In praise of evidence-based copyright policy

When I started studying copyright policymaking several years ago, what surprised me most was the the almost complete lack of empirical evidence underlying both existing copyright law and copyright-reform proposals. I'm talking about impartial economic analyses of the effects of copyright. Read pretty much any report, from the U.S. White Paper that led to the Digital Millennium Copyright Act to the discussion papers that kicked off Canada's review of copyright policy back at the turn of the century and you'll find lots of talk about balancing interests and promoting growth, but very little in the way of quantification by disinterested sources of copyright's benefits and harms.

Sure, there are many thoughtful philosophical treatises evaluating the justness of copyright, and there are certainly plenty of reports filled with numbers produced by one side or another to justify a partisan position. But studies looking at the societal impacts of copyright? Not as many as there should be, and those that do exist never seem to find their way into government studies proposing copyright reform. The economist in me bristles at the fact.

Which is why it's so heartening to read today that the British government's intellectual-property reforms include a declaration that "evidence should drive future policy."

Be still my heart! For a debate that's been driven almost entirely by politics and lobbying for almost 300 years, this is a very welcome change of pace.

Glyn Moody highlights the good bits, including the following:

the Government will in future give limited weight in IP policy-making to evidence that is not sufficiently open and transparent in its approach and methodology, and we will make it clear where we are taking this view. IPO will set out guidance in Autumn 2011 on what constitutes open and transparent evidence, in line with professional practice. The Government is conscious that smaller businesses and organisations face particular challenges in assembling evidence and will assess their contributions sympathetically, with the same emphasis on transparency and openness.

Full report here. Anyway, read Glyn Moody's piece. I'll likely have more to say when the actual legislation is tabled. And it'll be interesting to compare the upcoming Canadian legislation to the principles spelled out by the Brits. But for now, three cheers for rational policymaking!

Copyright infringement and high prices

Just a quick note to highlight the release of a new study, Media Piracy in Developing Countries. One of its main points seems to be that copyright infringement in these countries is largely driven by the high (monopoly) prices that companies charge for their wares in countries like Mexico, where almost half the population lives below the poverty line. I've only read the introduction and the Mexican case study (which has lots of good information on the Mexican informal sector in general and Tepito in particular), but seeing as just this morning I was hoping for more copyright scholarship focused on empirical issues, I can't wait to read the rest of the report. I'll even forgive their use of the word "piracy" in their title.

For the record, its case studies are South Africa, Russia, Brazil, Mexico, Bolivia and India. They also have a few chapters focused on more big-picture issues.

It also strikes me that the report, which was funded in part by Canada's International Development Research Council, is focused on the big picture:

we see little connection between these enforcement discussions [around copyright] and the larger problem of how to foster rich, accessible, legal cultural markets in developing countries—the problem that motivates much of our work.

This is exactly what we need: a greater focus on spurring cultural production, an openness to different ways of doing so, and less of a focus on copyright as an end unto itself.

Getting ready to debate Canadian copyright: Things to keep in mind

So Canada is going to be getting a new copyright bill, sooner rather than later. The cynic in me says that this only means that a federal election is also going be happening sooner rather than later. (My inner cynic also believes that the government is timing the release of the bill to cause as much havoc as possible with my dissertation.)

Still, I’ve been thinking about how to evaluate the bill if/when it gets to Parliament, particularly regarding the treatment of technological protection measures and ISP liability, which I’ve been focusing on in my dissertation work. There’s likely to be much more heat than light created once the bill hits the fan. After all, you have high financial stakes, and powerful, well-funded lobbies out to portray self-interest as the national interest. (In fairness, in some cases, this equivalence may hold. In some cases.)

There’s also the reality that copyright hits the emotional hot buttons of property and culture, with an assist to fears of American domination. Oh, and there’s the fact that journalists in general are lost at sea with such a needlessly complex topic.

So, to help my own thinking, I’ve come up with three issues and three questions that I hope will help me keep my eye on the ball while ignoring the self-serving and emotional rhetoric we’re going to be hearing a lot of over the coming months. If you find them useful, all the better.

1. Clarity: Are the provisions that directly affect consumers clear and easy to understand?
Copyright laws are notoriously complicated and contradictory. That was okay when it was a commercial law that mainly governed intra-industry disputes among businesses that could afford to throw money away on copyright lawyers. But now that copyright rules directly affect individuals, individual Canadians should be able to understand what they are allowed and not allowed to do. If the rules are too complex, that’ll be a huge strike against the bill. We need a consumer-friendly Copyright Act. If it exempts non-commercial activities, so much the better.

Here’s a quick test: After reading the legislation, are the conditions under which you can and cannot upload a song to a personal blog clear? (Right now, they’re not.)

2. Debate: Don’t listen to anyone who uses the word “pirate”

Rhetoric tends to muddy the waters of copyright debate. Most disturbing, for its tendency to shut down rational debate, is the accusation that someone is a "pirate" or that some activity is "piracy."

If you see or hear the word “pirate” or “piracy” in an article or interview about copyright, run away. Deployed by journalists and politicians, it demonstrates either laziness and a lack of understanding of what copyright is, and/or an unexplored bias in favour of a particular form of copyright.

