“Aereo” smiths (part two)

aereo-logoIn part one of this post I laid out the following propositions:  (a) We operate in a common-law system, so want and expect judges to apply the law to new factual situations; (b) intellectual property law is — as the Aereo case demonstrates — the very fount of new factual situations in our time; (c) lawyers try to navigate this system on behalf of clients but often find themselves or their clients being accused of cynical manipulation of the law for doing so; and (d) judges are making substantial policy decisions that not only affect the development of intellectual property law but have far-reaching consequences on commerce, culture and governance.

The last point in yesterday’s post concerned the judicial gloss on the Copyright Act, by way of the of the Supreme Court in Sony and the Ninth Circuit in Napster, by which it was decreed that the fair use as defined under the Act permitted time-shifting (recording Carson on your Betamax while you’re at work) and at least certain kinds of space-shifting (accessing media bought in one format via another, typically online format).  In Aereo, now, the Supreme Court is going to decide what the Act has to say about what some call “place-shifting.”

But  the Act doesn’t say a thing about any of this shifty business.  So aren’t the courts just winging it?  Well, no.  They’re engaging in the business of judging, as understood in Angl0-Saxon law.  But they aren’t deciding whether the equitable doctrine of mistake applies to a hitherto-unknown cow pregnancy or how to apply the ancient principle — judge-made in the first instance — of proximate cause a new industrial paradigm:  They are interpreting a statute representing very specific legislative policy decisions.  While the policies underlying copyright are not necessarily the ones the RIAA and friends would have you think they are, at least the legislative process operates within the confines of modern representative democracy.  What happens, however, when judges, um, circumvent that process and make their own policy decisions about copyright?

It’s not entirely fair to say that they are circumventing.  They’re mostly just judging.  As Michael Carroll, now a professor of law at American University put it in this 2002 law review article,  “copyright law has become quite complex and much of the Copyright Act . . . reads like  a very finely detailed contract.”  A contract, that is — as he says — “worked out among industry representatives and enacted by Congress.”  That’s “enacted by Congress” (Congress is supposed to be “us”) in the sense of “please, sir may I have another.”  But Congress and the Copyright Act simply can’t keep up with change.

Now, if you’re like me you may not like the idea that judges create policy and even thwart democracy on social issues, as they do with depressing regularity.  These rulings have a much bigger impact on our society than whether you can watch some stupid show or sporting event on your iPiece from Jupiter at 4 AM.  But we’re talking about something different here, part of which is judges actually doing their jobs.  While Congress can ignore problems or refuse to wrestle with hard questions, and mostly does so or even makes things worse by acting (just ask Judge Michel), courts can’t ignore the questions that come to them about whether a certain technology is infringing by saying, well, I don’t see anything here about no shifting.  When an issue of how the law as of that moment should apply to a new technology — or a new “legal head fake” – comes up and qualifies as a real case or controversy, judges have to make the call.

But what calls!

Consider, now, Napster, per Carroll:

An important point to recall is that the Supreme Court adopted a reading of the Copyright Act of 1909 that favored public access to programming delivered by cable systems. In doing so, the Supreme Court chose not to fashion a judicial compromise and, instead, established a baseline favorable to new technologies for legislative negotiations. In Napster, the Ninth Circuit . . .  chose a different course by holding Napster liable under a hybrid theory of vicarious liability and declining to use judicial power to create a compulsory license.

Now the Ninth Circuit didn’t really just wing it here.  It was utilizing well-established common law techniques of analogy to apply established law to new facts.  In fact, the title of the article I’ve been quoting from here is “Disruptive Technology and Common Law Lawmaking.”

Remember: Napster involved secondary liability, which is a judge-made doctrine in the first place.  It’s not a bad policy to have vicarious and contributory liability; it would be a bad policy, in fact, not to have it.   Anyway I can’t imagine life without it!

But judge-made policy it is and, as we all know, its most common application in the IP context is by analogy to classic case of Fonovisa:  The flea-market owner held liable for knowingly permitting sales of infringing merchandise on his premises.  That’s the paradigm, but now the flea market is the intertubes.  Says Carroll:

Any lawyer should understand the importance of analogies in common law lawmaking. It may have been that the Ninth Circuit would have had to reach back to some of these older cases to decide whether Napster is more like an absentee landlord or like a dance hall operator. Had these been the only available analogies, Napster quite likely would have fallen on the “dance hall” side of the divide; but the Ninth Circuit might also have explained what the operator of a computer system must do to be treated as a mere landlord. Instead, the Ninth Circuit relied heavily on Fonovisa . . . 

