[iwar] [fc:Whatever.happened.to.fair.use?]

From: Fred Cohen (fc@all.net)
Date: 2001-11-04 20:28:17
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Whatever happened to fair use?
In music sharing, it's the record labels vs. the consumers -- and the battle
is just beginning

BY DAWN C. CHMIELEWSKI
Mercury News 

Like any college student, Tony Tran knows his rights.

He has the right to sample music for free over the Internet. He has the
right to download an entire CD to his computer's hard drive and listen to it
for days to determine whether to buy it. And he has the right to make copies
for his friends.

        
  FAIR USE AT A GLANCE 
    "Fair Use'' is an element of copyright law that gives consumers the
right to make personal copies of songs, TV shows and other copyrighted
works.
History of Fair Use
 € The Copyright Act of 1976: This update of the 1909 copyright law adds the
judicially created concept of ""fair use'' to copyright law. The Supreme
Court set a four-pronged test to determine whether an individual can make a
copy of a song, book or other copyrighted work. Is it being used for
teaching, research or literary criticism? How much of the work is being
used? Does creating a copy erode the work's potential market value? And
what's the nature of the work?
 € (1984) Sony Betamax Case: Pivotal case in defining consumer's right to
fair use. The film industry argued that the videocassette recorder should be
taken off the market because consumers would use it to pirate films. Sony
argued that its new device could be used for substantial uses that didn't
infringe on copyrights: namely "time-shifting,'' or recording television
shows to watch later. U.S. Supreme Court ruled that society couldn't be
deprived of a new technology, just because some people might abuse it.
 € Audio Home Recording Act of 1992: The law springs from the recording
industry's attempt to keep Sony's Digital Audio Tape recorder off the
market. It reaffirms an individual's rights to make personal copies, but
requires manufacturers to add controls that prevent consumers from making
second-generation copies. It also requires manufacturers to pay royalties to
record companies, artists and songwriters for every piece of blank media and
recorder sold.
 € Digital Millennium Copyright Act of 1998: An attempt to update copyright
law for the Internet age. One key feature makes it illegal to circumvent
copy-protection measures built into copyrighted works Š laying the
groundwork for movie studios and record labels to introduce technologies
that set limits on personal copies.
 € October 1998: The Recording Industry Association of America sues San
Jose-based Diamond Multimedia to halt release of the Rio MP3 player. RIAA
argues that the device, when used to play unauthorized copies of MP3 song
files, would ruin the market for online music distribution. An appeals court
sides with Diamond.
 € December 1999: The RIAA sues Napster, accusing it of contributing to
widespread copyright infringement. Napster tries to use the Sony Betamax
defense. Federal Judge Marilyn Hall Patel rejects the argument. The case
continues, although the free Napster service has been shut down since July.
 € January 2000: The Motion Picture Association of America sues 2600
Magazine, a hacker newsletter, for publishing a code that unlocks
copy-protection on DVD movies. A Norwegian teenager created the code to
watch movies on computers using the Linux operating system. U.S. District
Judge Lewis Kaplan ordered 2600 to stop distributing the DeCSS code or
linking to other Web sites that made it available.
 € September 2001: Universal Music Group said it plans to incorporate
measures to block copying on all of its audio CDs by early next year. Other
major record labels Š including Sony Music, Warner Music, EMI Group and BMG
Š are quietly experimenting with CDs that cannot be copied, or ""ripped,''
to a personal computer.
 € September 2001: Sen. Ernest Hollings, chairman of the Senate Commerce
committee, drafts a bill that would require consumer manufacturers to build
copy-protection controls in all consumer devices, from televisions and
TiVo-inspired personal video recorders to MP3 players, eBooks and PCs. The
Security Systems Standards and Certification Act would make it a felony to
defeat the copy-blocking technology. The bill has not yet been introduced.