If you hear it from a pundit or lobbyist, it demonstrates the same bias, an attempt to bypass rational discussion of the limits and utility of specific copyright rules by appealing to gut feelings about “property.” (And usually in support of a particular interest.) The implication is always the same. If you’re doing something I don’t like, you’re stealing something from me; or you don’t believe in property, so you must be a lefty pinko. Regardless, it’s a sure sign that the speaker or writer isn’t interested in a rational debate over the most socially useful construction of copyright.

Copyright law is about setting the lines that determine how and by whom creative works can be accessed and used. In other words, it's about how the state defines the specific property rules related to creative works. Except for the intangible nature of creative works, this is no different from how the state acts when creating any other property right.

Different people have different views about where these lines should be set. At the maximalist end, proponents of strong copyright argue that copyright ownership should resemble ownership of physical goods, like a house, providing a great deal of control to the copyright owner.

However, maximalist copyright control is not always best for society as a whole. All property rights are always set by the state and always contain limits. You may be allowed to own a gun (or maybe not), but you are not allowed to shoot your neighbour with it. And if you do shoot your neighbour, police can obtain a search warrant to enter your premises to look for the gun.

The state places limits on all forms of property because while well-defined property rights are socially useful for the construction of free markets, which themselves are socially useful, society is not served by absolute property rights. Absolute property rights themselves can lead to abuses, like being able to get away with the murder of your neighbour. Rather, limits on property rights themselves serve a socially useful purpose. For a less dramatic example, consider health regulations that limit what can be put in our food. The question becomes: where to draw the line? More property rights are not necessarily better.

As with physical property, so with intellectual property and copyright. Copyright is a temporary (typically life of the author plus 50 years) and limited (exceptions for educational purposes, for example) because without these limits, copyright would be socially destructive. To take an easy example, all creators (of songs, books, films or class lectures) stand on the shoulders of those who came before. It is not in society’s interest to give past creators or copyright owners (most economically important copyrights are controlled by non-creators) a veto over the production of future creators. Clearly, rights in creative works, if we believe them to serve a socially useful purpose, should be something less than absolute: the question is, how much less?

So, by all means, let’s discuss the actual benefits and harms that come from unauthorized downloading of songs, movies and books. Let’s talk about what rights consumers should have to do with the things that they purchase. (Interestingly, proponents of strong copyright rarely note that a fundamental cornerstone of property rights is that the seller typically has no rights over how a legitimate buyer uses “their” product.) But let's keep in mind the substantial benefits that come from a robust set of exceptions and limitations to copyright.

It actually turns out that the evidence, both empirical and theoretical, of the effects of copyright on cultural production and dissemination is much more ambiguous than slurs like “pirates!” and “piracy!” would lead one to believe. Furthermore, a recent study by the U.S. Government Accountability Office, casts doubt on the reliability of studies claiming losses due to counterfeiting and copyright violations. Moral of the story: always look at the study’s underlying assumptions, and who is funding the study.

The same rhetoric rule can be applied to anyone who asserts that they have a “right” to something. “Artists have a right to be paid for their work.” Sure, but how? And should the starving artist be treated the same as the global superstar? Empirically, only the biggest musical acts, for example, realize any significant income directly from copyright. As a heartless economist, I’d also point out that it’s socially inefficient to pay someone for something that they would have produced for free. Such as this blog posting, for example. And yet it’s covered by copyright, too.

Rights-talk doesn’t get us very far when trying to formulate public policy that affects many different interests. It just leads to a pissing match over which group has the bigger rights (creators? corporations? consumers? citizens?). Better to look at actual outcomes and try to satisfy as many people as possible.

Oh, and copyright? So not a left-right issue: both sides, at least in economics (which has much more to say about copyright than you’d think, given its relative absence from the debate), are equally hostile to it. On the left, certainly, you have the Marxist view that sees property itself as socially damaging. However, on the right, you’re just as likely to find those who see copyright as a government-enforced monopoly that restricts the marketplace, interferes with individual choice and gives far too much power to monopolistic corporate interests. In the middle, the honest, evidence-based debate is (or should be) over where to draw the lines; characterizing this line-drawing a left-right issue is just a cheap way to score rhetorical points.

3. Remember: Copyright is a means to an end, not an end in itself
At the end of the day, copyright is simply the means by which the government regulates the commercial market for creative works. While it has had the effect of privileging certain business models (hierarchical, top-down corporations whose existence depends on the artificial scarcity in copies created by copyright law) over others, the purpose of copyright is not to maintain these businesses.

Conservatives especially should see industry appeals for changes to copyright to protect specific businesses as appeals to protectionism that have nothing to do with the underlying purposes of copyright. So long as music, stories and essays continue to be created and distributed, in whatever form, it should not matter, from a creative, economic or societal perspective, if the record, publishing or movie industries as we know them change beyond recognition, all other things being equal.

Similarly, if stronger copyright law can be shown to provide society with a net benefit, it should not be opposed on narrow ideological grounds.

