There’s No “Third Way” on Copy Ownership

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New Labour, the FCC, and G.K. Chesterton are known for third ways. But when it comes to “copy ownership,” there’s no such thing. The mostly-awesome Copyright Office 1201 report wishes there was, however.

Imagine a book—say, “The Science of Hitting” by Ted Williams. The copyright to this literary work is owned by Teddy Ballgame, or his ghostwriter, heirs, and assigns. Now imagine the physical copy of this book that I have right here in front of me. This one. I own it—not the ghost of Ted Williams, not Fireside publishing. Me. While my ownership of this copy does not entitle me to make a movie out of the book, or scan it and put it up on the web, it does mean that if I sell the book I do not infringe the “distribution” rights of the author. The first sale doctrine hinges on this distinction between copy ownership and copyright ownership.

This distinction is also important in the world of software. If you own a copy of software, you’re specifically allowed to run it under the law, without needing to get special permission from the copyright owner. But you don’t need permission to read a book or listen to a record. So why do you need special legal permission to use a copy of what you own? Because under our law, running a program is considered making a “copy” of it in the computer’s RAM, and copyright owners have the exclusive right, with limited exceptions like the one I just mentioned, to authorize the making of copies of their works. If for some reason you don’t own the copy (say, you’re leasing it), you can only run the program if you have a “license” (that is, permission) that allows you to make RAM copies.

Software companies have taken this notion of a “license” to ridiculous levels, to the extent that they claim that, when you walk into a store and pay money for a physical good (the CDs software comes on, for instance), you don’t really “own” those physical CDs. You only “license” them. It’s never been totally clear what that means, since you can’t “license” a physical good—a “license” refers to legal permission to do something you otherwise couldn’t do. (Okay, it sometimes means the piece of paper or other legal instrument that embodies the actual license.) But when it comes to physical goods, there aren’t many options. You can own them, borrow them, or lease them. Maybe you’re a “bailor.” But the concept of license is totally separate from and orthogonal to any form of dominion over a physical piece of property. In fact, Public Knowledge is involved in a case that hinges on whether you actually “own” copies of software that you buy. Software owners should have the same rights as other copyright owners—but they shouldn’t have the extra super-right of claiming that the hundreds of millions of physical copies of things that they’ve sold over the years don’t actually belong to the people they sell them to.

Because the law in this areas is “in flux,” the Copyright Office ducks and ducks hard when it comes to the issue of whether you actually own the physical copy of the software that’s installed on your mobile phone. First, let’s review: I have an iPhone. Apple owns the copyright to iOS. But the phone is mine—not AT&T’s and not Apple's. Mine, mine, mine. Thus, if there are any copies of software embedded in that phone, I own them. If I own a slab of vinyl, I own a copy of the music on it. Those little grooves are mine. If I own some bound pages with ink squiggles on them, I own a copy of a book. Phones are no different. But the Copyright Office kind of wishes they were. In the Recommendation of the Register of Copyrights, it writes:

The Register concludes that the law relating to who is the owner of a copy of a computer program under Section 117 is in flux. In light of this uncertainty, the Register is reluctant to take a firm position on whether a purchaser of an iPhone is, or is not, the owner of the copy of the computer programs on the device. Where the law is unclear, the regulatory process (as distinguished from the legislative process) should be used to resolve difficult issues only as a last resort, especially when the issue is to a large degree a matter of contract interpretation. 

Page 90. Later, it continues that

[T]he state of the law with respect to who may be an “owner” of a copy of a computer program under Section 117 appears to be in flux, and the determination whether the owner of a handset is also the owner of the copies of computer programs contained in that handset may depend on an evaluation of a number of circumstances.

Page 167. There is also similar language in the Federal Register notice:

The Register cannot determine whether most mobile phone owners are also the owners of the copies of the computer programs on their mobile phones.

The problem with this reasoning is that there is no difference between the ownership of the mobile phone, and the ownership of any software copies embedded in it. There is no third way. If you own the phone, you own the copy. If you don’t own the copy, then you can’t own the phone. Copyright is an intangible right, but copy ownership definitely isn’t. It’s a flesh and bones idea: copy ownership can’t be metaphysically separated out from the ownership of the physical hunk of stuff.

I appreciate that the Copyright Office doesn’t want to make a stand on pending litigation, but that litigation is about who actually owns some hunks of plastic after an economic transaction. It is not about the creation or destruction of a new kind of intangible “copy ownership right” that floats unmoored from both copyright and the ownership of physical copies. Maybe such a new kind of intangible right is a good idea that would better comport with the law. But it isn’t the law. If the Copyright Office is satisfied that iPhone owners actually “own” their mobile phones, then it should also be satisfied that they “are also the owners of the copies of the computer programs on their mobile phones,” because one necessarily follows from the other. Elsewhere in the Recommendation, the Copyright Office does indeed find that "[t]he fact is that proponents ... have made a prima facie case that owners of mobile phones are also the owners of the copies of the software that are fixed on those phones and that as owners they are entitled to exercise the Section 117 privilege." (pg. 132). In fact, when it comes to copy ownership, there is no third way.

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