Category Archives: Uncategorized

It seems simple, really

I have to start by saying that I am not an economist, and I know just enough to understand that economic analysis is never simple or straightforward.  And yet, when these two different news items came to my attention in a short time frame, the link between the two of them still seemed pretty obvious.

Yesterday, Reuters news service ran an article about a rating of eleven countries based on their enforcement of intellectual property rights.  The index was prepared at the behest of the U.S. Chamber of Commerce by a group called The Global Intellectual Property Center, and it ranks the U.S. at the top of the list in terms of strong IP protection (23.73 points on a scale from 0 – 25).  But what is interesting is who scored lowest (out of the eleven countries that were ranked).  The four “worst” countries for providing the strong IP protection important to the Chamber of Commerce were the four countries known as BRIC — Brazil, India, Russia and China.

So what else do we know about these four nations?  In fact, why were they originally grouped together under the acronym BRIC?  The answer is that the term was coined because these four countries were the fastest growing emerging economies, showing growth rates between 5 and 9 percent in their gross domestic products (compared with US growth averaging 3.2 over the past 65 years).  The source of these averages for the BRIC nations is this report from PriceWaterhouseCoopers, dated February 2012, which contains this conclusion: “We expect the BRIC economies to continue to drive world economic growth in 2012.”

So the four countries driving economic growth are also the four countries with the weakest IP protection regimes, amongst those 11 rated by the Chamber of Commerce report.  Doesn’t the conclusion seem simple, that weaker IP enforcement is part of the picture for economic growth?  We need to acknowledge that the growth of the BRIC countries is slowing, as reflected in this news report about the conclusions of the Goldman Sachs Group, which originally coined the acronym.  But the very fact that the news report refers to the “BRIC decade” is significant; over an extended period all four BRIC economies have grown very fast, and all of them have done so without strong protection over intellectual property.

Correlations can be tricky things, but I think some modest conclusions are justified.  First, obviously, ratcheting up IP protection is no guarantee of economic prosperity.  As we will discuss further in a moment, it is very possible for nations, industries and even individual creators to thrive without relying on a strong government-created monopoly over the products of the human intellect.  Second, I think it is also clear that there is a point where IP protections can be too rigorously enforced, to the extent that they impede economic progress.  Indeed, it seems likely that the US, with its high score on the survey described above, has reached that point; at a recent forum sponsored by Federal Trade Commission, Professor Collen Chien of Santa Clara University pointed out that for the first time in 2012, a majority of patent lawsuits were brought by so-called “patent trolls” — companies that do not invent or create anything but exist simply to buy up patents and then demand licensing fees from companies that are trying to create and invent.  These licensing fees can reach the point where they are nothing more than a government-enforced tax on innovation. The situation developing in the US with patent “thickets” and patent trolling is a painful example of how broad grants and strict enforcement of IP rights can inhibit economic development.

If we move from the level of national economies to that of industries and creators, these two conclusions seem to hold up.

Consider the example of the Nigerian film industry, often referred to at Nollywood.  The Nigerian film industry has boomed over the past two decades, largely by becoming one of the world’s leading producers of digital video films.  And they have done this in a environment that “has not historically had robust intellectual property enforcement.”  As this research paper from the University of California, Irvine Law School suggests, IP protection is, at least a double edged sword.  Piracy can reduce revenues, but it also helps to create distribution channels and grow markets.  So creative industries seeking to grow in the digital economy need to do more than try, futilely, to eradicate piracy, they need to seek ways to shape their markets and their marketing to exploit the audiences that it can create.

Indeed, a recent book from Oxford University Press, called “The Knockoff Economy,” describes how several major industries, including fashion and food, can not only thrive in the absence of IP protection but can turn the shadow industries that develop around “knockoffs” into part of an overall economic strategy.  And the story of the US film industry, as told in Hollywood’s Copyright Wars, actually confirms the role of unauthorized copying in the growth of new industries and suggests a model for internal negotiations to control and benefit from such “piracy” that are more effective than rigorously enforced IP laws.

