File sharing: Innocent until proven guilty

Let's talk about digital rights management [DRM]. The idea behind DRM is that entertainment content will be delivered in a form that includes copy protection and a payment mechanism. In your paper, you identify DRM as a possible solution to the online copyright battle. Do you still stand by that?

Yes, it should still work. I got a lot of hostility to that idea from people who would normally agree with me. I got a nasty letter from someone, who said he took a videotape of his brother's wedding, and then he tried to transfer the sound to the digital audiotape that he had, and it wouldn't do it. He blamed DRM for that.

I wrote him back and said, look, be mad at the Digital Home Recording Act. That's what said you can't record from a digital source onto a digital audiotape. It has nothing to do with DRM.

DRM, as I see it, is merely the protection in the software, on a CD or whatever, that would allow micro-payments. It doesn't do this yet, but in principle it could. That's what I view as closer to ideal. They can let you do a lot and you pay a higher price, or let you do only a little in which case you'd be paying a lower price. It solves a lot of peculiar economic problems that arise when you're dealing with intellectual property. If it stopped copying, if it was fairly effective -- it will never stop all the hardcore crackers -- then the copyright owners will get a reasonably good deal and users will get a reasonably good deal.

The micro-payments idea has been floating around for years and it's never happened. Why do you think it would work and why hasn't it worked so far?

I have to believe the computer people who think that DRM is viable. The micro-payment part is the harder part because the credit card companies won't accept payments as small as micro-payments would need to be. If someone can come along who is able to accept small micro-payments -- one of the credit-card type companies -- then it could be viable. Right now, that's probably the biggest impediment: There's a fixed cost for using a credit card that's bigger than what a lot of these payments would be.

The idea has caused a fair amount of hysteria in the academic community, because they think fair use is going to disappear. I think that's totally not true. Fair use is still there. DRM can't keep you from reading the material, as long as you pay the price. Some say, Well, how can you take a paragraph and copy it anymore? That's what we normally consider to be fair use. But the fact is, you can still do that. You might not be able to cut and paste but as long as you can read it, you can type it.

But essentially, you're being forced to pay a company for a right that's protected in the Constitution ...

That's right. You might have to pay something. But you can always go to someone that has a legitimate version, or to a library or something like that. So I don't think it's really changing fair use. It's what fair use was before the copier. We certainly had fair use then, so this doesn't kill fair use. It's just not as easy as it could be but it's not any harder than it was 30 years ago.

But doesn't DRM limit the incentive to create, by making it harder for people to create works that derive from copyrighted creations?

I don't think that all that many people are going to use very much less. So you pay a little bit of money, which is all it should cost to get a copy. Academics mainly cite academic stuff and this usually goes at low prices. Everyone's putting up copies of their paper before publication for free downloads anyway. When you talk about quoting people's work, you see a lot more of that on the academic side. And they're the ones who are upset about it. There aren't that many novelists who are quoting other people.

Larry Lessig, Pam Samuelson and other legal scholars argue that the copyright balance has been shifting in favor of corporations for decades, with the extension of copyright law's term, the DMCA and other legislation. They think the balance has been upset so every issue becomes a vital opportunity to tip the scales back in the public's favor. Do you think these scholars are misreading recent copyright history?

While it's true that there's always been a balance, we don't know if it's been a particularly good or even balance. We really don't know. There's no empirical work that can tell you whether copyright is good or bad. It's one of the great problems with this area of law. And yes, copyright law has changed tremendously.

But I think there's a bit of hysteria there and part of it is self-serving. Academics have gotten a bit spoiled. These days they can copy things easily for free. If they had to pay some small amount, which is really all we're talking about, they get upset. I don't see the costs as a major problem.

I view the DMCA as draconian. I'm really quite unhappy about it. But I'm not unhappy with digital rights management, narrowly defined to software that keeps you from making copies; that doesn't extend the length of copyright; and certainly doesn't get rid of fair use.

What makes you so sure that DRM won't turn off consumers and make them focus on the rogue file-sharing services?

If it turns off consumers, they'll have to remove it or lower the price. The people selling these things want to make money, which means they want to give people whatever it is that they want to pay the most for. They want to maximize profits and if they change their product and no one wants to buy it, they'll change it back in a heartbeat. That's the beauty of the market. That's why it can't get too far afield. If they get every consumer mad at them, they'll be in big trouble.

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