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American Digital Media Copyright Issues Essay

Copyrighting digital media is a balancing act for the U.S. government. The digitization of entertainment (i.e. music, movies, software, books, etcetera) makes legislating difficult. Copyright owners seek to maintain the intellectual property of their creative works. On the other hand, consumers want the freedom to use their purchases—of copyrighted products—in various ways: sometimes in ways prohibited by law. On the other hand, certain uses of digital media products have no legal precedent. As a result, the landscape of copyright law is continuously adapting to consumer demands and other forces within the economy.

The usual complaint surrounding copyright infringement is revenue lost from pirating. A Washington Times article reported two months ago about a man—Xiang Li, a Chinese national—pleading guilty to “conspiracy to commit criminal copyright infringement and wire fraud in the distribution of more than [one hundred million dollars worth] of pirated software around the world.” Mr. Li disabled the “access control features” and digital licenses of software files and sold the on his website Crack99.com (Seper, 2013).

What is so striking about this case is that these cracked software programs were sold for the express purpose of mass-producing more. In essence, Mr. Li earned one hundred million dollars off of high-end sales, but there is no way to calculate the loss exacted from subsequent resales or free downloads. For his crimes, Mr. Li could be sentenced to 25 years in prison with a $250,000 fine (Seper, 2013). This weighty sentence exemplifies how serious the government is cracking down copyright infringement.

An ongoing debate has been evolving over the role of digital copyrights in the future. Some proponents of legislation may violate consumer rights (Musick, 2004). Digital products have always been limited in their profitability because they are susceptible to duplication. Pirating jeopardizes the ability of creators to recoup initial costs associated with researching and developing digital media products. The monetary incentive behind creation is diminished by theft. The United States government is adamant in their effort to deter the misuse of intellectual property (Musick, 2004). Evaluation of Copyright Legislation

The Congressional Budget Office or CBO is a non-partisan legislative agency of the United States that was established in 1974—by the Congressional Budget Act—to report on budgetary and economic issues. Members of the CBO are not considered based upon their political partisanship. The CBO uses expert analysis by way of impartial and objective reviews (CBO Overview, 2013).

The U.S. Congress relies on the CBO to offer in-depth analysis on digital copyright law. Congress may tackle copyright legislation in three ways: forbearance, compulsory licensing, and copyright law revision. Under forbearance, the U.S. Congress would stand back and let market forces resolve issues on their own. Product innovation and consumer demand may come to an amicable resolution by way of digital rights management or DRM technology. Some forms of DRM are very effective at rebuffing piracy. DRM can also be utilized for differential pricing (Musick, 2004).

For instance, a different price might be charged for using a digital music file for listening or mass-producing. DRM can prevent consumers from making duplicates. Another avenue of profitability is providing access, to digital media products, in a limited capacity. Netflix and ITunes are examples of this type of service (Musick, 2004).

An example of compulsory licensing would be Congress setting a flat-rate tax on certain products or access points to copyrighted works; then, royalties for creators of intellectual property would be determined by the amount of usage. No system is perfect though. Applying a flat-rate tax will undoubtedly cause problems.

For example, people using iTunes for uploading audiobooks or podcasts to their iPods may be disenfranchised by taxes on the use of iTunes to generate music industry royalties. Compulsory licensing could have unintended consequences on the economy (Musick, 2004).

Revising copyright law to benefit those most affected by copyright infringement is another way in which Congress can handle future legislation. DRM and limits on fair use policies could limit the ability of society to use digital media products freely. Sometimes the “greater public good” requires society to use certain types of digital media without having to pay for it. People may need to discuss things in a public forum like educational institutions, news media organizations, opinion blogs, and research development entities. Strict digital copyright laws could impede development within the economy (Musick, 2004).

Technology is digital media’s own worst enemy. The absence of a tangible piece of hardware like a CD makes protecting copyrights very difficult. Music files can be ripped and shared without a creator receiving monetary compensation. The digital media industry is now at a crossroads between extending their commercial interests and alienating the interests of consumers. People generally want to do what they want with their purchases, which is not always in line with the interests of digital copyrighters. The U.S. government is constantly reassessing the economic engine behind digital media creation (Musick, 2004).

