Thanks for the Idea


The concept of ownership is under constant assault in the digital age. While the law flounders trying to keep up, file sharers jump from one unstoppable technology to the next. Drew Turney asks if the online world has rendered IP obsolete.

It used to be cut and dried. We walked into a store and bought a 7-inch single or videocassette if we liked a song or movie. None of us had the means to reproduce it in the sort of numbers that would hurt copyright holders too much. But nowadays, an eleven-year-old on the family PC can copy and distribute anything to billions of otherwise paying customers.

New technology — and specifically digital technology — has made copyright infringement accessible to everyone, whether copying text from a website, downloading music and videos with file sharing tools or putting secret company files onto a flash drive and walking out the front door. But the online environment of cut-and-paste reproduction, file sharing and emailing files has thrown extra pressures — and temptations — into the mix.

Fighting against such attitudes is difficult. The ease of copying has, in the mind of some, given empowerment to those who believe ‘property is theft’, almost making it a right (or a rite) to copy what has been created by others.

As copyright infringement gets easier and recourse by the copyright holder less likely, it will be harder for companies who deal in IP to enforce it. It’s no coincidence companies today continue to integrate vertically — a media conglomerate that owns a film studio, newspapers, book publisher, TV station and more can diversify properties throughout different revenue streams.

But if it’s right there for the taking, who’s going to pay money for it? If IP stops generating revenue won’t it mean the end of content? Now the cornerstone of the economy isn’t trucks, farms, mines or land but ideas, what will become of the world when ideas are free?

Brave New World

Two anecdotes that reflect on IP in the digital age.

At a free seminar given at the University of Technology Sydney in 1999, the author recalls a newly minted (and now long-forgotten) guru of the digital age outlining the business model that would prevail online. The paradox of making money on the internet, he said, was to give what you had away for free. Nobody was going to pay for it, and visitor numbers would be the new currency. A new client at a Perth-based web development firm in 2004 asked if there was a way to restrict visitors to their website from copying the text on their pages. After a short silence to ascertain if it was a joke, the bemused developers calmly explained it was impossible.

Both stories perfectly embody the collision between traditional notions of copyright and the digital age. How do you put your brand or product in front of the widest possible audience but protect your property?

Given the choice between paying for media or stealing it with almost guaranteed anonymity, the temptation is often too strong even when we know we’re breaking the law, depriving artists of income and the other crumbling, 20th century-style defences against piracy. History has taught us ones and zeros on computer networks repeatedly outpace the law in the digital arms race.

Few would argue that theft is endemic, even seemingly independent observers. It’s not just the US-based International Federation of the Phonographic Industry, which claims 95 per cent of music downloads are illegal. A September 2008 Quantum Market Research YouthSCAN poll of 600 10-17 year olds in NSW and Victoria found 63 per cent didn’t see a point in paying for music that was freely available. Earlier this year, Microsoft released the results of a study by Galaxy Research that showed 45 per cent of Australians believe it’s okay to use pirated software for personal use (64 per cent for 16-to-24 year olds).

For a number of years now we’ve been reading about how we’re all producers as well as consumers, and the internet is a Utopia of free expression empowering us to control the media we consume. The dark side is that creating, sharing and referencing media so easily also makes it easy to steal.

Music and pictures

For many of us, the image of copyright infringement that comes immediately to mind revolves around the music and film industries — downloading product from file-sharing sites without paying for it, or buying dubbed tapes and discs from local markets, whose proprietors run illegal backstreet copying operations.

These days the music industry is business lore on how not to combat piracy. After slicing the heads off a many-headed Hydra, better and more elusive technologies have arisen to stay one step ahead of the law. First there was file-sharing website Napster. After the American music industry lobbyists and lawyers sued it out of existence came the age of Kazaa, a program that lived on your desktop and allowed you to share files with other users from your own system, bypassing a central host. Sharman Networks, incorporated through a labyrinthine network of holding companies based in Vanuatu and headquartered in Australia, couldn’t stay ahead of music lawyers for too long and court action shut it down in 2005.

