The Analog/Digital Divide

Notice-and-takedown, nominate-and-monetize and the new fair use

Professor Matthew SagLoyola University of Chicago School of Law

August 2015

Thesis• In the online word, the balance struck by the traditional

levers of copyright policy – (i) has been superseded online by the DMCA safe

harbor system and – (ii) is in fact increasingly irrelevant to our online lives.

• This may be a good thing.

FrameworkA framework for understanding the implications of the DMCA Safe Harbors

1. A tripartite classification of the relevant participants – • traditional producers, • online platforms and• users

2. “first-order effects” of the DMCA safe harbors on the incentives and behavior

3. “interaction effects”– Most of what is interesting about the DMCA safe harbors occurs in

the interaction of incentives

FIRST ORDER EFFECTS

Online PlatformsPositive (action)

– Reflexive compliance with facially valid notifications– Termination of ‘repeat infringers’ identified in said notifications– Restoration of content after counter-notification (a very weak

incentive)

Negative (inaction)– Avoid acquiring knowledge (actual, constructive) of infringement,

avoid inducing infringement

Conspicuous gaps– Filtering/inspection (even with general knowledge of widespread

infringement)– Discouraging infringement – Designing system to minimize infringement

» Insert Viacom v. YouTube discussion here

Traditional ProducersPositive (action)– Monitor for possible infringement and issue notifications

Negative (inaction)– Refrain from subjective bad faith notifications (Rossi, Lenz)

Conspicuous gaps– No reason refrain from issuing notifications in the face of

valid copyright defenses (except at the extreme)» Insert discussion of well known abusive/idiotic takedown notices

here.

– No cause of action against safe-harbored platforms facilitating and profiting from infringement*

– *Some attempts to chip away at the safe harbors

Users

Positive (action)– Counter-notify?– Action under §512(f)

Negative (inaction)– State law claims against wrongfully notifying party pre-

empted by §512(f)

Conspicuous gaps– DMCA Safe Harbors don’t change user liability for

copyright infringement

INTERACTION EFFECTS

Platforms & UsersOpen platforms -> user generativity• DMCA does not directly encourage user generativity, but

it does encourage open platforms which in turn encourage user generativity.

• Lack of prior restraint is part of a norms cascade that encourages yet more UGC which may or may not infringe copyright

» Insert discussion of tolerated use here

Traditional Producers & Online Platforms• Notice & Takedown => Nominate & Monetize – Notice & Takedown does not scale and is costly for

platforms and producers• This creates strong incentives for DMCA-Plus agreements

including: Bulk removal, Graduated Response, ContentID and other filtering solutions– reduces the costs of administering notice and takedown– creates a nominate and monetize system

• Nominate & Monetize– 1. Inevitable. The argument between platforms and

producers was never about filtering per se, it was about setting the default from which filtering would be negotiated.• Nominate-and-monetize agreements have been seen as

something forced upon platforms by producers (Bridy) but producers also feel their participation was coerced.

• If some filtering was inevitable, welfare comparisons between filtering and no filtering (e.g. Helman & Parchomovsky) are irrelevant.

• No legal requirement for filtering => platforms significant leverage to get producers to opt in to nominate-and-monetize rather than simply block. The alternative would have been slower to no uptake of social media by traditional producers.

– 2. Voluntary filtering is better. voluntary nominate-and-monetize agreements are preferable to an external mandate• Filtering needs to be tailored to the technology and how the

platform is used. Dropbox ≠ YouTube

– 3. No guarantee of due process. Nominate-and-monetize systems lack DMCA safe harbor checks and balances• Platforms and producers will assess the trade-off between

false positives and false negatives– But this may not fully account for the public interest– Filtering is a form of prior restraint.

The interaction of notice-and-takedown and nominate-and-monetize and user incentives

• Normative signals– Open platforms enlarge public conception of fair use

and the limits of copyright • This is the opposite to Jim Gibson’s ‘Risk Aversion and Rights

Accretion’ thesis. • There is a contradiction between user TOS and the use of

copyrighted material that second level agreements permit. What is this doing to the public’s conception of copyright?

– Preemptive filtering may counteract this, but not if the material is set to monetize rather than block

Normative Assessment• Balance of publication used to be determined by

gatekeepers responding to their understanding of what copyright law allowed

– Risk aversion and rights accretion– Boundary issues settled by gladiatorial contests between

representative interests

• Hardly a perfect system, but decisions were still tethered to the substantive content of copyright law.

• In a caricature of notice-and-takedown the substantive content of copyright is irrelevant:

– Users don’t care because they never get sued; platforms don’t care because they are immune; and producers don’t care so long as their takedown notices are not subjectively in bad faith

Photos: https://en.wikipedia.org/wiki/Unmanned_ground_vehicle#/media/File:Gladiator_240G.jpg and https://upload.wikimedia.org/wikipedia/commons/f/fc/Zombie_walk_Pittsburgh_29_Oct_2006.png

The balance of publication is simply what is left standing after the

zombie armies of infringement have been machine-gunned down by

traditional producers’ automated takedown notices

• Caricature nominate-and-monetize faces similar concerns– May be even worse because filtering systems can be

gamed by producers– Workings may not be apparent to users whose

content/speech is effected. – No accountability to third parties for mistakes and

misrepresentations– Machines can’t do fair use analysis (but neither can RIAA

lawyers)

• The caricature is a bit simplistic– At least some platforms have made some effort to reject

over-broad takedown notices– Some due process features encoded into some

nominate-and-monetize systems

• Assessment– If platforms remain open we have much more room

for fair use and tolerated use online than offline.• Tolerated use is generally a social good• If nominate-and-monetize imposes some revenue sharing

over the top of tolerated or fair UGC, this is not a significant problem– Payment to copyright owners that does not inhibit access is not a

harm.

• Enhanced legitimacy of the copyright system

– If nominate-and-monetize makes platforms hghly restrictive • we lose the benefits of user generativity• the piracy pretext is restored

Some data

We looked at 10 of the Billboard top 20 singlesAnd took the first 20 search results on YouTube

tab FairUse, sort

Fair Use? | Freq. Percent Cum.------------+-----------------------------------Copyright Owner Approved | 67 33.50 33.50 No | 47 23.50 57.00 Unclear | 43 21.50 78.50 Likely Yes | 21 10.50 89.00 Yes | 19 9.50 98.50 REMOVED | 3 1.50 100.00------------+----------------------------------- Total | 200 100.00

This is really rough data. More a proof of concept than anything else I don’t stand by it, please don’t treat it as fact.