Topic 73

Intellectual property issues associated with reproduction and/or transformation of digitized text by Dwarkesh

The problem is illustrated simply enough: A printed book can be accessed by one or perhaps two people at once, people who must, of course, be in the same place as the book. But make that same text available in electronic form, and there is almost no technological limit to the number of people who can access it simultaneously, from literally anywhere on the planet where there is a telephone (and an Internet connection). At first glance, this is wonderful news for the consumer and for society: The electronic holdings of libraries (and friends) around the world can become available from a home computer, 24 hours a day, year-round; they are never "checked out." These same advances in technology create new opportunities and markets for publishers.

But there is also a more troublesome side. For publishers and authors, the question is, How many copies of the work will be sold (or licensed) if networks make possible planet-wide access? Their nightmare is that the number is one. How many books (or movies, photographs, or musical pieces) will be created and published online if the entire market can be extinguished by the sale of the first electronic copy?

Why Is There A Problem?

Origins of the Issues

Two elements motivate reproduction and/or transformation concepts of intellectual property:

• Advances in technology have produced radical shifts in the ability to reproduce, distribute, control, and publish information.

• Information in digital form has radically changed the economics and ease of reproduction. Reproduction costs are much lower for both rights holders and infringers alike. Digital copies are also perfect replicas, each a seed for further perfect copies. One consequence is an erosion of what were once the natural barriers to infringement, such as the expense of reproduction and the decreasing quality of successive generations of copies in analog media. The average computer owner today can easily do the kind and the extent of copying that would have required a significant investment and perhaps criminal intent only a few years ago.

• Computer networks have radically changed the economics of distribution. With transmission speeds approaching a billion characters per second, networks enable sending information products worldwide, cheaply and almost instantaneously. As a consequence, it is easier and less expensive both for a rights holder to distribute a work and for individuals or pirates to make and distribute unauthorized copies.

• The World Wide Web has radically changed the economics of publication, allowing everyone to be a publisher with worldwide reach. The astonishing variety of documents, opinions, articles, and works of all sorts on the Web demonstrate that millions of people worldwide are making use of that capability.

• With its commercialization and integration into everyday life, the information infrastructure has run headlong into intellectual property law. Today, some actions that can be taken casually by the average citizen--downloading files, forwarding information found on the Web--can at times be blatant violations of intellectual property laws; others, such as making copies of information for private use, may require subtle and difficult interpretation of the law simply to determine their legality. Individuals in their daily lives have the capability and the opportunity to access and copy vast amounts of digital information, yet lack a clear picture of what is acceptable or legal. Nor is it easy to supply a clear, "bright-line" answer, because (among other things) current intellectual property law is complex.

Why the Issues Are Difficult

The issues associated with intellectual property (IP) in digital form addressed in this report are difficult for a number of reasons:

• The stakeholders are many and varied. A wide variety of stakeholders present a broad range of legitimate concerns about the impacts of information technology. It is important to understand what these different concerns are and how technology affects these stakeholders. For example, the ability to self-publish on the Web may change the interaction between authors and traditional publishers, leading to shifts in power

• Content creators have different agendas, handle IP according to varying strategies, and look for different kinds of return on their investment. Authors have a variety of motivations, different notions of what constitutes a return on their investment, and as a consequence, different strategies for handling intellectual property. The traditional model--content produced and sold, either directly or with advertiser support--is the most familiar and encourages a view of IP law as the foundation that provides exclusive rights. But other models include giving intellectual property away in the expectation of obtaining indirect benefit in a positively correlated market (e.g., distributing free Web browser software in the expectation of building a market for Web server software), sharing IP to enhance the community (e.g., providing open source software such as Linux and the Apache Web server), or keeping it private (e.g., establishing trade secrets).

• The multiplicity of actors, motivations, returns, and strategies matters because discussions concerning intellectual property (e.g., the effects of changes in levels of IP protection) are often set in the context of a single model, suggesting that all parties are affected equally by any change in IP law or policy. But the actors are not homogeneous, and the consequences of IP policy decisions will not be felt uniformly. Policy discussions must take into account the heterogeneity of strategies for IP. Fundamental legal concepts can be interpreted differently. For example, significantly different views exist on whether the notion of "fair use" is to be construed as a defense against a charge of infringement or an affirmative right that sanctions copying in specific circumstances.1 The difference matters, for both theoretical and pragmatic reasons. If fair use is an affirmative right, for instance, then it ought to be acceptable to take positive actions, such as circumventing content protection mechanisms (e.g., decoding an encrypted file), in order to exercise fair use. But taking such positive actions may well be illegal under the regime of fair use as a defense.

• Laws and practices vary worldwide, yet networks have global reach. The information infrastructure, like the communications networks on which it builds, is global, yet there is considerable variation in different countries' laws, enforcement policies, and even cultural attitudes toward IP. This report focuses on U.S. law and practices but acknowledges that larger global issues are important and in many ways unavoidable. For example, it is typically impossible to determine where a reader of electronic information happens to be physically (and hence whose laws apply), and at times quite easy to move information from a country where certain actions may be illegal to one where laws (or enforcement) are lax.

• The economics of information products and IP can be subtle. Although content-producing industries account for a sizable and growing portion of the nation's economy and international trade, the economic significance of protecting IP is not completely clear. Stronger IP protection could encourage increased levels of creative output, resulting in more rapid progress and additional information products. But protecting IP also entails costs, including costs for directly related activities such as enforcement, and other less obvious costs (such as decreased ability to build on the work of others and the increased expenditure of resources to reproduce a product without violating its IP protection). The net economic effects of changes in protection levels are difficult to assess.

The stakes involved in all this are high, both economically and in social terms. Decisions we make now will determine who will benefit from the technology and who will have access to what information on what terms--foundational elements of our future society.

What can be done?

The concept of publication should be re-evaluated and clarified by the various stakeholder groups in response to the fundamental changes caused by the information infrastructure. The public policy implications of a new concept of publication should also be determined.

Licensing and Technical Protection Services can also be used against reproduction of rights received properties. Use of licensing is becoming more widespread, especially for information previously embedded in physical artifacts and sold under the first-sale doctrine. Increasingly, digital information acquired by libraries, for example, is available only by license. While some licenses may have advantages (e.g., providing more rights than are normally available under copyright), their use as a model for distribution of information raises a number of concerns, particularly the potential for an adverse impact on public access.