Finally, if we want a very current, individual example, we need look no further than the Korean pop star Psy, whose “Gangnam Style” video is now the most watched YouTube video in history and who stands to make $8.1 million dollars from the fame that he has gained by not enforcing his copyright.  Very few of us had probably heard of Psy before the Gangnam Style video became the subject of the many parodies and remakes that flooded YouTube, blogs, college campuses, etc.  He took no action to prevent those “knock offs,” as many artists and production companies would have done.  Instead, his fame grew to the point where he could license his song and his image for commercial uses at levels he could only have dreamed off if he enforced his copyright rigorously.  In short, he found a way to monetize “piracy.”

So, slippery as such conclusions can be, I feel comfortable with these two assertions.  First, creative people and creative industries can thrive without strong IP protections.  In fact, if you are continually looking to the government to increase IP enforcement on your behalf, your industry is probably already in bad trouble.  Second, it is perfectly possible to over-enforce IP rights to the point where creativity and economic growth are stifled.  There is good evidence that the US has passed that point, and the example of the BRIC nations should suggest to us that we need to reverse our course.

Now we see through a glass, darkly

When U.S. News and World Reports runs a major article on academic journal publishing and the open access movement, it should be pretty clear that there are big changes afoot.  And the past couple of weeks have seen major developments in the movement toward public access for taxpayer-funded research, both here in the U.S. and in Europe.

In the U.S., the two groups most vigorously supporting public access, the Scholarly Publishing and Academic Research Coalition (SPARC) and the Alliance for Taxpayer Access, recently sent a letter to the White House, urging it to act on the “We the People” petition that many of you signed two months ago supporting taxpayer access and accountability.  We are still waiting for a response, which the White House promises whenever a petition can gather 25,000 signatures in 30 days (it only took 2 weeks in the case of public access).  We can hope, of course, that the White House’s delay is caused by the effort needed to develop a comprehensive policy, but I personally wish we knew one way or another.

Much of the letter from SPARC and ATA details the recent developments in the UK and EU, especially the announcements last week from both the Research Councils UK and the European Commission of plans to move rapidly toward public access for all funded research articles.  Both groups will allow a six month embargo on scientific articles and a twelve month embargo for those in the humanities and social sciences.  The reason for bringing these details to the attention of the White House is that public access is an important issue of competitiveness and economic growth.  If the U.S. does not want to continue to fall behind the rest of the world in terms of scientific research and innovation, this is a vital step to take.  As the SPARC/ATA letter says,

This approach [public access after short embargoes] is rapidly becoming the default mode for countries that want to retain a competitive advantage in R&D, in science, and in the translation of ideas into new products and services.

So the challenge for the Obama administration is to decide if such competitiveness is important to the U.S., or if protecting legacy industries will take precedence.

In the U.K this same debate has been in the foreground since the release of the “Finch Report,” named for Dame Janet Finch who chaired the task force that wrote it.  That report comes down pretty firmly on the side of protecting legacy industries by stating that the only appropriate path to open access is that of paying article processing fees to traditional publishers so that articles can move from behind subscription barriers but publisher revenue streams are protected.

Not surprisingly, the STM publishers immediately endorsed the Finch report; if they have to have open access, they naturally want to ensure that they are the ones who get paid to provide it.  But the report’s myopic focus on only one form of open access has not gone unchallenged.  This detailed response from SPARC Europe points out many of the gaps in logic and evidence that plague the Finch report (referred to as “a thumbs up for open access but an expensive way to get there”), and suggests a more balanced approach that recognizes that many different business models are underway and that we should not put all of our eggs in one basket.  The RCUK took that message to heart, it seems, since their announcement, made only shortly after the release of the Finch report, clearly rejects the latter’s one-sided approach.  Instead, RCUK will give its researchers an opportunity to select the business model for publishing that works best for them – either publication in an open access (for which article processing fees may be charged but are by no means inevitable) or by self-archiving in a publicly accessible database (so-called Green Open Access, which should not be called, as the U.S. News article does “quasi-open access”).

In this debate we see why some of the issues raised in the U.S. News article are so important.  The largest message I got from reading that article was that we need a lot more transparency about the costs of publishing a single academic journal article. At one point the Executive Director of the American Physiological Society is quoted as saying that the per-article cost at his journal is between $2,500 and $3,000, a figure he uses to ridicule the idea that upfront money from academics could replace subscription income.  But why does it cost that much?

