1. Judge Gertner will reduce the damages somewhat.
2. She will find that the statutory damages provisions of the Copyright Act do not contravene constitutional protections under the Gore line of cases.
3. The First Circuit will affirm.
4. The Supreme Court will deny cert.

I think the damages provision might be vulnerable in a specific defendant’s case (though Ms. Thomas-Rasset would be a better test than Mr. Tenenbaum here), but is safe on its face. In lawyerspeak, it’ll survive a facial challenge, but might fail as-applied.

The Gore limits depend in part on the concept of notice: defendants should know ahead of time how much they’d be liable for if they violate the law. No one expects punitive damages of 500:1 (Gore) or 145:1 (State Farm). But predicting liability – at least at its minimum / maximum amounts – is easy for copyright law. That’s a key difference between a statutory damages scheme, with a range specified by the legislature, and a common-law one where juries pick a number from a hat.

Second, the range of damages in the Copyright Act looks reasonable on its face. $30,000 per work (and up to $150,000 for willful infringement) is a lot, especially if it’s just to deter (or compensate for harm by) a single defendant. (General deterrence is out under Philip Morris v. Williams, which is sad for law & econ thinkers.) Imagine a business that runs off copies of “Harry Potter and the Deathly Hallows” in its basement and sells them. Copyright infringement of this one work is clear, but the business carefully shreds all evidence of sales. So, it’s impossible to prove actual damages; businesses are often risk-averse, meaning that higher awards of damages are needed to deter; and there’s only 1 copyrighted work at issue. Statutory damages are important to provide any deterrence – since proof of harm is under the infringer’s control – and since the infringement might be quite profitable, an award might need to be high (even $150K). Hence, the damages scheme is clearly rational in at least some cases.

The harder question is whether the unconstrained jury discretion for statutory damages could run afoul of due process protections. Individual downloaders tend to be pretty similar if you think about it: there’s not much difference between Thomas and Tenenbaum. So why is her penalty almost 4 times more per work than his, for the same type of infringement? Neither has much in the way of monetary resources, so they’re either undeterrable, or able to be deterred at a fairly low amount (marginal value of a dollar and all that). Here is where the damages scheme seems like it might be vulnerable: it does get hard to predict liability in some individual cases, and the wide range of damages looks a bit too much like absolute discretion. (Thought exercise: what if a jury could award any amount of damages per infringement? Would that improve deterrence against Tenenbaum and Thomas? Would it be significantly less accurate than the actual damages, which everyone agrees are pretty low in real terms? But such a framework would likely run afoul of constitutional limits.)

If this is right, it means that both sides should worry – as should Congress. Getting damages right is important, but preserving both procedural and substantive protections for defendants is just as much so. Comments and disagreement welcomed…

I wasn’t at the courtroom, so I’m relying on reporting / blogs, but I think they’re wrong. Here’s why.

First, Tenenbaum’s attorneys failed to object to the liability question. So, it’s not preserved for appeal. That’s bad, unless the First Circuit decides to tackle it sua sponte, which they won’t.

Second, look at Joel’s actual testimony (quotes from Ray Beckerman’s helpful site, emphasis mine):

“He also testified that he had used the sublimeguy14 username, admitted that he had used KaZaA, and that the KaZaA shared folder in the screenshots from MediaSentry were his. He also testified that it was not uncommon for him to see other people uploading files from him on the KaZaA traffic tab.”

“He testified that he had burned CDs of the music in his shared, and testified that he had ripped CDs to his computer.”

“He testified that he had listened to, talked about, made mixes of, and made available for distribution all of the music in his shared folder.” [ignore the distribution part]

“The redirect was very short… He was asked if he was now admitting liability, to which he said yes. ”

Even throwing out the redirect, if Beckerman is reporting this accurately (I trust him), Tenenbaum has admitted to facts that constitute violations of 17 USC 106(1), 106(2), and 106(3). The liability bit came on redirect and can be ignored without affecting the outcome. The plaintiffs thus clearly made out their case on chief on infringement, and since Tenenbaum’s fair use defense was shot down ahead of time, it was all over but the shouting (and the damages calculation)…

