Futurist Prediction Update – Copyright – Update 1

Me and my junior editor, Kleopatra

Me and my junior editor, Kleopatra

I’ve written about Copyright since 2008. My original articles were explanatory, for friends and relatives. That changed when Doctor Mihály Ficsor borrowed Barry Sookman’s blog. That post, which consisted of so many inaccuracies that I couldn’t count them, got me involved.

Unfortunately almost no one involved understands the subject completely. I’m including myself in this. I am not a lawyer, and do not pretend to be one. I do know business, technology, the arts, and distribution systems.

I also know humans. I spent a long time working as a sales rep cold calling some of the largest companies on the planet, and making sales to them. I managed to break into customers that were big enough to buy Sony Corporation in total, not just Sony BMG, the music arm.

The members of the Motion Picture Association of America and the Recording Industry Association of America aren’t all that impressive to me. Nor are their lawyers. While I was working in sales I ended up going head to head with some of the legal big boys in Washington D.C. and Sacramento.

So where am I going?

A while back I made a prediction. I made it off the cuff, and I didn’t draw too much attention to it at the time. My reasoning was fairly simple, and based on history.

  1. When Microsoft gained a majority market share in the computer operating system market, they changed their contracts to block manufacturers from installing alternative operating systems. This anti-competitive move killed several competing software manufacturers, leaving only Apple, who made their own hardware, and the GNU/BSD and GNU/Linux operating systems which are freely given away.
    Because of this action, Microsoft was found guilty of anti-trust violations in the United States and several other countries. Many people still refuse to believe that Microsoft was guilty of killing off its competitors, even though the court documents are readily available.
  2. International Business Machines (IBM or Big Blue) fought a long running war with the United States Department of Justice over anti-trust allegations. IBM required its mainframe customers to purchase IBM software as part of the package when they purchased the computer. Wikipedia has a good article about this.
  3. The California Air Resources Board was required by the Federal Environmental Protection Agency to reduce air pollution. One target was automobiles. CARB however soon ran into a severe problem. To gain further reductions the automobile manufacturers had to use more advanced computer systems.
    The manufacturers regarded this as a means of retaining service customers. They refused to sell the tools to diagnose faults in their Electronic Control Units (ECU) to independent repair facilities. CARB passed a rule requiring the manufacturers to sell these diagnostic tools for fair market prices to anyone (DOC FILE WARNING).
  4. The Ethyl Corporation was founded to manufacture and sell leaded gasoline as an anti-knock additive. Ethanol could have been used, but there wasn’t any money in ethanol (ethanol was used in Europe until after World War II), which could be grown by any farmer. Tetraethyl Lead was a manufactured product, and could be sold for a reasonable profit. That it was a neurotoxin, that poisoned the workers that manufactured it, the customers that used it, and the people who lived near roads was a minor detail. Curiously ten years after Tetraethyl Lead was phased out of use crime rates started dropping. That this is what would happen in cases where lead poisoning was slowly being flushed from the body is probably only a coincidence. See Declaring victory: Getting rid of ETHYL Leaded gasoline took too long and cost too much, but it’s still a great achievement… and Charles F. Kettering and the 1921 Discovery of Tetraethyl Lead In the Context of Technological Alternatives.
    Ethyl Corporation fought the introduction of Unleaded Gasoline. They then fought the phase out of Leaded Gasoline. Without Leaded Gasoline the company has no reason for existence, public health be damned.
  5. This one is apocryphal. My uncle was in the Canadian Army in World War II. Actually a couple of uncles were. My dad was turned away by the doctor because he had a heart murmur. My uncle told me that they were still using bolt action Lee Enfield rifles in his regiment because the manufacturer had managed to sell someone in procurement on how safe they were compared to automatic weapons.
    I don’t know if the story is true, but I do know that he carried a Lee Enfield bolt action rifle during his term of service. The German soldiers he was fighting against all carried automatic weapons. It doesn’t do you much good to have a safe weapon if you are dead.

I think you see the pattern here. In each case, the dominant market holder took action to stay the dominant market holder, AGAINST the best interests of the consumer. Money, money, money, money!

You’ll also notice that I avoided mentioning any of the long history of the entertainment industry’s own battles with technology.

At this point I need to take a long quote from an earlier article titled Doublespeak from Sookman, dated January 2, 2010. It was actually the last article posted on my original Blogspot blog before I migrated everything to MadHatter.ca.

DoubleSpeak from Sookman

Hum, what to say. Barry publishes an article titled ITIF Report: Strategies for Reducing Digital Piracy.

