Are Candidates Even Talking About the 21st Century Economy?

It’s very common to encounter broad complaints saying things like, “Copyright law should not stop me from fixing or altering my technology.” Often, this generalization is made by people who don’t necessarily know they’re referring to Title I of the DMCA but who have read somewhere that copyright law prevents reverse engineering, maintenance, jail-breaking, and overall tinkering with products ranging from personal small electronics to cars, trucks, and tractors.

But as I first discussed in this post, the whole concept of ownership of many of our core products may be waning faster than these apparent conflicts with intellectual property law might ever be addressed. This transformation is highlighted by what seems to be an inexorable march toward an autonomous vehicle transportation system—a change that comes with consequences far more relevant than the matter of a “right” to fiddle with the gadgets we purchase.

With the announcement last week that the federal government officially endorses the development of driverless vehicles, it is noteworthy that no candidate running for any office seems likely to address the radical social and economic implications of this seismic shift in the transportation sector. Although I cannot bring myself to compare and contrast Donald Trump with any other prospective candidate for office, for the purposes of this post, suffice to say that between Trump’s version of trickle-down economics and Hillary Clinton’s version of focusing on the middle-class, it seems to me that neither candidate is talking about the same 21st century economy in which Wall Street is investing.

Candidates across the political spectrum keep referring to fair trade deals as a common scapegoat as a prelude to their myriad promises to “bring jobs back” to America. This is already a fallacy, pretending that we can reverse globalization through tax policy alone, or without a specific plan for investments—either public or private—that might actually grow domestic jobs. Meanwhile, VCs, Wall Street, and the tech firms are placing big bets on a more generally automated future; and nobody seems to want to talk about the jobs we are, therefore, poised to eliminate over the next decade or two. Not outsource through trade. Just eliminate right here at home.

For instance, a truly driverless future would probably wipe out a minimum of 10 million jobs, beginning with an estimated 8.5 million who work as drivers and at least a few million who work in some capacity related to the current ground transportation industry. Granted there would be jobs created in order to build and maintain a new, driverless infrastructure, but only a fraction of the number that would be lost. And equally if not more challenging is the question of whose investment would build this new infrastructure?

Let’s face it. The United States is bipolar when it comes to great building projects, which I think explains why our infrastructure is antiquated in contrast to other developed—and even developing—nations. As if to emphasize our duality in this context, it’s notable that the two eras when most American infrastructure was built happen to have been based on antithetical models. The first era was a period of unfettered capitalism, which built the foundations of the country’s industrial capacity from the mid-19th to the early 20th; and the second era was a brief period of outright socialism—the New Deal—which built highways, buildings, dams, etc. most of which is still in use today, even if it’s looking a little rusty.

Now that the Obama administration has given a federal fist-bump to the driverless vehicle—and if this does mark a tipping point when we can say this transition is inevitable—then we’re going to have to address the question of ownership (i.e. whose investment it’s going to be). Would Americans allow Google, Uber, Ford, Lyft, and Tesla (GULFT) to own the entire transportation infrastructure for the nation? Or would we build the infrastructure as a public work? Because historically, allowing private industry to make that kind of stranded investment in exchange for monopoly control has not been particularly good for consumers or innovation.

When the nation was first being electrified, there was debate over whether we should build a distributed versus a centralized system. A distributed system of smaller, co-generating plants would have been safer, more energy efficient, and less monopolistic. So, naturally we built a centralized system. This meant massive, stranded investments by the utility companies for which they could only be compensated through monopoly control of the market until those monopolies were finally busted up in the 1990s. Meanwhile, consumers (a.k.a. “rate payers”) had no competitive choices, and the utility owners had zero motivation to innovate. As a result of this legacy, the United States remains a follower rather than a leader in advancing new, non-carbon-based, energy solutions.

So, now we fast-forward a decade or two in the world of ground transportation. We no longer own cars. We hail a driverless vehicle to take us to the grocery store where the goods on the shelves have all been delivered by a driverless cargo vehicle from a distribution center serviced by hundreds of other driverless cargo vehicles. Accidents are very rare, the air is cleaner, and (in theory) consumer costs come down. We no longer have car payments or auto insurance, and the lower cost of transportation could lower the cost of goods.

