Author: David Newhoff

David is an author, communications professional, and copyright advocate. After more than 20 years providing creative services and consulting in corporate communications, he shifted his attention to law and policy, beginning with advocacy of copyright and the value of creative professionals to America’s economy, core principles, and culture.

Petitioner Asks SCOTUS to Hear ReDigi Case

A new business called OmniQ has filed an amicus brief urging the Supreme Court to grant cert in ReDegi v. Capitol Records, alleging that the Second Circuit’s opinion in December 2018 effectively brings an end to the First Sale doctrine.  The company is developing a patent pending model that (presumably) would facilitate an online market for “used” and hard-to-find motion pictures.  Its brief contends that the lower court erred in its plain text reading of “reproduction” under the copyright law and would permanently “outlaw” the kind of technology they propose to introduce.

It is unlikely the Supreme Court will agree to hear ReDigi, not least because, as Hollywood Reporter’sEric Gardner rightly notes, “The issue of whether the First Sale Doctrine has survived the digital age may make for good scholarly articles, but is the Supreme Court really going to devote its limited bandwidth to technology that’s already outdated?”  ReDigi proposed to facilitate trade in “used” digital music files at the same time that subscription streaming was on the rise and may, therefore, be considered obsolete at inception. But in its brief, OmniQ implies that its business model fulfills an unmet need in the market by addressing what it claims is dwindling access to classic motion pictures …

…the public has already lost access to vast libraries of motion pictures and other audiovisual works, simply because modern technological solutions like the one at issue here are lacking.

…the breadth of choice in movies was many times higher 20 years ago than it is today.

I personally find the brief’s argument about the lower court’s interpretation of “reproduction” somewhat persuasive when it states “there is no ‘reproduction’ without the multiplication of copies.” If in fact a file can be moved from my hard drive to your hard drive so that you now have it and I do not, then it there is a plausible argument to be made that “reproduction” has not occurred.  But from there, I think OmniQ’s claims overreach, blaming copyright protections for phenomena fostered solely by the market and technological change.

First Sale Probably Does Not Survive the Digital Age

Even if the Supreme Court were to agree with OmniQ that the Second Circuit misread “reproduction” in ReDigi, this would not rescue the fact that the proposed business model exceeded the purpose of the First Sale doctrine because it would create a “used” market in name only—one that could theoretically become a substitute for the primary market.  In 1908, the Supreme Court held…

“It is not denied that one who has sold a copyrighted article, without restriction, has parted with all right to control the sale of it. The purchaser of a book, once sold by authority of the owner of the copyright, may sell it again, although he could not publish a new edition of it.”

And for the next century, physical copies of books, records, DVDs, etc. were sold in second-hand stores, garage sales, or rented through outlets like Blockbuster.  But the fact that a “used” digital file is identical to a “new” digital file is a technological reality that reshapes the meaning of “second-hand” material, and this at least alters—if it does not outright extinguish—the First Sale principle.  

Further, the potential for a transaction facilitator (which OmniQ presumably aspires to be) to foster a parallel trade in “used” digital files operating at internet scale is a vastly different consideration from the scope and nature of the secondary market that emerged between 1908 and the digital age. 

Finally, these same technological changes have spawned a primary market that (despite persistent complaints that all media should be free) is both cheaper and more abundant than the primary market of 20 years ago.  For example, The Criterion Collection, while perhaps not wholly satisfying to all film buffs, allows an account-holder to stream a library of motion-picture classics for about 27 cents a day—access that was unthinkable 20 years ago.  

In the still-evolving digital market, therefore, a petitioner like OmniQ should at least be required to demonstrate that its purpose is to facilitate a “second-hand” trade in material that is not likely to become available via licensed distribution systems—whether online or as physical copies.  And in this regard, the brief makes an emotional and cultural plea that fails to present a problem caused by copyright law.  

“1960 Doesn’t Exist on Netflix”

To demonstrate the market need for its business model, OmniQ relies almost entirely on one article written by Zach Schonfeld in 2017 for Newsweek.  It is an engaging piece on the theme that motion pictures from the oeuvres of Hitchcock, Truffaut, Fellini, Kubrick, et al are disappearing from mainstream cultural literacy.  The spirit of the piece which focuses almost exclusively on Netflix, is well captured when Schonfeld quotes blogger Nora Fiore (a.k.a. The Nitrate Diva) …

“If you’re the biggest name in film streaming services, the less you offer in classic movies, the more you imply that classic movies have less to offer.  It’s a terrible message to put out there.”

Perhaps this is a fair observation about contemporary culture and the movies, but the reasons for these changes have little or nothing to do with copyright law and everything to do with the inevitability that Netflix was going to transition to become a producer of new material. 

