{"id":3138,"date":"2012-07-24T14:28:17","date_gmt":"2012-07-24T13:28:17","guid":{"rendered":"http:\/\/emilkirkegaard.dk\/en\/?p=3138"},"modified":"2012-07-24T14:28:17","modified_gmt":"2012-07-24T13:28:17","slug":"report-copyright-and-innovation-the-untold-story-michael-a-carrier","status":"publish","type":"post","link":"https:\/\/emilkirkegaard.dk\/en\/2012\/07\/report-copyright-and-innovation-the-untold-story-michael-a-carrier\/","title":{"rendered":"Report: Copyright and Innovation: The Untold Story (Michael A. Carrier)"},"content":{"rendered":"

Official loation.<\/a><\/p>\n

Download mirror: Copyright and Innovation The Untold Story<\/a><\/p>\n

 <\/p>\n

It reads like a series of cases studies of how horribly the current legislation is being abused.<\/p>\n

 <\/p>\n

 <\/p>\n

Abstract:<\/p>\n

Copyright has an innovation problem. Judicial decisions, private enforcement, and<\/p>\n

public dialogue ignore innovation and overemphasize the harms of copyright infringement.<\/p>\n

Just to pick one example, \u201cpiracy,\u201d \u201ctheft,\u201d and \u201crogue websites\u201d were the focus of debate<\/p>\n

in connection with the PROTECT IP Act (PIPA) and Stop Online Piracy Act (SOPA). But<\/p>\n

such a debate ignores the effect of copyright law and enforcement on innovation. Even<\/p>\n

though innovation is the most important factor in economic growth, it is difficult to observe,<\/p>\n

especially in comparison to copyright infringement.<\/p>\n

This Article addresses this problem. It presents the results of a groundbreaking study of<\/p>\n

31 CEOs, company founders, and vice-presidents from technology companies, the recording<\/p>\n

industry, and venture capital firms. Based on in-depth interviews, the Article offers original<\/p>\n

insights on the relationship between copyright law and innovation. It also analyzes the<\/p>\n

behavior of the record labels when confronted with the digital music revolution. And it<\/p>\n

traces innovators\u2019 and investors\u2019 reactions to the district court\u2019s injunction in the case<\/p>\n

involving peer-to-peer (p2p) service Napster.<\/p>\n

The Napster ruling presents an ideal setting for a natural experiment. As the first<\/p>\n

decision to enjoin a p2p service, it presents a crucial data point from which we can trace<\/p>\n

effects on innovation and investment. This Article concludes that the Napster decision<\/p>\n

reduced innovation and that it led to a venture capital \u201cwasteland.\u201d The Article also<\/p>\n

explains why the record labels reacted so sluggishly to the distribution of digital music. It<\/p>\n

points to retailers, lawyers, bonuses, and (consistent with the \u201cInnovator\u2019s Dilemma\u201d) an<\/p>\n

emphasis on the short term and preservation of existing business models.<\/p>\n

The Article also steps back to look at copyright litigation more generally. It<\/p>\n

demonstrates the debilitating effects of lawsuits and statutory damages. It gives numerous<\/p>\n

examples, in the innovators\u2019 own words, of the effects of personal liability. It traces the<\/p>\n

possibilities of what we have lost from the Napster decision and from copyright litigation<\/p>\n

generally. And it points to losses to innovation, venture capital, markets, licensing, and the<\/p>\n

\u201cmagic\u201d of music.<\/p>\n

The story of innovation in digital music is a fascinating one that has been ignored for<\/p>\n

too long. This Article aims to fill this gap, ensuring that innovation plays a role in today\u2019s<\/p>\n

copyright debates.<\/p>\n

 <\/p>\n

Disgusting part:<\/p>\n

D. Personal Liability: Experience <\/strong><\/p>\n

The concerns about the effects of personal liability are not theoretical.<\/p>\n

Several of the innovators I interviewed relayed the harrowing experience of<\/p>\n

being personally sued. The first described a \u201cprocess server that broke into the
\noffice\u201d and \u201cknocked on the door like it was the police.\u201d414<\/p>\n