Here, you can browse and annotate the proposed settlement, section-by-section. … In addition, you can:

• Study our reading room of lawsuit documents
• Join the conversation in our forums
• Draft an amicus brief to the court on the wiki

This is a potentially exciting venture on two fronts. First, it may foster dialogue about the fiendishly complex settlement, which could have a huge impact on the shape of copyright law and the public domain for years to come. Because it is so complicated and doesn’t include much flash (and perhaps because so much attention is going to health care, climate change, Jon & Kate, and other pressing issues of the day), the settlement has not been as widely debated as it should be. Second, it will be another experiment in using the tools of the interactive internet to promote true civic engagement and debate.

But whether it will work depends in large part on whether people participate, so go check it out. The links posted on the site’s Introduction are a good place to start.

Law students spend hundreds of thousands of dollars each year on statute books or statutory supplements for their courses. These statutory supplements, notorious for their weight and bulkiness, are compilations of subject-specific statutes and regulations, most of which are publicly available at no charge. This article discusses the advantages of digital statute books, details how the authors created a digital statute book that was used in two securities regulation courses, and evaluates the result of that experiment.

In brief, Professor Bradford created a downloadable PDF copy of the statutes and regulations needed for his Securities Regulation class.  It’s a massive document, over 2,400 pages, enough to give any law student severe spine problems if they printed it out and carried around in their backpack.  But of course, the point of the statute book being digital is that you don’t have to do that.  Furthermore, Bradford made it possible to highlight and annotate the document in Acrobat Reader.  If you’re interested in seeing it, you can download the whole thing from Bradford’s class page.

• The move to Web applications challenges the open source model – copyleft only works if you’re distributing software to your users. With network services, for example, the GPL becomes a permissive license – if you’re running a Web server that is under the GPL, you aren’t distributing the code, so there’s no obligation under the license to provide that code to your users. Web apps thus can undercut open source goals / obligations, and also have the effect of equalizing the various flavors of licenses (BSD, GPL, etc.).

• The Affero GPL seeks to move network-based services closer to the PC-based model for open source licensing – the AGPL modifies the GPL’s bargain by linking the source provision requirement to the modification of the underlying code and its distribution user interaction over a network [Update 26 May: Aaron corrected me!]. Copyright remains the fulcrum: modification (creation of a derivative work) gives the license its grip, ensuring that users have access to source code. In addition, the AGPL reduces vendor lock-in: if the vendor goes out of business, or begins behaving badly, users have the code. However…
• Data is the primary challenge to open source in cloud computing – access to source doesn’t help much if the data from a Web application remains inaccessible. Often, the only interface to a Web application’s data is via the site itself – if there’s no API, or a limited API, the transaction cost of shifting to a different vendor or application increases dramatically. This may be particularly acute for financial or business data.
• The set of social relationships that is critical to the Web – think Facebook – isn’t yet addressed by the open source model. Being able to set up your own version of Facebook is effectively worthless if you can’t migrate the social connections that characterize social networking. It’s hard to replicate the value of a Web community by taking the underlying code and installing it on your computer or server. (How well would “Bambauer’s Book” fare if I decided I was sick of Facebook and wanted to start my own?) Network effects can thus create lock-in.
• There are three key challenges in a world of cloud computing: data portability, privacy (typically governed by contract, but think also about Fourth Amendment issues), and compatibility (particularly protecting the integrity of social relationships during migration). Before networked apps, access to source took care of these concerns – you could examine both the data formats and how the data was processed by the code to address concerns. Terms of service – the parameters of the relationship between the user and the networked service – thus become critical in addressing these worries for cloud computing…
• For the GPL model to migrate to networked services, copyright and licenses aren’t enough – we also need technological features that protect user freedoms. This becomes difficult to mandate, though, as the universal applicability of copyright no longer does this work for us. To enable user autonomy, for example, data has to be portable, which means that network services must provide APIs to communicate with other services. Take for example LiveJournal – the code is under the GPL, but there’s no way to get access to all of the relevant data that a user creates and depends upon. In terms of data security, banks have become a model for why protected is needed.
• To replicate the GPL model for Web services, we need three things: 1) access to source, 2) carefully designed terms of service, and 3) technological features (such as data APIs).
• Aaron identified Identi.ca, a micro-blogging service ( = like Twitter), as a key proof of concept for open source Web services. It’s licensed under the AGPL v3 (#1 above). The service’s ToS specify which data is private and which is not (#2 above) – private data isn’t shared, but is only used to provide services to users, and Identi.ca will only turn data over to the government under a court order. The service also describes exactly what it does with the public data it stores, constraining its freedom with regards to that information. Finally, Identi.ca has an API (a clone of the Twitter API, evidently) that lets users get their data out of the service (#3 above). Users can also export relationships in a standardized format (Friend of a Friend). Identi.ca addresses the vendor lock-in concern by implementing the Open Authorization protocol, which allows separate instances of the network software to communicate with each other. This enables interoperability without exposing private data. If you want, you can have your own Identi.ca version – and it can talk with other versions! For Twitter addicts, Identi.ca will talk to Twitter (well, at Twitter) if you have an account for Tweeting.