Before I go on, I have to interject that it is curious that in one moment, copyright is alleged to be a framework for nostalgic fuddy-duddies who don’t understand the future, but in the next moment, it is the nostalgic fuddy-duddies who are blaming copyright for stifling connection to the past.  Or I might also note that one of the complaints about copyright terms is the false allegation that creators will not produce anything new as long as they retain copyrights on older material they can keep reselling.  Maybe there are forces at play that are not really about copyright?

Speaking as one nostalgic fuddy-duddy who would rather watch Day for Night than Game of Thronesany day, the problem (if we agree it is a problem) with the apparent loss in status of classic films in the cultural mainstream is not a licensing issue.  Netflix could make all these films available tomorrow, and I predict that younger audiences will, by and large, think they’re being told to eat their vegetables.  

It isn’t copyright’s fault that a whole generation has been feasting on a steady diet of short-attention-span, handheld video clips for more than a decade.  The young mind does not easily transition from TikTok to Tarkovsky, and availability of the latter alone is not going to fill the apparent gap in cinematic literacy. Piracy statistics bear this out year after year as even illicit access worldwide continues to favor major, contemporary works like blockbuster movies by substantial margins.  

As an observer of culture and a cineaste, I would love to join Schonfeld and the film historians, academics, and buffs he cites for a drink to mourn the apparent loss of interest in the classics, but this was to be expected in a market destined to expand and become more segmented.  It should be little surprise in a world where we can have “liberal news” and “conservative news,” that entertainment is going to be even more distinctly subdivided.  

On the plus side, we get a diverse range of material and subject matter because investors are not restricted to appealing to the safe middle every time.  On the negative side, we no longer share a common film culture as we once did.  But this is a change borne of technological innovation in distribution systems that has nothing to do with copyright per se. 

Further, I think Schonfeld’s article is unduly harsh on allNetflix offerings as being substandard when he writes, “The universal power of boredom guarantees that any piece of Netflix programming will be watched by millions simply by virtue of being plastered across the Netflix homepage.”  This complaint that Netflix does not host a library of classics that Schonfeld et al believe it should is not especially helpful to OmniQ’s purpose.  After all, this is familiar territory. When David Lynch’s Blue Velvet was released in 1986, the box-office winner that year was Top Gun. It was ever thus.

Which Market is OmniQ Really Trying to Serve?

Serious film buffs have long been a niche audience who, by and large, have had to spend extra resources in the pursuit of their passion.  In many ways, I can only imagine that film-buffery is easier today because one can enter a title into various search tools and locate, for instance, a used DVD someone is willing to sell.

Presumably, OmniQ wants to facilitate the same kind of one-to-one transactions in titles that would-be sellers own as digital files on hard drives rather than plastic disks.  And it is not an unreasonable premise to claim that First Sale should apply to this kind of trade so long as the number of copies in circulation remains fixed and never increases.  A problem arises, however, when an enterprise facilitates this trade at scale in works that are available through licensed channels; and it is not clear which market OmniQ proposes to serve.

If OmniQ is focusing on the serious collector looking to obtain a digital file of a hard-to-find title by Ernst Lubtisch, they may have a reasonable legal argument, but possibly not a viable business.  If instead, the company is responding to a declining interest in classics like The Apartmentor Spartacus (both named in the Schonfeld’s introduction), availability is not the underlying cause of this cultural phenomenon.  These and other popular classics are widely available through existing channels, including streaming, and this weighs against OmniQ’s claim that First Sale remains relevant in the digital age.  

As mentioned, it seems highly unlikely the Supreme Court will hear ReDigianyway, but even if it were to overturn the Second Circuit opinion on “reproduction,” I suspect OmniQ would still have a lot of homework to do in order to prove that its business operates within the spirit of First Sale.  I do not think one magazine article, no matter how much I personally agree with the spirit of its commentary, is going to support OmniQ’s argument with regard to copyright law.  

Flipping the Narrative on the Effects of Social Media

Many years ago while still in college, I was on the train to New York City—a beautiful ride along the eastern banks of the Hudson River.  Several rows from me sat a family of American tourists who caught my attention when I heard the dad say, “Look kids, there’s Alcatraz.”  

Reasonably confident that Alcatraz sits on an island in San Francisco Bay, I glanced over to see the man pointing across the river and his two children gazing at the fortress of the Military Academy at West Point.  The layers of incorrectness in this guy’s armchair tour-guiding is more or less the kind of “information age” social media has amplified at an unprecedented scale.  And I remain unconvinced that there is a policy, either public or private, that can do much about it. 

