Copyright Blog

Quite a moderate view from Eric Schmidt, in response to the proposal that German newspaper publishers get a revenue stream from companies which aggregate their content online. The full quote is quite telling, though… “I fear that such a regulation would slow down the development of the Internet because it creates additional costs and leads to inefficiencies”. Equating cost with inefficiency is interesting, it suggests that the most efficient (and therefore best) company is one with no costs. It also suggests that cost is, somehow, bad – free is always better. 

Eric Schmidt works for Google, a company with a 65% gross margin and only one significant revenue stream supporting all their loss-making projects, and who pay nothing for their key resource (other people’s content). They do, however, charge for their own service (advertising), creating cost for other  people. Wouldn’t it be more efficient, therefore better according to his theory, if they gave it all away for free?

Rob Levine has written a review of William Patry’s book “How to fix copyright”. Which you should read. And when you do, you must not neglect to flip over to the comments where Mr Patry has been holding forth in somewhat splenetic style.

Marvellous.

Mark Bide is the Project Director of the Linked Content Coalition, about which you will hopefully soon hearing more. Posted below are some remarks he made to The Intellectual Property Lawyers Organisation

It is hardly a secret that, in the era of the internet, it is increasingly difficult to maintain successful businesses which are dependent on copyright.

It is also no mystery. The ability to make perfect copies and to distribute them instantaneously to over 2 billion people – the 30% of the world population classified as internet users – has irrevocably changed the copyright industries – those industries we also sometimes call “the media”.

This is not a bad thing. The barriers to becoming a publisher – in the broadest sense of that word, someone who makes something creative public – or indeed to becoming a self-published author or creator of any kind – have largely disappeared. We can all be published authors or composers or performers or directors now.

No one can (or at least no one should) object to this. The democratisation of mechanisms for publication and dissemination brings with it a huge benefit. But alongside this, we have seen the steady erosion of the capability to make a return on investment from the creation and dissemination of content.

Business models in the media have – almost without exception – been dependent on copyright for 300 years; copyright has been the mechanism that has provided the rewards for creativity. That solid foundation has enabled the development of the diverse and creative media sector from which we all – individually and corporately – benefit.

Despite the common caricature of the traditional media as dinosaurs who are desperately trying to hold onto a lost past, in reality the media are embracing their digital future. Some sectors have certainly been temporarily wrong footed not just by the sudden and dramatic shift in technology but also by aspects of the law. Copyright law, while remaining for the most part fit for purpose, has been made less effective by interventions such as the DMCA and the eCommerce Directive which have made certain infringing business models viable with almost complete impunity.

So while economic and distribution barriers have come dramatically down, the entrepreneurial response you might expect has been muted by the double-whammy of technology and the law, both contributing to the foundations of copyright businesses being undermined.

Despite this, the overall response from the media has been positive and creative. And with this response has come the recognition that – on the network – rights rather than content are the unit of commerce. We trade no longer in physical objects but in rights of access and use.

However, complete disregard for copyright on the internet has become so commonplace as to be unremarkable, something we may rarely admit to doing ourselves but embarrassedly admit is all too common among our children or grandchildren.

But it isn’t simply individuals who disregard copyright; whole sectors of business have developed on the internet whose entire business model is dependent on turning the principles of copyright on their head, of moving from a permission culture to one that at best offers a limited power of opt out and take down.

On the internet, we now find ourselves in a position where making investment in creating content looks a mug’s game. Investment in exploiting other peoples’ content is a much better bet. On line, the best profits from content are made by those who make little or no investment in content creation, and accept none of the risks and liabilities associated with what it has always meant to be a “publisher”.  They leave that to others. The mugs, whose online content creation continues most often to be subsidised by revenues from their traditional – off line – activities.

At the same time, legislators, under pressure from those who tell them that copyright is somehow old-fashioned and Luddite, seem increasingly inclined to go even further in weakening copyright law.  The media are told they must seek “new business models” that do not depend on copyright – but these have consistently proved elusive.

