fans were asked to pay whatever amount they wanted to digitally download it.

According to Internet marketing blog DoshDosh, this “donation-style” system is significant because of Radiohead’s reputation and the size of their fan base, which easily reaches into the millions globally.

The band is able to offer their songs in a digital rights management-free mp3 format because they do not have a record label; hence they own complete distribution rights over their music.  This essentially bucks the industry trend of reliance on record companies and marketing teams to produce, commercialize and promote music records.

Alongside the digital download of their album, Radiohead is also selling a £40 box-set which consists of the CD album, vinyl records, additional songs as well as artwork and lyrics.  Whilst this “viral” marketing assault by Radiohead clearly resulted in massive foregone album sales revenue, it also reportedly resulted in enormous revenue in other areas, including a sell-out concert tour, as well as unquantifiable augmentation to their fan loyalty, reputation and brand awareness/strength.

Similarly, rock band The Smashing Pumpkins released their Machina II album for free on the Internet by sending 25 physical copies of it to fans active in the online music community, with explicit instructions for re-distribution.

This approach has been successful for a number of (already highly popular) bands and contrasts with the approach taken by rock band Metallica, who sued Napster in 2000, thereby distancing them from fans and leading to a major public relations disaster for the band.

The following table summarizes some of the models for commercialization of copyright material (music), both traditional and new.  Of particular interest is the fact that not all successful (or potentially successful), non-traditional sales models involve copyright infringement (note that the copyright is held by the musician/record label etc):

Model 

Issue

 Licence to use paid for by… Copyright infringed? Encourages artistic innovation? Value lies in… Issues?
Trad. online sales model (e.g. Sony, iTunes) Consumer No Yes The song itself Goes against developing social expectation that Internet materials should (and can) be free
P2P file sharing No-one (no licence to use) Yes – by the person making the song available via P2P and by each person who downloads it No No value Illegal; no reward for those who are creative
New Model (Radiohead) Musician chooses to make music available for free but (in some cases) charges advertisers to place ads on the page where the song is available No Yes – if the song is a success then people will pay more to advertise (analogous to ad breaks in a successful TV show) The sheer number of people d/loading (ad potential) Arguably will only work for bands that are already successful
New Model (Guvera) Advertisers on behalf of consumer No Yes – copyright owner still receives $$$ The sheer numbers of people d/loading (ad potential) Untested as yet; needs industry support to succeed

Conclusion on protection of online copyright works

Policy in relation to the protection of online copyright works is currently in a state of flux. This is largely because the advent of broadband (and projects such as the NBN) is a game changing development and policy-makers are still in “catch-up” mode.

Legislatures and courts in Australia and abroad have so far taken a fairly traditional approach to dealing with the protection of online copyright works. Some novel measures (such as the “three strikes” approach) have been touted, although it is yet to be seen what impact such measures will have, and indeed what counter-measures might be adopted by ever-exuberant copyright users.

Ultimately, however, it is expected that creative creators will continue to think outside the square to develop new business models – and that this group will manage to stay “ahead of the curve” when it comes to generating value (and new revenue streams) from their creative efforts.

This paper is amended from a conference presentation given by Mr Nicholls at the CMCL Conference, Melbourne, November 25-26, 2010

Matthew Nicholls is a principal of Nicholls Legal, contact: matthew@nicholls-legal.com.au.

The assistance of Rebecca Measday, Law Clerk at Nicholls Legal, in preparing this paper is gratefully acknowledged.

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The Parallel Bars: Australian and American copyright law compared

September 23, 2010

By Assoc. Prof. David Brennan

In view of the Polo/Lauren v Ziliani litigation that concluded in Australia with a 2008 Full Federal Court decision it is interesting to observe a similar case going to the US Supreme Court in the Omega v Costco litigation (summary here at IPKat).

In both cases the plaintiff seeks to rely upon copyright in a device (logo) trade mark. In both cases, the logos were copied onto parallel imported goods, being goods lawfully made offshore and imported into the relevant copyright territory without the permission of the owner of the local copyright – Polo/Lauren and Omega respectively. In both cases there is no suggestion that the parallel imports are not ‘genuine’, nor is there a suggestion that they are of any lesser quality than goods distributed by the plaintiff. In both cases the plaintiffs sought to rely upon their copyright ownership in their logos to restrain the importations. In both cases, the disputes occur in territories where the effects of trade mark law exceptions deny to the plaintiffs any right in their registered marks to restrain the parallel imports.

