American Lawbreaking

Tolerated Use: The Copyright Problem
The law, lawyers, and the court.
Oct. 16 2007 7:32 AM

American Lawbreaking

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What are the most violated laws in the United States?

Traffic laws take first place, perhaps, but your next bet should be on copyright. Every week, in various ways, you probably violate the copyright law. How? When, say, you check out old MTV videos on YouTube. Or if you, bored at work, decide to research the surprising origins of the character Grimace. Or if you make a mix CD for a friend or play DVDs at a house party. Each will lead you into a facial violation of the copyright law, and in today's world, it's almost unavoidable. But is it a bad thing?

Illustration by Alex Eben Meyer. Click image to expand.
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Copyright is the nation's leading system for subsidizing the creative industries, especially film, television, and book publishing. Its total evasion can threaten the cultural health of a country—witness places like Hong Kong, where piracy has decimated what was once a booming film industry. But, like many laws, copyright has acute difficulty in adapting to rapid, real-world change. The politics of copyright policy—concentrated media companies vs. millions of disorganized consumers—simply do not lead to balanced legislative outcomes. Consequently, the copyright law only sometimes adjusts itself to new challenges in the courts or the legislature. Instead, in recent years, it is often in copyright-enforcement practice that change is happening, where tolerance of lawbreaking has become the main way copyright is adjusting to the Internet age.

In 2006, shows like Saturday Night Live began to see their skits downloaded millions of times on YouTube and other similar Web sites. That meant both millions of copyright violations and millions of viewers, prompting very different reactions between and within large media firms. The legal departments jumped: "Millions of people are stealing our work!" The marketing departments responded gleefully: "Wait—millions of people are watching SNL?" The tradeoff is between control—what lawyers want—and exposure—what marketing departments crave. And for media companies that want both at once, there's no easy answer.

Tim Wu explains how we all violate copyright in this Slate Vvideo:

The story of Guyz Nite is the perfect illustration of this conflict within media firms. Guyz Nite is a "comic rock" group that made a video for its song Die Hard, composed entirely of clips from the three Die Hard movies, produced by 20th Century Fox. It was posted on YouTube.

Fox's legal department went first, ordering YouTube to take down the video, pronto. But then Fox's marketing department effectively reversed its own lawyers by contactingGuyz Nite and offering to pay them to put the video back up. You can't fault Fox's reasoning: The band was creating the kind of viral marketing you can't buy—intellectual property rules be damned. In a reversal of fortune, Fox even invited the band to the New York premiere of the fourth Die Hard film.

The Guyz Nite story is not typical in copyright history. Instead, there's a more traditional response to the unauthorized use of copyrighted materials that resembles the instinctive response of man to mosquito. In the 1960s, for example, the TV broadcast industry did everything it could to squash the new "community antenna" (cable TV) industry. In the 1970s, the TV and film industries despised the new Betamax VTR (the VCR) and tried their level best to kill the "Japanese invader." And in the early 2000s, the music industry systematically destroyed Napster, Grokster, and any other company that dared name itself similarly.

But in the late 2000s, media companies seem to be changing their tune. Mass, industry-threatening piracy is still never tolerated. But the tough-guy act typified by the music industry of the early 2000s, and recently in the case of the $222,000 fine imposed on Jammie Thomas, may be going out of fashion. Instead, media companies—particularly in television and film—are at least sometimes practicing a mellower concept called "tolerated use." They watch and see whether infringements are actually harmful or not before sending out their copyright pit bulls.

Sometimes the industry disagrees. YouTube, as discussed above, has been the inspiration for massive infringement of the copyright laws. Whether YouTube itself is actually liable is an interesting, separate legal question. But even more interesting is the fact that the media firms are themselves divided as to whether YouTube is ultimately good or bad for their business.

In 2006, NBC reacted at first to YouTube by telling the company to take down any infringing videos. But it later changed its mind and began to actively feed YouTube with what it hoped might be attractive episodes of Saturday Night Live and other shows. Viacom has taken the opposite tack—this year it sued YouTube for more than $1 billion in copyright damages, and it seems determined to force the company to proactively block all Viacom content. For Viacom, this is a delicate game—for if YouTube does block all of Viacom's shows while leaving up material from NBC, ABC, and other competitors, Viacom could easily lose by winning.

