Copyright and Trademark Laws

Grafstein Lecture in Communications: Joshua Gans, "Information Wants to be Shared"

Centre for Innovation Law and Policy

The 2013 Grafstein Lecture in Communications

Joshua Gans

Professor of Strategic Management
Jeffrey S. Skoll Chair of Technical Innovation and Entrepreneurship
Rotman School of Management, University of Toronto

"Information Wants to be Shared"

Competition Between Copyright Holders? How Horrendous!

The European Commission announced last Wendesday that it has decided to open formal proceedings against CISAC (the “International Confederation of Societies of Authors and Composers”) and the individual national collecting societies that are members of CISAC and has sent them a Statement of Objections (SO).

The Commission doesn't question the practice of collective administration of performing rights. The SO concerns only certain relatively new forms of copyright exploitation: internet, satellite transmission and cable retransmission of music.

With regard to these new forms of copyright exploitation, what the Commission probably envisages is competition between the national collecting societies, each of which would be allowed to recruit members and customers on a EU-wide basis.   

The merit of the Commission's views requires a separate discussion.  Yesterday, however, CISAC issued a press release reacting to the SO, and containing the following hilarious statement: 

How Piracy Opens Doors for Windows - Los Angeles Times

The LA Times yesterday published the following article:  How Piracy Opens Doors for Windows.  The article explains why some software publishers complain so much about piracy, but do very little to prevent it. Basically, it makes the same argument that I made in a paper published last year in the UTLJ.  What I especially liked (in addition to being quoted...) is a remark made by Bill Gates, which in an unguarded moment confrimed my point.  Here's what Gates said in 1998 to an audience in the University of Washington: 

Although about 3 million computers get sold every year in China, people don't pay for the software. Someday they will, though... And as long as they're going to steal it, we want them to steal ours. They'll get sort of addicted, and then we'll somehow figure out how to collect sometime in the next decade.

I wish I had this qoute for my paper.  Thanks Bill.

 

Re-Righting Copyright

I recently published an op-ed in the National Post called "Intellectual property laws need a rewrite."  It drew an unusual amount of interest, so I thought I would post it here (albeit one might have to discount the level of interest for the fact that the article discusses the Da Vinci Code).  Comments welcome.

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Writers and publishers have a problem; the very law that serves their business obstructs their business.  And no one knows what best to do about it.

All new works of authorship borrow from previous ones, taking characters, plot devices, abstract ideas or even quotations.  But common though such borrowings are, copyright law makes it very hard to know exactly which ones are without risk of legal liability.  Dan Brown, author of the popular Da Vinci Code, was accused of taking too much of another work's ideas and plot. He got away with it - after a very expensive court battle made necessary by the ambiguous law.  By the time a court renders a decision in a given case, far too much money and productive time have already been spent on it.  And so, authors and publishers make very cautious decisions or even try to obscure their sources.

Rewriting IP Rights from the Back-End

Richard Owens aptly describes how the vagueness of the boundary between lawful borrowing and unlawful copying makes it difficult for creators who build upon others’ previous works. He urges us to develop intellectual property laws with clearer rules defining such boundaries.

While I agree with the motivation for the plea, I’m not sure that if the goal is attainable. Not, of course, that we couldn’t have clear rules. We could, for example, rule that any borrowing of any idea or any expression requires permission. This would be a clear rule, but one that would plague creativity with transaction costs and surely stifle it. We could have no copyright at all—again a clear rule—but assuming that copyright is important, not one that will do much good either. So I’m not sure if we can avoid Learned Hand’s challenge of fixing a boundary without ever knowing precisely where.

But not being able to define clear rules doesn’t necessarily leave us helpless. Instead of confronting the problem from the front-end (creating clear rules) we can approach it from the back-end: the available remedies and the incentives that they create. I believe that the true culprits aren’t necessarily the vague boundaries between lawful borrowing and unlawful copying, but rather their combination with the remedies available once infringement had been established.

Copyright Board's New Ringtone Decision

The Copyright Board issued yesterday its decision certifying SOCAN's Tariff 24 for ringtones.   The Board set a base rate of 6% of the price paid by the subscriber for the ringtone (net of any network usage fees) with a minimum of $0.06 per ringtone.  The main legal controversy before the tribunal was whether the delivery of ringtones is "communication to the public" but I don't want to comment on that here.  Instead, I want to comment on a more fundamental issue, and ask why should the royalties be set by a tribunal at all?  Why wouldn't copyright holders and ringtone suppliers enter into voluntary agreement and decide who should pay and how much?  Ordinarily, prices are determined by the "market".  Why then are these prices set in a strange way in which one seller (SOCAN) proposes prices and then, over a period of three years lawyers, prominent economists and other experts try to convince a tribunal what those prices should be?

Euro Excellence v. Kraft

In 1994, when the member states of what would later become the World Trade Organization sat to draft the TRIPs Agreement they could not agree on the question of parallel importation and the extent to which IP law should regulate it and eventually decided not to decide and let each country decide its own policy. It seemed that in Euro-Excellence v. Kraft the same thing happened to the justices of the Supreme Court of Canada. They too could not agree on what Canada’s copyright law says on the issue.

Access Copyright and Misleading Copyright Notices

Earlier this week, the CCIA, an association of computer and communication companies, including Google, Microsoft and Yahoo, filed a complaint with the US Federal Trade Commission accusing several professional sports leagues, book publishers and other media companies of misleading and threatening consumers with overstated copyright warnings (such as the FBI warnings available on many DVDs).

This practice of overstated and misleading warnings is not, of course, a US invention.  Canadian copyright owners are not shy of the practice.  An especially annoying example is one that I just came across in the university context.

Canadian universities, including our own UofT, have entered into licensing agreements with Access Copyright - The Canadian Copyright Licensing Agency.  The license purports to permit the university to reproduce copyrighted material beyond what it is entitled to under the copyright act, e.g., under the fair dealing provisions. Under the agreement, when the university prepares coursepacks, for example, it is required to affix the following prominent notice:

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