The copyright positions on parallel importation in Australia and the US have similarities and differences. Both countries confer a right in copyright owners to restrain the parallel importation of goods embodying the owners’ protected copyright subject matter (the parallel importation right). Each country has, however, created quite different parallel importation exceptions.

Australian copyright law has over the past 20 years been notable for its waves of reform which have created specific exceptions to the parallel importation right in relation to particular types of physical items, such as the 1991 reform creating a qualified exception for books, or for copies of particular subject matter, such as the sound recordings exception enacted in 1998. Also in 1998 another exception was created to the parallel importation right arising from ownership of copyright in an ‘accessory’ to an item. An accessory is defined to be things such as packaging, written instructions and – important for the Polo/Lauren case – ‘labels’.

US copyright law has no such specific array of exceptions to the parallel importation right. Instead, it has since the 1976 Act a codified first sale (exhaustion) doctrine. It provides a general exception to a broad distribution right conferred upon owners of US copyright. Hence while an owner of US copyright has a right to restrain the commercial distribution of copies of its works, which includes the parallel importation right, third parties under the first sale doctrine are entitled to distribute copies ‘lawfully made under’ the US Copyright Act. In Quality King v L’anza Research this doctrine was interpreted by a 1998 US Supreme Court to create an exception to the parallel importation right for the importation of goods that were manufactured in the US with the authority of the US copyright owner, exported to a foreign territory, and then imported back to the US by an intrepid parallel importer. That is, goods that have been on a ‘round trip’.

With that as the back-drop, the salient aspects of the two cases can be juxtaposed.

In Polo/Lauren, the key question before the Australian Full Federal Court was whether an artistic work in the form of polo player logo stitched onto the front of parallel imported shirts comprised “a label”, and therefore outside of the plaintiff’s parallel importation right by virtue of the specific ‘accessory to an item’ exception. The Australian court had little trouble in concluding based on a purposive interpretation of the legislative text that the logo (in the court’s words ‘a representation of a polo player swinging a mallet whilst astride a cantering polo pony’) was indeed a ‘label’ and fell within the exception.

In Omega the key question before the US Supreme Court is whether a watch made by Omega in Switzerland, and to which an artistic work in the form of a globe logo was stamped to its underside, should be regarded as being ‘lawfully made under’ the US Copyright Act, and therefore outside the plaintiff’s right to restrain third party importation by virtue of the general first sale doctrine. A US Court of Appeals has concluded that the ‘round trip’ extended operation of the doctrine could not apply as the goods were manufactured in Switzerland. That conclusion is seemingly consistent with the views of the three leading US copyright texts (Goldstein, Nimmer, and Patry), and is a conclusion supported by the US Department of Justice. The US Supreme Court is however now reviewing its correctness, and in so doing will decide whether (and if so, in what circumstances) the first sale doctrine can apply to imported goods manufactured outside the US.

Three points can be made:

  • Both Polo/Lauen and Omega are odd copyright cases. The substantive intellectual property in both cases is trade mark. Copyright incentives are clearly not required. Moreover the trade mark laws of both Australia and the US operated to deny to the registered proprietors a right to restrain parallel importations in the cases based on trade mark rights.
  • Australian copyright law as it relates to parallel importation has been moulded by repeated legislative reform. In stark contrast, US law has been left untouched by Congress, and the major development since 1976 has been the Quality King decision.
  • The Australian Polo/Lauren decision was interpreting a recently enacted, specific exception. Therefore the object and purpose of the provision was clear and the scope and impact of the decision was contained. The US Omega decision on the other hand could have potentially far reaching consequences. Because the first sale doctrine is a general exception the decision could possibly curtail the parallel importation right of all owners of US copyright. Also, and in contrast with the Australian provision, the contours of the first sale doctrine were fixed in a legislative history dating to the early 1960s.