Now that is exactly what the report is named, no doubt about that. And Barry’s quotes are accurate. But…

Barry isn’t stupid. Doctor Robert D. Atkinson, President of The Information Technology & Innovation Foundation isn’t stupid either. It appears that they know George Orwell too damned well. Remember that beautiful line in Orwell’s classic book 1984, ‘We have always been at war with Eastasia?’

What we have here is a classic form of Doublespeak. To quote Wikipedia’s article on Doublespeak, ‘Doublespeak (sometimes called doubletalk) is language constructed to disguise or distort its actual meaning, often resulting in a communication bypass. Doublespeak may take the form of euphemisms (e.g., “downsizing” for layoffs) or deliberate ambiguity.’

The euphemism here of course is piracy. What they actually mean is copyright infringement.

But wait you say – doesn’t everyone use the term piracy for copyright infringement? I mean there’s even a Pirate Party which has evolved into a worldwide political movement. Much to my surprise, I found out when researching this article that the usage of the term piracy for copyright infringement actually predates the concept of copyright infringement! From Wikipedia:

For electronic and audio-visual media, unauthorized reproduction and distribution is also commonly referred to as piracy (an early reference was made by Daniel Defoe in 1703 when he said of his novel True-born Englishman : “Its being Printed again and again, by Pyrates”[2]). The practice of labeling the act of infringement as “piracy” actually predates copyright itself. Even prior to the 1709 enactment of the Statute of Anne, generally recognized as the first copyright law, the Stationers’ Company of London in 1557 received a Royal Charter giving the company a monopoly on publication and tasking it with enforcing the charter. Those who violated the charter were labeled pirates as early as 1603.[3]

The legal basis for this usage dates from the same era, and has been consistently applied until the present time.[4][5] Critics of the use of the term “piracy” to describe such practices contend that it is pejorative and unfairly equates copyright infringement with more sinister activity,[6] though courts often hold that under law the two terms are interchangeable.[7]

Fascinating. So historically the term ‘Piracy’ was used for ‘Copyright Infringement’ before ‘Copyright Infringement’ legally existed. But we are getting sidetracked. One side of the argument is trying to paint the other side as thieves and murderers. Not a very nice move on their part.

OK you say – everyone called copyright infringement piracy. Why should I? Let me posit you a question. If your entire Ninth Grade high school class decided to take swan diving lessons from the Observation Deck of the CN Tower without parachutes, would you allow peer pressure to make you join them?

Right. You wouldn’t. You’d think they either were idiots, or pod people. But you wouldn’t follow them. So when you are talking about copyright infringement, call it copyright infringement – not piracy.

And remember – these people aren’t idiots. They are using DoubleSpeak to try to gain an advantage in the discussion about Copyright and it’s place in the modern world. By using a pejorative, they wish to convince the general public that their side is in the right, without there being a substantive discussion of the benefits and costs to the public of our current copyright regime. Even more important to them however is that they do not wish under any circumstances to get involved in a discussion of the benefits and costs to the artists of our current copyright regime! Oh my god, that would be terrible!

No. I’m serious. I’m not sure that Barry understands this. He isn’t an artist after all (artist being defined as writer, composer, musician, film maker, photographer, painter, etc. – in simple terms a human or other intelligent being capable of producing works which can be copyrighted). I’m not sure that Robert Atkinson understands it either, after all he’s a gunslinger for hire whose organization has taken conflicting positions in the past. Both will claim loudly that what they are doing is for the benefit of the artists, while a rational evaluation will show that it’s not the artists that benefit – it’s the middlemen. Specifically the CRIA, RIAA, MPAA, IFPI,, etc., etc.

So what exactly is going on if Barry doesn’t understand what he’s doing? Well, let’s take a look at a story that was in Barry’s Computer and Internet Law Updates for 2009-12-28 about an Italian case where a court has ruled that BitTorrent Sites May Be Censored In Italy according to TorrentFreak (note that this story was sent from Barry’s Blackberry – if you wish to go directly to the article click here.

I don’t know what the legal costs have been for the IFPI (probably the industry organization involved according to an earlier TorrentFreak article), but you have to question if the looked for increase of sales would cover them. There is no proof that I know of, that blocking downloads actually causes an increase in sales. But let’s assume that there is. If 1% of the cost of a $10.00 US Compact Disc was be used for copyright enforcement ($0.10 US), and the cost of legal representation was $10,000.00 US, then they would have to sell an additional 100,000 Compact Discs to break even. But could they afford to spend 1% of their revenues on enforcement? What if they only spent 0.1%? In that case they’d have to sell an extra 1,000,000 Compact Discs. The math makes sense. The economic reasoning doesn’t.