But those benefits may easily be diminished if we haven’t considered how to address the massive shift of 10-plus million people formerly employed in ground transportation-related jobs. Plus, we now have a more thorough consolidation of transportation service than the railroad monopolies controlled at the turn of the 20th century. Every vehicle trip is now part of a vast, networked system that relies very little on human labor. So who owns that system? We have to assume that the capitalists currently investing in the model expect they will own it. That’s a lot of control to give to GULFT.

Wall Street, Silicon Valley, and now the Obama administration are all projecting a future in which the transportation sector simultaneously sheds millions of jobs and centralizes control of the lifeline of the entire nation—and not one candidate from any party thinks this is significant enough to talk about. Instead, they’re campaigning on traditional, and at times absurd, promises that they know best how to bring 20th century jobs “back.” In this one regard, maybe the future is already here because it doesn’t seem to me like anybody’s driving the bus.

Society Can’t Have What Authors Don’t Create

As a follow-up to my last post responding to Public Knowledge’s allegations of “regulatory capture” at the US Copyright Office, I thought one of their accusations deserved its own post. When copyright law is discussed as a broad principle—either in a practical or philosophical context—critics such as PK, Techdirt, the EFF, and Fight for the Future seem to view copyright from a collectivist perspective, stressing that its purpose is to serve society, which is the only reason why it should ever serve the author. As a result, these parties have at various times raised a fuss over statements to the contrary made by Register Pallante, and this sentiment was reprised in the “report” by Public Knowledge, Here’s what the report says:

Perhaps the starkest evidence of cultural capture can be found in statements by the current Register of Copyrights, Maria Pallante. She has, at various times during her tenure, commented that:

“Copyright is for the author first and the nation second.”
“I think the problem we have today in terms of imbalance that we might feel in the copyright statute is that we have gotten away from the equation that puts the authors as the primary beneficiaries, followed by the public good.”

The report at this point also cites two of Pallante’s statements about enforcement, but that’s a separate topic. The reason these “author first” quotes twist the copyright skeptic’s knickers stems from their focusing on the IP clause in the Constitution, which reads to promote the progress of the sciences and useful arts as a predicate to the congressional power to enact IP laws. There can be little doubt that the Framers did have a practical goal in mind when writing IP into the general legislature—that America would one day be all big and have science and culture just like Europe. But they had philosophical principles in mind, as well. And in both practical and philosophical contexts, the skeptics are wrong to criticize Pallante, let alone to cite these quotes as evidence of her “cultural capture” by big-money rights holders.

Practical Copyright

This one is just mathematical. In the simplest terms, it should be obvious that there is no way for works to be of any benefit to society until they are first created by authors. If Mark Twain doesn’t write the book, we don’t get to read the book; and if anyone can prove the inverse, that would be a powerful magic indeed. In this purely functional context, Register Pallante’s quotes merely reflect the only order of operations that can occur between creator and consumer, regardless of any other specifics pertaining to the application of copyright law.

If copyright does not first provide the author with a property right in his or her labor, society doesn’t get anything. To those who would counter this by doubting copyright’s value as an incentive—insisting that the author will create anyway—even if this were true, it is a position that moots the accusations lobbed at Pallante about the proper function of copyright. Instead, the assertion that copyright does not incentivize is a wholesale rejection of its utility, one which obliterates any discussion about the proper functioning of that utility.

Copyright’s Philosophical Beginnings

As Americans, we tend to focus a lot on the practical—usually on the commerce part of the equation—and leave the philosophical to the realm of political rhetoric. But the early arguments made for the protection of intellectual property, in both the state and federal legislatures, were predicated on the natural rights of the individual, and not on the individual’s fealty to society. In fact, one could say that John Locke’s assertions about the natural rights of the individual make a case for those rights in spite of society. This is because Locke’s Two Treatises on Government (1689) are argued from first principles in rebuttal to a treatise favoring absolute monarchy.