It is worthwhile to reflect on the second and third points in the context of a recent book importation Australian review. Over 2008-2009 the Australian Productivity Commission conducted a public inquiry into the existing qualified book exception to the parallel importation right introduced in 1991. Under that exception, the parallel importation right can be exercised unless a book is unpublished in Australia 30 days after its foreign publication or is otherwise not supplied 90 days after a customer order for the title has been placed. Larger Australian book retailers sought expansion of the exception and the abolition of the parallel importation right for books. This would have enabled the retailers to have unfettered access to cheaper books wholesaled abroad. Australian authors sought retention of the qualified exception upon the parallel importation right, arguing that the ability to exercise some territorial control upon books was important to protect against (for example) offshore remaindered stocks of Australian authored-titles flooding the local market, and prejudicing the viability of Australian professional authors. The Productivity Commission ultimately recommended expansion of the exception and abolition of the parallel importation right for books. By a (reportedly) narrow margin the Australian government cabinet ministers rejected that recommendation.  (Click here for reportage).  The law has therefore remained unchanged.

The highly democratic and sophisticated policy contest that was involved in this Australian debate over the parallel importation of books is a far cry from the blunt means of reform that is represented by judicial interpretation of the US first sale doctrine, an interpretation which could impact on all copyright-dependent industries without discrimination. The Obama administration in opposing the grant of certiorari reminded the US Supreme Court that Congress ‘deliberately granted copyright holders the right to control importation of lawfully made copies’ and ‘remains free to amend the Copyright Act in order to adjust the balance’. As can be seen from the book debate in Australia, questions of public interest can be finely balanced in this area. Arguably more nuanced outcomes can be arrived at outside of the often binary nature of judicial decision-making.

David Brennan is an Associate Professor at the Melbourne Law

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The Slender Reeds of Originality and Authorship: Fairfax Media Publications Pty Ltd v Reed International Books Australia Pty Ltd [2010] FCA 984

September 23, 2010

by Kim Weatherall

So you have some kind of maybe-copyright-protected-work. It’s, say, a magazine or a newspaper or something. Someone copies bits. You want to sue, because you want to stop them. You go to a lawyer. And they tell you:

  • That where you might have thought you have a newspaper, all of the bits of which are valuable for their own reasons, but, you know, it’s a newspaper, in fact the lawyers will have to play a kind of Russian-doll game to work out what ‘copyright-protected works’ exist: everything from, perhaps, individual headlines to a compilation – that no one ever sees of course – of the articles abstracted from all the advertising and photographic material; and
  • Oh, by the way, to prove your copyright you must have lawyers and experts traipsing through your office watching every move of your editors, sub-editors, journalists and tea-ladies (or tea-blokes) so that the intellectual efforts of their activities can be traced, described, and set out in affidavits. (Oh, and then, when you’ve done all that, the other side will argue that the evidence isn’t representative and doesn’t prove anything because of the lawyers being there, how’s that for cute?)
  • Oh, and you’ll need to pick an edition, articles, and headlines where the actual human beings who wrote them can depose to the process they went through in putting together that particular edition and those particular headlines.

Counter-intuitive? Maybe? No bones about it, actually. We’re in a bit of a mess. We meaning ‘the copyright-erati’ of Australia. There’s a lot that I think is right about the decision in Fairfax Media Publications Pty Ltd v Reed International Books Australia Pty Ltd [2010] FCA 984. But it is worthwhile taking a little step back and asking yourself: does this process of proof, and this process of reasoning, make any sense at all? If not, how did we end up here? Hold those thoughts.

The case

I don’t need to summarise the case here. Google the case name and you’ll find several very good and succinct summaries produced by various law firms. In short, we have a company (Reed) that is making money by (as part of a larger news type service) providing to subscribers the Australian Financial Review headlines and short abstracts of the articles (well, 40-60% of them anyway). Fairfax not happy. Fairfax sue. They claim copyright in:

1. Each individual headline;

2. Each Article including its headline;

3. The compilation of Articles in each edition (sans advertising and photograph materials – that is, just the article texts with headlines); and

4. The compilation being the whole of each Edition.

So they have to show copyright in each of these, and, if there is subsistence, infringement.

Copyright in headlines: is a headline a copyright work?