Unless we find a way to turn back this tide, professionally-created content of all types will inexorably become increasingly rare, particularly on line. Our challenge is simple: we have to make investment in content pay again. If we don’t, there will be no investment. This will be massively impoverishing of our culture and our society.

However, I don’t want to sound as if I believe that all is lost. I would argue that, what we have seen is not a failure of copyright but rather a failure of technology, or perhaps of technological implementation. Bringing the ordered structure of copyright back to the chaotic world of the internet does not require wholesale change in copyright itself (although doubtless there is a constant process of updating required – as Professor Hargreaves has indeed pointed out); rather it lies in finding more effective ways of implementing copyright in this relatively new environment.

To quote the late Charles Clark, adviser to the publishing industry in the latter years of the 20^th Century: “the answer to the machine is in the machine”. If we can make rights management and rights clearance work effectively at the machine level, everyone will benefit. Consumers will get what they want. Authors and their media partners can get a fair reward for their efforts – and we can continue to develop an effective and competitive online supply chain which also profits from its use of content.

So we must find ways of making technology work as well for us in the management of copyright as it has in managing other aspects of the immense complexity of the internet. The internet is not the end of the media, it is a massive marketplace. Technology is not the enemy, it will be our saviour.

I’m not talking about “Digital Rights Management” – or in Euro-speak “technical protection measures” – although well-implemented technology to enforce rights has its place. Rather I am talking about the “digital management of rights” or perhaps the “management of digital rights”.  We need to be able to communicate effectively about rights in order to build automated and semi-automated ways of transacting in them.

I will offer you one sure-fire prediction about the future of the internet in the next decade. In much the way that it has become a pervasive human-to-human communication environment, it is set to become an equally pervasive machine-to-machine communication environment. This is sometimes (although probably erroneously) called Web 3.0. The revolution implied is on the same scale as the development of the World Wide Web as a publishing medium, and subsequently the development of Web 2.0 – social media, and the engagement of us all in the creative process.

We are still in the early infancy of this latest development in the internet. But it is clear that standards for unambiguous identification and description will play a key role in its effective deployment – particularly in a field like automated rights management, which is intolerant of ambiguity about (for example) who controls rights – or even more importantly who should be paid for their use.

Much work has already been done in developing relevant technical standards in different sectors of the copyright industries – but these are isolated in silos.  As all the different sectors converge on a single distribution channel – the internet – we need to find ways of working together much more effectively. Our customers care little about which sector we think we work in – these distinctions are becoming increasingly difficult to define.

This is why – with the support of the Information Society Directorate General of the European Commission – the European Publishers Council (for whom I work as a consultant) are launching a cross-media project in 2012 called the Linked Content Coalition, with a view to building the necessary foundations of this standards-based information infrastructure, to allow the existing trade standards organisations from across the media to learn from each other and to work together on issues of interoperability.

Is this the answer to the challenge to copyright on the network? No, of course it’s not. But it is at least part of the answer. It is only one element of the infrastructure needed – necessary but not sufficient – to facilitate the creation of a voluntary but effective market for automated and semi-automated rights trading. Completing the task will take a long time, and will involve substantial investment on the part of the copyright industries. But I am convinced that this is a task worth undertaking. Our culture is built on creativity and creativity is built on copyright.

We have already seen enough of the damage that a faulty internet does to the creative industries to know that continuing on this path will lead to less media, which will leave end users – you and me – very much the poorer.

We know that copyright is worth protecting because we know how much economic, social and cultural good springs from it. We also know that small changes can produce dramatic turnarounds. We are working on one small change with massive possibilities. I hope to see the internet deliver – finally – on its tantalising potential to create a new army of content entrepreneurs and content products for us all to enjoy.

That’s a world I want to live in, I hope you do too, and I hope you will support our efforts.

Thank you.

I won’t try to summarise, just head on over to Terry Hart’s blog and look for yourself (be sure to read the comments). A bunch of big brains bumping up against each other.

And have a squizz at Robert Levine’s take on it too. He’s not particularly polite about all the big brains…

There are lots of people out there who would like less copyright, and plenty of people benefiting hugely from the fact that it doesn’t work well online.

