Monthly Archives: July 2004

Ernie’s beginning a list. Continue reading →

Word has it that the regulators in Washington are enamored of Professor (in the School of Computing) Hollaar’s recent paper, Sony Revisited, and that it is in part responsible for Congress’ current infatuation with the Induce Act. Professor Hollaar is a smart guy, and his paper is an interesting and well-researched examination of secondary liability in the context of copyright law. But if Congress thinks this justifies the Induce Act, then there is some deep confusion somewhere. I suspect there are two possible sources for this confusion.

(1) Hollaar discusses the scope of “inducement” liability in the context of patent law. There are some in Congress who seem to think that the Induce Act “merely” carries the same idea to copyright law. This is just a mistake. The scope of the Induce Act as written is far broader than the scope of inducing patent infringement as interpreted. And if “all” Congress wants to do is extend patent inducement to copyright law, then it should amendment the Induce Act to state precisely that. That would be a vast improvement over the existing proposal — not enough to justify it in my mind, but it would make the harm it will cause much much less significant.

(2) Hollaar discusses the purpose and meaning of the Sony case. While his discussion is technically correct enough (though the idea that copyright is the right to protect a “business model” is really not right at all), imho, the Professor, and in turn, the supporters of the Induce Act, are really missing the point of Sony.

As everybody knows, Sony set the rule that when a new technology has the “potential” to support “substantial noninfringing use” of copyrighted material, the maker of the technology would not face secondary liability for copyright infringement.

But what no one (in Washington, at least) seems to understand is why Sony set that standard. It was not because the Supreme Court is filled with copyright infringers who wanted to encourage copyright infringement. It was instead because the Supreme Court was filled with judges not eager to engage in the complex balancing required to judge whether a technology creates more benefit than harm. As the Court stated:

Sound policy, as well as history, supports our consistent deference to Congress when major technological innovations alter the market for copyrighted materials. Congress has the constitutional authority and the institutional ability to accommodate fully the varied permutations of competing interests that are inevitably implicated by such new technology.

This is not an opinion about copyright law alone. It is an opinion about separation of powers — about which branch is best able to do the necessary balancing that copyright law demands, “within the limits of the constitutional grant.” Sony says, in effect, when a technology is not simply a technology for violating the law, then it is left to Congress to decide whether and how that technology is to be regulated. Congress, not the courts.

Why is that a great idea? Because (isn’t this obvious to Republicans?) courts are awful, expensive, and slow institutions for judging the economic effect of new technology. Soviet planners with better lighting. And rather than bury innovators in years of litigation before their innovation gets to market, the Sony rule says: let the innovation go, if there is a potential for a substantial noninfringing use, and if Congress wants to regulate it more, then let Congress weigh the benefits of the technology against its costs.

Ignoring this extremely sensible separation of powers principle has already cost Silicon Valley dearly. See, e.g., ReplayTV. ReplayTV is the digital equivalent of the VCR. It does the job more efficiently, and it promised to do some things the VCR couldn’t do, too. But under the principle of Sony (innovate first, regulate later), it should plainly have been allowed into the market without intervention by the courts. Yet precisely the opposite happened. Content owners sued ReplayTV. It was dragged into federal litigation for many many months defending its new technology. And before the case could be resolved, the company effectively declared bankruptcy.

Is this the future Senators Hatch and Leahy want for all new technologies that impact copyrighted material? Will every Apple be forced to defend its innovation in a federal court? Will federal judges become the arbiters of good technology? Will technology firms be forced to spend more on lawyers than on R&D?

Whatever the lobbyists say about this bill, this is the single most important fact that we should not forget: It is a lawyer employment act. It will force technologists into court before they get to enter the market place. It will shift responsibility for striking the balance in copyright law from Congress to unelected federal judges.

That’s not a bad thing for me, or my kind. I, after all, think the courts have some role here (in setting the limits of copyright), and I, after all, make lawyers for a living. But for an already overregulated Silicon Valley, it is another nail in the coffin by the regulating-obsessed in Washington. Continue reading →