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Us Against Them? How the Intellectual Property Wars Damage Our Personal Freedoms, Our Jobs, and the World Economy

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In the war over downloading and sharing electronic media, voices from both sides need to be heard in order to understand the nature of the conflict and how it might be resolved. This chapter explores the points of view of the various sides in this battle critically.
This chapter is from the book

We're dealing with an industry where an unspoken strategy is that the killer app (software application) is piracy. [1]

Michael Eisner, CEO and former chairman of Disney

Were the manufacturers of the printing press forced to protect the monks? [2]

Andy Grove, CEO and founder of Intel

The fundamental hypocrisy of the music industry (and of some artists) in the current debate over the MP3 4mat, Napster and other 4ms of online xchange of music is that they're talking about copyright, intellectual property and other such noble concepts when the only thing that they're actually trying to protect is the commercial value of their musical "product." [3]

Prince, the artist

Overhead, picture-perfect cumulus puffs float in the light breeze. The mother of the bride lays to rest one of 756 worries about the day: the weather has cooperated. The bridal party leaves the bower and steps out into the dappled sunlight. Guests commence circulating around the hors d'oeuvres and sipping glasses of Mondavi Reserve. A deejay has set up his equipment in the party tent, and half a dozen large loudspeakers are blowing happy tunes all over the place. You wander over and take a look at his gear; wow, there's hardly anything here! You recall wedding deejays of a few years ago who lugged big trunks full of turntables, CD players, and hundreds of vinyl and plastic platters to play. This guy has a laptop computer, a mixer board and an amplifier. That's it. When you ask him about it, he tells you he has about 3,000 MP3s on the laptop and a cool software program that lets him arrange them into a playlist. If a wedding guest asks him to play something, he searches for it and can slip it right in to play next.

As you're marveling at this robust and compact technological development, you hear a loud, sudden commotion, followed by a collective gasp from nearby guests.

It's Them!

You crane your neck and see four men in black jackets racing toward the party tent. One stops to say something to a man in a tux whom you recognize as the father of the bride. The man in the black jacket hands him a piece of paper, and as he does so, you see the back of his jacket. There are four large white letters: RIAA. The other three men have surrounded the deejay; one is reading him his rights, and the others are confiscating his computer. It's the Men in Black—but not the Will Smith and Tommy Lee Jones kind.

Far-fetched? Well, technologically this vignette is au courant and, given the current state of downloaders-versus-the-music-industry, such black-jacketed enforcement is not beyond the bounds of credulity. Nor would it be out of step with history, as we saw in our last chapter.

But the scenario is too simplistic, too Us versus Them. Read further and you'll see that sometimes we are them, while at other times, they are us. To make matters even harder to understand, the factions in this war over intellectual property often come at one another from the flanks as well as from the front. You need ascorecard to keep track of the players and some color commentary to describe their strategies and positions. It's game time. Let's get to it.

This deejay, by the way, has broken two laws: one, downloading copyrighted music he did not pay for, and two, using that music in public performance without paying royalties for the right to do so.

And of course the Recording Industry Association of America (RIAA) doesn't really run around in flak jackets confiscating computers and interrupting weddings, but it has taken a tough stance against those it perceives have violated the copyrights of its members. The subpoenas the RIAA began issuing in the fall of 2003 were the most public manifestations of the war between the music industry and its customers.

This spectacularly well-covered confrontation—it was practically a media event—painted the music industry as Them with a capital "T." The single most covered subpoena was that issued to 12-year-old Brianna LaHara, a Manhattan honor student who would have had to scratch up $150,000 for each of the 1,000+ songs she'd downloaded if the RIAA hadn't been willing to settle with her Mom for $2,000. (For more on this, see Chapter 8, Eliot Ness or Keystone Kops? .)

But the music industry has looked out for itself on other intellectual property fronts for years. Consider:

  • Two men entered the Wilde-Meyer art gallery in Scottsdale, Arizona, and told the owner that she would have to stop playing the radio for background music. [4]
  • Restaurant waitstaffs are breaking the law if they sing "Happy Birthday" to customers. The song is under copyright, and singing it in a public venue such as a restaurant is technically a public performance, meaning a royalty should be paid to ASCAP. [5] The tune was written in 1893, and the lyrics first appeared in print in 1924 and were first copyrighted in 1934.

    The copyright, now owned by Time Warner, brings in $2 million a year. As of now, the song won't enter the public domain until 2030.

