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Cloudy With a Chance of Infringement

by Paul Rapp on April 19, 2012

I just became aware of a two-part article about what’s wrong with copyright law that ran recently on the business news site Bloomberg.com. It’s by the brilliant copyright scholar (and Google counsel) William Patry, and is excerpted from his new book How to Fix Copyright (Patry’s also the author of the treatises Patry on Copyright and Patry on Fair Use, and 2009’s wonderful Moral Panics and the Copyright Wars.) It’s like a long string of brilliant money quotes, one after another, and if this stuff interests you even slightly, you can Google “Patry Bloomberg” and you’ll land right there. Don’t skip the comments at the end, in which various knuckleheads get all agitato about what they think Patry just said, and then get quietly, politely and efficiently demolished by a Patry rejoinder.

One of Patry’s many statements that leapt off the screen into my cerebellum was “We are fast approaching an era when there will be copyright laws without copies in the traditional sense of the word.” Hoo boy.

There was no real need or call for copyright laws until copying technology emerged in the form of Guttenberg’s movable-type printing press in the 1500s. The first laws protected (and restricted) publishers, then after 100 years or so authors started getting their due. The idea was that giving authors near-monopoly control over what happens with copies of their works would provide authors with an incentive to create more works.

So what happens when there are no copies? It can certainly be argued that a digital file, a mess of tiny 1s and 0s sitting on a little disk, are barely copies of anything. And what about streaming? You are looking at someone else’s copy, which is located on a server far, far away. If there is any kind of monetized transaction at all, it’s not for a copy, but for access to somebody else’s copy.

A Cato Institute study a few years back described the difference between having a digital copy and streaming as insignificant, since both result in having the work appear on your screen or in your speakers. There’s a zillion free and easy-to-use programs that capture streams so you can have your own digital copy. Watch kids who grew up on digital; they don’t care if they “own” a copy or not, they just want stuff to happen once they touch a button.

So, it only makes sense that everything is headed to the cloud, right? Spotify, Netflix, IPads, smartphones and feather-light laptops with minimal storage because who needs it? Everything is up there, all the time, waiting for you to come get it.

Which brings us to the MegaUpload debacle. You may have heard that this cloud storage mega company got busted a few months ago, ostensibly for hosting all sorts of pirated movies and music. This was no normal bust. Based on a U.S. warrant, a New Zealand SWAT team stormed the castle of MegaUpload’s founder, an odd, corpulent German guy who named himself Kim DotCom. Other officers of the company were hauled in around the world, all of MegaUpload’s billions of dollars have been seized, and an unrelated company that operated the servers holding billions of files for MegaUpload’s estimated 60 million customers, Carpathia Hosting, has been left holding the bag.

The legal issues here are sticky—did MegaUpload actively encourage infringement? Did any infringement even happen in the United States? Is the seizing of a guy in New Zealand kosher?

In the meantime, the U.S. Department of Justice is acting pretty weird in the preliminary court proceedings. What’s of particular concern is that the prosecutors don’t seem a bit interested in preserving what’s on the servers. And, even assuming that there was lots of illegal stuff going on and that MegaUpload is liable (and that’s a big if), it’s undisputed that there is a lot of totally legitimate, noninfringing stuff that people had stored on MegaUpload. Just a couple of weeks before the bust, the company mounted a big PR campaign featuring a bunch of musicians (including Will.I.Am and Kanye West) singing “I Love MegaUpload.” Truth is, lots of folks, famous or not, used the site to legally store and distribute information.

At this point, all of the data is being preserved by Carpathia at considerable expense, and most of the parties are asking that the judge release some of the seized money to facilitate returning noninfringing files to their owners. And the U.S. attorneys are fighting this tooth and nail.

This has the cloud-storage world in paralysis. If the perception is that any remote server is vulnerable to getting wiped off the face of the earth by an out-of-control government prosecutor, the lovely and natural future envisioned by William Patry is toast. And who benefits from that? Nobody except the big record and movie companies, who desperately cling to their outdated, anti-consumer and anti-technology business models, which are threatened by the cloud.


Paul Rapp is a local information and media lawyer who hasn’t read an e-book yet but hopes to soon. He can be reached through his website, paulrapp.com.