Law and Information

I’m currently in Berlin, attending Wizards-of-OS 4.0, a terrific conference organized by Volker Grassmuck and this team. Earlier the week, Lawrence Lessig, Yochai Benkler, and Hal Varian – to name just a few – had been presenting. Yesterday, I had the pleasure to chair a panel on the EU Copyright Directive. In essence, the session sought to analyze and evaluate the current EU copyright landscape as shaped in important ways by the EUCD (among other directives). On the panel were Bernt Hugenholtz, Director of the Institute for Information Law at the Univ. of Amsterdam; Tilman Lueder, Head of Unit “Copyright and knowledge-based economy”, DG Internal Markets, European Commission; Cornelia Kutterer, Senior Legal Advisor BEUC; and Maja Bogataj, Director of the Intellectual Property Institute, Slovenia.

The four presentations, each rich in substance, touched upon a broad variety of important issues and it is almost impossible to summarize the panel. However, I think there were at least three recurring themes where some sort of consensus among the panelists emerged.

Harmonization of copyright law comes at significant cost and leads to a race to the top as far as the protection of copyright holders’ interests are concerned.

Bernt Hugenholtz explained in quite some detail, based on a recent (still confidential) report he wrote for the European Commission, why we should be very skeptical about copyright harmonization. He argued, in essence, that the EU step-by-step-harmonization efforts have imposed a huge burden on both the EU legislative machinery as well as on national lawmakers who, in the past 15 years or so, have had continuously to transpose EU copyright directives into their national laws. More fundamentally, he raised the question whether harmonization, at all, can be the right tool – vis-à-vis enormously time-consuming legislative processes (the work on the EUCD goes back to 1996) – in a quicksilver technological environment. The strongest argument against harmonization, though, is the observation that harmonization has created significant asymmetries and imbalances: It significantly distorted the traditional balance between the interests of copyright holders on the one and the interests of users and the public at large on the other hand in favor of copyright holders. Bernt also argued that harmonization (vis-à-vis the principle of territoriality of copyright law) has produced negative effects on the Internal Market. In the recommendation-part of his speech, he proposed to restrain from future harmonization in this area. Rather, he suggested the use of soft law and, in the long run, of the creation of a unified, truly European Copyright Law.

The EUCD has created significant asymmetries and imbalances that need to be fixed.

It doesn’t come as a surprise that Cornelia Kutterer in particular has made it very clear in what ways and areas the EUCD has favored copyright holder’s interest over user’s interest. Much of the discussion focused on Art. 5 EUCD, which sets forth (largely voluntary) exceptions and limitations, and on the legal protection of technological protection measures. In the latter context, Cornelia addressed issues such as interoperability and (lack of) transparency. From a very different perspective, Tilman Lueder was questioning whether the EUCD has struck the right balance between exclusive rights and fair compensation, and whether compensation models will prevail in the age of digital distribution (vis-à-vis DRM.)

The solution to some of the flaws of the EUCD might be found in other areas of law such as competition law or consumer protection law.

With regard to potential answers to the problems created, in part, by the EUCD, Cornelia Kutterer – as well as previously Tilman Lueder to some extent – proposed to consider the use of consumer protection laws and competition law to rebalance interests. She suggested, for instance, to conceptualize DRM as “technical terms” in analogy to contractual terms, and to extend the scope of the Unfair Contract Terms Directive in a way that it includes such technical terms (“code”) too. Another issue to be dealt with in the consumer protection acquis is EU-wide labeling requirements for DRM.

Later this morning, we will ask how accession and candidate countries can learn from these (largely: bad) experiences surrounding the EUCD in particular and EU copyright harmonization in general. At a workshop sponsored by the Soros Foundation, we will talk in greater detail about the pitfalls of EUCD implementation (what Maja Bogataj yesterday has described as “cut-translate-paste”-legislation). In this context, we will also explore as to what extent best practices of implementation can be identified that might be helpful to future EU member states (and, probably, in the context of law reform projects.) We had a first cut at what shall become a EUCD best practice guide, check it out here. It’s an initial and uncompleted draft and very much research in progress, so feedback and contributions are most welcome and much appreciated.