The author-side article processing fees for many Gold open access journals are substantially lower; at Duke, where we have a fund to help reimburse some of these costs for our faculty, the average fee we support is around $1200.  Before any government commits to paying article processing fees to traditional publishers, we need much more clarity and transparency about what costs those fees support.  The U.S. News article makes the point that many of the costs cited by publishers seem rather mysterious.  Content in academic journals is not paid for, of course, and peer-review is almost entirely also done by volunteer labor (supported by university budgets!).  The author of the piece goes on to list other costs like editing and formatting, but points out that these are borne by non-academic publishers as well, who also manage to pay their writers.

It is worth noting that on the few occasions when we get solid numbers about the costs and profits of academic publishing, the numbers do not seem to add up.  A industry financial analyst for Deutsche Bank pointed out some time ago that if publishing academic articles costs as much as legacy publishers say that it does, the 30 – 40% profit margins they enjoy would not be possible (see the quote associated with footnote 19 in the linked article).  And in the Georgia State lawsuit, where the judge was able to compel the plaintiff publishers to produce some real numbers, she rejected entirely the claim that profit margins were so slim that permissions income was a make-or-break proposition for academic publishing.

So the big question for governments and funders as they consider how best to support the transition to public access is why some traditional publications cost so much (and would pass those alleged costs on to taxpayers) while Gold OA journals and Green self-archiving seem to be more cost-effective alternatives.  A lot of additional transparency would be required before recommendations such as those in the Finch report could be taken seriously.  Fortunately, the RCUK and the EC seem to be moving in a more sensible and sustainable direction.

Breaking news

I have just learned that Judge Evans issued her ruling in the Georgia State case this afternoon.  I have not seen it yet, but am told it is quite long and that only a handful of infringements were found among the 99 instrances of copying that were challenged.  I will post about the judge’s analysis as soon as possible.


I will be out of the country for a three week trip to Turkey starting May 17.  I would not ordinarily impose this fact on my readers — although I am very excited about it — but for the fact that my departure date is May 17.  As many of you know, the copyright infringement case against Georgia State University over electronic reserves is scheduled to go to trial on May 16.  The coincidence of these dates means that this blog will not be the best place to get hot news about that case; indeed, many of you will probably know of the result well before I do.

For those seeking up-to-date information about that case and other copyright developments, I recommend the ARL policy blog and the blog from the Copyright Advisory Office at Columbia University.  Many others, I hope, will also report on important developments, including the higher education press.

I plan to post one more comment about the GSU case in the coming days, then this space will be inactive until at least the second week of June.

It probably needs to be said

Copyright junkies will remember the superb blog maintained for several years by copyright scholar, author and practitioner William Patry.  Many will also recall that Patry shuttered his blog in 2008, in part because of his growing perception that readers were not able to separate his personal opinions expressed therein from official policies or opinions of his employer.

I can not claim even a fraction of Patry’s erudition or experience around copyright matters, but I am afraid I can claim a little bit of his problem.  Several recent communications about this blog have pushed me to want to be very clear about the relationship between what is written here and the policies of Duke University.

To begin with, I have to acknowledge that the problem of separating my opinions from Duke policy is a little more difficult on this site because it is part of the Duke Libraries website and is maintained, as is the whole Libraries’ web presence, by Library IT staff.  Nevertheless, much of what has been and, I hope, will continue to be written here is my opinion, and solely my opinion.

To begin with, I need to distinguish the blog from other parts of the web site.  Many of the “static” pages are intended to provide guidance for Duke faculty, staff and students, as well as others who stumble across them.  These pages contain, to the best of our ability, objective analysis and application of copyright law.  Likewise, one category of blog posts, that labeled “Copyright Information Notes,” is used for explanations of copyright law principles, provisions and applications.  All of this material, while not University policy per se, is somewhat more objective than mere opinion and is intended to be useful in guiding practice.

All of the rest of the blog posts, however, reflect my own opinion and not in any way the policies of Duke University.  Indeed, I often express opinions about what legislation ought to be adopted or how a court in a particular case ought to rule that are at odds with my advice to individuals engaged in actual creation or use of copyrighted materials at Duke.  This is because the way the law actually is can often be very different from how I think it ought to be.