Three questions

When I'm evaluating whatever the government proposes, I'll be asking myself the following three questions:

• How will these changes to the Copyright Act affect the creation and distribution of creative works?
• How will these changes affect Canadians’ ability to innovate?
• How will these changes affect Canadians’ existing rights to use and access creative works?

These questions appeal to evidence over emotion, and to the needs of people (creators and citizens) on all sides of the debate. They are agnostic as to specific business models, without neglecting the fact that, in some cases, society’s and creators’ interests may best be served by supporting a particular old-media business model. They ignore where the proposals originated, be they from Canada, the United States, the movie industry, or elsewhere.

The coming debate over copyright is going to be filled with slurs, name-calling, emotionally charged rhetoric, and questionable evidence. This is par for the course, but it doesn’t have to be this way. It is possible to have a respectful, fact-based debate over copyright.

The cynic in me, however, says otherwise. It would be nice if, in the coming months, Canadians proved him wrong.

Why Buy American has nothing to do with Canadian copyright reform

One of the fun things about doing a dissertation on copyright is that you can’t go a day without something interesting happening (unfortunately, this is also one of the annoying things when you’re trying to finish said dissertation).

Yesterday’s news had lobbyist Scotty Greenwood, of the Washington-based Canadian American Business Council, suggesting that Canada could get around the country’s exclusion from the Buy American program, which allows U.S. governments to favour U.S. suppliers, if the Canadian government addressed U.S. concerns on copyright. Howard Knopf was quick off the bat decrying this as a bad idea.

And it could be (it would depend on the net economic and social benefits of such a deal). However, thanks to the NAFTA and the decentralized nature of the American political system, this kind of quid pro quo is highly unlikely. Conservative Industry minister spokesperson Darren Cunningham gets it exactly right when, as the Globe’s Bill Curry reports, he “notes that state and municipal governments, which are the source of the tensions, are unlikely to share Washington’s level of interest when it comes to copyright policy.”

Happily, my dissertation is examining exactly this issue, specifically why Canada and Mexico have taken over 12 years and counting to implement the WIPO Internet Treaties despite constant pressure from the United States and its content industries to do so. The United States is without question the region’s superpower. But, despite the fact that copyright has been at the top of the American trade agenda throughout the Bush Jr. and now Obama regimes, Canada has proposed (and failed to pass, thanks to minority government-related election calls), first a 2005 bill (legislative summary) that didn’t do what the U.S. wanted, and then a 2008 bill (legislative summary) would have given the U.S. much, but not all, of what it wanted. (Mexico’s experience, which I’m currently researching, is somewhat different.)

While lobbyists like Greenwood can suggest that Canadian movement on issue X will yield American movement on issue Y (what political scientists call “linkage”), it’s actually really hard to link issues in Canada-U.S. relations, for two reasons.

First, as Cunningham suggests, unlike Canada’s, the U.S. political system is not concentrated in one person. Stephen Harper can make credible promises to link unrelated issues because he, for all intents and purposes, controls Parliament. Barack Obama can’t deliver in the same way, because he has to deal with a Congress that he does not control and whose interests may differ from his. The politics are much more complicated. A basic point, but one that politicians, journalists, lobbyists and we political scientists don’t always remember.

Second, there is currently no regional institutional framework to allow for the easy linking of issues. This is where the NAFTA comes in. The NAFTA sets baselines and rules governing North American economic activity, but it contains no way to modify (easily) these rules, meaning they’re essentially stuck in amber.

There’s a reason why the United States has incorporated successfully its demands on copyright protection into its trade agreements: they’re trading something the other guy wants (access to the U.S. market) for something that the U.S. wants (U.S.-style copyright laws). But because Canada and Mexico already have guaranteed access to the U.S. market, thanks to the NAFTA, the U.S. has relatively little to offer its trading partners. Somewhat ironically, the NAFTA has provided North America’s juniour partners with a not-insignificant degree of policy autonomy.

(Given the reality that copyright laws are changed regularly in response to technological developments, the American strategy of using trade agreements, which can’t be modified easily, to set other countries’ copyright laws may backfire in the long run.

On another point, the lack of issue linkage in the current Anti-Counterfeiting Trade Agreement is one of the more puzzling things about those negotiations. Given the secrecy surrounding the talks, it’s unclear even why countries like Canada are negotiating this agreement. But that’s a topic for another day.)

While the second point is a bit underappreciated (though Stephen Clarkson hypothesized it a few years ago, in a paper that kickstarted my own thinking on the issue), the first point is a cornerstone of the study of Canada-U.S. relations, since at least the publication of Keohane and Nye’s Power and Interdependence in the 1970s.

I’m not saying that linkage is either impossible or always undesirable. The moribund Security and Prosperity Partnership of North America provided a forum that allowed for policy linkages and may have provided an opportunity for the United States to exert pressure in 2008 to get what it wanted in what eventually became Bill C-61. Canada and Mexico may decide to implement U.S.-style copyright policies.

The two governments may attempt to link issues. But absent some kind of new regional institutional structure, or a new round of free-trade talks, any kind of Buy American-copyright linkage has the odds stacked against it.