IPSC, Copyright and Society

Third Breakout Session: Copyright & Society
Clemens Appl & Philipp Homar, Vienna University of
Economics & Business, Education 4.0: Recent Challenges to Copyright
From user-generated content to user-generated copyright. Use
of materials for educational purposes is one of the most important aspects of
the project.  Standing on the shoulders
of giants: research and teaching is based on preexisting knowledge.
Creation of content in education also matters.  MOOCs, other forms.  Public as distinct from users/“prosumers,”
educational institutions, other intermediaries; European collecting societies
are intermediaries who collect remuneration and fulfill social and cultural
Typical forms of digital learning: digital coursepacks;
collaborative learning; student generated content—looking to determine which
are the most common/relevant. 
Reliability and accessibility of resources on multiple devices is
required.  In terms of ©, we have
reproduction and distribution/performance/sharing.  Private and public sphere convergence: not a
small group in the classroom but all over the world.
E-learning exceptions exist in Austria and Germany, but they’re
different so that you can’t have cross-border classes without infringing.
Uncertainty despite 2001 Directive allowing use for illustration for teaching
or scientific research with credit “to the extent justified by the
non-commercial purpose to be achieved.” 

Equitable remuneration or Ginsburg’s concept of “permitted but paid” replacing
fair use.  Statutory licenses for
redistribution/not new creativity.  Free
as in free speech, not free as in free beer. 
[I don’t much like this formulation.] Equitable remuneration.
Desired outcomes: Regulations with a clear scope; general
clauses aren’t enough for the educational sector. Prevent double remuneration
of rights holders.
Kristelia Garcia, University of Colorado Law School,
Facilitating Competition by Punitive Regulation
Majors (60% of market) tried to withdraw digital rights from
ASCAP.  Universal secured a rate nearly
2x that ASCAP secured.  First time they’d
tried to license the digital rights by themselves; collectives have always been
justified on ability to minimize transaction costs and use bargaining power,
but this result (2x rate!) suggests a weirdness.  Assignment is not exclusive; Sony/Universal
could have done a deal w/o withdrawing digital rights from ASCAP.  ASCAP’s contracts didn’t allow partial withdrawal:
voluntary, but if you’re in you’re all in.
Doubling of the rate: ASCAP is responding to needs of
differently situated members and operating under consent decrees; thus might
not have been able to charge market optimal price. Alternately: pathological
private ordering, her position. 
Negotiations amounted to parallel pricing/tacit collusion.  Collective bargaining made more sense in
analog world; can’t go around to every restaurant. Easier to know what Pandora
played and how many times. 
ASCAP had to amend its governing documents to allow partial
withdrawal; SDNY as rate court rejected that. This doesn’t bode well for ASCAP,
or for majors who don’t want to monitor every restaurant.
Why should we care? 
Potential for anticompetitive behavior to stifle innovation in the
distribution space.  Sony/Universal went
to the strongest streaming service first—doesn’t encourage new entrants. Can
also be a method to cut out artists’ royalties. 
ASCAP requires royalties to go to artists. 
What should we do? 
The rate court? Antitrust? 
Antitrust may have difficult time here—parallel pricing and tacit
collusion don’t violate the Sherman Act etc. They are concerning, but not
enough to violate the law.  Merger review
is usually effective but doesn’t work here, partly b/c of history of
nonintervention by DoJ.  When we went
from 4 major publishers to 3, it didn’t make the situation worse because it was
already crappy.  Consent decrees: the big
hammer—but it’s already in use; the individual publishers don’t operate under
it.  Withdrawal = more concern for
competition than collectives governed by consent decrees. Network effects in
content and tech.
Proposal: have gov’t set prices, but allow opt out of
regulation if you can show robust competition in an area. Similar to private
utility regulation.  That increases the
cost of private ordering, but also opens up regulatory gaming/lobbying.
Removing digital rights only = remove lots of revenue while
leaving lots of overhead for the group, including the smaller players.  Total withdrawal might eventually lead to a
market clearing solution/lower payments for smaller players.
Brauneis: §115 is always an option for covers. When you’re
talking about petitioned opt-out, do you also mean that you want publishers to
be able to exempt themselves from the §115 license?
A: No.  Thinking of it
on the other end—mandatory so that you can’t go around it, even with Harry
Fox.  If the licensee doesn’t want to go
to the mandatory route and thinks it can work out a better rate w/the
publisher, it can do so only if it shows the market is competitive. But should
give more thought to the licensor side as well.
§115 is less concerning than public performance rights, b/c
Sony and Universal wanted the right to deny licenses altogether. 
Matt Sag: how significant is the antitrust exemption for
webcasting? Otherwise this looks like a solid antitrust case.
A: We don’t have the smoking gun. 
Sag: that’s because they collude with immunity at
SoundExchange. Structural problem.
A: agreed. Not enough competition for traditional tools to
Sag: in other industries that are this concentrated, the
actors are very careful—the publishers found out that they shouldn’t do this in
the Apple Books case.  But in music, they
have a special room where they can discuss how to kill Pandora. Maybe that’s
the problem.
A: root problems w/in the industry are a big deal.  We could move on to full on barriers to
entry, if Sony/Universal pull their content they might be able to prevent
successful streaming services other than the ones they allow/control.
Pam Samuelson: who out there could do some worthy
regulation?  Before we say let’s go, who
can do it?  The Copyright Office isn’t
well situated for that kind of market power analysis.  They don’t know enough about the music
industry and their report was not warmly embraced.  Where is there institutional competence to
right this particular balance?  Maybe the
FTC over others, but they’d need some congressional delegation of authority.
A: that’s the sticking point.  (Samuelson suggests Tim Wu’s Copyright’s
Communications Policy
Lisa Macklem, University of Western Ontario
Cash For Content: Profiting from Copyright on the Internet
© uses boundaries to control, while the internet was
designed to increase communication/exchange knowledge.  Schumpeter’s theory: evolutionary—different flows
that disrupt existing equilibria. 
Posner: overregulation = artificial rents through scarcity.  Virtually all transactions have some
uncompensated third party effects.  Differences
in the kinds of IP make them inappropriate for property treatment—sui generis
understanding is best.
New entrants: internet intermediaries.  Technological neutrality isn’t obviously
connected to ©, but changing the form of the internet has important
implications for ©.  Courts approach new
technologies with new understandings—TV through internet is not legally the
same as TV through the air.
Aereo: search for the best analogy. If the goal is to be technologically
neutral, are they finding the right analogy? Unintended winners in Aereo:
consumers insofar as the service spurred TV companies to speed up authorized
online access.
Cloud computing: technologically the decision could have
applied to it, but distinguished—this is a danger of getting the analogies
ESA v. SOCAN, 2012 SCC 34 (Canada 2012)—ESA wanted to
double-dip when video games were played online. 
Licensed music w/in a video game doesn’t justify an additional royalty
when the game is downloaded; that shouldn’t be different than when a physical disk
is purchased.
CBC v. SODRAC: CBC uses incidental copies to produce an end
copy that is ultimately shown; simple matter of creating final product. Now
before the Canadian court.  Tech
neutrality as central to ©.  Part of the
balance b/t copyright owners and copyright users.  [History of discourse around what counts as “equal
treatment” suggests that agreement on what neutrality is will be hard to come by.]
How Netflix gets it right: tech neutrality can foster
increased distribution/dissemination of knowledge.  More rights owners may have to be satisfied
with smaller slices of the pie. Netflix doesn’t rely on standard Nielsen
ratings—pushing the boundaries of innovation on content.
Lea Shaver, Indiana University Robert H. McKinney School of Law
Social Publishing 
Book proposal: Book hunger: economic demand for published works
is different from cultural demand. Zulu language—10 million speakers, a lot of
them poor, so standard publishing model doesn’t work and doesn’t generate many
books for them. When social entrepreneurs/nonprofits have taken up the
challenge, though, there is great demand. 
Pratham Books in India—sold cheaply largely to institutional buyers—huge
interest.  Unexpressed demand: publishing
for the blind. 
Social publishing: Driven by sense of social mission. Rely
on social subsidies to make the revenue model work—charitable contributions,
gov’t support. More creative approaches to © because not dependent on recouping
costs from sales.  Social distribution:
want to deliver books at the lowest possible price.
Business model innovation: they are forced by necessity, b/c
going after hard to reach market niches, to radically innovate v. traditional
publishing model.  Amazon innovated at
one point in the product market; but these organizations have to innovate at
every step to drive down costs of doing business.
Content acquisition: First Book is US based organization
that works with for profit publishers who agree to make copies of works
available at 70-90% discount to closed marketplace of organizations, about
70,000 across the US, that serve low income children. They’ve targeted diverse
books—minority characters and authors, not produced by standard market—they’ve
set up an advance purchase commitment w/publishers to change what gets
Book Dash: South Africa. Come together to write a book and
give it away. 

