Chew Before You Swallow

It's not that I've been withholding internet link sausages from the starving masses, it's that I've been away (and down with back problems). So remember to chew as you work your way through this platter!

• Some of the work I did over a decade ago is still coming back to haunt pirates and those who would sell them the tools of their "trade," as the Ninth Circuit ruled yesterday. In the IsoHunt case — formally, Columbia Pictures Indus. v. Fung, No. 10–55946 (21 Mar 2013) (PDF) — the Ellison matter is rather central to the panel's reasoning.

  As to the first prong of § 512(c)(1)(B), we have held, in the context of service providers who charge for their services, that a service provider receives a direct financial benefit from infringing activity where “there is a causal relationship between the infringing activity and any financial benefit a defendant reaps, regardless of how substantial the benefit is in proportion to a defendant’s overall profits.” Ellison, 357 F.3d at 1079; see also Napster, 239 F.3d at 1023; CCBill, 488 F.3d at 1117–18 (holding that the Ellison “direct financial benefit” vicarious liability standard applies under 17 U.S.C. § 512(c)(1)(B)). Thus, where a service provider obtains revenue from “subscribers,” the relevant inquiry is “‘whether the infringing activity constitutes a draw for subscribers, not just an added benefit.’” CCBill, 488 F.3d at 1117 (quoting Ellison, 357 F.3d at 1079).²¹

  * * *

  21. Our decisions interpreting the “financial benefit” prong of §512(c)(1)(B) derive almost entirely from our earlier decisions discussing “direct financial benefits” in the context of vicarious liability for copyright infringement. Those cases also involved defendants who derived their revenue from consumers. In particular, our decision in Fonovisa, Inc. v. Cherry Auction, Inc., 76 F.3d 259, 263–64 (9th Cir. 1996), has been the starting point for our subsequent § 512(c)(1)(B) decisions. In Fonovisa, we held that swap meet operators “reap[ed] substantial financial benefits from admission fees, concession stand sales and parking fees, all of which flow[ed] directly from customers who want[ed] to buy the counterfeit recordings” available at the swap meets. 76 F.3d at 263. In doing so, we relied on district court decisions “imposing vicarious liability on the operator[s] of [dance hall] business[es] where infringing performances enhance[d] the attractiveness of the venue[s] to potential customers.” Id. (citing Polygram Int’l Publ’g, Inc. v. Nevada/TIG, Inc., 855 F. Supp. 1314, 1332 (D. Mass. 1994)).

  (slip op. at 48–49) Ten years is a long time for a decision on internet "stuff" to remain current... even considering that one of the three judges on this panel (Judge Pregerson) was also on the Ellison panel. Then, the copyright holders' counsel in IsoHunt were also our amici in Ellison.

  All of that said, the battle over internet piracy is beginning to resemble the gun-control debate rather too closely for comfort. Mr Fung's position was, essentially, that making tools and venues for pirated material available to the general public doesn't cause piracy — pirates cause piracy, and as the mere toolmaker/venue provider he's not responsible for that. The Ninth Circuit — properly, as it's bound by logic and by Grokster — rejected that position.