There are others out there who wish it would work better and are coming up with ways that can happen (I’m one of them).

And there’s another whole category of people who want copyright, or some kind of right, to extend beyond words and pictures to the subject of those words and pictures. If they, or something they own is written about, or photographed, they want copyright-style control over that.

“Absurd”, chuckle copyright lawyers and well informed legislators. To imagine such a thing is to fundamentally misunderstand the nature and aims of copyright and the law.

“Good idea”, say others rather ominously, having heard a rather selective and seductive pitch.

In a sensible world I would discard such ideas. But in a world where the law has turned copyright on its head, reversed its aims and made monstrous riches for people who steal value while adding none, I have learned never to underestimate the common sense of those whose job it is to legislate.

Asking anyone who has to get re-elected every five years to think about the next ten, or twenty, or hundred is asking a lot. Bad law, after all, is one of the things which keeps politicians in business.

This idea has form…

Of course, while a new law would make life simple, new rights can be created without one. And one sector in particular has been busy doing so for the last ten years or more.

So here’s my guide for fun things to make and do: invent a new kind of copyright in two easy steps.

Before you start:

Imagine you own a football club. You are a powerful and wealthy individual. You are a member of an elite group – a league – of other clubs which are also run by powerful and wealthy individuals. You’re all used to getting your own way, and you are used to being able to squeeze money out of your club’s fans in interesting and innovative new ways.

One of the best ways is “Rights”. Rights have been a goldmine, and they’re the gift that keeps on giving. TV rights are the best example – the right to bring TV cameras into a ground and point them at the action has turned from a great way of attracting attention to your sport to a multi-billion pound (or dollar or euro or yen) business.

The way “Rights” work, if you’re a football club or other sporting body, is this:

Step 1: have a venue

First, your venue. Your stadium is your place, right? People can only come in it if you say they can. And you can set the rules. So you do. People can only come into your ground if they agree to certain rules. And you do, whether you know it or not, when you buy a ticket. Some are obvious: don’t bring your own food and drink. Don’t go on the pitch. Don’t misbehave. Some, less so: don’t take any pictures. Don’t communicate with anyone outside the ground. Don’t tweet. You thought you were buying a ticket, but actually you were signing a contract.

[by the way - an aside - but some don't have any venue at all but still try the tricks outlined here. City marathons, for example, whose venues are the streets to which the public have unrestricted access, have been known to try to impose restrictions on the media].

Step 2: make some rights

Then, make some “Rights”. You have banned people from doing certain things, which means you can decide if anyone else is allowed to do them. By banning them you have made them into “Rights”. Ta-da! These aren’t legal rights, like copyright, written down and defined in law. They’re custom rights, written down and defined by you. The more you ban people from doing, the more “rights” you can invent and try to sell to someone. TV rights, for (the most obvious) example. But there are many others. You have magicked up a whole new business at the gates of your event, limited only by your imagination in creating and exploiting the rights you now own.

Step 2a: control the media

But there’s a fly in the ointment. There are some people you have been letting in for years, and you still want to, who can do a whole load of things which are otherwise banned. They’re the media. You want them there to publicise your game and promote your sponsors (when people buy sponsorship from football clubs they’re really buying cheap advertising space in newspapers). You can’t lock the media out, but you certainly don’t want them using their words and pictures willy-nilly because that might damage the “Rights” you just created by banning people from doing those things.

The media get on the nerves of your average football club owner. He’s used to being autocratic and having control, and these guys turn up every week and then write and print whatever they want. Worse than that, some of them are in the business of selling their words and pictures to others. They’re making money from your club, you’re expensively making facilities for them and they’re robbing you of the opportunity to sell more “rights” to more people.

You have to try to rein them in.

Paperwork works…

There used to be an easy way of doing this which was to treat them like ticketholders. Sneak a contract in the way when they think all they’re doing is turning up to do their jobs.

So it began, a decade ago or more. Photographers and journalists turning up at sports events would be asked to sign a bit of paper before they came in. It used to say anodyne inoffensive things – they confirm their identity, that they have insurance, who they’re working for and so on. All fair enough.