He continued:<\/p>\n

\u201cEverything about it was meant to psychologically intimidate,\u201d \u201cit made a huge<\/p>\n

impact on me,\u201d and \u201cI am going to do what I can the rest of my career to avoid<\/p>\n

being in that situation again.\u201d415<\/p>\n

\n

Another innovator explained that the labels said \u201cwe\u2019re not going to sue the<\/p>\n

company, we are going to sue you personally\u201d since \u201cwe can make all kinds of<\/p>\n

allegations and it\u2019s your job to prove you\u2019re not infringing\u201d and \u201cthe lawsuit is<\/p>\n

going to cost you between 15 and 20 million bucks.\u201d416<\/p>\n

The innovator decided<\/p>\n

that he could \u201cfind better uses\u201d for his money \u201cthan to give it to lawyers.\u201d417<\/p>\n

\n

A third respondent noted how \u201cstressful\u201d it was when he was sued<\/p>\n

personally. It was \u201cdefinitely very scary\u201d when they came with the \u201cmultiple<\/p>\n

inch lawsuit for a couple billion bucks.\u201d418<\/p>\n

The innovator was afraid of the<\/p>\n

\u201cunknown\u201d and worried that he could have a judgment \u201cthe rest of [his] life.\u201d419<\/p>\n

\n

A fourth participant relayed a comment from a high-ranking official in the<\/p>\n

recording industry who said \u201cit\u2019s too bad you have\u201d children \u201cwho are going to<\/p>\n

want to go to college and you\u2019re not going to be able to pay for it.\u201d420<\/p>\n

The<\/p>\n

innovator recognized a \u201creal undisguised intimidation factor\u201d and commented<\/p>\n

on the \u201cthug-like nature\u201d of the \u201cbehavior of the record companies.\u201d421<\/p>\n

\n

A fifth innovator knew that the personal lawsuit was \u201cpart of the game,\u201d<\/p>\n

but still thought it was a \u201cslimy, scummy thing to do.\u201d422<\/p>\n

He was disappointed<\/p>\n

since he was not a \u201c\u2018free anarchist\u2019 kind of guy\u201d but was \u201cquite the opposite,\u201d<\/p>\n

trying to \u201cdo things that [we]re positive for the industry.\u201d423<\/p>\n

The labels,<\/p>\n

however, \u201cjust make up stuff to slander you and disparage people.\u201d424<\/p>\n

This<\/p>\n

made partners \u201cvery hesitant,\u201d since few would work with a company that was<\/p>\n

sued and could go out of business.<\/p>\n

The personal attacks were potent, and \u201cmost people do not have the<\/p>\n

intestinal fortitude to weather [them].\u201d425<\/p>\n

One respondent \u201ccould list a dozen<\/p>\n

people who have been sued and say \u2018I want to fight,\u2019\u201d but then \u201cjust go away\u201d<\/p>\n

and \u201cclose up shop, even if they\u2019re doing something that is reasonable.\u201d426<\/p>\n

\n

A sixth respondent explained that \u201cby far the most significant factor<\/p>\n

worrying the [company\u2019s] founders\u201d and \u201cfrankly the thing that pushed them
\nover the edge to stop the business rather than fight on appeal\u201d was \u201cthe<\/p>\n

prospect that they could be personally liable.\u201d427<\/p>\n

There was \u201cno reason\u201d to sue<\/p>\n

the company founder individually, and the plaintiffs made \u201cfairly ludicrous<\/p>\n

allegations.\u201d428<\/p>\n

But the \u201cmere fact\u201d that the allegations were \u201cout there\u201d meant<\/p>\n

\u201cthe CEO had to watch his step\u201d and could \u201crisk losing his house and his<\/p>\n

family\u2019s life savings.\u201d429<\/p>\n

There was \u201cno question\u201d that the personal lawsuit<\/p>\n

\u201chad the deterrent effect it was intended to have on innovation.\u201d430<\/p>\n