Now we live in the BitTorrent age, which uses a similar peer-to-peer protocol as Kazaa and others, but lifts pieces of individual files from far and wide across the internet, meaning no single user has an entire (illegal) movie or song download, but instead shares millions of bits of them with everyone else on the network.

The music industry is now a shadow of its former self. In June 2007, Rolling Stone magazine ran a two-part story on the death throes of the music business, saying "the record business has been shrinking since the beginning of the decade. US album sales have fallen 25 per cent since 2000, the biggest year on record — and the year Napster went mainstream. Sales of digital singles — which are up 2930 per cent since 2003 — haven’t come close to making up the difference, driving revenue down sharply."

The book industry ultimately sought a co-operative rather than a combative stance, accepting a $125m litigation settlement from Google and promising to collaborate with the search giant’s Book Search tool. Now broadband speeds are allowing for wholesale piracy of movies and TV, large bets are taking place on whether Hollywood will adopt a 21st century approach.

Richard Conrad, technology editor of the Melbourne Herald Sun, thinks the assault on IP is cultural. "The digital native generation increasingly doesn’t get why digital content should be considered commodities that ought to be bought," he says. "There’s a mindset that they have a right to see or hear whatever they can find regardless of whether it’s obtained legally or not. Downloading movies, music or software doesn’t feel like shoplifting – it feels more like picking up stuff they’ve found lying on a city footpath."

Since the music industry’s decline, ad hoc precedents in the courts are cobbling piracy, copyright and IP laws together as content owners and users try to figure out who’s right and wrong in a digital world the progenitors of our legal system couldn’t imagine.

Simon Longstaff, executive director of Sydney’s St James Ethics Centre, agrees technology has blindsided our understanding of ethics, but thinks the tide can still be turned by the unlikeliest of suspects — users.

"For thousands of years it was generally accepted slavery was all right," he says, "especially when technology changed and the invention of ships increased its scale. It took a lifetime for men like [British parliamentarian and anti-slavery campaigner] Wilberforce to bring about change — slavery was prolific and profitable. But people started to realise the enslavement of another person was inconsistent with the notion of everyone deserving respect."

Plus, as Longstaff points out, we appear to want to do the right thing when we have the capability. While the music industry desperately held onto outmoded models, alt rock band Radiohead released its 2007 album In Rainbows on its website, encouraging fans to pay what they thought it was worth. The album was still a big commercial success when it was released later through traditional retail channels.

Either way the debate is impassioned. Traditional media cries poor and consumers justify piracy as revenge for years of price-fixing and big business screwing artists and consumers alike. But the law is clear – IP from a musical track to nuclear submarine blueprints is subject to copyright, and obtaining it without payment or permission is theft. So is IP, like chemical film and daily newspapers, slowly dying?

Shades of grey

Of course, copying a song file is more serious than reproducing a line out of a song on your blog … isn’t it? Digital technology has produced a lot more fuzzy areas than clear ones, areas lawyers have barely started thrashing out.

As an example, the blogosphere is maintained by referencing other pages on the internet not just through links from one page to another but by copying the text from them. So what’s the difference between stealing and referencing?

The answer lies somewhere in a large gulf between extremes. Quoting a line in a song may indeed be reproducing material that’s subject to copyright. So is a national newspaper reprinting a story without the permission of the author or rights holder. It’s hard to imagine the former resulting in a prosecution, but the latter would result in a scandal. Somewhere between the two is a line, but where is it?

Geraldine Farrell, special counsel for IP lawyers Griffith Hack, explains it’s a matter of degree and courts decide these issues on a case-by-case basis. "The key thing with copyright infringement is that it has to be a substantial part of somebody’s work," she says. "The quality of what is copied is important, so if someone copies three paragraphs the court would look at whether it’s a substantial part of the original work from a quality perspective. There may only be one really key sentence that is copied and, because of its quality, the courts can still say it’s a substantial part."

As is the case with many legal precedents, the line is drawn simply over what the concerned parties are willing to sue over. Even though the law is constantly broken on blogs, Facebook and Twitter every day, big media actually gave us our first case of the difference between referencing and copying.

