The film, music, and publishing industries have always cried, “Wolf!”

I’ve written before about how the film industry decried and fought the VCR. In 1982, Jack Valenti, in sworn testimony before Congress, stated that “the VCR is to the American film producer and the American public as the Boston Strangler is to the woman home alone.” Of course, the Supreme Court upheld the legality of the VCR and the film industry not only prospered; it makes more money from home video sales than from from the theatrical box office.

Mike Masnick at techdirt does a far more thorough job, setting forth the long, continual, and continually misbegotten history of existing industries decrying the doom foretold by emerging technologies. He starts with John Philip Sousa, the conductor.

In 1906, he went to Congress to complain about the infernal technology industry and how it was going to ruin music:

These talking machines are going to ruin the artistic development of music in this country. When I was a boy…in front of every house in the summer evenings, you would find young people together singing the songs of the day or old songs. Today you hear these infernal machines going night and day. We will not have a vocal cord left. The vocal cord will be eliminated by a process of evolution, as was the tail of man when he came from the ape.

It’s a long and hilarious history. Did you know that in the 1980s home taping was “killing” the music industry? That using your DVR is theft? That Thomas Edison argued that film projectors would kill the film industry?

The whole thing is worth reading and worth remembering next time you read a screed by Bono or Scott Turow.

PBF on the interrelationships between law, technology, and the arts on 9/15

On September 15 at 6pm I’ll be speaking at SPACES on the interrelationships of art, law, and technology. SPACES is a gallery, a resource, and a public forum for artists who explore and experiment. To find it, go here.  There will some minor similarities, I suppose, to the talk I gave at the Cleveland Institute of Art two years ago, but this one promises to be significantly different and better.

Law struggling with changes in material reality: corporate confidentiality this time

I have emphasized again and again the difficulties law faces when there are profound changes in the material reality of our lives, including, for example, demand for new sources of energy. Law is not a set of rules good for all time in all places and all things. It is, rather, an evolving system that tries to do justice in the particular situations it addresses.

The new technologies for copying and disseminating information have of course thrown our legal system into confusion over copyright. Those technologies also are having a profound impact over notions of confidentiality and privacy. Wikileaks is of course in the news in connection with its disclosures of U.S. military secrets, including its release of an Apache helicopter attack in Iraq.

The efforts of a British court to deal with Wikileaks illustrate the difficulties courts often have in applying legal rules that grow out of an era already long past to the new world. Wikileaks’ released of documents from Barclays Bank detailing Barclays’ efforts to use offshore affiliates to evade taxes in Great Britain. A judge ordered the Guardian newspaper, which had published the documents, to take the material down because, he reasoned, the bank had a right to confidentiality.” He also ordered the Guardian not to publish links or other directions for finding the documents on the internet even though they were widely available on sites not based in Great Britain.

As Alan Rusbridger, the editor of the Guardian, explains, the disconnect between the court’s view of confidentiality and the realities of the internet expose a certain degree of absurdity:

The Internet is throwing sharp relief to the illogical nature of our system. Technology is way ahead of the law, and the law is limping along trying to make sense of it.

Professor James Edelman of Oxford believes the court order in connection with the Barclays documents might be the last example of this particular type of confusion, particularly because Barclays may realize that its legal efforts, even if “successful” in getting an order barring publication in the U.K., only serve to publicize the existence of the documents the bank is trying to keep hidden:

“What is significant about the ruling,” he said, “is that it will open people’s eyes that even if you can get an injunction to preserve information that is able to be obtained over the Internet, I suspect that the injunction won’t last.” The publicity over the injunction creates more interest in the material, leading other sites to publish it. The Guardian will be able to return to court, he said, and argue the injunction no longer serves any purpose.

Mr. Rusbridger said that the newspaper still had not decided whether to do that. The cost for being wrong, he said, could be as much $300,000 in legal fees.

Seeming to prove Professor Edelman’s larger point, however, when Wikileaks became overloaded by the traffic about a week ago, another site, techcrunch.org, published the seven memos under the heading “How Barclays Ensured That Everyone Would See Their Confidential Tax Documents.”

Who owns the rights to ebooks – publishers who bought the rights to publish “in book form” or the original authors? I’ll bet on the authors.

Who owns the rights to electronic versions of books governed by contracts published back in the days when there was no such thing as an e-book?

Typically, the contracts an author signed with the publishers of those books gave the publisher the exclusive right to publish “in book form” or “in any and all editions.” According to the New York Times (hyperlinks added),

In 2001, Random House sued RosettaBooks, an e-book publisher, for copyright infringement when Rosetta signed contracts with authors . . . to release digital versions of previously published novels.

In its suit, Random House relied on wording in its contracts that granted it all rights to publish the works “in book form.”. . .

In 2001, a federal judge in Manhattan denied Random House’s request for a preliminary injunction against RosettaBooks, ruling that “in book form” did not automatically include e-books. An appellate court similarly denied Random House’s request.

On Friday, however, the Times reports (hyperlinks in original) that “Markus Dohle, chief executive of Random House, sent a letter (pdf) to dozens of literary agents, writing that the company’s older agreements gave it ‘the exclusive right to publish in electronic book publishing formats.’” According to Mr. Dohle’s letter:

The vast majority of our backlist contracts grant us the exclusive right to publish books in electronic formats, as well as more traditional physical formats. At the same time, we are aware there have been some misunderstandings conceming ebook rights in older backlist titles. Our older agreements often give the exclusive right to publish “in book form” or “in any and all editions”. Many of those contracts also include enhanced language that references other forms of copying or displaying the text that might be developed in the future or other relevant language that more specifically reflects the already expansive scope of rights. Such grants are usually not limited to any specitic format, and indeed the “f0rm” of a book has evolved over the years to include variations of hardcover, paperback and other written word fonnats, all of which have been understood to be included in the grant of book publishing rights. Indeed, ebook retailers market, merchandise and sell ebooks as an alternate book format, alongside the hardcover, trade paperback, and mass market versions of a given title. Whether physical or digital, the product is used and experienced in the same manner, serves the same function, and satisfies the same fundamental urge to discover stories, ideas and infomation through the process of reading.

