|THE BALANCING ACT
Congress and the European Parliament clearly believe that the threat of digital piracy justifies, and even requires, drastic new measures to protect the rights of copyright owners. Each also apparently believes that these measures are properly balanced against the general public interest.57 However, the results, along with the supporting rhetoric, suggest that both Congress and the European Parliament perceive the public interest much too narrowly. In Europe, the public interest is addressed by providing narrow exceptions to promote specific social goals, such as access to copyrighted materials by the blind. In the United States, where copyright has traditionally been viewed as a generally undesirable monopoly, but nonetheless necessary to provide incentives to authors and artists, Congress has focused simply on whether consumers can view copyrighted material, rather than whether the consumer can manipulate it, modify it, and re-use it in ways traditionally protected by the fair use doctrine.
This approach to the balance of interests has the practical effect of largely equating the public’s interest with that of the incumbent copyright holders and ignores the essential tension between the copyright monopoly and creativity. Augmented with technology-focused prohibitions, the copyright monopoly now threatens not only the creative endeavors of the author and artist, but also the technological innovation that has provided important new ways to communicate and share creativity. In short, these shortsighted efforts to enhance digital copyright protections have shortchanged the public, and threaten to undermine the primary purpose of copyright.
A. Balance in the DMCA
In the United States, Congress is authorized to grant copyrights under the powers granted by the Copyright Clause of the United States Constitution: “. . . To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”58 Historically, the United States Supreme Court has seen the Copyright Clause as both an authorization and a limitation on Congressional power; i.e. Congress may exercise this power only to the extent that its actions “promote the progress of Science and useful Arts.”59 Thus, Congress must balance the rights granted to copyright holders against the public’s interest in a thriving scientific and creative culture.60
In addition to the limitation on Congressional power implicit in the Copyright Clause, the courts have recognized a tension between the granting of copyrights and the First Amendment’s guarantee of free speech. According to the Supreme Court, “copyright law contains built-in First Amendment accommodations.”61 The first of these is the idea/expression dichotomy: ideas and facts are not protected by copyright; only the author’s “expression” is protected. Second is the fair use doctrine: under certain circumstances, the public may use even the author’s expression for some purposes, “such as criticism, comment, news reporting, teaching. . .”62 These limitations on the copyright enable both free expression and the “progress of Science”: the free exchange of ideas, the ability to build upon prior expression, and the existence of a healthy public domain are essential to the development of new intellectual creations.
Neither the DMCA nor the proposed INDUCE Act properly reflect the balance between the public interest and the rights of the copyright holder. Despite the rhetorical flourishes that accompany it, the DMCA’s attempts to preserve fair use fall short of providing any meaningful protection. The overwhelming effect of the statute is simply to provide copyright holders a near-absolute right to erect formidable technological barriers to the actual exercise of fair use; exceptions to the anti-circumvention ban are limited, narrow, and inflexible, especially when compared to the courts’ approach to fair use as requiring a case-by-case analysis.63 The statutory triennial review, the “fail-safe” mechanism supposedly intended to protect fair use, instead requires that granted exemptions must apply to a “class of works,” and must not focus on the intended use.64
Congress clearly expressed concern about the potential impact of the DMCA on fair use, but even in its expressions of concern it apparently misconstrued the balancing act required by the tension between the Copyright Act and the First Amendment. According to the Library of Congress, Congress’ primary concern was that access to certain copyrighted materials might be diminished by strong digital rights management tools. But fair use means much more than mere access – the Copyright Act explicitly states that fair use can include “use by reproduction in copies …”65 More importantly the Copyright Act makes clear that fair use is to be judged by its purpose, “such as criticism, criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research.”66 Thus the DMCA’s focus on exemptions based on “categories” of copyrighted materials misapprehends and undercuts the fair use doctrine as articulated by the courts and codified by Congress in the Copyright Act.