Here is where I think it is fair to say that the court clearly got the answer right. Headlines are not copyright works, and so the court concluded (actually, the court was a little more cagey than that. At paragraph 50 her Honour Justice Bennett notes that ‘this does not exclude the possibility of establishing a basis for copyright protection of an individual headline’. The courts always make that statement in these cases and as a result, people will keep arguing that their particular title, headline, or whatever is so very original it should be protected. It’s a shame really).

Her Honour’s finding here is clearly consistent with a very long line of authority in which common law courts have consistently refused to recognise copyright in single words, titles, and short phrases: think Dick v Yates (1881); Francis Day & Hunter v Twentieth Century Fox (1940), or, more recently, State of Victoria v Pacific Technologies (Australia). Like the judgments in those various cases, Justice Bennett’s judgement shows perhaps a little discomfort in finding a reason to exclude the headlines (well, either that or just wants to be very comprehensive) – and so throws every possible argument at it. So we know that the headlines in the case were not copyright works because:

  1. There are very good public policy reasons dictating otherwise. Not least, newspaper headlines are titles and every Tom, Dick and Harry (and every reference or bibliographic resource) who wants to refer to the newspaper article needs, as a matter of course, to reproduce the headline. It would be really inconvenient if that turned into copyright infringement. Um, yes, yes it would.
  2. The headlines were not sufficiently ‘original’.  Adding clever puns isn’t enough.
  3. The expression embodied in the headlines was, a bit like the phrases in State of Victoria, a bit too close to the ‘idea’ in the headlines;
  4. They are just too insubstantial and too short to qualify for copyright protection. Not every piece of printing or writing that conveys information can be subject to copyright.

Number 4 seems to be the reason on which her Honour puts the most emphasis, followed by the sheer inconvenience of finding otherwise. That’s helpful, I think, and correct. “Too insubstantial” is the kind of reason that is hard to overcome with ever-more-extensive evidence about the amount of work/work/inventiveness that goes into generating a phrase/title/headline. And relying on the merger of idea and expression, as per State of Victoria, is also a little tricky beyond the facts of that particular case. You can (outside those special facts) usually find other words to express something.

So, all in all, this is a good bit of judgment.

Is the compilation of articles (without ads and without photographs) a literary work?

Justice Bennett says yes, rejecting Reed’s argument that it is a ‘hypothetical work’ since it never actually exists or is sold to the public like that. It’s kind of hard to argue with this assertion. We don’t have a lot of well-established principles for working out whether there is ‘a work’ or not or finding the parameters of a work in copyright (if you’re interested, one of the better discussions of this I’ve seen was Mike Handler’s article on Broadcast copyright in the Sydney Law Review). But again, like the failure to simply ‘rule out’ headlines as ever being works, this kind of reasoning has the unfortunate result of encouraging a Russian-Dolls type dissection of a product into ever-smaller-and-less-coherent ‘bits’. This has to lengthen pleadings and complicate copyright arguments. It’s a shame. But by the same token I don’t see a clear way to avoid this (note to self – think about that sometime).

Is an article together with its headline a copyright work?

Here’s where it all gets a bit more dicey. The question here is whether it’s right to see an ‘article together with its headline’ as a copyright work.  In a post-IceTV world, you have to be able to identify authorship to find copyright. So the article with headline has to either be a work of authorship, or a work of joint authorship. Problem: mostly, it seems, journalists don’t write headlines (headline-writing being a special skill, as quite extensive evidence sought to prove). So ‘headline plus article’ isn’t a work of authorship.

Anyway: is it joint authorship? Well, that’s kinda awkward too, because for one thing, the journalist’s name is on the by-line (which is a bit weird if they’re only a joint author, perhaps).

But at a more fundamental level, you have a problem that editors edit, and the practice has been to see editing as a distinct function not conferring joint authorship. This may or may not be fair: there’s been plenty of recognition that there are cases where the existence of a good editor has made great writing, in particular, possible – taken undigested genius and turned into something that the rest of us can hold sufficiently in our head to enjoy. But despite whatever evidence might be thrown at the question, I suspect it would be quite hard for a court to turn around and hold an unattributed editor as a joint author. Thus Justice Bennett states affirmatively (paragraph 94) that “straightforward editing of articles for the purpose of inclusion on a page, which may or may not involve substantial changes to the article, is not enough to attract joint authorship for copyright purposes.” Later (paragraph 97) she says that ‘sub-editors edit in the traditional sense, in a manner insufficient to make them joint authors’.