Then the small print started to get longer, and the clubs teamed up to agree on the wording, but nobody really noticed. Who reads the small print, right? As long as they could do their jobs they didn’t care. As long as they could produce their newspapers their editors didn’t care either.

So the small print increased and increased and without anyone realising what was happening the sports had made themselves some “rights”. They had banned the media from doing all sorts of things with their own content, and the media hadn’t even realised they were doing it.

…until someone reads it

And long may it have stayed that way had a few people in the media not started reading the small print and raising objections, partly because the terms started to impinge on what newspapers (and in those days it was mostly newspapers) did every day – in other words because the sport got too greedy.

So was born a whole new battleground between sport and media which results in increasingly frequent and increasingly bitter conflagrations. If you picked up a newspaper, for example, during the first week of the England Football League season this August you might have been surprised to see reports written by reporters in the stands. They had been locked out of the press box. Coverage was dramatically reduced.

Similar things have been seen at various times in coverage of cricket in Australia, the current Rugby World Cup, the Indian Premier League and countless others. In other areas, events organisers have tried to ban critical comments of their event as a condition of entry, tried to force copyright of photographs to be handed over to them, have demanded free use of any material generated at their event.

The thing all these agreements, whether anodyne or outrageous, have in common is that they are trying to extend the concept of intellectual property to events. By creating a made-up contractual right event organisers reserve for themselves some of the things which the law reserves for copyright owners.

It’s not as easy as it once was

In recent years it has become a little more difficult for them. The News Media Coalition* is one organisation which has been set up to help ensure that these agreements are at least subject to some discussion and negotiation and it has been very successful in challenging some of the more egregious examples.

But the overall issue is more insidious than just a few sports bodies and concert promotors trying their luck when dealing with the notoriously tactical and careless media. Some of them actually believe that the concept of intellectual property should be extended to cover events as well as content. That staging an event should give you a legal, not just contractual, right to have control and ownership of the content created which is connected with the event.

Think about that for a second.

Someone who organises an event owns some sort of IP right in the event itself. They have a legal right to some sort of control over “use” of the event. Their control isn’t based on anything fixed and identifiable – like a photograph or an article, but on something abstract and ephemeral – the event itself.

This saves them from all the trouble of imposing contractual restrictions on everybody at the event, and then from tracking down and suing anybody who ignores them. It covers people watching on TV, who see the event without being there in person and therefore without a ticket to print rules on. It saves them from having to negotiate with the troublesome media who constantly interfere with their desire for total control. You can see the appeal.

Freedom of thought?

But it would also extend the idea of IP into scary places. If you can’t write about a concert or a football match, for example, without first getting permission, what happens to criticism? If, when you take a picture or something you may already have handed some ownership of it to someone else, you might find that you owe someone something for just having something you thought was your own property.

If by discussing it with others, expressing opinions about it, recalling it within earshot (or web-page-shot) of others, you are also breaching someone else’s rights then we have extended IP to actual thoughts. Far from the original intention of IP – to encourage the sharing of original thinking by protecting its expression – some would extend the reach of the law right into your mind. Forget freedom of speech, freedom of thinking will under threat.

It’s a mad idea. But it won’t go away. The English Premier League argued recently, not for the first time, that football matches should be given a performance right, of the kind given to performance works such as ballets (the insinuation that football matches are choreographed is slightly amusing). The court said no. But some politicians have heard the headlines, thought little about the implications, and warmed to the idea. That’s not just mad, it’s terrifying.

* disclosure: I was one of the founders of NMC and sat on its board until earlier this year. I have also conducted negotiations with sports bodies on their behalf

The NLA won its appeal today. (Disclosure: I was on the board of the NLA when this action began and I am a previous chairman).

To judge from some of the coverage you would think this is the end of the web as we know it. There is an attempt to portray the ruling as a criminalisation of web browsing and somehow a perverse outcome which sets the internet back.

I would encourage anyone interested to look a little deeper than those rather dramatic assertions. “End of the world as we know it” always makes a good headline but in this case it’s wildly disingenuous.