After clips from shows owned by the Channel Nine Network were shown on Network Ten’s popular chat show The Panel, Nine sued Ten for copyright infringement in the Federal Court. After decisions in the Federal Court, Full Federal Court, the High Court and then referral back to the Full Federal Court, the decision came down in Nine’s favour, saying Ten had infringed Nine’s copyright in broadcasting some of the clips of Nine’s shows.

Reusing someone else’s clips has been around before The Panel — ABC-TV’s commentary program Media Watch has been running since 1989, and regularly uses clips of other stations programs. But The Panel case was an important milestone in media law with long-reaching and perhaps unwitting implications for the digital age about whether the context affects a breach in copyright.

Blogs are a conversation as well as a broadcast medium, like a gathering in a disembodied global pub to discuss interests with like-minded people. Talking about a scene from your favourite movie with friends is fine. Copying it off the DVD and uploading it to MySpace or YouTube can be a breach of copyright.

But surely sending a link to a friend is different to mass-market broadcasting. The problem is that if you do it online, you’re doing both. Even though the law doesn’t distinguish between the two, Farrell reminds us it’s about how much someone stands to lose.

"They’re both technically an infringement," she says. "But the issue is if one is a mass marketing mail-out, the damages suffered by the copyright owner would be higher than if you’d just shared it with a couple of friends. Before doing anything, the copyright owner will look at how many other people have received it, what losses the owner has suffered and what they might get in return for suing you for infringement — only after they’ve done this assessment and decided that it’s worth pursuing you will they come after you."

More than music

As outlined by Naomi Klein in her 2001 anti-corporate manifesto No Logo, the obsessive cost-cutting of the early 1990s recession prompted multinational corporations to get out of the ‘making’ and in to the ‘selling’ business, outsourcing everything from manufacture to distribution until many corporations of today own little more than the rights to assets rather than assets themselves.

It means the IP of brands, products and services is far more profitable than factories or fleets, and the World Trade Organisation (WTO) has spent the past few decades expanding and fortifying IP law. Part of the international effort has been a campaign to crack down on notorious ‘pirate’ regions across Asia and Eastern Europe whose commercial and regulatory environments make them havens for copyright infringement.

The most recent — the Trade Related Aspects of Intellectual Property Rights (TRIPS) — was formed at the end of the 1994 General Agreement on Tariffs and trade (GATT) talks in Uruguay. Member states took it so seriously a condition of China’s 2001 entry into the WTO was for the government to overhaul its patent, copyright and trademark laws to bring them into line with the industrialised nations.

In fact, as Robert Laughlin (author of The Crime of Reason) told the Sydney Morning Herald in January of this year that the move to bolster IP rights means that knowledge itself might be under threat as every corner of human ingenuity is subject to copyright by commercial interests. "The growing efforts of governments, corporations and individuals to prevent competitors from knowing certain things that they themselves know has led to a stunning expansion of intellectual property rights and the strengthening of state classification powers," Laughlin wrote.

Because it’s not just about movies or books, and it’s not just about the internet. It’s about how easy it is to copy, transmit and reproduce digital data, and in today’s world almost all IP is expressed digitally. If you maintain a database of clients in address book of your email program, that’s IP. It’s worth money to your competitors, and if it’s compromised it could mean your business continuity.

Until recently, privacy was the only issue facing users who gleefully reported their movements, friends and details on social networks like Facebook or MySpace, but those services were merely a dry run for a much larger movement to compute online. Called cloud computing, it means more of what we do — even tasks traditionally restricted to our desktop like creating text or spreadsheet documents — will move online with software services like Google Docs.

Until recently, privacy was the only issue facing users who gleefully reported their movements, friends and details on social networks like Facebook or MySpace, but those services were merely a dry run for a much larger movement to compute online. Called ‘cloud computing’, this is where your applications and your files, documents, email, etc) are stored not on your PC or server but elsewhere at a service provider and accessed via the internet. Google Docs is an example of this offsite service. It means more of what we do – even tasks traditionally restricted to our desktop like creating text or spreadsheet documents – will move online, and thus into a different environment re security and access.