On its face, the INDUCE Act would seem to require no consideration of fair use principles at all. According to its co-sponsor, Senator Patrick Leahy, the bill “simply clarifies and codifies [the] long-standing doctrine of secondary [copyright infringement] liability.”67 By its very structure, the bill focuses not on the users of copyrighted work, but instead only on “the bad actors who are encouraging others to steal.”68 However, perhaps surprisingly, Senator Leahy explicitly addressed the issue of fair use, asserting that: “This legislation is also carefully crafted to preserve the doctrine of ‘fair use.’ Indeed[,] by targeting the illegal conduct of those who have hijacked promising technologies, we can hope that consumers in the future have more outlets to purchase creative works in a convenient, portable digital format.”69 Not apparent from Mr. Leahy’s statement is exactly how an expanded opportunity to purchase creative works relates to fair use.
The INDUCE Act’s potential impact on fair use is serious. New fair uses have traditionally developed as a direct consequence of emerging technology, such as the piano roll, the jukebox, and the videocassette recorder (“VCR”).70 Because these technologies, and the resulting new methods of communicating and consuming information, were unforeseen by the drafters of copyright legislation, thriving markets sprang up to exploit the resulting “gaps” in the copyright law.71 Naturally, in each event certain producers of information were threatened, and demanded corrective legislation. In some cases, Congress responded with new rights to protect the producers. However, in each case a new fair use was born, such as the right to “time-shift” television programs using a VCR.72
The INDUCE Act threatens the development of new fair uses by potentially pre-empting the development of information technology in the first place. The developers of the VCR, faced with the INDUCE Act, would have been forced to consider whether the VCR, a device certainly capable of significant non-infringing uses, might have the potential to cause widespread violations of the Copyright Act. Even if “time-shifting” were already recognized as a fair use, and therefore non-infringing, the VCR developers would be required to consider other potential infringing uses, such as the unauthorized manufacture and commercial distribution of copies of copyrighted material. Had the INDUCE Act already been in place, would the VCR’s developers have withheld it from the market for fear of liability, thus forestalling the development of a major market in home entertainment?73
B. Balance in the EUCD
Although less explicit than in the United States, a tension between copyright and free expression is also apparent in the European Union. The European Convention on Human Rights, Article 10, states that:
Everyone has the right to freedom of expression. This right shall include freedom to hold opinions and to receive and impart information and ideas without interference by public authority and regardless of frontiers.
However, this statement mentions only interference “by public authority,” reflecting a greater willingness to accept restraints on free expression imposed by private actors.74 According to one commentator, “the potential conflict between copyright and free speech has long been ignored in European law.”75
The EUCD takes note of the freedom of expression as well as a more general public interest in its preamble,76 but clearly focuses on the importance of strong protection for copyrighted works, especially with respect to digital works. This focus is justified by the need for ensuring proper incentives for the creation of works:
Any harmonisation of copyright and related rights must take as a basis a high level of protection, since such rights are crucial to intellectual creation. Their protection helps to ensure the maintenance and development of creativity in the interests of authors, performers, producers, consumers culture, industry and the public at large.77
Thus, freedom of expression is trumped by a perceived need for strong copyright protection; indeed, the drafters of the EUCD appear to be completely unaware that stronger intellectual property rights pose any significant threat to the public interest.
The EUCD grudgingly acknowledges that some member countries might perceive a need for some limitations on intellectual property rights, in the (narrowly defined) public interest:
The Directive should seek to promote learning and culture by protecting works and other subject-matter while permitting exceptions or limitations in the public interest for the purpose of education and teaching.78
However, it is worth noting that the EUCD addresses the public interest in this case by permitting exceptions or limitations, while emphasizing that the granting of rights to copyright owners must begin with a “high level of protection.” The EUCD attempts to circumscribe exceptions even more tightly, by noting that “certain exceptions or limitations may have to be even more limited when it comes to certain new uses of copyright works . . .,”79 thus exhibiting an inherent bias against creative new uses for copyrighted works made possible by new technology.