• Turning slightly less theoretical for a moment, an interesting attempt at gathering actual data concerning publishing issues — something that doesn't happen very often — has concluded that bookshop browsing is a vital component of even online book sales in the UK. I believe this is true for the US market, but of substantially lower magnitude, for a very simple reason: Our pervasive, current-works-oriented public library system fulfills browsing functions that the UK's vision of public libraries does not. Thus, I expect that the purported "one third of sales" effect has a different magnitude here — and, in particular, it is a substantially different magnitude away from major metropolitan areas. For the sake of illustration, assume that the "nonsubstitution" barrier is a two-hour drive/trip. A two-hour trip with no bookstore is a lot easier to plot on a map of Texas (or of California) than it is on a map of England...
• It's all about the business of literature... depending, of course, on the definition of "literature" at issue. For all of the insight in Mr Nash's piece, it is limited by its failure to display a coherent grasp of what it is ultimately concerned with — and an underinclusive incoherent grasp. Then, too, the portrayal of the history of the three-century-long orgy among thirteen distinct and independent "industries" that we now call "publishing" leaves a bit to be desired, but then so does everyone's; the problem here is that Mr Nash is making some sweeping generalizations based on other sweeping generalizations about the past that simply are not consistent with late-twentieth-century research into the Company of Stationers, let alone the continental experience. Despite these flaws, Mr Nash's piece provides some useful things to think about when trying to figure out pricing — and, in particular, when trying to figure out e-book pricing.
• If there's one thing constant in the arts, it's change. If there's one aspect of change that one can count on, it's counterintuitive shifts in segment dominance that aren't at all what they seem. That piece in the FT is a specific example, because of what it does not acknowledge: That the "Nashville music establishment" today is largely what the "LA music establishment" looked like in 1973. A substantial proportion of the "country" music culture emerging from/controlled in Nashville today would have been pop-rock controlled in LA in 1973. Country music still includes George Strait and Loretta Lynn... it's not limited to George Strait and Loretta Lynn. This should sound an awful lot like Dylan going electric!
• Healthy ecosystems require diversity, not monocultures. That's why there will remain a place for commercial publishing in the face of the self-publishing ideologues no matter what. Besides which, certain kinds of properties are just plain unsuited to self-publishing... and those kinds of properties form a substantial minority, at minimum, of sales. Even within fiction, it's hard to imagine an authorized media-tie-in novel being self-published!
• The Steubenville Shame — perhaps Intransigience? — has some obvious root causes. The most obvious of those causes is a thriving culture of bullying. As disgusting as the gender-based aspects of football-hero-worship in small-town America are, they are just the most obvious expression of bullying from a sense of privilege earned through noncentral means. Really: What does high-school football actually contribute to Steubenville, Ohio (or, more to the point, Cobb County, Georgia — where so many CNN personnel live)? And what are the future prospects of the heroes of Steubenville's High's team... and of the not-quite-heroes on the offensive line?

  One place we could start is by eliminating all interscholastic (and intercollegiate, for that matter) sporting competition. I'm not saying that we should get all organized physical activity out of the schools; I'm saying we should be more concerned with limiting us-versus-them unifying memes to those that do not involve the immediate imposition of physical dominance over others, if we care at all about limiting that sort of thing off the field. Of course, if we don't care about it — and we're willing to sink the money that should be going into classrooms and libraries and laboratories and textbooks for all of the students into locker rooms and stadia that will be actively used (as opposed to merely traversed) by a distinct minority of students — then go right ahead. Just don't bitch too much when the football coach at a research university makes as much money as the top five tenured professors on that campus. Combined. Or when "hazing" gets a little out of hand on the job...

• Copyright reform may, or may not, be in the wind. Admittedly, at least some change is long overdue... particularly since that Gerald Ford-era copyright law was itself over a decade old in its most important aspects when it was passed. My concern is that the Register's own comments to Congress reflect an even greater degree of agency capture by transferee interests — "big media" — than did the unsatisfactory blatherings of her predecessor, particularly concerning "orphan works" and related problems. To quote myself from last month:

  The current debate over copyright, especially as it is on the 'net, uncomfortably resembles the partition of a colony by colonial powers without a voice at the table for the indigenous peoples (or at least not one drowned out by moneyed interests like the East India Company). It seems to me that we've made that mistake a few times before with unsatisfactory results. We really, really shouldn't be repeating it.

  (emphasis in original). I'm not backing down at all from that statement; some of my colleagues thought it was too inflammatory, but I'm starting to think it too mild.

• Related to the copyright-reform issues — but not properly part of, despite its presence in the Copyright Act — there is deserved, increasing skepticism regarding DRM. The real problem with DRM is that it reifies the already broken and untenable sell-the-package meme in the entertainment industry — a meme kept around only by assertion of economic power in the distribution chain that should get a lot more antitrust scrutiny than it does. Print publishing is, perhaps, the best example of this, with the hardcover/trade paperback/mass-market paperback history overlaid with e-books restricted to specific e-readers. The public is being forced to pay for packaging; in fact, the packaging is both a necessary and a sufficient guide to pricing (to well inside a closed order of magnitude), so long as one is looking within the same industry segment. That is, fundamentally, incompatible with copyright, which is concerned with the content and not the packaging. Further, it is at a deep level incompatible with Kirtsaeng, which was concerned with publisher price points being maintained via other aspects of packaging.