Pratham Books: Illustrations are donated to a bank.  Any person can tell a story in their language
using these pictures.  Disrupts our
construct of authorship, revealing it as an effect of the conventional
publication model.
Distribution/printing/education: African Storybook Project
distributes works in the form of PowerPoint—the costs of 50 print copies
shipped across bad roads is much greater. 
Enables teachers to translate slides into other languages.

Bookshare in US: Often approached by for-profit publishers interested in their
expertise in ebook platforms and publishing. 
Marketing and sales: PJ Library: Funding comes from Jewish
philanthropic sources; Jewish themed books, and work w/different community orgs
to identify Jewish families and mail them a free book each month.  Book serves as marketing for the
Pratham books—reaching the most remote villages, “the last
child.”  Tried partnership with post
office; with Unilever.  Even if we could
ride the Coca-Cola trucks, it wouldn’t work—because books aren’t a commodity
like Coca-Cola. It’s important that the book be relevant to this particular
person in this particular language. 
Digital distribution can have a broad selection and address niche market
as well as mass.
“Mission-driven innovation.” These organizations not focused
on money/profit are able to innovate better than for profit organizations
especially in areas of market failure. 
We should fund organizations that are willing to do the difficult and
expensive work of innovation, which carries large risks of failure.   Future
of publishing industry more broadly?
Q: Consider also failures. 
Wikimedia Foundation’s Wikibooks, which has been around for years but
hasn’t succeeded very well. [Great point: taking lessons only from success is a
classic problem of examining innovation.] 
Ways to quantify/reward community production, e.g., with tokens.
Samuelson: Brewster Kahle’s Bookmobile in developing
countries: prints out books and gives them away.
A: signs of the variability of the possible form.
Q: What about “altruistic piracy”?  People who are disseminating cheap copies but
not following all the rules.
A: Reminds her of questions about the history of publishing
for the blind—doesn’t know if that story has been told.
Matt Sag: There are places where exemptions for blind are
rarely used—other factors are preventing production.
A: that’s the story this book plans to tell. You need more
than an exemption.

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