The heads of the G8 countries meeting this week are about to ratify the Anti-Counterfeiting Trade Agreement (Acta), which — it’s claimed — could let customs agents search your laptop or music player for illegally obtained content.
The European Parliament is considering a law that would lead to people who illicitly download copyrighted music or video content being thrown off the Internet. Virgin Media is writing to hundreds of its customers at the request of the UK record industry to warn them that their connections seem to have been used for illegal downloading. Viacom gets access to all of the usernames and IP addresses of anyone who has ever used YouTube as part of its billion-dollar lawsuit in which it claims the site has been party to “massive intentional copyright infringement.”
It seems that 20th-century ideas of ownership and control —- especially of intellectual property such as copyright and trademarks — are being reasserted, with added legal muscle, after a 10-year period when the Internet sparked an explosion of business models and casual disregard, especially of copyright, when it came to music and video.
But do those separate events mark a swing of the pendulum back against the inroads that the Internet has made on intellectual property?
‘DOOMED TO FAILURE’
Saul Klein, a venture capitalist with Index Ventures, is unconvinced. Klein has invested in the free database company MySQL, Zend (the basis of the free web-scripting language PHP) and OpenX, an open-source advertising system.
“In a world of abundance — which the Internet is quintessentially — that drives the price of everything towards ‘free,’” he said. “People don’t pay for any content online. Not for music, not for video. They get it, either legally or illegally.”
Is that sustainable?
“The model of suing your best customers and subpoenaing private information is doomed to failure,” Klein said. “It’s putting a finger in the dyke. It won’t change the macro trend, which is that there’s an abundance of information. Copyright owners need to find new ways to generate income from their product. The fact is, the music industry is in rude health — more people than ever before are going to concerts, making it, listening to it. It’s the labels that are screwed. The artists and managers are making money. The labels aren’t.”
“What is broken is the paid-for model for content, though it won’t go away entirely. We look to invest in scarcity, where people will pay a premium for something not in abundance,” he said.
He gives the example of Viagogo, a ticket-selling site that Index Ventures has invested in: “Selling tickets for Madonna or Prince capitalizes on the public’s interest in paying for scarcity.”
But the BPI, which represents UK record labels, disagrees: “Music’s true value is greater than its price ... people can see that creative people and the companies who pay them are not being fairly rewarded for the use of their work online and almost everyone now agrees this needs to change.”
UNHAPPY CREATORS
Content creators are taking a more assertive stance.
Scott Adams, the cartoonist best-known for his Dilbert strips, stood up for his work in a blog post in April last year, where he reasserted ownership of his products: “When you violate a copyright, you take something valuable from the copyright owner that he can’t get back ... After I published The Dilbert Principle, within days it had been illegally scanned and was widely available on the internet for free. Technically speaking, it wasn’t theft. But I still lost something. I [and my publisher] lost the ability to decide if, when, and how to publish as an e-book.”
That drew many comments, such as: “There’s nothing that you can do about us. You’re impotent, we’re everywhere, and soon, we’ll be everyone. It’s over. It’s time to start seeing the world as it actually is, and not as you wish it to be.”
Yet Acta spooks many. A draft version on the Wikileaks site said it reveals “a proposal for a multilateral trade agreement of strict enforcement of intellectual property rights related to internet activity and trade in information-based goods, hiding behind the issue of false trademarks.”
One of the footnotes has sent a shudder across the net: “Members shall provide for the provisions related to criminal enforcement and border measures to be applied at least in cases of trademark counterfeiting and copyright piracy.”
That can certainly be interpreted as meaning that you could be stopped at Customs and quizzed about the music or films on your iPod or laptop.
A more likely interpretation, however, is that Acta is really aimed at the big players, who copy CDs or DVDs on an industrial scale.
US trade representative Sean Spicer said in a statement on June 5, after the last round of Acta negotiations, that “the main focus of the discussion was border measures, particularly how to deal with large-scale intellectual property infringements, which can frequently involve criminal elements.”
Perhaps coincidentally, the UK Electronics Alliance, representing about 1,200 UK companies, will this month claim that counterfeit electronics cost the UK economy £1 billion (US$1.98 billion) per year in supply-chain problems caused by fakes, yet only two customs officials have full-time jobs tracking them down. Counterfeiting — especially of medicines and electronics, but also of car parts — has become a serious problem in recent years and the consequences can be serious. Subpar drugs can end up on store shelves, for example.
Part of the aim of Acta therefore is to provide an international means of putting pressure on countries from which counterfeit products originate. But Acta’s tentacles may spread wider than expected.
It would include “safeguards for ISPs [Internet service providers] from liability, to encourage ISPs to cooperate with right holders in the removal of infringing material.”
But for those pirating material, that might also mean ISPs could finger them with the backing of the law.
INDIVIDUAL RIGHTS
And the implications for privacy? Acta is silent on the rights of the individual. That is no surprise since the signatories would include the US, the UK and China, which have widely diverging ideas on the topic.
As one music industry insider who asked to remain anonymous said, part of the problem with online culture is that people are used to getting stuff for free, while feeling that they will not be tracked down.
“Imagine if someone somehow bought up Wikipedia and demanded payment for access,” he says. “People don’t like the idea of paying for things they’ve not been used to paying for. The Internet has given the opportunity for normal people to infringe intellectual property more easily than ever before. But I think there’s a creeping understanding that what the record industry has been banging on about for all these years really is a problem.”
Adams, meanwhile, thinks that challenging people is the perfect way to create “cognitive dissonance.”
Put “a person in a position of doing something that is clearly opposed to his self-image. Then wait for his explanation. The explanation will seem absurd to anyone who doesn’t share the dissonance,” Adams said. “I also enjoy the rationalizations from the people who say it is okay to violate copyrights whenever it’s cheaper than paying. They argue that these violations will encourage greedy publishers to be more efficient, thus transferring wealth from recording companies to ... Steve Jobs.”
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