In her June 13 article on FastCompany, former Google VP of Communications Jessica Powell recommends a behavioral and cultural shift whereby those who work for Silicon Valley join, rather than scorn, the conversation about regulatory and practice changes in her industry …  

… we tend to close ranks when our industry is criticized. We view an attack on Facebook’s handling of content moderation, for example, as something that might threaten all the legal protections given to platforms—and if we’re Twitter, YouTube, Reddit, or any other social platform, we tend to go silent. Rather than providing a more nuanced critique about what Facebook may be doing wrong (or right), we attack the outsiders as Luddites who want social media apps to remove all speech we don’t like or demand that platforms like Facebook should hire a million humans to moderate controversial content. 

Kudos to Powell for identifying the habits of her colleagues and for proposing the very reasonable notion that “Some of the best ideas about how to sensibly regulate tech can probably be found in the Valley….”  Fair enough.  And by all means, cooperation would be a refreshing change coming from that industry. But what if it is necessary to flip the narrative on the nature of what we’re really talking about?  

Powell does not acknowledge in her article the Olympian hubris with which Silicon Valley has proclaimed its innovations to be so universally beneficial for society that the critics should shut up and thank them for their largesse. Remember that all proposals, even those seeking to mitigate new forms of tech-enabled crime, have generally been rebuffed with some variation on the caveat that we must avoid stifling the greatest tool for democracy ever created.  

That premise continues to distort the nature of the conversation, and it is probably false.  Rather than assuming a platform like Facebook is a positive social force with a few negative effects that need mitigating, it may actually be the case that it is a negative social force with a few nice qualities.  We can wish one another Happy Birthday, keep up with our friends, and even have some very substantive discussions; but what if social media as an information source is fundamentally toxic to democratic institutions and we have to address it in those terms?   That would be a very different conversation from the one being had right now, and I cannot imagine “the Valley” Powell describes would be eager to table the premise that much of what they do is, on the whole, destructive.  

In a blog post for Luminate, an organization that funds and supports efforts to improve democratic institutions around the world, David Madden writes about tackling Digital Threats to Democracy …

“Over the last nine months, three of the world’s biggest countries have held elections: Brazil, Nigeria, and Indonesia….Social media posed a clear threat to the elections of all three countries.

 “…a video on Facebook three days before the polls suggested that the [Brazilian]Workers’ Party Candidate Fernando Haddad was planning to distribute ‘gay kits’ to child care centers. 

… a rumor that [Nigerian]President Buhari was dead and that a body double was serving in his place. This rumor was so widely shared that President Buhari had to publicly deny that he had been ‘cloned’.

Online “hoaxes” increased dramatically during the [Indonesian]campaign and the deadly violence that followed the announcement of the election result was the natural conclusion of the incendiary battle fought on social media and WhatsApp.”

These, and many stories like them, are the reason the conversation is finally being had about platform moderation and/or regulation.  Congress just last week held hearings on the subject of “deepfakes” because it is clearly the next technological innovation about to be weaponized and aimed at democratic institutions.  But this kind of purposeful disinformation, as devastating as it has proven to be, may be more easily mitigated than the ordinary, subtle effect the new “commons” has in steadily eroding the delicate fabric that holds liberal democracies together.  

For instance, because it’s in my wheelhouse, I’ll note a recent blog post published by my friends at Creative Future on the topic that Google has funded academics who just happen to espouse anti-copyright views.  When I scrolled by their post on Facebook yesterday morning, there were 260 comments, so I took a peek.  I know. Never read the comments.  But the problem with that rule of thumb is that the comments are us.  Bots and trolls notwithstanding, they are an anthology of what we think and why we think it, except that we are perhaps just egomaniacal enough that we like to believe the peanut galleryis everybody else.  

Just in response to this one blog post, commenters unpacked their views on liberals, conservatives, capitalism, socialism, climate change, and academia overall, plus at least one reference to Nazis and, of course, one guy reciting Scripture.  It’s like a Richard Scary book illustrating Crazytown, where the village hosts a public forum on one topic, and a literal food fight would be a step forward in thoughtful discourse.  Whether in agreement or not with a given post—even just straight reportage—the subject is too-often subsumed by other matters about which the commenters seem equally uninformed. Look kids, there’s Alcatraz! 

We are all ignorant about a great many things.  Even the most gifted astrophysicist who knows way more than you and I about the cosmos is still searching for what she does not know.  But with regard to the kind of informed public that is understood to be essential for the survival of a democratic society, the capacity of social media to amplify misinformation is not only unprecedented, but it is not limited to the most obvious forms of chicanery.  The effects are subtle and mundane.  The simple act of typing and publishing a misinformed comment more deeply etches a false narrative into one’s world view.  Multiply this phenomenon across every story on every topic, and it is little surprise that democratic institutions are in dire straits. 

