Copyrights and Voluntary Initiatives

August 26, 2014

The Internet is an incredibly complex ecosystem. One of its fundamental strengths is its decentralized nature: no one entity controls it. Anybody can contribute to its content or its architecture. As a result, however, no one entity can address problems as they arise. One such problem is online theft.

So how do we address piracy? A panel at the Technology Policy Institute’s Aspen Forum last week examined voluntary initiatives—particularly the Copyright Alert System—as one tool that relies on marketplace solutions and collaboration among stakeholders. The question, according to panelist Robert Brauneis, professor of law and co-director, Intellectual Property Program, George Washington University Law School, is “[h]ow should we approach radically decentralized piracy,” which is now possible because of digital and broadband technology? One solution is legal enforcement, he said, but another is a contractual approach, exemplified by the CAS.

Under the CAS, artists, moviemakers and other content owners notify participating ISPs if they see that someone used the ISP to put their music, movies and TV shows on public peer-to-peer networks without permission and in violation of U.S. copyright law. Without revealing the subscriber’s identity to the content owner, the ISP passes the notice to the subscriber as a Copyright Alert.

The alert makes the accountholders aware of the unlawful activity that may have occurred using their Internet account, educates the accountholders on how they can prevent copyright infringement from happening again, and provides the accountholders information about ways to access digital content legally. The hope is that most accountholders will take the appropriate steps to stop the activity after a single notice. If copyright infringement continues on a subscriber’s account, however, the ISP may temporarily reduce the subscriber’s Internet speed or service tier, or may redirect the subscriber to a landing page, until the subscriber contacts the ISP or completes an online copyright education program. Subscribers who believe they have received an alert in error may seek review from an independent arbitrator provided by the American Arbitration Association before an ISP imposes any of these measures.

Panelist, Jill Lesser, executive director of the Center for Copyright Information, which administers the CAS, observed that the voluntary nature of the CAS allows for participants to cooperatively, flexibly and expediently adjust the program based on lessons learned over time. In understanding “[t]he growth of the Internet, the growth of digital technologies and ultimately the growth of really compelling content,” Lesser emphasized, “[t]he value of cooperation and the value of looking more holistically at the problem” are both key in finding a solution to copyright infringement.

This makes sense. We live in a time of incredible innovation, experimentation and investment in the media industry. High-quality content and new ways to consume it proliferate. Although legislative solutions are sometimes necessary, they run the risk of becoming outdated by the time they are enacted or shortly thereafter—particularly in the Internet space where change is the only constant—and modifying the laws can be a challenging and lengthy process. This makes voluntary initiatives worth pursuing.

Professor Chris Sprigman, also a panelist, acknowledged that piracy is an issue, but questioned the severity of its impact on sales and also challenged whether it had an effect on creative output. He nonetheless lauded the copyright alert system for using social norms to create a proportional response. He noted that “most of us live our lives according to norms every day…. We don’t steal and we don’t break other laws not because we’re afraid of the punishment, but because that’s just not who we are.”

Panel moderator Michael Smith, a senior adjunct fellow at the Technology Policy Institute and a professor of information systems and marketing at Carnegie Mellon University, observed that the academic literature overwhelmingly indicates that piracy harms sales.  He pointed to a recent review he worked on with fellow researchers, which concludes that sixteen of nineteen peer-reviewed papers on the subject establish that piracy negatively impacts sales. He also mentioned recent research that shows it harms creativity, as well. The position that piracy somehow benefits creators and rights holders is an increasingly marginal view.

Jeff Lowenstein, U.S. Congressman Adam Schiff’s deputy chief of staff and legislative director, said the issue for him was relatively straightforward: the world would be a better place with less piracy. Indeed, creators and distributors require some assurance that their rights will be respected to continue investing in creating content and innovative distribution platforms. Shira Perlmutter, chief policy officer and director for international affairs at the USPTO, agreed, remarking that there is “[i]rrefutable evidence at this point” that digital content theft has a substantial impact on sales. She added that voluntary initiatives are designed to encourage investment and innovation in the media industry.

Voluntary programs—such as the CAS—designed to educate consumers about the harm of piracy, discourage the behavior, and point toward legal channels have value. They represent a collaborative, thoughtful, flexible, market-oriented approach to reducing piracy and encouraging creativity and innovation. For too long, defenders of piracy have conveniently advocated that online theft is a victimless crime, but we know that is not true. As a society we should not accept theft of creative works just as we do not accept theft of physical property, consistent with the American norms of the rule of law and respect for property.