IP & Behavioral Science: The P2P-Example

So far, I’ve had an interesting week. It started on Tuesday in Munich where I attended an interesting workshop on Intellectual Property Law and Behavioral Sciences, organized by the Gruter Institute and the Max-Planck-Institute for Intellectual Property. Scholars from both sides of the Atlantic discussed the promises of a behavioral science approach to IP Law. I was talking about neuroscience and copyright law in the digital age, asking as to what extent neuroscience might be helpful to gain a better understanding of some of the most interesting copyright-related phenomena we’ve observed in cyberspace. Building upon earlier research conducted at the Berkman Center, I was focusing on the p2p file-sharing phenomenon. In the presentation, I tried to provide and map possible explanations of the file-sharing puzzle (why does it happen, why is it large-scale, why is it persistent?), using an extended version of Lessig’s four-mode-of-regulation framework by replacing Lessig’s “Dot” (i.e. the individual that is exposed to the four constraints on behavior) by a brain. My basic argument is that easy-to-use technology, market conditions, perceived illegitimacy of copyright norms and enforcement problems, and social norms overwriting legal norms (among other factors) are necessary, but not sufficient conditions to explain the emergence, scale and persistence of the p2p file-sharing phenomenon. Other factors have to be taken into account too, including social signaling, trust, and reciprocity (see Ernst Fehr’s research) – elements that are implemented on the platform level through Charismatic Code. The resulting practices of sharing might be bolstered by and corresponding with emotionally preferable states of mind. Since negative emotions are associated with free riding (defection triggers anger in others; defectors expect others to be angry with them), they might provide incentive to share despite lack of direct punishment on P2P networks. Positive emotions, by contrast, might result from cooperation/sharing: fMRI scans show that mutual cooperation is associated with activation in brain areas that are linked with reward processing (cf. Rilling, Gutman et al.)
The p2p case, in my view, nicely illustrates the promise (as well as the problems!) of an interdisciplinary research approach to IP law and policy - beyond law and economics.

Records Management: Local Laws vs. Global Infrastructure and Policies

Yesterday, I went to New York City to attend a series of interesting meetings as part of a consulting job for a multinational Swiss company. Together with the Swiss project leader and U.S. colleagues, we continued a discussion on global records and information management strategies. Once again, I was particularly intrigued by the complexity and granularity of the interactions between legal and regulatory frameworks regarding information and records management on the one hand and IT infrastructure issues on the other hand – both with regard to the physical and logical layer. From an information law perspective, it’s particularly interesting to study how regulators and legislators have been influenced by particular cases (e.g. Enron) as well as technological developments (e.g. storage media and techniques). The legal and regulatory responses are far from coherent even within a jurisdiction (in the U.S., for instance, different approaches have been taken to paper records, electronic documents, and email retention) and vary (not surprisingly) significantly among jurisdictions. For a global company, this heterogeneity and, sometimes, inconsistency of rules and regulations presents a though challenge if the company seeks to develop a global information and records management system as well as globally applicable corporate policies (e.g. on email management and retention). The complexity of the task to design and implement such systems and policies further increases due to the fact that each approach has different ramifications in areas such as litigation (buzzword e-discovery) that have to be taken into account in an iterative decision making process.

Internet Governance: Mapping a Diverse Diversity Debate

Right now, I’m waiting in Zurich for a delayed flight to London, from where I will be traveling to Oxford in order to attend a workshop on Internet Governance hosted by the Oxford Internet Institute. The workshop seeks to clarify the issues that are addressed in the first Internet Governance Forum meeting that will take place in Athens later this year. I have drafted a position paper on the diversity issue. The paper maps the diverse diversity debate and summarizes some of the key challenges faced by the IGF. The conclusion of the short paper (I will post a full PDF version later on) reads as follows:

An initial analysis of the contributions to the first IGF meeting confirms the impression that the “diversity” debate includes a broad range of topics. This position paper has outlined the contours of a framework that might be helpful to map the various issues addressed in the respective contributions. The challenges faced by the IGF, however, go far beyond analysis and categorization. First, the many items on the diversity agenda have to be prioritized. Second, the IGF — like other policy-makers (or “-shapers”) in cyberspace — faces the challenge of synchronizing technological innovation and market development with regulatory evolution if it chooses to set diversity as an item on the regulators’ agenda. Third, the IGF needs to decide on the approaches, institutions, and structures that are apt to deal with the complex components (and the interactions among them) of a diverse information environment. In this context, the promise and limits of a laissez-faire approach to diversity need to be assessed as well. Fourth, the IGF faces the challenge of facilitating discourse among stakeholders from various cultural, societal, economic and legal backgrounds. A look at the history of (national) debates about diversity in electronic media in general and content diversity in particular suggests that these cultural differences will make any implementation efforts at the international level particularly tough.

Against this backdrop, the IGF would be well-advised to focus on specific and clearly defined issues (e.g., the IDN issue), while gaining a deeper understanding — and raising awareness — of the interplay among the many elements that are crucial for building and maintaining a diverse digitally networked information environment.

Tomorrow, finally, back to St. Gallen.