This is an important ruling but actually not particularly controversial. What it says, in effect, is that you can’t copy stuff without permission. In other words it says exactly what copyright law says. The controversy, such as it is, centres around the fact that the company on the other side of the case depends on a different interpretation of copyright law – specifically that its particular use of content doesn’t require permission.

This may be a common assertion among internet businesses and many others have thrived on the assumption that other people’s content is a free resource available for exploitation. The justification is usually, at its heart, a post-rationalisation. Essentially their argument is that their use of content has to be legal because if it wasn’t they wouldn’t be able to be in business. Which would be terrible because they have a good business and their users like them.

In this particular case the company in question, Meltwater, decided to take a legally aggressive route when confronted with the NLA’s request that they take a licence. They referred the NLA to the UK’s Copyright Tribunal which in turn caused the NLA to go to the high court for a ruling which was today confirmed on appeal.

Meltwater may well be rueing the day they decided to do this, because the consequence of their action is that any possible ambiguity about interpretation of the law has been removed. This doesn’t just affect them, it affects anyone else whose web business is founded on a generous interpretation of the law.

With considerable chutzpah, Meltwater’s CEO has responded to the ruling today by saying “The big takeaway from this ruling is that our position has been made stronger for the upcoming Copyright Tribunal”. He doesn’t say how,  which is perhaps unsurprising since it would appear that their starting position (which can be summarised as “we don’t need a licence, but even if we do our clients don’t”) has not just been completely and wholly undermined but some other issues. such as the copyrightability of headlines, have also been clarified in favour of content owners.

Meanwhile the PRCA, Meltwater’s partners in this case (and for legal reasons the lead appellant), seem to be trying to say the ruling makes web browsing illegal or generally criminalises web users. “Millions of professionals will unwittingly infringe copyright legislation on a daily basis by simply browsing the web”, according to a scary statement on Paid Content.

This is, to my mind, clearly nonsensical. Most websites come with explicit or implied permission for people to browse them. What they don’t do is come with any kind of permission to set up a business which relies on copying all the content and selling services based on it to commercial users, nor to ignore requests to stop doing so. Meltwater tried pretty hard to make that case but the original judge and the appeal court both said no.

Which, in my view, is common sense.

I was looking at the Meltwater website just now and was struck by how it had changed since i last looked. Last time a phrase stuck in my mind which I couldn’t find anymore. They used to describe themselves thus: “Meltwater Group is a privately held Norwegian company committed to disrupting the status quo through novel technologies…”. It was the commitment to disruption which had stuck in my mind.

They now take a slightly different tack: “Meltwater is a global Software as a Service (SaaS) company developing disruptive, no-nonsense software…”. Not quite the same emphasis. Perhaps it turns out that disruption cuts both ways.

UPDATE: after posting this I was reading the Meltwater press release about the case again and found one thing a bit confusing having just read the actual judgement.

The press release says

“…The Court of Appeal  ruled that it will be very rare that headlines are copyrightable, which is something we’ve been saying from the start,” said Francis Ingham, Chief Executive of the PRCA. “Going back hundreds of years, no court has ever found a title worthy of copyright protection.”

I didn’t remember seeing this in the judgement, so I thought I could helpfully post the relevant paragraph so you can decide for yourself (emphasis added by me):

22.In these circumstances, the conclusion of Proudman J in paragraph 71 of her judgment that newspaper headlines are capable of being original literary works is plainly correct; indeed at one stage in his argument counsel for PRCA conceded as much. It was not suggested that she was not entitled to accept the evidence of Mr Bromley as indicated in paragraph 70 of her judgment. In those circumstances the conclusion in the last sentence of paragraph 72 that “some of the headlines are independent literary works..” is, in my view, unassailable. I would reject the submissions of counsel for PRCA on this part of the case.

Later on, in the conclusion, it says:

48 …There may be some cases in which neither the headline nor the ‘scrapings’ constitute a copyright work or a substantial part of a copyright work. A licence would not be required in such a case but there cannot be many of them.