As we increasingly move online and offsite, IP jurisdictions become much more important. Server farms hosting your data could be anywhere. Let’s say freedom fighters overthrow a country that’s home to a data centre hosting all your business information. After they download your data at gunpoint and sell it to Eastern European identity thieves to raise money for their cause, how does that affect your compensation for damages if your place of business has no reciprocal agreement with the country involved? There’s no single global copyright law, and not all countries are WTO members.

Google itself is cagey on the subject. The company doesn’t discuss the locations of its server facilities around the world and told Fast Thinking only that "information is not stored in a given locality unless we are confident that we can meet our expectations for the privacy and security of users’ sensitive information".

The company almost caused a panic in September 2008 with the terms and conditions of its new browser, Chrome, saying any software or content created with the browser would remain Google’s property. After a quick howl of protest Google changed it, claiming it was a mere typo, but it could easily have been just a bullet point in another endless list of terms vendors know we never read.

Online or cloud computing is small, but it’s growing. If it becomes the norm, will the sum total of human knowledge and expression be there for the bittorrenting? Online computing services are springing up like field mushrooms, offering models from the storage interface of Google Docs to complete virtual desktop environments with software pre-loaded, all accessible through a web browser.

To some it’s the ultimate in mobility and freedom. To others we haven’t even begun to scratch the surface of the security and IP issues. As open source software specialist and lawyer Brendan Scott of Open Source Law told Richard Chirgwin of the A Series of Tubes podcast in late 2008, "You’re giving something of great value to someone else. What happens if they lose it, break or don’t give it to you when you want it back?"

In fact we already have cases like it. In January 2009 blogging site Journalspace.com was irreparably crippled when a disgruntled ex-employee overwrote the entire database, wiping out Journalspace users’ blogs at a stroke because he knew there was no effective back up. In 2002 Australian web-based email service start.com.au suddenly closed its doors, deleting all user accounts and the data in them. If we were all computing online with a major provider who decided tomorrow to switch its servers off because of the economy, what recourse would we have to get vital business IP back?

It’s also not just about what’s online but how much control you have over it — including removing it where necessary. In early 2008 reports surfaced about how hard it was to remove a Facebook account, a 34-year-old company director telling The New York Times it took two months and several email exchanges with Facebook customer service personnel to completely remove his account and accompanying data.

Infringing legally

So in a world where IP is so easy to access and potentially abuse, how restrictive do we have to be? There’s no argument reproduction of copyright material is illegal, but the police didn’t show up every time we recorded a TV show on videotape in the 1980s.

Though not automatic, there are exceptions to copyright laws. If a news crew covers the serious crash of a delivery truck on a highway, the picture editor needn’t remove the logo of the delivery company with Photoshop lest the delivery company launch legal action. The law tries to recognise certain uses of copyrighted material are necessary for society to function, a concept called fair dealing (called ‘fair use’ in the US).

In Australia, we have five grounds to claim fair dealing: research and study; review and criticism; reporting the news; legal advice; and parody and satire, the latter enshrined in the 2006 Copyright Act and brought about in part because of The Panel case mentioned earlier.

If your use of copyright material falls under one of the above legal concepts, the onus is still on you to prove it. Imagine you’re a struggling documentary filmmaker shooting on the streets of a large city and location sound picks up music from passing cars. When your film comes out you get several nasty letters from music publishers’ lawyers suing for using their copyright material without permission.

Think you’re covered because you can argue fair dealing under review and criticism, or — depending how topical your doco is — reporting the news? Maybe so, but legal services to defend your case aren’t free and if your opponents can sniff lots of money to be made out of it, they’ll deliver you into the grip of an expensive legal action.

As the above principles suggest, institutions from newspapers to blogs can protect themselves using the concept. Describing the blogosphere as a ‘house of cards’ that fair dealing mostly props up, Farrell actually reminds us the field has an unlikely progenitor. "Bloggers are basically building on what other people have previously said," she says. "It’s much the same as the way the patenting regime was built. You get a patent by writing a how-to manual for an invention. Inventors look at other patents and they might see something they can build on, so many inventions are ideas built on what other people have done."