When you add up every other ‘Enforcement Action’ that has been taken against ‘Piracy’ the economic justification makes even less sense. So as my Dad would have put it – ‘What the hell is going on here?’

After banging my head against the wall for a long time, I’ve finally come up with a theory of sorts. It fits the facts. It makes better economic justification than ‘Enforcement.’ But it does sound a little bit paranoid. Like something a crazy ‘hatred-driven style of Maoist Guard’ might come up with… So let me lay out the evidence that I’ve seen. Almost all of it is public, so unlike the other side I will provide documentary links (yes, I’m being nasty again). When my evidence is anecdotal, I’ll tell you.

*****

Case 1 – OINK.CD

OINK.CDOink’s Pink Palace was a torrent site that specialized in music. Music professionals such as Trent Reznor of Nine Inch Nails was a member. If we can take the industry representative (IFPI) who spoke to reporter at face value the reason for the raid on OINK.CD was pre-release music. Think – pre-release music. Just where would they have gotten that? In other words the industry was using the police to shutdown a service that their own employees were using! They couldn’t catch them on the inside, so they dumped on Alan Ellis, even arranging for a BBC camera crew to film the raid on his flat. Based on statements made by police at the time, it appears that the IFPI lied police and prosecutors (the police statements were bizarre to say the least).

Now this is where it gets anecdotal. I have friends in low places, and they allege that some of the alleged 60 pre-release albums were deliberately uploaded by the labels. If this is true, and it comes out in discovery (this case is under British law, and it is a criminal case, Regina V. Ellis, so I do not know if Mr. Ellis would be able to do discovery on the IFPI or the labels), it could cause problems for the prosecutors.

For an excellent article about the implications of the OINK.CD enforcement effort check out this article at Demon Baby.

Case 2 – EliteTorrents
EliteTorrents was a general torrent site. To the best of my knowledge it is the only torrent site that has the distinction of being taken down by the Federal Bureau of Investigation. Their crime? A movie industry insider uploaded a ‘pre-commercial release work’ which hasn’t been identified, but is rumored to be Star Wars Episode 3. Right. A movie industry insider commits an act of copyright infringement (is it copyright infringement if the act was done by someone who worked for the company? It couldn’t be classified as theft – nothing is missing!) Unfortunately for EliteTorrents the torrent (not the video) was uploaded to their server. Result is that the site admin spends four years in jail, another admin gets eighteen months, and an uploader escapes jail but looses his job. Whether he is the uploader who actually uploaded the file that brought everything down isn’t mentioned, but it is doubtful, since he worked for Lockheed Martin. Oh, and a movie exec says that the release made no difference at the box office.

Case 3 – Demonoid
Demonoid is an odd one. While it is a private tracker, it is so high profile that you could consider it the CIA of the tracker world. Demonoid has been up, and down, many times over the last few years, changing country of origin at least once because of legal issues. Wikipedia has an article describing this.

Case 4 – The Pirate Bay
The Pirate Bay is probably the most infamous torrent site, and people who were involved with it started the original original Pirate Party in Sweden. The Pirate Bay claims that it is legal under Swedish law, and usually posts legal threats to their website, often with smart aleck responses.

In 2008 Nine Inch Nails released their newest album under a Creative Commons license on The Pirate Bay. Their move was apparently a great success, with the band making a good profit. They’ve also allowed their fans to put together their own packages like this one and use the Pirate Bay for distribution.

More recently Director Hanna Sköld released her feature film Nasty Old People. On the front page of her website she put a torrent link. The tracker she choose to host her torrent was The Pirate Bay. It was a great film, if you haven’t seen it I highly recommend it. Oh, and she’s taking donations, I sent her $20.00 US to thank her for her work.

*****

So looking at the cases above, and considering how little economic benefit that industry has gotten from them, why are they doing this?

Easy. It’s an anti-competitive act. If the requirement for Internet Service Providers to block The Pirate Bay stands, Italians won’t be able to enjoy Hanna’s film, or the latest Nine Inch Nails album. By blocking the alternative distribution methods that independent artists are adopting (Finnish producer Samuli Torssonen also uses The Pirate Bay), they limit the market that the independents are using to reach their customers. If the independents can’t distribute using the alternate channels, their only choice is to use the big, established, distributors.

Now that may sound paranoid, but look at the evidence. The actions that the industry organizations are taking aren’t cost effective if what they are doing is trying to increase their sales by blocking ‘supposedly illegal’ downloads of the product they distribute. However if they can manage to convince legislators that Torrent technology should be made illegal, then a competing distribution system cannot form, and all distribution continues through them.

Anti-Competitive Acts – MegaUpload

The five cases I mentioned above involved anti-competitive acts. The four cases I mentioned two years ago also involved anti-competitive acts.