You should read the whole judgement of course. But hard to see how the PRCA’s conclusion that it is “very rare” that headlines are copyrightable can be drawn from the judgement. Or am I missing something?

The Guardian has received much coverage this week for it’s new strategy, to go “digital first” and cut its costs massively.

There’s no doubt that the Guardian has an enormous amount of cost they can cut before it shows, and perhaps their CEO’s grim warnings about the fatal consequences if they don’t is as much a way of side-stepping the inevitable howls of anguish from unions and staff as it is the true reason for making what others might look on as sensible adjustments.

But the “digital first” thing is a bit more worrying, to me anyway. The logic is really hard to understand.

On the one hand, they have a determined policy of keeping their digital product free, because doing otherwise “closes down digital opportunities”.

On the other hand it doesn’t seem at all clear what these opportunities are. They have recently made a big move to set up an office in the USA, where much of their audience lives, in the hope that they can make that audience more profitable.

It seems to me like the triumph of hope over experience. You could sum up the whole digital business strategy of virtually every newspaper on the web as having been “build audience now, make money later”.

Even as the audiences have grown like topsy, the money has lingered far behind. The early, optimistic belief that digital would provide a thick layer of icing on the print cake gave way to hopeful speculation that while the digital audience might not be worth much, nor would it damage print – so it was a form of viral marketing.

The more current realisation that print is dying (and the Guardian is explicitly planning for, even accelerating, this change) has been greeted by most, privately at least, with an increasingly panicky desperation to find a model that works or – for many – find a new job before their business impodes.

The curious thing about the Guardian’s position is that while they’re bravely facing up to the realities of their perilous position (Andrew Miller says they have £200m left in their trust fund – which for a company which has lost considerably more than that in the last few years and still loses over £30m per year isn’t much of a safety net) they still seem to just have blind hope that the web will somehow come good in time to save them.

Perhaps it will, and if they deliver their goal to make £91m from digital in five years then I guess they stand a fighting chance (although that’s still only half their current turnover, and they don’t say how much of it comes from services like dating, separate from the actual newspaper).

But there have been countless digital newspaper business plans with that sort of number in them, usually justifying some large capital investment in digital (The Guardian is going to invest £25m this year), and they have mostly proven to be complete fantasies. A new guru presents an even more fantastical plan the year after, but rarely if ever are the enormous returns actually delivered.

In other words, seen from the outside the Guardian seems to be trying to reconcile two inherently conflicting points of view into something they can present as a rational strategy.

On the one hand, they have a strong belief that by growing their online audience they can grow their influence and stature and become a sort of world newspaper. Released from the constraints of print they have the freedom to find their audience all over the world and they don’t want to put barriers in the way of that.

On the other hand they need to make more money, or at least lose less.

So they’re dramatically cutting costs to address the urgent need to improve the bottom line.

They’re making an optimistic five year plan safe in the knowledge that it will be a long time before anyone will know if it can be delivered (and plenty of time to change it before the deadline anyway).

And they’re hoping it will all come good in the meantime.

I hope that’s not it, and that the Guardian has some amazing secret masterplan up it’s sleeve.

But it’s basically the approach adopted by most newspapers for most of the history of the internet, and so far it has an unbroken record of failure.

Apple have announced their Newsstand. It’s a sort of container for newspaper and magazine apps. They’re arranged in a shelf format, a bit like shops. When a new issue comes out you can pay for it (or you might have a subscription).

This is hardly rocket science but in the topsy-turvy digital world it’s a huge innovation. People are pondering at length what it can all mean, who will win and who will lose.

In fact it’s self-evidently not particularly innovative – existing services like Zinio and, er, Newsstand do the same thing.

The real significance is that it brings a large chunk of Apple’s 225m credit-card wielding customers within the reach of publishers everywhere.

In other words, paying for content is becoming less strange and more ubiquitous.

Many anxious views will be expressed about Apple’s terms of trade, their percentage take and their non-sharing of data but to me that’s beside the point.

To have a market worth fighting over we have to have a market. Expanding the world of paid content is a good thing and we can argue over the money when there’s a bit more of it at stake.