To be very specific about this point, let me refer to two recent posts on this site.  In one, I expressed agreement, after long uncertainty, with the general shape of a fair use argument for streaming digitized video for teaching purposes.  My agreement with this argument, however, does not mean that Duke will suddenly embrace the practice, nor that I will encourage the University to do so.  The reason is that, first, even well constructed fair use arguments do not always win in court and, second, that defending a fair use case is very expensive even when the defendant is successful.  So my advice on this matter will always be tempered with a risk analysis for the University and a discussion of how the benefits of a new practice weight against the potential costs involved.  This is a discussion that is unique to each institution and must remain distinct from the more theoretical opinions expressed in blog posts.

As another example, let me say very clearly that my comments about the flaws and/or causes for concern that I see in the plaintiff’s motion for summary judgment in the Georgia State copyright infringement lawsuit cannot be used to speculate about Duke’s policies about the practices in question.  Indeed, Duke’s policies are clearly formulated and usually can be found on its website.  Those interested can look for official documents and neither need to nor should assume that the opinions I express about how other conflicts ought to be resolved reflect University policy or practice.

Finally, I want to express my gratitude to Duke for allowing me the leeway to express my opinions in this manner.  No one at Duke has ever challenged my right to say what I please in this space and this current message is not instigated by any internal concerns at Duke.  Instead, I have become aware that some of my readers from elsewhere have tried to draw erroneous conclusions about Duke from what I have written.  I hope that readers in the future will be more careful to recognize the nature of what they read here and that I will, on the basis of that care, be able to continue to trespass on Duke’s generosity by expressing my own opinions on this site.

How efficient is our licensing system?

Two letters landed on my desk a few weeks ago, both from the Copyright Clearance Center.  I have written before about concerns over what we are actually paying for when we pay permission fees to CCC, and my experience with these two letters deepened that concern.

The first letter asked us to give permission for another university to use in class a newsletter from the 1970s that is on our digital collections web site as part of the holdings of the Sallie Bingham Center for Women’s History.  We had to deny the request because we do not hold the rights in this particular newsletter; we have digitized and displayed it based on a belief that doing so is fair use.  In any case, the original author cannot be located since the work was pseudonymous.  The result is that CCC, having actually failed to contact the rights holder, will now send the other university a denial of permission message.  This disturbed me, and I decided to get in touch with the professor directly, suggesting that she link to our digital collection so her students would still be able to read the work.  Unfortunately, the permission mechanism at CCC is an either / or switch, which cannot accommodate all of the nuances of copyright in higher education.

The second letter started a much more complicate chase.  It informed us that someone at Duke was entitled to a royalty check, but that the original check had gone uncashed for 6 months.  The letter offered to reissue a check (for a $25 fee that was nearly half the total amount) or gave us the option to refuse the payment altogether.  Since the letter was sent to an impossible address – the name of one University entity but the box number for a different one – it was no surprise that the first check had been lost.  When this second notice found its way to my desk, I decided to investigate.

What I found was very troubling.  The folks at the CCC told me that the royalties had been collected from a South African university and they cited two titles.  Unfortunately, neither title seems to be something for which anyone at Duke has the rights in the first place.  One appeared to be a Harvard Business case study; the other was an article from a journal for which I was given an ISSN that is non-existent.  None of the authors named by CCC appear to have any connection to Duke, and I cannot locate the specific article at all.  When I asked for more details, two different representatives at CCC promised to call me back.  That was three weeks ago, and I have heard nothing further.

My concern here is not to collect the $56 dollars being offered to us.  Instead, I am wondering just what that South African university actually paid for.  Obviously a substantial fee was collected and permission granted.  Yet the CCC seems to have based that fee on a mistaken perception of who the rights holder is and that they were authorized by that rights holder to sell the permission.

We are often told that the application of fair use on campus can be quite narrow because there is an efficient mechanism for licensing reuse and rewarding authors.  This experience reinforces my perception that that mechanism is not as efficient as is often claimed, and that a great deal of the money we spend on permissions never does get to the authors who are supposed to be rewarded.  The fact is that locating rights holders is very difficult, and the Copyright Clearance Center is as much at the mercy of those difficulties as are the rest of us.  One of the reasons for reinstating a renewal prevision for US authors into our copyright law would be to make locating the real holder of specific rights much easier.  Until we have such a system in place, we must be wary of relying too heavily on any licensing organization to actually know who each rights holder is and how to get them the fees that are supposed to motivate them.