Such ‘building upon’ is actually one of the cornerstones of digital media. As anyone who’s ever seen Albert Korda’s famous Che Guevara photograph on a T-shirt or poster knows, content is continually repurposed. In many cases, creative input that goes into your re-iteration of content attracts its own copyright, regardless of whether you had permission for the original.

But how far does fair dealing go? "We have general internal guidelines but we ultimately take a view depending on the particular work in question, the history of its creation and the nature of the news article we are planning to publish," says Peter Kerr, commissioning editor of the Sydney Morning Herald. "Fair dealing is always a factual question depending on the circumstances of the work and the use it’s put to. A reporter of the Times Online (London) republished large slabs of online technology editor Stephen Hutcheon’s interview with a leading Google executive with attribution but using more than what we’d consider fair use."

Fair dealing is something the news business takes seriously. In September 2008, Fairfax Media sued global information publisher Reed Elsevier for reproducing headlines from the Australian Financial Review in online search databases, claiming they were original works subject to copyright in an attempt to stop Reed users using headline and story summaries for information instead of buying subscriptions.

At time of writing, the judgement on that case is yet to be delivered, much like the judgement on the issue of digital IP as a whole.

The end of an era?

Like in no other sector of society, the gulf between what’s easy, moral and legal is only getting wider. With the profits of the entertainment industries at stake, the billion dollar questions remains about who’s going to pay for content. The digital age seems to have answered "certainly not the user". The tools that allow us to make a mockery of IP laws (the PC and the internet) are now too deeply entrenched in society to be held back. So it would seem global entertainment production is the weaker of the two, their lawyers and think tanks marking small victories in an ultimately unwinnable war.

Theories abound about who will pay for media. We already have a free-to-user medium in analogue TV; maybe movies and books just have to get with the program and let expensive, targeted advertising pay for the content. It’s actually already happened, with novelist Fay Weldon accepting a commission from jeweller Bulgari (2001’s The Bulgari Connection) to write a novel prominently featuring their products. But in a world where digital technology lets us bypass the ads, even that model might be a dying anachronism of the 1950s.

It’s a decade-old skirmish and we’ve barely scratched the surface. As high def-grade broadband (which can deliver movies and TV in high quality) starts to go mainstream it’ll be a much bigger problem than websites sharing song files. Digital IP strategies are becoming more robust too, but we all know calling something ‘unbreakable’ is like a red rag to a bull to the hackers of the world.

The race for IP is nothing less than a new Cold War with new global superpowers. Will we learn the lessons from the real thing or will it all end in mutually assured destruction?

IP safeguards

Just how do you protect an idea, secure a plan, keep a dream under lock and key? Legally speaking, you can’t. Copyright refers to the expression¬¨¬® the book you’ve written, song you’ve recorded or design you’ve drafted. Protesting that you thought of it ages ago won’t give you a leg to stand on if you haven’t written it down or put it into an expressible form.

Copyright protection is automatic once an idea is put into an expressible form — in Australia (and in most countries) there is no formal register of copyright. Other forms of IP can be registered — designs, trademarks and patents go through an examination and registration process. With your IP rights secured, litigating to protect them is then a much more formalised process through a supporting framework that backs up your case.

For one thing, IP laws only exist on a country-by-country basis — there is no such thing as international laws for different forms of IP. If you have copyright on an image, design, literary or musical work or corporate logo, going after a party who rips it off in a far-flung jurisdiction can be expensive and unwieldy; even if that country has a reciprocal arrangement that recognises that the copyright exists, you may still have to sue in a foreign country. There are different forms of IP protection, from patents and designs to copyright and trademarks, all of which depend on what you are trying to protect.

The length of time you can get protection differs too: copyright has a limited duration (in Australia it’s usually 70 years after an author’s death), trademarks can be perpetual — as long as you continue to renew and use the trademarked item in the market you’re almost immune to challenge. Patents are a different matter — they generally last for 20 years, but that’s 20 years of exclusive rights for you to exploit the invention or to license someone else to.


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