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| © Will Lion |
Time for a fresh approach?
Last month, TMT blog was fortunate to attend a ‘drinks and conversation’ function with Daniel Gervais, Professor of Law at Vanderbilt University, and Eddie Schwartz, musician, songwriter and record producer. The function was jointly hosted by the Intellectual Property Research Institute of Australia (IPRIA) and Melbourne Law School’s Centre for Media and Communications Law (CMCL).
Gervais is co-director of Vanderbilt’s Intellectual Property Program, while Schwartz’s songs – which include Pat Benatar’s Hit Me With Your Best Shot and Paul Carrack’s Don’t Shed A Tear – have sold more than 30 million copies. As President of the Canadian Songwriters Association, Schwartz is not exactly the kind of person who you’d think would speak in favour of file-sharing – yet he describes it as ‘one of the greatest things ever invented.’ According to Schwartz, the music industry must find alternative ways to make money, and file sharing can provide a global distribution platform to do just that.
The Australian copyright landscape
Under the Australian Copyright Act 1968, users can access and use the copyright works of others without infringing that copyright in certain circumstances. The principle avenues of access are voluntary licences, statutory licences (sometimes called compulsory licences) and the fair dealing defences.
Statutory licences and fair dealing will not, however, assist the majority of file sharers to escape liability for copyright infringement. The former extends only to specified classes of conduct set out in the Copyright Act (including the use of certain works by libraries and archives, educational institutions and institutions assisting persons with print disabilities; and the retransmission of free-to-air broadcasts). Similarly, for the fair dealing defences to apply, the relevant dealing must be for one or more of the specific purposes set out in the Copyright Act (namely, research or study; criticism or review; reporting news; the giving of professional advice; parody or satire; and certain limited private uses).
Voluntary licensing, on the other hand, enables copyright owners to grant permission (generally pursuant to a contract) for a person to do an act that would otherwise infringement the owner's copyright. This is the precisely mechanism that Schwartz and Gervais argue should be employed to deal with music file sharing.
The Schwartz and Gervais model
Schwartz and Gervais propose monetising private non-commercial file sharing – in effect, letting the ‘pirates’ keep the booty but asking them pay for a lease over the ship. Under this model, users would simply continue what they are doing – sharing music files in which copyright subsists. However, a voluntary licence fee of around $3 to $5 per month would be charged to users on an opt-out basis (whether through their ISPs or via some other collection mechanism). The licence would render their conduct licensed, and the fees collected would be pooled and distributed to relevant rights holders.
Under the model:
Some challenges
Schwartz and Gervais’ model is not without its difficulties.
The approach may, for example, blur the boundary between licensed and unlicensed material. One of the virtues of the model, accordingly to Schwartz, is that it requires no behavioural modification on the part of users. Yet, it may be difficult for users to differentiate between licensed and unlicensed content. For example, BitTorrent (a popular file sharing protocol, and the focus of the iiNet litigation) enables users to share not only music, but also movies, TV shows and software. A user may not appreciate that their licensed file sharing licence only extends to limited classes of digital content.
Moreover, a fundamental premise of the model is the ability to track what users are downloading and then distribute royalties to copyright holders on some equitable basis. However, some file sharing platforms enable users to make encrypted connections, rendering it difficult, if not impossible, to track this traffic. This may, in turn, compromise the manner in which royalties are allocated.
Although this licensed file sharing model still needs some refinement, it is, according to Schwartz, generating significant attention as a potentially workable approach for addressing the serious challenge that ubiquitous file sharing poses for the music industry.
Schwartz and Gervais propose monetising private non-commercial file sharing – in effect, letting the ‘pirates’ keep the booty but asking them pay for a lease over the ship. Under this model, users would simply continue what they are doing – sharing music files in which copyright subsists. However, a voluntary licence fee of around $3 to $5 per month would be charged to users on an opt-out basis (whether through their ISPs or via some other collection mechanism). The licence would render their conduct licensed, and the fees collected would be pooled and distributed to relevant rights holders.
Under the model:
- for a modest fee, users obtain licensed access to the world’s most comprehensive music database
- artists can leverage an already existing – and extremely efficient – global content distribution system
- licence fees are distributed to all rights holders in an equitable, pro-rata manner (for example, based on the popularity of a particular song)
- although record labels would no longer control distribution, they can still use the platform to promote their stable of artists
- ISPs may incur lower bandwidth costs, by being able to cache licensed content locally
Some challenges
Schwartz and Gervais’ model is not without its difficulties.
The approach may, for example, blur the boundary between licensed and unlicensed material. One of the virtues of the model, accordingly to Schwartz, is that it requires no behavioural modification on the part of users. Yet, it may be difficult for users to differentiate between licensed and unlicensed content. For example, BitTorrent (a popular file sharing protocol, and the focus of the iiNet litigation) enables users to share not only music, but also movies, TV shows and software. A user may not appreciate that their licensed file sharing licence only extends to limited classes of digital content.
Moreover, a fundamental premise of the model is the ability to track what users are downloading and then distribute royalties to copyright holders on some equitable basis. However, some file sharing platforms enable users to make encrypted connections, rendering it difficult, if not impossible, to track this traffic. This may, in turn, compromise the manner in which royalties are allocated.
Although this licensed file sharing model still needs some refinement, it is, according to Schwartz, generating significant attention as a potentially workable approach for addressing the serious challenge that ubiquitous file sharing poses for the music industry.