Plus ca change, plus c’est la meme chose (GBS again)

In the brief time since the Amended Google Books Settlement was filed with the court (on Friday the 13th) and released to the public, there has been a flurry of commentary from a variety of perspectives.  Two interesting themes have emerged, however, from those on both sides of the great debate over whether the Google Books project is a good thing or a bad thing.  First, both sides seem to acknowledge that the changes have not been all that substantial.  Second, no one seems to think that the debate and legal maneuvering is really over.

Here is a quick look at what I perceive to be the major changes.

First, and probably most significant, the Settlement is now very clear that it applies only to books registered for copyright in the US or published in the UK, Canada or Australia.  This is an obvious attempt to avoid the objections and potential legal complications of including in the new Google products books subject to different copyright regimes and different author expectations; this comment on the Stanford Cyberlaw blog calls it “a policy-oriented maneuver intended to remove political pressure coming from abroad.”  It is interesting to consider what this means for the actual Google Book search results.  Will we continue to see snippets only of “foreign” books scanned by Google in the free database?  If so, does that indicate that Google really is continuing to assert fair use in some cases?  Or will these books disappear altogether?  In any case, we know that under the new terms, such works from other countries will not be part of the institutional subscription database, and that fact will substantially lower the value of the product.  Many of the works that will now be excluded are the very ones that research libraries have the most difficulty obtaining via interlibrary loan, so they are ones we were most counting on finding in the Google subscription database.  We must expect that the pricing of that database will be adjusted to reflect a significant decrease in value offered.

The next important thing to note about the amended settlement is what it does not do.  It does not address the concerns over reader privacy that have been expressed by many groups.  The Electronic Frontier Foundation expresses its disappointment about this lack of a privacy plan here.  In a conversation about this topic yesterday, a colleague of mine made the point that for Google to offer a privacy plan for this product would beg the question of privacy policies enterprise-wide, and that is a discussion Google, which depends on targeted advertising, does not want to have.

On the positive side, the amended settlement does clarify that rights holders can elect to allow free availability of their out-of-print but still in-copyright books, or to have them released subject to a Creative Commons license.  This will be a significant benefit to academics who have retained or reclaimed copyright in their own books; unfortunately, that is a much smaller class of authors than it should be.

In many ways the heart of the settlement, its huge compulsory license to Google to commercialize orphan works and other unclaimed titles, has not changed much.  There is a nice discussion of this aspect of the matter in this New York Times article.  The basic change being made is some restriction on how the money generated by sales of these works can be spent, and the appointment of an independent “fiduciary” to the Books Rights Registry board to protect the interests of this immense unrepresented class  The fundamental legal problem of an inappropriate use of the class action suit to create this license does not, and probably cannot, change.  Without that license, there is little if any incentive for the parties to bargain at all.

The great unknown in all of this is whether the Books Rights registry will be able to license other parties to exploit orphan works in ways similar to the opportunity the settlement creates for Google.  The provisions of the first settlement that had been known as the “most favored nation” clause, which said that the BRR could not give anyone else more favorable terms than Google got, has been removed — see the changes in sections 3.8(a) and 6.2(b) in the above-linked “redline” version of the settlement.  So it is now the case that if the BRR can license orphan works at all, it can give favorable terms to other parties.  But that is a very big “if.”  As James Grimmelmann explains in this post, it is not at all clear that the BRR will have this authority until and unless Congress acts to resolve the orphan works dilemma legislatively.  The NY Times article also seems to believe that this change depends on Congressional approval before the new independent fiduciary can assist with other orphan works projects.  So Google likely still has its exclusive position, which could only be threatened by an unlikely combination of Congressional action and very deep pockets.

Overall, it is hard to argue with the title of this article from Library Journal which suggests that the amended settlement agreement makes only minor changes, and, as noted above, the most significant change probably decreases the overall utility of the settlement to academic libraries.  The LJ article quotes a spokesman for the Open Book Alliance (which opposes the Google project) to the effect that the settlement is “sleight of hand.”  Even allowing for the bias source of this quote, I think it reflects a truth, that Google and its partners (which is what they are, as opposed to opponents, at this point) wanted to change the agreement as little as was necessary to slip by the complaints raised by the Justice Department.  As the NY Times article notes, that is really the only critic of the original deal that the settlement is designed to placate.  Whether it has gone far enough to satisfy the DoJ is still an open question.