  • College radio stations, once the greatest U.S. venue for introducing new groups (and where we first heard Smashing Pumpkins), have been told they must pay play fees, just as their commercial counterparts do. In most cases the funds aren't there, and the stations have resorted to playing "independent" local groups—perhaps not an entirely bad thing (think of the indie movement in the film industry) but the stifling of a legitimate venue for listening to new music nevertheless. Consider: Has this had an impact on CD sales?
  • In 1996, ASCAP informed summer camps in the U.S. that many songs commonly sung around the campfire—songs like Woody Guthrie's "This Land Is Your Land," Bob Dylan's "Blowin' in the Wind," and Irving Berlin's "God Bless America"—were copyrighted material for which royalties should be paid. Although ASCAP was willing to settle for a blanket royalty fee as low as $257 for some camps (and as high as $1,500), the society backed off after a summer of bad press, saying such "public performances" were okay if they weren't for commercial gain.

While the music industry starred in our little wedding vignette, it's not the only content industry confronting its own customers over copyrights. The computer software industry disrupts business for the companies for whom it obtains court authorization to audit. Customers at preview screenings of blockbuster movies aren't happy about having their pockets emptied in search of little camcorders.


Upon the bounding main in the 1700s, it wasn't always easy to tell the pirates from the good guys. The pirates didn't always fly the Jolly Roger, and the King's navy might plunder just as much as those they brought to justice. To the English, Sir Francis Drake was a gentleman and commissioned "privateer," but to the Spanish, he was a ruthless pirate. Jean Lafitte ran a 10-boat pirating concession out of Louisiana and sold his stolen goods to the upper crust of New Orleans. William Dampier augmented his pirate booty with fees for speaking and writing in London. Henry Morgan, the "King of Pirates," operated out of Jamaica for years until he was finally caught and thrown into a British jail—then he was released by Charles II, knighted, and made governor of Jamaica.

Who is Us and who is Them?

Upon the bounding digital main, the question still applies. Are we the public? Are we the same public that America's founding fathers felt so strongly needed easy, inexpensive access to knowledge? Are we the content creators for whom intellectual property laws offer the opportunity for recompense for our work? Are we the customers who pay the cost of the monopoly granted by the government to copyright and patent holders? Are we the 45 million investors in the companies being ripped off by downloaders?

Just exactly who is Us and who is Them? Was Pogo right when he said, "We have met the enemy... and he is us"? [6]

At least we can tell you who some of the players are. Let's assume for the sake of argument that the Us in our equation includes (intentional or not) unauthorized music, movie, game, and software downloaders, copiers of CDs, corporate misusers of software licenses, software and content counterfeiters, distributors and resellers of material obtained in violation of intellectual property laws, and probably everybody who uses KaZaA to download. [7]

Now we need a Them. There are several camps. In fact, there are as many camps as parties in an Italian election. Those with the highest degree of "themness" would probably be the trade associations and lobbying groups that, through powers of attorney granted by their members, actually go after "us." Call them Camp A. They include:

  • The RIAA, which lists 1,000 labels as backers but whose top five members—BMG, EMI, Sony, Universal Music, and Warner Brothers—make up 75 percent of the recorded music industry. They all now have their own music downloading sites, use KaZaA themselves to track downloaders (and for that effort are under suit for violating KaZaA's licensing agreements), and use statistics on music downloading over KaZaA to fine-tune their marketing strategies.
  • The Motion Picture Association of America (MPAA), run until spring 2004 by former studio head Jack Valenti, a one-time bomber pilot and aide to President Johnson, which represents all the major studios. The MPAA is a lobbying group as well as a support group for law enforcement.
  • The BSA, an association of companies from Adobe Systems to Symantec, which makes its money from member donations, software license-infraction fines, and court awards from successful lawsuits. The BSA is as concerned about software licensing violations as it is about outright piracy.

Camp B might be considered the content vendors, chief among them Disney, Sony, and Microsoft, which have the lobbying and business clout to drive their respective trade associations as well as their own lobbying and enforcement divisions. Disney, you will remember, made over $600 million in 2003 with its tribute-to-piracy film, Pirates of the Caribbean, starring the roguish and lovable Johnny Depp. Sony oncegot busted for making up reviews for its movies from a fake reviewer at a real newspaper (does that violate intellectual property rights?) and makes more money selling audio equipment (like MP3 Players) than it does selling recorded music. Microsoft is constantly embroiled in lawsuits brought by companies like Apple Computer and Sun Microsystems alleging copyright and patent infringement.