Two years ago I saw the industry making anti-competitive acts. Now we have SOPA. They can take down any website, and if they mess up and take down the wrong site, you can’t sue them, they are golden. But they can sue you. Does that sound fair?

MegaUpload FBI Anti-Piracy Warning

MegaUpload FBI Anti-Piracy Warning

Then of course we have MegaUpload. MegaUpload had the guts to hire some major talent to record a song extolling the virtues of the site.
Universal Music wasn’t amused, and used a Digital Millennium Copyright Act take down notice (an American thing – suggest you follow the link if you haven’t heard of that weird law) to get the video pulled. TorrentFreak covered the story as it unfolded here, here, here, here, here, here, here, and here.

So then the FBI takes the site down. Fast. Curious how that happens just when Universal seems to be backed into a legal corner. TorrentFreak probably has the best coverage, most mainstream publications don’t understand the issues in play, the articles in order of publication are here, here, here, and here.

I have a suspicion that the district attorney has put his hand in a meat grinder with this one. Before my body got too crippled to allow me to work I used to use file lockers all the time.

When you are trying to transfer large Computer Aided Design files (Solidworks, Pro-Engineer, AutoCad) that sometimes were ten gigabytes in size, email just didn’t cut it. When you had to transfer them that day, well, it was too damned expensive to rent a seat on an airplane to ship a couple of DVD-Rs, never mind that after 9-11 everyone was so damned paranoid that you’d have to send a body with the disks.

So a file locker was the only cost-effective way to move large CAD files. We weren’t the only company using file lockers to do that. Just about everyone was. It was faster than trying to get your corporate IT department to set things up on the company servers, and when you are working against a deadline to get a new model of machine out the door, well, you either do it, or you are looking for a new job.

Exactly how much material on the MegaUpload servers was “Legally” there? If the answer is, as I suspect, well over 90%, the District Attorney will be in conflict with Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417 (1984), the infamous Betamax case. And if District Attorneys in Virginia are elected, and the DA involved was hoping to ride this case into higher public office, he could be in for a rude awakening. Just ask the police involved on the OINK.CD raid. Or rather try to. The second you get them on the phone and they hear what you want to talk about they go strangely silent…

Anti-Competitive Acts – Veoh

What about Veoh? The original Veoh went bankrupt defending itself from a lawsuit over copyright infringement, a lawsuit it eventually WON. It might be able to collect some attorneys fees. Might. Doesn’t do the people who worked there any good. Doesn’t do the investors any good. Can they sue Universal Music Group for damages to their company? Should there not be sufficient deterrent against filing useless copyright cases like this?

Just exactly how many jobs did Universal Music Group kill this time?

Anti-Competitive Acts – Dajaz1.com

Anti-Competitive doesn’t fully describe this one. The right hand cut off the left hand with a chain saw, and then the patient refused medical help. “I just nicked myself with my nail clippers is all!”

Dajaz1.com was a popular music site. A lot of performers sent their latest music there to get it played, and get it talked up. Music that was talked up on Dajaz1.com sold better. The major labels all used it as a promotional site.

And they they got raided. Operation In Our Sites. Web site taken down, a Justice Department logo goes up. Justice Department claims that it was a massive pre-release music trading operation. Curiously one of the songs that was used in the complaint, which will filled out by an RIAA (Recording Industry Association of America) staffer was by an artist that wasn’t signed to an RIAA label. Oops.

This one could have come out of a Monty Python skit. Seriously. I’m going to borrow a quote from Mike Masnick, because his intro is a classic:

Imagine if the US government, with no notice or warning, raided a small but popular magazine’s offices over a Thanksgiving weekend, seized the company’s printing presses, and told the world that the magazine was a criminal enterprise with a giant banner on their building. Then imagine that it never arrested anyone, never let a trial happen, and filed everything about the case under seal, not even letting the magazine’s lawyers talk to the judge presiding over the case. And it continued to deny any due process at all for over a year, before finally just handing everything back to the magazine and pretending nothing happened. I expect most people would be outraged. I expect that nearly all of you would say that’s a classic case of prior restraint, a massive First Amendment violation, and exactly the kind of thing that does not, or should not, happen in the United States.

But, in a story that’s been in the making for over a year, and which we’re exposing to the public for the first time now, this is exactly the scenario that has played out over the past year — with the only difference being that, rather than “a printing press” and a “magazine,” the story involved “a domain” and a “blog.”