Because of the procedural posture in that case, the court was obliged to assume the worst about the flea market operator. After reviewing the precedents just mentioned, the Ninth Circuit held in Fonovisa that the flea market operator supervised the distribution of infringing recordings because it had the right to “control and patrol” its premises, along with a contractual right to evict the vendors for any reason. Further, the operator received a financial benefit because it received revenue from the vendors and patrons involved in the infringing distributions. To the Ninth Circuit, Napster looked a lot like a flea market involving barter, rather than a cash exchange.

Routine analogy.  Probably the right one.

But big, big policy, no?  Yes.  Of course it is.

Trademark lawyer Ron ColemanNow, back to Aereo and the question of head-fakes, of circumvention, of the technology equivalent of “defensive medicine.”  Judges understandably look at Aereo and behold its gazillion dime-sized antennas, each a little gun shooting media content bullets with subscribers’ names on them, with horror.  This seems the antithesis of efficiency, described by Judge Chin in his dissent from the Second Circuit’s ruling as a “Rube Goldberg”  apparatus.  This roundabout construct would, at any prior time in history, sink under the weight of its inherent and purposeful redundancy in materials and processing — but thanks to modern technology, the cost of each added subscriber and his concomitant mini-antenna is trivial.

Trivial — almost nothing. Just about the same, in fact, as the cost to a record company of one more music download; more or less the outlay required to service one more reader of the online version of the New York Times; roughly equivalent to the expense incurred when two more guys walk into a bar to watch the Super Bowl — none of which are free.

Well, they’re not free to someone who wants to legally obtain them, anyway.  You have to pay for them, and you know what’s funny?  To make sure you do, and to circumvent the efficiency inherent in letting you get these things for free -there is — quite understandably — a whole convoluted, inefficient IP protection regime in place.  It’s a maze of paywalls, copy protection, technological monitoring, litigation — kind of like a bunch of dime-sized antennas ….

Why does it look like that?  Because that’s the way the law made it. 

Yes, let us admit it! In order to give teeth to the legal regimes — copyright, patent and trademark — that protect the bundles of rights parceled out by legislators and judges, content owners must and do distort the channels by which goods, and especially these days digital goods, are distributed.  Because that’s the way the law made it.

If the head-fakes and circumventions that we take for granted in content distribution are understood to be a natural result of the artificial, which is not to say illegitimate, whack-up among rent-seekers on the IP supply side, why are we surprised, much less shocked, shocked!, to see them on the demand side?

Judge Chin readily eviscerated centuries of Rube Goldberg contrivances that limited access to copyrighted material when he freed Google Books from the constraints of copyright law.  Maybe that’s why he finds them so intolerable here.

But he shouldn’t.  If Google could stream the stuff that Aereo is bouncing back to its users, it would.  As it is, Judge Chin reads the Copyright Act to allow books, or pieces of them, to be shifted all over the Internet for free and without permission, license or royalty. No, today no one dares suggest you could do that — legally — with Law and Order and the Yes Network and the latest ditty from P. Diddy.  Those, it appears, are valuable enough to merit real copyright protection — even if we have to reverse-engineer legal compliance, complete with statutory damages for “willful infringement,” to get it.

That’s not right.  If we have to come to terms with the fact that judges are just going to be stuck with a policymaking role because that’s how it is, let them come to terms — before they condemn clients for listening to lawyers and lawyers for listening to judges — with what, in their struggle to do their jobs, they have wrought.

 

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Author:Ron Coleman

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2 Responses to ““Aereo” smiths (part two)”

  1. July 10, 2014 at 11:33 am #

    Its not an issue with IP law, but I wonder what the judges would say if someone invented the car right now and presented it as properly able to be used despite the objections of say horse breeders.

    “My lord, it is a large object, self-propelling, that can travel at up to 200mph and weighs anywhere between 1.5-3 tons. It can be privately owned by anyone who can pass a simple test. It requires to be filled from time to time with a highly flammable, explosive liquid that is proposed to be sold to anyone from the equivalent of a corner store.

    It is further proposed that the dispensing of the liquid may be undertaken by the person owning the vehicle who will not require any qualifications or safety training in order to do so. To encourage use of these vehicles, it is proposed that the fuel will be cheaper than bottled water….”

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