Of course, as we know from childhood, not all campers get along. In 2003 the British Broadcasting Company (BBC) announced it planned to put all—that's right, all—of its archived TV shows and movies online for free downloading as a service to the public (which, in Britain, is also its owners). This sent shockwaves through the other major worldwide TV networks, none of whom want to compete with free BBC stuff. Most network executives are hoping the BBC conversion of film and broadcast video will go slowly enough that they will be retired by the time all this content hits the beach.

Then there's Camp C. Let's call them the technology providers, both hardware and software. These include all those makers of MP3 players, media playing software, CD burners, memory sticks, wireless networks, broadband Internet systems, cable descramblers, satellite dishes, home networks, peer-to-peer file-sharing software, video cards, PC speakers, and CD label-making software. Camp C includes Microsoft, Apple, AOL, and Sony, who are members of Camps A and B as well. See? Many of them are both Them and the Enemies of Them at the same time.

The Camp D slot we might as well give to the Internet Service Providers (ISPs) who play a middleman role for Camps A through C and the pirates. They sell Internet access and services, which means they covet subscribers and are loath to irritate them. They have therefore fought to keep errant subscribers' names out of the hands of Camps A and B, but the courts and Congress have pushed them into becoming snitches—although case law swings back and forth on how assiduously they have to comply with Camp A and B subpoenas (more on how this works in Chapter 8, Eliot Ness or Keystone Kops? ). These are reluctant Thems.

Are we done, you ask? Oh, no. Camp E we will assign to the politicians and courts—those arbiters of modern life who always seem to find the messiest ways to deal with any rapid technological change. Congress, you may remember, actually named a major extension to the Copyright Act of 1976 after Sonny Bono, the guy who's only claim to fame was that he sang "I Got You, Babe," with Cher back in the 1960s (see Chapter 5, Inside the Sausage: The Making of the Digital Millennium Copyright Act ). They are supposed to be an Us, but seem to be a Them more often than not. Many feel this is because the government is inordinately influenced by the media companies, which also control the newspapers and TV stations, but it would be cynical of us to agree with this view. We simply think individual legislators have sold out to their various vested-interest constituencies.

Table 3-1. A Schematic of the Camps





Media trade associations and lobbyists such as BSA, MPAA, RIAA

Influencing legislation and enforcing copyright laws; represent Camp B


Bertelsmann, Disney, Sony, Microsoft

Create media content; hire Camp A; often at odds with Camp C


AOL, Apple, Microsoft, Pioneer, Sony

Provide the hardware and software to play media; often the same palyers as Camp B


Internet Service Providers, college networks

The connectivity between pirates and media; often persecuted by Camps A and B for providing essentially a passive service


Government and courts

Role is to be fair and balanced, but almost always tips toward more powerful and moneyed interests of Camp A



Earnest complainers and freedom fighters for the interests of free or unfettered media rights for Camp G



The intended beneficiaries of intellectual property, over whose rights to use the battle is being fought

Which brings us to the cynics who populate Camp F: the critics. These are the academics, pundits, gadflies, and anticopyright Web site purveyors, and the inevitable gaggle of journalists, bloggers, and adze-grinding attorneys and consultants, each of whom is more than able to find fault with the current trend toward increasing intellectual property protections. Their solutions, when prescribed, are often impractical and lopsided to the point of ludicrousness. But then, in a way, that's the job of the gadfly. You got Us's and Thems all over the place here.

The last camp is Camp G, specifically mentioned in the United States Constitution as the intended beneficiary of what intellectual property protections the government offers: us, the American public. Our only voice in the matter may be our elected representatives or the dollars we vote with in the market—unless you consider illegally downloading media an act of civil disobedience. We may not know for certain how assiduously the former are looking out for us, but what else is new?

There are other players as well, from the customs officials who bust counterfeiters to the venture capitalists who bankrolled Napster and KaZaA, from the hackers who find ways around software protection algorithms to the software developers who sweat for years to produce a single feature in a software application only to see it sell for pennies in the piracy bazaars. It includes musicians who deplore illegal downloading, and it includes musicians who perceive it as one of the finest marketing mechanisms. It includes the widows and orphans who own shares in the funds that own Disney and Microsoft and the widows and orphans who are downloaders.

So, have you got the message? We are Us, but we are also Them.

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