Like the EUCD, the Enforcement Directive acknowledges the right of free expression.80 But a single, brief reference to this right is overwhelmed by repeated declarations of the pressing need to aggressively enforce strong intellectual property rights in order to ensure incentives for producers.81 As with the INDUCE Act in the United States, proponents can reasonably argue that concern for free expression is unnecessary in the Enforcement Directive, since the Enforcement Directive does not purport to affect the substantive law of copyrights. Instead, it simply provides means for enforcing the law and discouraging acts that are already illegal. However, while it is true that the Enforcement Directive does not directly affect the substantive law of copyright, it certainly strengthens the effect of that substantive law, by creating powerful new tools for the enforcement of copyrights.
One tendency of the Enforcement Directive is to exacerbate an existing trend in European copyright law towards increased protectionism coupled with narrower limitations. This trend begins with the EUCD’s declaration that harmonization of copyright law must start with a “high level of protection.”82 The natural starting point is at or near the highest level of protection available in any of the EU states. Next, the EUCD requires only a single mandatory limitation on this right, while providing an exhaustive (and relatively short) list of exceptions and limitations that member states are permitted, but not required, to implement.83 Finally, the Enforcement Directive strengthens the substantive rights required under the EUCD by adding (in countries where they do not already exist) new remedies and enforcement procedures, while permitting even more aggressive enforcement measures.84 Accordingly, harmonization in European law necessarily centers on strong property rights, extremely limited exceptions, and broad-ranging enforcement mechanisms, with little room for flexibility or gaps in protection.
So, what happens next? The passage of the Enforcement Directive and the death of the INDUCE Act can be viewed as the end of the second wave of digital copyright legislation. So is the recent movement towards increased copyright protection and restricted fair use at its end? Or are there gaps remaining that need filling? Alternatively, will we decide that we have moved too far, too fast, and that we must re-think our approach to copyright protection in the digital age? The answers at this point seem equivocal. Proposed legislation in the United States represents a variety of “solutions” to the problem, some addressed at aggressively closing further gaps in digital copyright protection, others premised on the notion that existing legislation has gone too far. Clues to next steps in Europe are less visible, although a movement opposed to enhanced digital copyright protection is emerging.
The Consumer Broadband and Digital Television Promotion Act, introduced in the United States Senate in 2002, purports to address a reluctance on the part of content providers to distribute high-quality, broadband digital works absent additional assurances that their rights will be protected. In this bill, the proposed solution is a mandatory digital rights management scheme for digital television, created by industry cooperation under the oversight of the Federal Communications Commission.85 Other bills introduced in Congress propose to make unauthorized “offering for distribution” of copyrighted materials a criminal offense and to authorize the United States Justice Department to file direct civil actions against alleged infringers.86 These measures reflect a more-protection-is-better mentality, and continue to ignore any possible threat to artistic and technological creativity.
On the other hand, there is a counter-movement even within the United States Congress. The Digital Choice and Freedom Act of 2002, introduced in the House of Representatives, seeks to make the anti-circumvention provisions of the DMCA inapplicable against individuals who wish to make non-infringing uses of lawfully acquired material. The bill also proposes that “platform-shifting,” the transfer of a digital work from one piece of electronic hardware to another, be permitted for non-public uses, even if the transfer requires making a copy of the original work.87 Similarly, the Digital Media Consumers’ Rights Act of 2003 proposes that activities undertaken to exercise fair use of copyrighted material be exempted from both the anti-circumvention and anti-trafficking prohibitions.88 The Consumer Technology Bill of Rights, introduced as a Joint Resolution in the Senate, advocates a much bigger step back, suggesting that Congress formally recognize that such activities as time-shifting, space-shifting, platform-shifting and digital format translation are important consumer rights.89
In Europe, the shape of the next wave is less apparent. The European Commission has recently published a working paper “on the review of the EC legal framework in the field of copyright and related rights,” which purports to assess whether there is any “harmful impact on the fair balance of rights and other interests.”90 However, the paper takes a very technical approach to the issue, focusing primarily on the potential for “inconsistencies” within Community legislation, and does not address the apparently un-related rights of free expression and communication at all. Similarly, a fact sheet titled “Intellectual Property Rights and Digital Rights Management Systems,” published by the European Commission Information Society, mentions a “balance between the interests of rights holders and users,” but concern for the public interest is addressed only by a statement that “DRM must not be allowed to become a commercial or technology licensing control point.”91 From the European Commission’s point of view, the primary concerns at this point appear to be internal consistency and an inchoate threat of potential unfair competition. Again, concern for the public interest is limited to consumers’ expectations as to access; any potential threat to innovation itself is ignored.