Locke asks the hypothetical question why the individual wants to abandon his absolute, natural liberty to the state at all and concludes that among the reasons is the protection of his property. And because property in Locke’s definition includes the individual’s faculties and capacities, property, therefore, includes the products of those faculties and capacities. So, the philosophical foundation for intellectual property in the United States is actually predicated on the natural rights of the individual just like the rights codified in the First Amendment.

Madison was well aware of these first principles when he wrote in Federalist #43, “The utility of this power will scarcely be questioned. The copyright of authors has been solemnly adjudged, in Great Britain, to be a right of common law. The right to useful inventions seems with equal reason to belong to the inventors. The public good fully coincides in both cases with the claims of individuals.”

In context to its philosophical heritage, the IP clause does not grant the right of intellectual property to the individual any more than the First Amendment grants the right of free speech to the individual. Both were held to be natural rights; and by affirming these in the law, the state promises to protect those natural rights. This is a manifestation, more or less, of what Locke had advocated 100 years prior to the assembly of the First Congress.

But what about promoting progress?

Back in 2012, Congresswoman Zoe Lofgren (D CA), who represents Silicon Valley, criticized Register Pallante’s “author first” statements when she said, “It seems to me that the Constitution is very clear that copyright does not exist inherently for the author but for the benefit for society at large.” But Representative Lofgren’s asserting the obviousness of the “promote progress” part of the IP clause is an indication that she doesn’t know her history as well as she knows what’s in the interest of her tech-industry constituents. As copyright scholar Terry Hart addressed in his response at the time, the IP clause in the Constitution isn’t quite so clear as Lofgren thinks. In fact, we have a rather thick body of caselaw in which the courts have consistently reiterated the plain reasoning cited above: that unless the author first creates, society gets jack. (NOTE: Oliver Wendell Holmes never used jack in this manner.)

Additionally, there is a rich anthology of debate over exactly what the Framers meant by each of the key terms in the IP clause, which really is something of a grammarian’s enigma. For instance, it has taken a fair bit of judicial haggling to ultimately determine that the word science now firmly refers to copyright law while the term useful arts refers to patent law. But get this: based on the argument for interpreting meaning in the parallel construction of the clause, that pesky word discoveries maps to useful arts (i.e. patents). And that’s a constitutional conundrum because we are taught even in grade school that a discovery is the antithesis of an invention and is, therefore, the exact word one would use to describe something that is not patentable! You can patent an invented toaster but not the discovered laws of physics that make bread crusty.

Like “discoveries,” both “promote” and “progress” have been variously interpreted in the courts and in legal scholarship, often revealing the biases of the interpreters. In a very interesting paper, Sean M. O’Connor of University of Washington Law School makes a case for a French influence in the Framers’ choice of words based on his analysis that Madison and others were highly cognizant of the Encyclopédie published in 1751. Through this lens, the word “progress” would only apply to achievements that could be quantifiably measured to make progress, and this would nullify the entire universe of creative works produced by copyright — and probably quite a few technological innovations to boot. (How many apps could be said to make measurable “progress”?) Still, O’Connor concedes that this French-influenced interpretation of the clause is an academic exploration in the strictest sense and not a proposal for application of the law.

So, regardless of how one chooses to argue Framers’ clear intent—which is not as clear as Zoe Lofgren implied—I doubt very much that we would choose to reverse history and un-create the American oeuvre. In this regard, we can know for sure that the Framers could not have imagined the technology-enabled explosion of creative works in the U.S. in the 20th century, and whether one favors the chicken or the egg, it’s hard to dispute that we have a lot of chickens and a lot of eggs. Individuals and society have benefitted tremendously from copyright.

Public Knowledge and kindred organizations are leaning on weak scholarship when they criticize Register Pallante, or any other copyright expert, for stating that copyright is for the author first and society second. It’s easy to invoke constitutional clauses in a PR context and claim “obviousness” in the Framers’ intent, but most of the clauses are one sentence long while the laws and histories built upon them fill the pages of some very heavy books.