This is interesting when you think about it. First, her Honour clearly has in her mind a picture (a ‘traditional’ one, a ‘straightforward’ one) where editing is not joint authorship. I wonder though. Does this depend on job title? A separation of tasks in time? Would it be different if, say, the sub-editor had come up with the story idea in the first place (so had some more intellectual input into forming the article, if not its text?) In short, I don’t know if I know what ‘straightforward’ editing is, really. I have to say, too, that this reasoning, while logical, and consistent with what we’ve seen emerge post-IceTV as copyright’s unrelenting focus on human authorship, is going to cause plenty of headaches for people involved in collaborative creation. Think about it. IceTV (at least the Gummow et al judgment) seemed to put a great deal of focus on the author needing to be the person putting ‘pen to paper’ (or fingers to keyboard, so to speak). This looked like a shift away from the Cala Homes reasoning which allows for significant intellectual contributors to be authors. Now Justice Bennett tells us that fingers to keyboard isn’t always going to be enough – even if you’re taking out or putting back in large amounts of text while preserving the gist of the story (which I would have thought was reasonably intellectual). And of course Phone Directories has already told us that fingers to keyboard isn’t enough if you’re too rule-bound. I don’t know about you, but I’m having more and more trouble working out who is an author, unless it’s in the truly traditional kinds of literary and artistic creation.

In a sense, her Honour avoids getting into the guts of these questions by saying there isn’t the evidence of the actual collaboration process on the actual articles in question in the case: about, say, the extent of re-writing of those articles, or the level of involvement by a given editor (did the same person re-write and contribute the headline?). But that just brings me back to what I started with in this comment: where are we at, in copyright, when you have to try to get that kind of evidence? How realistic is it to expect that journalists who work on different articles every day will remember the particular process of collaboration leading to a particular article?

I would not want to be litigating these issues now. Can’t wait to see what the Full Federal Court makes of it all.

Infringement

But wait! There’s more! Having found no copyright in headlines, or in Articles including headlines, Reed’s abstracting service raises some really interesting questions about whether they have taken a ‘substantial part’ of the overall Article or Edition compilation. Her Honour found the answer to that was no, and a key part of the thinking here seems to be that compiling is compiling, and headline-writing is headline-writing, and if you’re claiming copyright for your compiling, you can’t claim for your headlines. This ensures that you can’t get ‘greater protection for an element of the compilation’ via compilation copyright than you get for the thing (the headline) on its own.

I can see the argument. But I wonder if it’s right to separate out the writing and the compiling here, and what the implications are for future legal arguments.

Can you really separate the two? If the headlines are written and re-written in the course of putting the whole thing together, and are written so as to work in sympathy with all the other headlines and content, is it right to say the writing of the headlines is a separate act? Could be regarded as artificial, I think. I’ll have to think about that some more.

Also, if you adopt this line, how, as a lawyer, would you plead the next case? Well, you’re going to have to do what Fairfax has done here, aren’t you? Identify a series of ever-more-specific works capturing the particular creativity that you say the other side has taken, because looking at the whole (compilation) won’t help you.

I’m going to have to think about this substantial part analysis more. But there is something about it that is making me uncomfortable. It’s logical. But, in a preliminary way, I think what is bothering me is that it is a kind of twisted, torturous copyright logic, not a real human being logic (and yes, I know, this is a case. But when logic strays too far from lay sense, you should be asking yourself why). On this analysis, the headlines just … disappear. They’re not works. They’re not part of articles. They’re not part of the compilation. They’re … invisible to copyright altogether. I wonder about that.

The final section of the judgment addresses fair dealing – finding this is fair dealing for the reporting of news. This post is already too long, so I’ll just say: how far have we come, that competition and substitution was so important in The Panel and so unimportant in this case.

Conclusion

This is a wonderfully interesting, mind-bending kind of judgment to read. I’m sure I’ll have more to say at some point. I should emphasise, perhaps, that I think the outcome is probably correct. Headlines shouldn’t be protected. News should be able to be reported. But aside from those ‘headline points’ (sorry), there remains… much to ponder.

Kimberlee Weatherall is a Senior Lecturer at the University of Queensland

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