-- Dawn Chmielewski
    
        ``If I like it, I buy it. If I don't, I delete it,'' said Tran, an
18-year-old computer engineering student at San Jose State. ``Obviously, the
artists and record companies aren't worried about consumers like me. They're
worried about the kids that download and don't buy.''

But record labels are indeed worried. Sharing music is a practice as old as
cassette tapes and college dorms. But Internet song-swapping sites and
technological advances in CD authoring turned what was once a limited campus
pastime to pandemic. And the recording industry is determined to stop it.

All five major labels are exploring ways to squelch music piracy at the
source: the compact disc. They're working with companies like Macrovision in
Sunnyvale to copy-protect CDs -- essentially, padlocking tracks on discs so
songs can't be ``ripped'' -- copied onto a computer -- and distributed
endlessly over the Internet.

An alliance of equally powerful technology companies, which includes IBM and
Intel, would extend copy protection to portable devices and removable
memory.

Even the online subscription services to debut next month -- MusicNet and
pressplay -- would introduce consumers to a new type of Internet music
experience: songs you rent, but don't own; and can't take with you.

These technological initiatives, undertaken as part of anti-piracy efforts,
put the labels on a potential collision course with consumers. Restricting
what consumers can do with their music CDs challenges the notion of ``fair
use.''

Simply put, ``fair use'' lets consumers make personal copies of copyrighted
works: from custom CD compilations of favorite dance tracks, to videotapes
of the hit NBC show ``Friends;'' to parodies of the epic novel ``Gone With
the Wind.''

But fair use is a right that remains up for grabs in the Internet Age.

Napster's attorneys tried to carve out a ``fair use'' right for the millions
of people who traded song files over the revolutionary peer-to-peer network.
Attorney David Boies argued that consumers used Napster to space-shift, or
convert songs they already owned on CD or vinyl into a convenient,
computer-friendly format. Federal judge Marilyn Hall Patel didn't buy it.

Record label executives argued then -- as now -- that ``fair use'' is no
right, it's a defense for copyright infringement. Consumers have no legal
right to make personal copies of the videotape they rent from Blockbuster
any more than they could brazenly bring a camcorder to the theater and
record ``From Hell'' to watch later. Similarly, they don't have a ``right''
to make multiple copies of the music CD they've purchased -- one for the
car, another for work and perhaps a dub for a friend.

``It could well be a court would find fair use in making a convenience copy
of sound recording, but that's never been tested,'' said one industry
executive. ``It's not an affirmative right. It's a defense.''

In the absence of clearly defined fair-use rights for consumers, the
recording and film industries are moving into the legislative void to assert
their own rights over digitally distributed content, said Jessica Litman, a
law professor at Wayne State University who specializes in intellectual
property.

It's an effort to find a new way to charge for the content they already own
-- delivered in a slightly different package. And the legislative
maneuvering has already begun.

Sen. Ernest ``Fritz'' Hollings, chairman of the Senate Commerce committee,
circulated a bill this fall that would require manufacturers to build in
copy protection on consumer electronic devices and PCs. It would cover any
device capable of ``storing, retrieving, processing, performing,
transmitting, receiving or copying information in digital form'' -- a
sweeping mandate that would cover television sets, VCRs, personal-video
recorders and camcorders.

Collision course: Anti-piracy efforts pit labels vs. consumers

``As I read that, it covers my microwave,'' said Litman.

The Hollings bill attempts to address the motion picture industry's concerns
about piracy -- and its desire to encrypt digital television broadcasts to
prevent copying in the home.

But it also sets the stage for a new type of pay-per-view model, in which
the consumer could no longer record premium cable broadcasts of, say,
Showtime's Original Movie Series, or popular HBO programs like ``The
Sopranos'' or ``Sex and the City.'' Missed the broadcast? You'll presumably
have to pay to watch it later.

``There's an irresistible impulse to turn copyright control into cash,''
said Litman. ``If it's something consumers want and the copyright owners can
keep control of it. The copyright owner can sell it separately.''

The recording industry is moving down the same path.