Fan sites are another example where approaches to copyright enforcement differ. Such sites cannot help but violate copyright laws. As they fawn over some person or product, they are almost certain to use copyrighted content. But it doesn't take a marketing genius to realize that suing adolescents who worship your product may not be the ideal way to promote the product.

Take the Leaky Cauldron, a leading Harry Potter fan site. It features news on the Potter films and books, essays on the works of J.K. Rowling, and a large gallery of fan art. It is also, at least to a copyright lawyer, an orgy of copyright infringement—including massive unauthorized use of characters, images, and the creation of "derivative works," like fan art. Any lawyer could find hundreds of thousands of dollars in statutory damages on a given day. The site itself could be a question on a law school final exam.

"We are totally aware that we operating at the grace of J.K. Rowling and Warner Media," says Melissa Anelli, the Web mistress of the Leaky Cauldron, whom I tracked down on Facebook, the muggle substitute for the Marauder's Map.Does she think she's breaking the law? "Strictly speaking, maybe. But we don't feel that we're breaking the law if J.K. Rowling doesn't mind what we're doing," she replies. The site, Anelli says, "empowers a lot of people to become artists and writers and video makers." And like the boys from Guyz Nite, Anelli's inbox contains not cease-and-desist letters but rather invites to the premieres of the Potter films, and the after-parties, too.

In the early days of Harry Potter and other fan sites, no one was invited to the after-parties. Instead, in 2001, grizzled members of the intellectual property bar, working for Warner Bros., sent a barrage of threatening letters to teenage boys and girls, demanding they take down their sites. One girl, then-16-year-old Heather Lawver, even set up a "Defense against the Dark Arts" site to fight overly aggressive copyright enforcement. Those days are mostly over for the Potter sites, though it's true that not all Harry Potter fan sites are tolerated. Sites that explore the erotic side of Potter's world, for instance, are still ordered to cease and desist. The same goes for large fan sites that sell unauthorized Potter merchandise, like T-Shirts that say, "Dumbledore, I'll be your whore."

This spring, at the Max-Planck Institute in Bonn, Germany, I gave a talk on the phenomenon of tolerated use, and in the audience was Stanford professor Larry Lessig, a Thomas Jefferson figure in the information revolution. "So here's what I want to know," he asked. "Why should we tolerate tolerated use?" His point: If you care about free expression and the core reasons for our copyright law—i.e., protecting the artists—why would you put up with a system that makes something like fan art illegal and then tries to ignore the problem? Surely the right answer is to fight for reform of the copyright law: Have the law declare clearly that most noncommercial activities, like fan sites and remixes, are simply beyond the reach of the law.

Lessig has a point. It is hard to see how anyone could endorse a system that declares many inoffensive activities illegal, with the tacit understanding that the law will usually not be enforced, leaving sanctions hanging overhead like copyright's own Sword of Damocles. The symbolic legal message is preposterous: "Remember, copyright is important, and you're breaking the law and you may face massive fines. But on the other hand, your site is totally great, so keep going!"

But there's a reason we do things this way: political failure. The failure in this case is one of the oldest stories in political economy. Big media is the kind of politically effective group that economist Mancur Olson recognized back in the 1960s: small, well-organized, and with much to gain from government. Meanwhile, all the people sitting around in basements creating fan sites and YouTube videos are, to Washington, political eunuchs—too diffuse and underfunded to exert much influence on the nation's laws. It all boils down to this: Harry Potter fanboys don't have K Street representation. Consequently, the political system spits out one kind of answer—an answer friendly to the "property interests" of powerful media companies but one that all but ignores the interests of the basement-dwellers. The formal result of that is what we have today: a copyright law that covers almost everything we do in the digital world.

But the paradox is that the current law is so expansive and extreme that the very firms that first sought it cannot even make use of it. Nor would they want to. In a well-functioning political system, the copyright law might be reformed in a grand negotiation between all interested parties, with the long-term goal of separating out the harmful infringement from the harmless. But in 21st-century America, that's not a result our political system is capable of reaching. And that's why, here as in the rest of the series, we leave it to tolerated lawbreaking to find some way out.

Tomorrow: How the Amish and the Mormons became a law unto themselves.

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