As others have noted, one of the greatest hazards posed by “deepfakes” technology is the prospect of  universal plausible deniability—the opportunity for anyone to claim that video evidence of them saying or doing something is fake when it is not.  Anticipating that environment feels as though we are standing on the edge of an event horizon different from the technological singularity predicted to occur when the machines become self-aware.  In this scenario, the singularity is caused by the paradox of infinite doubt—a gravitational force from which reliable information cannot escape because there is no longer sufficient consensus as to what a reliable source looks like.  

That may be needlessly pessimistic, but to the extent that we already see evidence of this phenomenon having tangible and devastating effects, social media must be recognized as an underlying cause of the problem, which means that it is unlikely to be its own antidote. Certainly not without a very different conversation that begins with Jessica Powell’s friends and colleagues dropping their making the world better rhetoric.  Because it seems abundantly clear that they are doing no such thing.  

Masnick Calls CASE a Big Media Bill?

From the Techdirt Sycophants Department

In his post of May 28, Mike Masnick dutifully opened his hymnal and joined the chorus in a rendition of “How to Criticize the CASE Act,” lending his bel canto to the refrain that the new law would create a “copyright trolling court.”  As explained here and here, this is an inscrutable criticism because the Copyright Claims Board will actually be a lousy venue for copyright trolls—principally because it is a voluntary resolution option.  But if you don’t believe me about that, Mike’s further implication that CASE is a Big Media proposal and the product of “soft corruption,” is so transparently illogical that you may dismiss the allegation by applying a modicum of common sense.

Wanting readers to believe he speaks truth to power, Mike employs a little misdirection with the following innuendo about two of the bill’s lead sponsors:

“We should note, that the House bill is sponsored by Rep. Hakeem Jeffries, along with Jerry Nadler. You may recall that those two Congressman were recently seen hosting a giant $5k per ticket fundraiser at the Recording Industry’s biggest party of the year, the Grammys. And, right afterwards, they suddenly introduce a bill that will help enable more copyright trolling? Welcome to the world of soft corruption.”

Yes, that’s what happened.  The CASE Act was drafted on the back of a napkin at the Grammys party. (Stand by for Mike to accuse me of straw man because he did not literally say this.)

In Reality Land, I suppose we can ignore the fact that a small claim copyright proposal has been floating around Capitol Hill longer than Rep. Jeffries has been a Member of Congress—and, for that matter, longer than the bill’s other main sponsor Rep. Doug Collins of Georgia.  But I guess Collins wasn’t at the Grammys and so doesn’t fit Masnick’s conspiratorial narrative?  We might also ignore the fact that CASE has solid bi-partisan support, even from Silicon Valley Rep. Zoe Lofgren, and that the only effective (albeit unreasonable) opposition in the last two or so years has come from the Internet Association and the Computer and Communications Industry Association.  But what readers should not ignore is their own basic ability to reason, which ought to sound something like this …

BIG MEDIA COMPANIES DON’T GIVE A DAMN ABOUT COPYRIGHT SMALL CLAIMS.

Mike’s implication that Jeffries and Nadler partied with the RIAA and “suddenly” introduced a bill is just wrong as a matter of public record, but even if nobody wants to bother looking that up, you might then ask what possible interest major record labels or movie studios or any other Big Media companies have in creating a voluntary, small-claim, alternative-dispute provision for copyright infringement?  As Mike himself is very fond of reminding people, these are powerful corporate entities with high-octane attorneys on staff.  There is nothing in the CASE Act for these companies.

I know it’s hard to fathom, but the CASE Act is a rare example of bi-partisan legislation designed for regular people—middle-class creators who have almost no affordable path to remedy unlicensed uses of their works.  And thanks in no small part to tech-evangelists like Techdirt, online infringement is both rampant and misconceived as acceptable, even by commercial users who ought to know better. 

Mike should go back through all the articles and public statements he’s ever made on the theme that he “supports creators” but wants “balanced copyright” and feel obliged to eat every one of those words.  CASE is about balancing copyright.  It proposes to level the playing field for little guys who are getting clobbered by the policies and practices of the tech giants, which only makes Mike’s implication that it’s a Big Media bill all the more offensive.  I know attorneys who think CASE might not work, which is at least thoughtful criticism based on its actual mechanisms, but misrepresenting the Copyright Claims Board as a processing center for invalid damage awards is just mean-spirited considering the kind of people it is designed to help.

At this point, it would be grand if Mike and the legal pundits who write the songbooks from which he so often sings would just admit they don’t like copyright and will vigorously oppose any kind of enforcement no matter what.  That would at least be honest.  Still obnoxious, but not patently absurd.