There are social and private incentives for creating works. Neither parties—creators or consumers—should hold exclusive rights over the issue because their existence is codependent. There should not be a monopoly on the school of thought driving copyright law. A consensus on copyright law should be determined by market efficiency (Musick, 2004). Digital Media Copyright Laws

The U.S. Copyright Act of 1976 details the difference between theft and copyright infringement. Theft is characterized by actually having complete control over a stolen piece of property. Copyright infringement is depriving the owner of potential revenue by misusing their creative work, as in the court case Dowling v. United States (Musick, 2004).

Copyright ownership is for a limited time. Book copyrights last an author’s lifespan plus 70 years. Copyrighted works-for-hire last 95 years. Afterwards, the works enter public domain. The first sale doctrine would allow a consumers to give away a book or resell it, but there is legislation impeding consumers from giving away digital media files. Licensing has become the preferred method for allowing consumers to purchase digital media; licensing agreements control the use of these products (Musick, 2004).

The advent of the videocassette recorder (VCR) led to the court case Sony v. Universal Studios. Universal sought resolution on the matter of VCRs being used for making copies of TV shows, which was viewed by them as copyright infringement. The term affixed to this was called time shifting: recording television broadcasts for later viewing. The Supreme Court felt that time shifting was mostly used for watching TV shows at a later date, which is not detrimental to the media industry. Despite pirating, the economic wellbeing of the media industry was not undermined significantly enough to ban VCRs. Making copies under the fair use policy had been permissible (Musick, 2004).

Copyright laws for software were the earliest forms of digital media legislation. In the 1980s, Congress made concessions for archival duplicates. The Computer Software Rental Amendments Act of 1990 contained preventative measures against renting purchased software. Comprehensive copyright law was first established in the Audio Home Recording Act (AHRA) of 1992. This law was more impartial in considering ownership rights and consumer rights.

Digital audio recording devices—without measure to prevent serial copying—were illegal to manufacture. The AHRA taxed the sale of these devices. Tapes used in conjunction with digital audio devices were taxed too. All these proceeds went to copyright owners. In exchange, consumers were allowed to make copies without infringing on copyrights (Musick, 2004).

The Internet sets the tone for later types of copyright law. The No Electronic Theft Act of 1997 or NET penalized personal and commercial data sharing on the Internet. The Technology, Education, and Copyright Harmonization Act of 2002 or TEACH exempted educational studies from the purview of copyright law, especially towards distance learning institutions like University of Maryland University College (Musick, 2004).

The Digital Millennium Copyright Act of 1998 (DMCA) redefined many aspects of copyright legislation. The DMCA awarded copyright owners royalties for music used on the Internet. Internet Service Providers, also known as, ISPs were no longer permitted to obstruct copyright owners from seeking resolutions on copyright infringement. The DMCA limits the distributing or manufacturing of products used for circumventing DRM. For instance, purchasers are allowed to make archival copies. An IT department of a company may carry numerous archival copies of cloned computer setups for employee workstations within their company (Musick, 2004).

The DMCA has provisions for tackling cases of copyright infringement. To limit the liability an ISP (i.e. You Tube or Google) might incur from users violating copyright laws, the DMCA mandated the issuances of takedown notifications. Once an ISP has been informed—by way of a takedown notice—they must comply by removing the information from their network. In addition, resulting subpoenas require ISPs to hand over private information on offenders (Musick, 2004).

Most of the time, peer-to-peer (P2P) file sharing of music takes the spotlight because it is of the upmost concern to copyright owners. There have been numerous business enterprises devoted to ripping original music files, converting them to compressed digital versions (MP3 format), and distributing those copies. The effects of P2P file sharing are evident by the drop in revenue from music sales: 4% in 2001, 8% in 2002, and 6% in 2003. Circumspection reveals that overpriced CD sales—among other things—inflated the losses sustained by the music industry; meaning, P2P file sharing alone did not diminish the music industry (Musick, 2004). Figure 1 depicts the annual rate of decline in the industry shipment value from 1987 to 2003:

Figure 1 (Musick, 2004) The Recording Industry Association of America (RIAA) has shifted their primary focus from pursuing website proliferators to the individuals directly engaged in P2P file sharing. The ensuing legislative actions are called “John Doe” lawsuits. The DMCA allows for subpoenaing P2P file sharers on behalf of copyright owners. The next viable option would be petitioning Congress to change the law on matters concerning digital media copyrights (Musick, 2004). Notable Criticisms

The evolution of digital copyright law is determined by how technologies use digital products. For instance, the company Viacom has brought numerous DMCA cases against other companies, claiming a violation of “safe harbor” provisions. Safe harbor provisions limit liability from opposing legal action provided that a company was acting on good faith or within the prescribed standards of law. Viacom tried to unsuccessfully prosecute YouTube for purposefully allowing users to infringe on their copyrights. For instance, You Tube being ignorant of a user posting an illegal copy of a movie is not grounds for an actionable lawsuit (McSherry, 2012).