Copyright Reform Suggestions, part 2

They are almost five months old but now, and I meant to point them out a long time ago, but the six-point proposal for copyright reform released by Public Knowledge is well worth reading, studying and mailing to your local Congressman.

As has been said before on this site, it is probably passed time that our copyright law be throughly revised and made flexible enough to address new technologies that have come into existence since 1978 as well as to anticipate and accommodate those that have yet to be invented or widely-used. But there is not a lot of political will to undertake a comprehensive copyright reform these days, and the overwhelming influence the biggest content companies seem to wield with major players in Congress suggests that comprehensive reform might do more harm to the interests of consumers and, especially, educators, then good. Until we can reasonable hope for through-going reform in a positive direction, the kind of incremental changes suggested by Public Knowledge seem like the best direction to focus our energies. Although it is fair to call these proposed reforms “more modest,” some of them would be quite radical in practice.

Two of the suggestions made by Public Knowledge will be quite familiar to those who follow copyright issues — fair use reform that would make the four factor test more usable and sensible in today’s digital environment and orphan works legislation to reduce the risk of making productive, socially beneficial works that are not currently subject to commercial availability and whose rights owners are AWOL. One proposal that I have not written about before in this space, but have discussed elsewhere, is that copyright holders should be required to give notice to consumers whenever they are imposing contractual or technological restrictions on a work that takes it outside of the uses reasonable expected under copyright law with its exceptions, including fair use. The principle that consumers should know what they are buying and whether they an use it for reasonably foreseeable purposes is actually quite basic in our commercial law, and neither contracts nor DRM systems should be allowed to defeat reasonable expectations of a purchaser without prior notice.

All of these suggestions — the remaining three are limits on secondary liability, protections against copyright abuse and simplified, fairer licensing rules — deserve our attention and support, at least until a more comprehensive and fair reform of copyright seems possible.

Blogging law

Trying to catch up on interesting developments over the past few weeks, I note the very interesting and wide-ranging discussion going on across several blogs dealing with legal scholarship about the value of blogging in that discipline. It seems to have started with several reports (here on Balkinazation, here on the Volokh Conspiracy, and here on Law Librarian Blog) about the rapid increase in citations to blogs in the legal literature. Lots of interesting questions are raised here. Why are these citations growing? Jack Balkin writes about the assimilation of blogs into the “larger universe of legal writing.” Is there a different ethic and etiquette for citing blogs in scholarly articles? Eugene Volokh suggests that there is and provokes a fascinating chain of replies. His discussion of the ethics of citing unpublished sources continues here. And finally, is this good for scholarship, or the beginning of the end? Brian Leiter writes a long piece on “Why Blogs are Bad for Legal Scholarship.” In spite of the apparent “liar’s paradox” here – telling others not to read blogs in a blog – Leiter makes an interesting argument about the importance of mediation and some way to test and evaluate the expertise of the one whose writing is being cited.

I have commented before on the growth of informal channels of scholarship, but have not written much about the relevant roles for different types of scholarly venues. These posts, and several others to which they link, do a nice job of starting that discussion. The linking itself is an important phenomenon; blogs provide a novel environment in which arguments and discussions can connect to and interpret each other. From that perspective, citing to a blog in a traditional article seems to defeat some of the principle advantages of blogging – the immediacy and interconnection.

It is also interesting to speculate on why legal scholarship seems to be the discipline in which this conversation is taking place. When I first read about it, I wondered if the unique aspects of legal scholarship, where most of the journals are edited by students rather than by full-time academics, might lead the professorate to feel less proprietary about their publications and thus more willing to experiment outside of the traditional confines of scholarship. Leiter suggests a somewhat different spin on this observation when he writes: “The problem is that reputational effects in the legal academy are mediate by two institutions whose primary arbiters are not, themselves, experts or even quasi-experts… First, one of the major venues for legal scholarship remains the student-edited law reviews” (the second institutional problem is the “journalistic reception” of legal ideas). For Leiter, the problem to which this lack of expertise contributes is the “availability cascade” – “an opinion that appears to be informed gains credibility by virtue of being repeated and thus becoming current in discourse.” For its discussion of this phenomenon alone, Leiter’s piece is worth reading, even while recognizing that blogs are certainly here to stay and scholarship is going to have to find ways to deal with them.