Public Knowledge Declares Copyright Office is Full of Copyright Professionals

In a document Public Knowledge has the conceit to call a “report,” the organization now proposes that the US Copyright Office is trapped in a state of “regulatory capture.” Usually, this is a term reserved for a condition that arises when the people who work at a regulatory agency become either culturally or economically too close to the industry they’re supposed to be minding. The most obvious and acute example we’ve seen is when employees working at the SEC have been offered lucrative gigs on Wall Street and this kind of big-money careerism drives their regulatory decision-making. (See The Big Short for a brief dramatization of the phenomenon. And don’t pirate it!)

The Copyright Office, of course, is not a regulatory body like the SEC, though it does certainly play a leading role in setting copyright policy for the nation through its analysis and recommendations on a variety of topics. The USCO does not decide legal cases or pass copyright laws. Part of the Office’s mandated role is to consider a broad range of copyright-related issues, while accounting for the views of a diverse group of stakeholders, and to make recommendations that uphold the full scope of copyright’s purpose, including exceptions and limits to legal protections for rights holders.

Given the mission of the Copyright Office, the institution tends to attract employees who (brace yourself) think copyright is a good thing and who are predisposed to emphasize copyright’s benefits to the nation. That’s going to irk anyone who views copyright as a negative–like the folks at PK–but it certainly does not mean the office is “captured” by large, corporate rights holders. PK’s accusation is one that might play well in a climate of general distrust of all government agencies, but the evidence they present in order to prove that the Copyright Office is amok with industry sycophants is not only thin and circumstantial, but is also remarkably hypocritical if one takes a peek under the rug in the Public Knowledge foyer.

One might notice, for instance, that Public Knowledge co-founder Gigi Sohn is now lead counsel at the FCC, which has been pushing a “set-top-box” proposal that the Copyright Office has critiqued within the ambit of its statutory role. What PK doesn’t like, I suppose, is that the CO disagrees with their assertion that the FCC proposal “has nothing to do with copyright,” so now PK has moved into full-court press to discredit the whole Office as functionally biased. One might think that with Gigi Sohn as the common denominator in this story—and Google as the clear winner if the FCC proposal were to pass—PK would tread a bit more lightly with accusations of cultural “capture,” but not so much. When you’re shielded by the appearance of representing “public interest,” you can get away with almost anything.

The Revolving Door Accusation

To support its premise, Public Knowledge, with McCarthy-like righteousness, presents a list—a table of thirteen former or current employees of the Copyright Office who either have worked for private-sector, rights-holding organizations prior to working at the Office or who are now working for these private entities after their terms at the Office. That thirteen copyright attorneys over a 22-year period might be employed in some capacity for copyright owners is a rather unremarkable observation, but PK seems to think it’s a smoking gun. Of course, they had to stop the list at thirteen because the fourteenth former CO employee might have been leading copyright attorney William Patry, who now serves as senior counsel to Google (I guess they didn’t want to mention that one). Or, as one of the named thirteen, Steven Tepp, observes in his response, PK also didn’t bother to list the many other Copyright Office employees who, “went to Internet and tech companies, the Smithsonian, the FCC, and other places that no one would mistake for copyright industries.” One might almost get the idea that experienced copyright attorneys pursue various career paths or something.

To be utterly pedantic about it, is PK actually suggesting with its little chart—that the IP law firm, where Marybeth Peters took an advisory role after leaving the Copyright Office in 2010, only gave her that job after they confirmed that 16 years’ worth of her copyright analysis as Register consistently favored “industry”? And which industry would that have been exactly? The D.C. firm named by PK provides counsel on copyright, patents, and trademarks; and you can bet your boots they’ve had a few technology clients, and probably quite a number of other clients outside the unholy trinity of music, motion pictures, and publishing.

PK also notes that Peters now serves (part-time) on the board of Copyright Clearance Center, a private organization that states, “Our vision is to create global licensing and content solutions that make copyright work.” That almost sounds like 21^st-century innovation to streamline digital content licensing, which is exactly what CCC does. So how is this career move by Peters evidence of “capture” at the Copyright Office? It’s not. PK is assuming nobody will look at the details and will accept their premise at face value.

