Copyright And Innovation Can Coexist
March 27, 2007
Derek Slater is the activism coordinator at the Electronic Frontier Foundation.
"The punishment should fit the crime," but copyright law's harsh penalties don't match up with this maxim, and the entertainment industry has taken full advantage of that in its misguided war on new technologies. A bill recently introduced in Congress would help address this imbalance and add crucial protections for the rights of innovators and fans.
Just last week, Viacom sued YouTube and Google for hosting allegedly infringing videos uploaded by users, and nearly every news headline highlighted the one billion dollars in damages that the entertainment company is seeking. In fact, the suit declares that figure as a floor, not a ceiling—the penalty could be billions higher if the suit is successful, even without Viacom proving that much actual harm.
The threat of so-called "statutory" damages hangs over the heads of technology creators of all stripes, not just YouTube. Reps. Rick Boucher and John Doolittle have introduced the FAIR USE Act of 2007 to limit this draconian penalty and provide innovators with some much-needed breathing room.
Unlike most other legal areas, plaintiffs in copyright cases don't have to prove actual damages. Instead, they can choose to get statutory damages, which a judge can set as high as $30,000 per copyrighted work infringed. When it comes to mass-market products like the iPod or TiVo that are used by millions of customers, damages could run into the trillions of dollars—more than enough to bankrupt anyone from the smallest start-ups to the biggest companies. What's more, private assets of corporate officers, directors and investors are not necessarily shielded from liability in copyright cases.
Copyright's statutory damages are particularly problematic because it's unclear when a multipurpose tool creator can be held responsible for its customers' infringing uses ("secondary liability"). That turns innovation into a game of Russian roulette—if a court says you guessed wrong and fall outside the law's protections, you go out of business. The mere threat of litigation can chill technology creators and investors, keeping great gadgets and features out of consumers' hands.
Big media companies have historically tried to wield the law in precisely this way. For instance, Hollywood sued to block the first VCR and sued again to block the first mass market Digital Video Recorder (DVRs), pushing developer ReplayTV into bankruptcy. Record labels went after the first portable MP3 player and are currently suing XM Radio for creating a TiVo-like device for its satellite stations. The suit against YouTube is just the latest attempt by an entertainment company to protect its existing business model by stifling innovation.
Ultimately, the entertainment industry's attacks on new technologies are attacks on fans' rights to make legitimate use of digital media. Copyright law doesn't just confer rights on artists—it gives the public certain rights to make use of copyrighted works. Among other things, fair use lets you to record a TV show to watch it later, move a song to the portable player of your choice or quote a movie in a review.
So long as copyright law's treatment of innovators remains unbalanced, it will deny consumers the full benefit of their rights under the law. Sites like YouTube can facilitate copyright infringement, but they also open up new channels for free speech. Technologies like the iPod, TiVo and the Sling Box are empowering fans to make personal use of their digital media whenever, wherever and however they want. But the more innovation is chilled, the less consumers will be able to use copyrighted works in such novel, legitimate ways.
What would strike a better balance? For one thing, the entertainment industry should be seeking ways forward that get artists paid without treating all innovators and fans like potential copyright criminals. Just like the VCR opened up what are now Hollywood's largest revenue streams (home rental and sales), so too can today's breed of disruptive innovations provide sufficient compensation for artists. Some companies are already starting to come to their senses; for instance, rather than sue YouTube, CBS has licensed video clips for use on the site.
But Congress must also step in and reform copyright law. The FAIR USE Act would limit statutory damages in secondary liability cases, yet allow copyright owners to still get injunctions and actual damages for harm suffered, just like litigants in most other areas of law. In addition, the FAIR USE Act would make clear that manufacturers of hardware devices cannot be held liable based on the design of technologies with substantial non-infringing uses. Finally, it would help consumers make certain legal uses of copyrighted works that technical barriers set up by copyright holders would otherwise prevent.
The FAIR USE Act doesn't fix all of copyright's wrongs, but, if passed, it would be a huge step in the right direction. To learn more about this critical bill and take action to support it, visit EFF's Action Center.