However, as in the United States, a counter-movement suggests that copyright law should be re-examined, with more attention given to the public interest. One response to the Commission’s working paper proposes a “Digital Rights Directive” to address specifically the balance between intellectual property rights and other public interests, including consumers’ abilities to “enforce their fair-use or fair-dealing rights.”92 Curiously, this response includes no mention of the right to free expression.
The harmonization effort in Europe and the DMCA in the United States react primarily to the perceived threat, largely to the existing entertainment industry, of rampant piracy and unauthorized exploitation of copyrighted works. In reacting, legislators have either ignored or misunderstood the delicate balance required between copyright protection and the right of free expression. The outcome presents a significant threat to innovation. This threat appears not just with respect to new information technology, but also to the creative efforts of individuals not aligned with the traditional entertainment industry, since artistic creativity depends critically upon a thriving public domain as well as a flexible approach to fair use. Further, any stifling of new technological innovation presents an extra threat to creativity, as technological development has historically fostered radically new methods for communication and expression.93
To respond appropriately to these threats requires a pragmatic approach. Digital rights management schemes are here to stay. These schemes can be effective, at least in discouraging small-scale piracy, and they create opportunities for creative new ways to distribute and price digital content. And the stakes, as viewed by the entertainment industry, are tremendous: the Motion Picture Association of America, for example, estimates that “Internet piracy” costs the motion picture industry alone more than three billion dollars annually.94
One critical problem for opponents of strong protection for digital rights management technology is how precisely to articulate the problem that these technologies, coupled with robust enforcement mechanisms, present for the public. The issue is not simply that the entertainment industry has gone too far in its offensive against young pirates; rather the issue is whether the current regulatory scheme neglects the balance between intellectual property rights and a thriving creative sector. We should be concerned when consumers’ expectations as to time-shifting and space-shifting are frustrated. But we should be more concerned about whether the DMCA, the EUCD, and their progeny threaten our ability to express ourselves in creative new ways, and indeed whether the threat extends to our ability to create new technologies and media for doing so.
Articulating the threat to the public has been more difficult than explaining the dangers of rampant piracy to the entertainment industry. But at bottom, the claim that piracy presents a risk of reduced incentive for creativity is no more inherently plausible than an assertion that increased restrictions on fair use and threats to technological innovation endanger the public interest. Most would agree that since stronger protection promises greater profits to the entertainment industry, some increased incentive to produce is likely. Exactly how much, however, is another matter. Likewise, to the extent that this increased protection places even slightly greater restrictions on public use, some reduction in creativity and innovation is inevitable. Again, the question is precisely how much. Legislators have chosen to ignore these questions.
For so long as legislators (and the public) instead believe that the “balance” that must be struck is between threats to the entertainment industry and frustrations of consumer expectations, remedial efforts are likely to be limited to ineffective tinkering at the edges of the current law. Needed instead is a general recognition that the threats to the public good, while difficult to grasp, compel an analysis of copyright law in the context of the proper balance: between the need for intellectual property rights to encourage artistic creation and the need for a creative, expressive and innovative society. Only with this proper balance in mind can we expect to create copyright law that will truly “promote the progress of Science and the useful Arts” and protect our “freedom to hold opinions and to receive and impart information and ideas.”