Now, I could point out that a “revolving door” table comprising a few hundred key federal employees would list in its right-hand column not a variety of private-sector roles, but just one company called Google. And that in itself is not a smoking gun, per se. Google produces a lot of highly-skilled technologists, who perhaps should work in the public sector. But if we’re talking cultural “capture”, let’s be real.

Views on Copyright

As consequential evidence of the CO’s “capture,” Public Knowledge accuses the office of contorting copyright law; serving the interests of rights holders; advocating for expanded copyright; sticking its nose where it doesn’t belong; ignoring stakeholders; and (bizarrely) being generally ignored or rejected by the courts, Congress, and other agencies. Holy smear campaigns, Batman, that’s quite a laundry list of accusations. But then, it’s SOP for Public Knowledge to present the part of the story that supports their accusations while ignoring the rest of the facts.

For instance, it is true that the courts have at times disagreed with the recommendations or interpretations of the Copyright Office. But quite often, they haven’t. Welcome to the law. Debate on principle or interpretation is part of the process and always has been. So, unless Public Knowledge wants to roll up its sleeves and present real data—not cherry-picked anecdotes—that show clear evidence of consistent bias in the USCO and conflict with the courts, then what they really appear to be saying is, “The CO disagrees with us, so it must be corrupt.”

One could cite numerous examples as to why this accusation is unfounded, but a rather compelling one would be the Copyright Office’s latest round of Rule Making on exceptions to Section 1201 of the DMCA. As I reported in this post, the recommendations from the CO reveals that the Office generally favored the parties petitioning for exceptions rather than the rights holders arguing against those exceptions. According to Tepp’s rebuttal cited above, the 22 exceptions allowing circumvention of TPM is an unprecedented number. Meanwhile, Section 1201 of the DMCA is a fairly contentious issue among copyright watchers and direct stakeholders, but it’s a subject that remains arcane for most citizens. As such, it seems like a perfect opportunity for the Copyright Office to exercise the “maximalism” of which it now stands accused, yet the record reveals exactly the opposite trend.

Why is Being Anti-Copyright the Only Non-Corrupted View?

Public knowledge states the following as a prelude to its accusations that the Copyright Office is on a perpetual copyright contact-high from partying with rights holders:

“Beyond the revolving door, frequent gatherings—both formal and informal—of Office staff and industry representatives provide further evidence of cultural capture. For example, the Copyright Office organizes a series of ‘Copyright Matters’ lectures, both ‘to provide education and training’ to Copyright staff and to serve as a larger ‘community forum.’”

Remember when Obama, as a brand new president, was going to speak to kids at the start of the school year, and the Republicans went all ape-shit and declared, “He’s going to indoctrinate the kids!!” That was a pretty crazy-pants moment for America, right? Same thing here. Yes, let’s be clear once again: the Copyright Office generally believes copyright is good for the country. You will also find employees of the EPA who dig clean air, several members of HUD opposed to homelessness, and at least a few folks at the DOD who err on the side of security and are prone to wearing uniforms.

Maybe Public Knowledge thinks the Copyright Office is culturally corrupted because so many of PK’s own copyright positions are just kinda bananas to people who know the law and who don’t view copyright as a pernicious regime. Y’know on account of the fact that copyright has been pretty good for us. For the first 50 years, the U.S. hardly had much of a culture industry at all, but by the mid 20th century, it was the world’s leading producer of creative works, and that production created a lot of really good jobs—way more jobs than all of the internet giants combined have produced or are likely to produce.

Even beyond copyright, though, Public Knowledge’s “report” compiled of innuendo and half-truths reflects a core dysfunction, in my view, with all contemporary politics. It almost doesn’t matter what the issue is, the theme across the political spectrum is one of tearing down institutions and systems rather than any engagement in a good-faith debate that might actually improve a system. This is understandable because the game is rigged. We have allowed corporate values to write public policy in far too many areas, and people are being hurt as a result. But PK is not critiquing—let alone debating with—the Copyright Office, it’s gunning for its very existence and gunning for copyright law itself. If anyone believes that agenda is in the public interest, they are sorely mistaken.

The Illusion of More

Dissecting the digital utopia.

Author: David Newhoff