David Kushner of the New Yorker magazine wrote an article on George Hotz: the 17-year-old kid that hacked the IPhone. Hotz wanted to use his purchased IPhone via T-Mobile, but it was released exclusively on AT&T. So Hotz circumvented the DRM software and made it work with any cellphone carrier. Then he posted a You Tube video of himself using the hacked IPhone with T-Mobile service. This awarded Hotz with a lot of congratulatory fame and some money (Kushner, 2012).

After doing this for some time, Hotz turned his sights on the corporation, Sony Computer Entertainment of America. His hack of the PS3 allowed him to install other operating systems, play pirated games, or even use previously incompatible software. Sony responded by filing a lawsuit against him. Their concern was that beneficiaries of hacked PS3s could cheat during games or deprive creators of royalties. Sony was awarded a positive outcome, which allowed them to successfully obtain any information—via Hotz IP address—relating to his hacking or pirating activities (Kushner, 2012).

Sony inflamed digital rights activists by collecting IP addresses of people who downloaded hacking instructions from Hotz’s website. His antics as a rebellious free rights hacktivist earned him the support of a hacker group named Anonymous. Sony has been getting harassed ever since. Anonymous shut down their websites: Sony.com and Playstation.com. The group is also suspected of infiltrating their “online-entertainment hub” and compromising the personal information of over 77 million subscribers (Kushner, 2012). Pending Copyright Legislation

The government might argue that the Cyber Intelligence Sharing and Protection Act (CISPA) is a response to technology becoming a threat to national security. Writer Jason Koebler of U.S. News Reports explains that the U.S. government is trying to pass this bill to prevent cyber crime, but there are also components in the bill that will compromise civil rights. Hackers pose a huge threat to society because they steal, ransom off, spy on or sell the intellectual property. The main goal of CISPA is to allow American corporations to use the cybersecurity resources of the U.S. government in exchange for corporations releasing private information on consumers (Koebler, 2012).

According to Mashable.com, there has been vehement opposition to CISPA. Writer Alex Fitzpatrick reported on the petition signatures collected by the activist group, Demand Progress and Fight for the Future. So far, they have collected 300,000 online signatures, which have been emailed to Congressional House Intelligence Committee reviewing the bill (Fitzpatrick, 2013).

China is the most popular threat to the national security of the U.S. A recent article by Peter Navarro stresses the need for American businesses to operate elsewhere. China refuses to honor American copyright laws. Google left their operations in Beijing because China stole their blueprints for running a successful search engine. The Chinese rip-off of Google’s intellectual property is Baidu, which now holds 75% of the market Google once dominated there (Navarro, 2013).

Prominent business or political figures are cautioned on how to travel to China; digital theft is a government enterprise. Nicole Perlroth—a writer for the New York Times—reports that such individuals (i.e. corporate executives) do not carry their own computer devices on visits overseas. Kenneth G. Lieberthal is a Brookings Institution expert that follows this practice. The threat is that one’s computer devices will be hacked for the purpose of stealing intellectual property, among other things (Perlroth, 2012). Conclusion

The judicial process of the U.S. government is continuously testing the application of digital media legislation; this system will set the tone for technological advances in the future. The CBO plays a crucial role in analysis of bills under review for Congressional approval, which in turn affects the American economy. The CISPA bill, under review in the U.S. Congress, has the potential to prevent copyright infringement by diminishing the privacy rights of American citizens. In general, the extent to which the U.S. government is allowed to enforce copyright laws depends entirely on the American people. Commerce is increasingly becoming less secure with the digitization of media. Every party involved must come together to decide how far they want to go in protecting intellectual property of creative works, while being mindful that a misstep might have unforeseen consequences.


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