I thought Aaron’s talk was absolutely fascinating. The key worry that remained with me is that we’re really dependent on vendors to make the open source model work: if they don’t enable tech features, such as data APIs, or put together obnoxious terms of service, we won’t get the equivalent of the GPL’s freedoms in the networked services world. It’s not clear how to counteract this – Aaron is bullish about best practices and the example set by services such as Identi.ca – but at least, thanks to Aaron and SFLC, we have an accurate sense of the challenges.

Now that the semester is over, I am preparing to give a short lunch presentation to my colleages next week on this topic. My aspiration is for everybody to go into the fall journal submissions season with a little better understanding of the terms of the transaction that occurs when you sign a publication agreement. (My secondary goal is to foster open access; as readers of this blog will know, and you may see for yourself by clicking on our “open access” tag, this is a pet issue of mine.)

To guide the discussion, I have written a very short introduction to publication agreements for authors. It’s purposefully aimed at a nonspecialist audience, so there are plenty of things it doesn’t cover. But I don’t think it does such a bad job at teeing up the issue. An excerpt:

Suppose you wish to live in my house. You and I might reach two sorts of agreements to make that happen. First, I could sell you my house. In that case, it would become your house: you could live in it, hold raucous parties, trash the place, resell it, or do anything you wished. Second, I could rent you the house. It would still be my house, but you would have my permission to do whatever we agreed to in the lease.

Publication agreements are like that. You can assign your copyright in the work, which is like selling your house. Now it’s not your work any more: it belongs to the publisher. Perhaps they will give you permission to continue using it in certain ways, but at the end of the day, they own it. Alternatively, you can retain your copyright in the work, but grant the publisher the permissions it needs to publish it (including the permission to, for example, include the work in the major electronic legal research databases). This alternative is like renting your home. It’s still your work, but you and the publisher have agreed that they may use it in certain specified ways.

I’d love to hear any feedback readers of this blog may have on the piece. This whole thing is Creative Commons licensed, so of course you are free to copy and adapt it yourself.

In some ways this is better, and in some ways worse. Fingerprinting can catch a lot of infringement, but it’s a rule rather than a standard: there’s no way for a content ID system to figure out fair use. (Heck, lawyers are bad at it.) The dispute resolution form improves things, but I wish the system notified the poster first (with, say, a deadline for response) before taking down the allegedly infringing content.

This is a nice reminder that the Internet is a world of private power. There’s no right to post to YouTube, and posters get whatever process Google decides to afford them when content appears to be infringing. In many ways, this recapitulates the standard public choice problems of copyright law: copyright-owning interests are concentrated and powerful, and copyright-using interests tend to be dispersed and weaker. In that sense, we’re probably fortunate that the content ID take-down system is as thoughtful as it apparently is. /Update