 <\/p>\n

Conclusion:<\/p>\n

Today\u2019s front-page stories and front-line battles on copyright have focused<\/p>\n

on issues of piracy and theft. Given the figures of lost profits and jobs bandied<\/p>\n

about by the entertainment industry, that is not surprising. But any discussion<\/p>\n

of these harms must consider the countervailing argument.<\/p>\n

Overaggressive copyright law and enforcement has substantially and<\/p>\n

adversely affected innovation. This story has not been told. For it is a difficult<\/p>\n

story to tell. It relies on a prediction of what would have happened if history<\/p>\n

had taken a different course. We cannot pinpoint these losses with certainty.<\/p>\n

And this gap is no match for piracy harms, which have been proclaimed with<\/p>\n

the loudest of megaphones.<\/p>\n

This Article addresses this age-old problem. It treats the Napster decision<\/p>\n

as a case study to ascertain the effects of the decision on innovation and<\/p>\n

investment. By interviewing 31 CEOs, company founders, and VPs who<\/p>\n

operated in the digital music scene at the time of Napster and afterwards, it<\/p>\n

paints the fullest picture to date of the effect of copyright law on innovation.<\/p>\n

The Article concludes that the Napster decision stifled innovation,<\/p>\n

discouraged negotiation, pushed p2p underground, and led to a venture capital<\/p>\n

\u201cwasteland.\u201d It also recounts the industry\u2019s mistakes and adherence to the<\/p>\n

Innovator\u2019s Dilemma in preserving an existing business model and ignoring or<\/p>\n

quashing disruptive threats to the model. And it shows how the labels used<\/p>\n

litigation as a business model, buttressed by vague copyright laws, statutory<\/p>\n

damages, and personal liability.<\/p>\n

Innovation is crucial to economic growth. But the difficulty of accounting<\/p>\n

for it leads courts and policymakers to ignore it in today\u2019s debates. Any<\/p>\n

discussion of the appropriate role of copyright law must consider the effects on<\/p>\n

innovation. This Article begins this process.<\/p>\n","protected":false},"excerpt":{"rendered":"

Official loation. Download mirror: Copyright and Innovation The Untold Story   It reads like a series of cases studies of how horribly the current legislation is being abused.     Abstract: Copyright has an innovation problem. Judicial decisions, private enforcement, and public dialogue ignore innovation and overemphasize the harms of copyright infringement. Just to pick […]<\/p>\n","protected":false},"author":17,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1451],"tags":[1918],"class_list":["post-3138","post","type-post","status-publish","format-standard","hentry","category-copyright-and-filesharing","tag-innovation","entry"],"_links":{"self":[{"href":"https:\/\/emilkirkegaard.dk\/en\/wp-json\/wp\/v2\/posts\/3138","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/emilkirkegaard.dk\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/emilkirkegaard.dk\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/emilkirkegaard.dk\/en\/wp-json\/wp\/v2\/users\/17"}],"replies":[{"embeddable":true,"href":"https:\/\/emilkirkegaard.dk\/en\/wp-json\/wp\/v2\/comments?post=3138"}],"version-history":[{"count":2,"href":"https:\/\/emilkirkegaard.dk\/en\/wp-json\/wp\/v2\/posts\/3138\/revisions"}],"predecessor-version":[{"id":3141,"href":"https:\/\/emilkirkegaard.dk\/en\/wp-json\/wp\/v2\/posts\/3138\/revisions\/3141"}],"wp:attachment":[{"href":"https:\/\/emilkirkegaard.dk\/en\/wp-json\/wp\/v2\/media?parent=3138"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/emilkirkegaard.dk\/en\/wp-json\/wp\/v2\/categories?post=3138"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/emilkirkegaard.dk\/en\/wp-json\/wp\/v2\/tags?post=3138"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}