One of the label-backed online music services -- MusicNet -- will not permit
subscribers to transfer songs to portable devices or burn custom CDs. The
partnership between streaming media giant RealNetworks and labels EMI,
Warner Music and BMG seeks to create a music rental business -- the online
equivalent of a Blockbuster for songs. It represents a potential fresh
source of revenue that won't erode the industry's income from CD sales.

Blockbuster for songs: Industry aims to create a music rental business

``The labels see an opportunity to move to a paradigm where people aren't
getting the whole enchilada anymore, they're getting just the beans. And
limited rights to the beans,'' said one industry source, speaking on
condition of anonymity.

This desire to create new, lucrative markets for music explains the
industry's efforts to lock songs to CDs. While only one label -- Universal
Music Group -- has publicly disclosed plans to lock tracks on CDs next year,
all five majors are experimenting with similar techniques to prevent
copying.

When the industry discusses it at all, copy protection is described as a way
to combat underground Internet file-swapping sites like Morpheus, KaZaA and
Gorkster by starving them of fresh content; even as the industry sues the
alleged pirate sites in court. It's a tool to snuff-out piracy at its
source.

Now, for the rest of the story.

``The music business has a problem. They have one way to get revenue:
selling CDs,'' said one industry insider. ``We're trying to limit what we're
selling to you when we sell a CD, so that we can have other services.''

Locking music to the CD unlocks market potential. The labels see an emerging
music rental business on the Internet for cost-conscious consumers. A
reinvigorated business at retail -- one no longer threatened by the Napsters
of the world. And perhaps even a ``deluxe'' version of the CD that permits
the flexibility consumers now take for granted, such as the ability to rip
tracks and create custom mixes or convenience copies.

Macrovision moves the record industry closer to that vision with a new,
tiered marketplace for music with a version of its copy-protection
technology to be announced in the coming weeks.

It places two versions of the music on a single disc. One version would play
on a regular CD player. But when you insert the disc into a computer, the
directory of songs hides, so CD-ripping programs can't find the tracks to
extract. Instead, the computer sees compressed versions of the songs that
are encoded with rights-management technology that sets limits on what the
consumer does with the file.

``The consumer can put it on PC, listen to it, move it onto a portable
player -- once it can be authenticated that he is the right owner for that
piece of music,'' said Miao Chuang, Macrovision spokeswoman.

Backlash building: Curbing copying `is really missing the boat'

If copy-protection experiments fail, record label executives say privately
they will simply abandon CDs for another, more friendly format. That's no
idle threat: They've done it before. Anyone remember the strong-arm shift
from vinyl to CD?

Chris Gorog, chief executive of Roxio, the leading maker of CD authoring
software for PCs and Macs, predicts consumers will rebel against the
recording industry's attempts to curb CD burning. It's a phenomenon bigger
than recorded music itself -- with an estimated 5 billion blank discs to be
shipped this year, compared to 3 billion music CDs sold.

``Clearly, what the consumer wants to do -- and has done now for many
decades -- is buy recorded music and have the ability to make copies,'' said
Gorog. ``It's been very clear that making compilation tapes, sharing tapes
with friends, turning on your friends to new bits of music actually has
propelled the growth of the industry. To view the simple act of recording as
the enemy is really missing the boat.''

The backlash is already building.

Wayne Guerrini, a 49-year-old former radio engineer now living in East Mesa,
Ariz., said he turned to underground Internet sites like Napster and
Morpheus to find what he couldn't get in stores. He's found lost recordings
by jazz greats like Stan Kenton or rare compilations, like ``Time Traveler''
by the Moody Blues. He said he would pay some small stipend -- say $5 -- to
download such tracks from a site that compensates the artists and composers.

But extinguishing CD-burning just goes too far.

``If they're going to put safeguards or whatever they want to call it so I
can't rip songs, I'll just quit buying CDs,'' said Guerrini. ``It's going to
drive people into the underground.''

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