Warner Music has issued a take-down notice under the Digital Millennium Copyright Act for the video slideshow of Larry Lessig’s keynote talk at the OFC Conference in San Diego in March 2009. This can only be viewed as 1) a sad commentary on automated detection of copyrighted material, 2) a serious error in judgment, or 2) a deliberate provocation. Naturally, Lessig is going to fight, which I assume begins with a counter-notification under Section 512(g)(3) of the DMCA. I’ve been going over the myriad of clips in Lessig’s talk, trying to figure out which might be the source of Warner’s notice. It’s an interesting question whether Warner might be liable under 512(f) of the DMCA, along the lines of Lenz v. Universal’s claims, for failure to issue this notice in good faith. (Is it sufficient to believe in good faith that all uses require permission, or to hold a completely unreasonable yet devoutly believed view on the topic? I’m dubious – most subjective standards have some objective grip at bottom.) It’s hard to see Lessig’s utilization of the clips as anything but fair use: they’re quite abbreviated, the use is in a non-traditional educational setting, and there’s no market displacement of the originals. Not sure, in other words, how this fight started, but I have a sense of how it’ll end…

As Wilt Chamberlain said, nobody roots for Goliath. What caught me, though, was how Porter frames the root problem:

Google is in the final analysis a parasite that creates nothing, merely offering little aggregation, lists and the ordering of information generated by people who have invested their capital, skill and time. On the back of the labour of others it makes vast advertising revenues…

Google’s stealing, then, deprives content creators of the sweat of their labors. They’re reaping where they have not sown. Intuitively, this appeals. What’s fun for me is that I think it’s ultimately a daft argument.This contention picks up labor-desert theory, most commonly associated with philosopher John Locke. For Locke, people possess only their body and their labor. Once we use our labor to create something new from the common store of ideas, concepts, and facts, we deserve a property right in that new thing; to do otherwise would be to harm us. Newspaper reporters create stories from the world’s facts and thus we might want to reward that labor. So far, so good.

But labor-desert theory raises a hard question: how much of the new thing really derives from your labor? Reporters depend on facts, quotes, standard journalistic constructs and techniques… their labor is a necessary component, but it’s not the sole reason for a story’s value. Put it this way: imagine I lease a Chevy Impala. I use it to start a thriving, highly profitable pet supply delivery business. Without the Chevy, I’d be taking the subway or biking – not good options when carrying kibble. But you wouldn’t see autoworkers or Hertz employees lined up outside my apartment asking for a cut of the profits. How is the Google situation different?

My sense is that what’s really at work is what Margaret Radin put forth as “personhood”: people feel less possessive about a car they’ve created than a story they’ve written. (Why is that? Building a car is much harder.) The story is mine; I have a right to determine how it’s used, and to receive benefits that flow from that use. Plus, creators focus on what lawyers call “but-for” causation: but for my labor, this story wouldn’t exist. Hence, my control over it deprives no one. But there are lots of reporters, and they often file very similar stories. There are even citizen journalists and bloggers who can do (some of) the same work. So, “but-for” doesn’t really work.

At base, I don’t think this is about copyright, or “hot news” misappropriation, or IP at all. It’s psychological. Content industries are in massive flux that’s painful for those who work in them. The old intermediaries (record labels, movie studios, the New York Times editorial staff) are in retreat, and new ones (Google, iTunes, Digg) are on the rise. The invective derives from dislocation, from uncertainty, and from resistance to change. But things will be OK. After all, the MPAA’s Jack Valenti once compared the VCR to the Boston Strangler, and the little boxes turned out to be a boon for the movies.

Steal away!

In addition to a pleasant trip down memory lane (except Jelly Rolls – I hate dueling pianos), this short raises some fun copyright questions. Is this a parody? If so, of what – South Park, Lotusphere, or both? If it’s of Lotusphere, aren’t we in infringing territory (at least in the Ninth Circuit) under Dr. Seuss v. Penguin Books? What about a trademark claim – this mash-up is good enough that I actually wondered if Trey Parker and Matt Stone were involved somehow? (And if so, what does this mean? Only crappy mash-ups are safe from legal liability?) If you’d asked me these questions when I was at Lotus, I’d have looked at you as though you asked about the release plans for Lotus Marmoset 1.0, but now that I’m a lawyer, I sit and ponder them.

Anyway, if you like the vid, here’s another one on Web design that is spot-on.