Accordingly, Random House considers contracts that grant the exclusive right to publish “in book form” or.”in any and all editions” to include the exclusive right to publish in electronic book publishing formats. Our agreements also contain broad non-competition provisions. so that the author is precluded from granting publishing rights to third parties that would compromise the rights for which Random House has bargained. We believe the effective exercise of electronic rights is key to the future of publishing and that the combined marketing of print and digital formats increases overall sales and creates the largest possible pool of revenues for authors and publishers, Our efforts and investments in the digital realm perfectly complement Random House’s unmatched physical sales and distribution capabilities, which remain a centerpiece of our business and relationships.

But William Styron’s family disputes Random House’s assertions that it owns the rights to publish electronic versions of Mr. Styron’s books. One problem with Random House’s position is that, despite what Mr. Dohle writes, Random House’s contract with Mr. Styron did not grant to Random House rights that refer to “forms of copying or displaying the text that might be developed in the future,” and, in further contradiction to Mr. Dohle’s words, were quite explicit in being “limited to . . . specific format[s].” As the District Court decision in the case between Random House and Rosetta Stone makes clear, Styron’s contract granted Random House “an exclusive license to ‘print, publish and sell the work in book form,’ Styron also gave it the right to ]license publication of the work by book clubs,’ ‘license publication of a reprint edition,’ ‘license after book publication the publication of the work, in whole or in part, in anthologies, school books,’ and other shortened forms, ‘license without charge publication of the work in Braille, or photographing, recording, and microfilming the work for the physically handicapped,’ and ‘publish or permit others to publish or broadcast by radio or television … selections from the work, for publicity purposes ….’”

The court reasons that the “separate grant language . . . to convey the rights to publish book club editions, reprint editions, abridged forms, and editions in Braille . . . would not be necessary if the phrase ‘in book form’ encompassed all types of books. That [language] specifies exactly which rights were being granted by the author to the publisher.”

The court further opined that “a reasonable person ‘cognizant of the customs, practices, usages and terminology as generally understood in the particular trade or business,’  would conclude that the grant language does not include ebooks. ‘To print, publish and sell the work in book form” is understood in the publishing industry to be a ‘limited’ grant.’” (citations and footnote omitted)

Finally, the court pointed out that Random House itself had acknowledged that ebooks are a new medium (and thus, presumably, not within the contemplation of the parties when they entered into their agreements to allocate their respective rights):

In this case, the “new use” – electronic digital signals sent over the internet – is a separate medium from the original use – printed words on paper. Random House’s own expert concludes that the media are distinct because information stored digitally can be manipulated in ways that analog information cannot. Ebooks take advantage of the digital medium’s ability to manipulate data by allowing ebook users to electronically search the text for specific words and phrases, change the font size and style, type notes into the text and electronically organize them, highlight and bookmark, hyperlink to specific parts of the text, and, in the future, to other sites on related topics as well, and access a dictionary that pronounces words in the ebook aloud. The need for a software program to interact with the data in order to make it usable, as well as the need for a piece of hardware to enable the reader to view the text, also distinguishes analog formats from digital formats. See Greenberg v. National Geographic Soc’y, 244 F.3d 1267, 1273 n.12 (11th Cir. 2001) (Digital format is not analogous to reproducing the magazine in microfilm or microfiche because it “requires the interaction of a computer program in order to accomplish the useful reproduction involved with the new medium.”). (citation omitted; hyperlink added).

There’s no question the publishing houses are fighting for their very existence. It’s interesting, though, that copyright holders are fighting the publishing companies over those rights. So much of the focus in this area of late has been over Google’s right to copy books to make them searchable so that they could be found and, as a result, purchased or otherwise obtained from the rightful owners of the books themselves. But now it’s the publishers who are trying to stretch the rights they contractually negotiated for decades ago to realms no one imagined at the time.

It will be interesting to see where this goes next. As a contracts professor, my first impression is that Random House isn’t exactly in the strongest of positions.

Law and education must change since the realities they control and shape have changed.

Changes in reality requires changes in the law, in the ways we practice law, and in the ways we teach. What has been Best hasn’t been Best because it is the Best for all time but, rather, because it has been the Best way we’ve figured out how to do what we want under the circumstances that have faced us. Change the circumstances, and what’s Best changes.

Nothing the RIAA does to enforce the interpretations of copyright laws formed when record companies had a virtual monopoly on producing and distributing recorded music is going to change the inevitable consequences of the fact that the technology to produce and distribute recorded music is now available to any individual with a laptop and an internet connection.

Nothing lawyers scream at their clients is going to change the fact that personal expression is more public and more permanent than ever before. All the insistence in the world on traditional rules regarding the formation of contracts isn’t going to change the fact that applying those rules strictly to the online marketplace is going to create a mess.

And nothing is going to change the fact that my students and my kids spend their time differently than I did and want to use different tools to express themselves than I did.

Realizing my son’s obsessions with things that don’t seem to matter (video games) are not necessarily worse than the ones I grew up with (professional sports) might even help me communicate with him about what creativity is.