There are so many things about this story that are crazy, it’s difficult to know where to start, so let’s give the most important point first: The US government has effectively admitted that it totally screwed up and falsely seized & censored a non-infringing domain of a popular blog, having falsely claimed that it was taking part in criminal copyright infringement. Then, after trying to hide behind a totally secretive court process with absolutely no due process whatsoever (in fact, not even serving papers on the lawyer for the site or providing timely notifications — or providing any documents at all), for over a year, the government has finally realized it couldn’t hide any more and has given up, and returned the domain name to its original owner. If you ever wanted to understand why ICE’s domain seizures violate the law — and why SOPA and PROTECT IP are almost certainly unconstitutional — look no further than what happened in this case.

I strongly suggest reading Mike’s article in full. Then go to the source. Yes, Dajaz1.com is back up and running, and Mel is mad as hell, and isn’t going to take it any more. Among the published papers for SOPA is a list of websites that no one is allowed to sell advertising to. Remember, this is a site that the Justice Department ended up deciding that they could not bring charges against. So what does the site find?

GroupM Advertising Restrictions.

Media Vendor shall not display or permit the display on any page where the ads or other Deliverables placed hereunder appear or in any manner associate the Advertiser or any content provided hereunder with any web site, person or entity (or content related thereto) that is in the business of copying, distributing, or publishing, or facilitating or enabling the copying, distribution or publication, of material without authorization from applicable copyright holders, including but not limited to peer-to-peer sharing sites and sites containing pirated content. Without limiting the generality of the foregoing, in no event may the ads or other Deliverables hereunder be displayed or otherwise associated with any of the web sites listed here

Yep. They are a “Group M” restricted site. No one can sell them display advertising. They aren’t doing anything illegal. But the music industry doesn’t like them, wants them shut down, and by god they are going to damned well be shut down, even though it is the music industry that has been sending them all of the music they’ve been playing!

Here’s the document. The text above I had to put together, since it was split between the first and last pages for some reason.

57541331-GroupM-Blacklisted-Websites
http://viewer.docstoc.com/
//

It just so happens I was trading tweets with Michael Geist this afternoon. I disagree with Michael violently at times. It isn’t that I think he’s stupid. I just think that there are areas where he needs to be educated. Quickly. Anyone who thinks that DRM/TPM actually works has massive holes in their education.

But there are things he knows that I don’t, and I’ll happily use his expertise when I can. Michael wrote an article titled Cyberlaw 2.o for the Boston College Law Review in 2003. In it he covers “Denial of Advertising” as a method of controlling websites. You can download the article here.

Now you know one reason that this website has no advertising.

Back to Dajaz1. Mel has been writing about what happened to them, and could happen to anyone else, even without SOPA. You can ignore what Mike Masnick said. You can ignore what I said. You can ignore what Michael Geist said. You can ignore what TorrentFreak said.

But you can’t ignore Mel, because it really happened to him. Read his stuff and think about it. And if you host anything in the United States, make plans to get it out of there fast, and to adopt a domain extension that the United States does not control.

Reality Check: Show Me The Language (Part 1)

Reality Check: Rogue Websites & Private Right Of Action (Part 2)

Reality Check: Debunking Representative Ted Duetch (Part 3)

Reality Check: Save The Artists Errr The Trade Groups! (Part 4)

In Closing

I really don’t think anyone understands what will happen to the United States if SOPA/PIPA passes. And they will be back. Just as big, and probably twice as ugly, but better hidden next time.

I’ve run some numbers myself, and what I’ve come up with scares me silly. I come up with the Entertainment Industry loosing 500,000 jobs, and the Consumer Electronics/Internet Industry loosing 4,500,000 jobs. You think the current recession in the United States is bad, let them pass SOPA/PIPA, and you’ll really have something to cry about.

It will impact Canada too. If our largest and closest trading partner gets hit that badly, we are going to take a massive hit as well. It won’t hurt us as badly. We can still export raw materials to Europe and Asia, but a lot of what we export to them comes back to the United States as finished goods. Normally.

The United States will not believe that their own legislation caused the recession to deepen. They’ll insist on trying to export it to other countries, where it will have similarly disastrous effects.

This is not going to be fun. Not fun at all.

Regards

Wayne Borean

Saturday January 21, 2012

This entry was posted in Copyright, Law, Politics and tagged , , . Bookmark the permalink.

4 Responses to Futurist Prediction Update – Copyright – Update 1

  1. Pingback: Links 21/1/2012: Linux 3.3, GNOME Shell 3.2.2 | Techrights

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  3. lwsapir says:

    Hi Wayne! I nominated you for the Versatile Blogger Award. You can see my post here: http://www.lairdsapir.com/2012/01/lets-get-random/ as well as read some instructions that go along with the award. :) Laird

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