The Digital Freedom Campaign was launched today, and I was delighted to join my colleagues from the Consumer Electronics Association, the Media Access Project, Computer and Communications Industry Association and The Electronic Frontier Foundation at a press conference to talk about the campaign. My statement is here.

The purpose of the campaign is to build grassroots support for copyright laws that protect, rather than limit, creativity, innovation, free speech and competition. While attempts by the content industry to strengthen copyright further through increased penalties, government technology mandates and lawsuits is nothing new, the past several months have seen perhaps the greatest onslaught of legislation and litigation since Public Knowledge was founded five years ago. You can read about those initiatives here, here and here. These efforts have been particularly irksome because the industry won the Grokster case at the Supreme Court (and just recently at the district court), has been successful in its lawsuits against individuals, got Congress to pass the Family Entertainment and Copyright Act, which gives the industry special protection for "pre-release" works, and has entered into agreements with ISPs to pass on warning notices to individuals they believe to be engaged in illegal file sharing. So to paraphrase the immortal words of Howard Beale - We're as mad as hell and we are not going to take it any more.

Public Knowledge is pleased to join in the Digital Freedom campaign. The issues we are discussing today have been at the heart of our mission since I helped to start the organization five years ago.

I just returned from three days in the Bay area, and the highlight of my trip was getting a tour of, and giving a policy talk at, the Google campus in Mountain View. It was everything you may have heard about, and more - terrific free food, a top of the line health club, water treadmills, Segways, scooters, even washers and dryers, complete with free detergent and fabric softener. While these amenities were remarkable, I was more struck by the touches of whimsy - each conference room named after a foreign city (I had a meeting in the Bangui conference room - anyone know where that is?), massage chairs in the waiting rooms, and a "mouse" made from a basket, carefully placed in a stairwell to look like a rodent had taken up residence. Many thanks to Google Policy Analyst Rishi Jaitly for his hospitality.

But the policy talk, entitled "From Capitol Hill to Silicon Valley: Copyright, IP Law and Innovation was serious, as was the meeting I had beforehand with several of Google's top product lawyers (old friends Daphne Keller and Glenn Otis Brown), as well as its top copyright lawyer (and new friend), Alex MacGillivray. With its recent $1.65 billion purchase of You Tube, copyright law and the prospect of future litigation weighed heavily on the Googler's minds. And well it should, since Universal Music just announced that it was bringing lawsuits against two other video sharing sites, Grouper.com and Bolt.com. And even though You Tube has licensing agreements with several of the large music companies, those agreements don't cover Hollywood, or people like video journalist Robert Tur, who is claiming that You Tube "induces" copyright infringement. Moreover, to the extent that those licensing agreements include uses of copyrighted works that could be considered fair use, there is concern about setting a precedent that presumes that such uses need to be licensed. Another concern is that once the content companies get their feet in You Tube's door, that they will demand design control and other concessions regardless of the value they receive from the promotion that You Tube and its brethren provide.

You can lead a horse to water, but you can't pay it to legally download

While Congress is out, the PK blog can get a little thin--at least my posts, anyways. It's not that things aren't going on, but it can be difficult to shoehorn the PK view/agenda into the news of the day. And who wants to read shoehorned news anyways--you can get that anywhere--and really, that's not the value of our blog, nor is it interesting for you to read.

That said, the intersection of a number of stories around the web/blog-o-sphere makes for an interesting analysis, and hopefully an more interesting read.

Here are the pertinent stories. If you haven't read them, open them up in another tab, and then please come back here when you're done:

• Universal uses Video Sites, but not the market leaders.

• AllMyMp3 says the labels won't take their money.

• LimeWire sues RIAA.

Contents:

• House Panel Sets Aside Copyright Bill
• IP3 Awards Winners Announced

At today's scheduled Judiciary Committee Markup, everyone's not-so-favorite copyright bill for the end of 2006, the Copyright Modernization Act was scheduled for passage. The CMA had actually been on the markup schedule for the previous two weeks, but folks on both sides of the debate had successfully chimed in to delay the bill.

This week, it was a little different. A few bills were considered and passed out of committee before the CMA was considered. This week, it actually came up and Rep. Lamar Smith, Chairman of the Judiciary Subcommittee on Courts, the Internet, and Intellectual Property, who introduced the bill was recognized to make a statement. In it, he said he had counted heads in the committee and was confident that he had the votes for successful passage, but was concerned that the bill may be set for difficult passage out of the House and Senate. He said he'd prefer to start anew next year. Chairman F. James Sensenbrenner rhetorically asked if that was an indication that Smith wanted to withdraw the bill from markup consideration, and then made it so.

A collective sigh of relief was let out from a few rows of audience, comprised of consumer device manufacturers and some service providers.

From there, Mr. Smith made a heartfelt statement thanking and congratulating Chairman Sensenbrenner on his leadership of the full House Judiciary Committee.

So, with your support by writing and calling your members of Congress, we've managed to dodge another bullet for, we think, the rest of the year. Good work!

I don't know whether to be flattered or annoyed, but several musician's unions, performance rights organizations and songwriter groups, joined by (no surprise), the National Association of Music Publishers (NMPA), specifically singled out Public Knowledge and the Consumer Electronics Association in a letter to House Judiciary Committee leaders Reps. F. James Sensenbrenner (R-WI) and John Conyers (D-MI). The letter is here.

The groups were responding to our making musician and songwriters groups aware that a number of provisions in the Copyright Modernization Act are flagrantly anti-artist and anti-songwriter. I blogged about it in great detail here. Although they don't dispute the fact that what we said is 100% true, they said that they

are outraged that the Consumer Electronics Association and Public Knowledge would claim to speak on behalf of creators while consistently working to erode the current legal protections of our intellectual property.

The Copyright Modernization Act (HR 6052) was pulled from the markup agenda today at the House Judiciary Committee. There is some new language around that we're looking at, dealing in large part with the orphan works section of the bill. None of the crucial issues surrounding innovation and the attacks on satellite radio were changed.

You can see the text of a proposed manager's amendment here.

One substantial amendment proposed by the Copyright Modernization Act is to increase the upper limit of statutory damages for copyright infringement by allowing parts of a compilation to be deemed separate works:

"[T]he court in its discretion may determine that such parts are separate works if the court concludes that they are distinct works having independent economic value"

Currently, the maximum statutory damages that can be awarded under Title 17 §504(c) is $150,000 per compilation. Under the proposed bill, a court can award $150,000 per part of a compilation (or what we typically might call an "album" or CD). This means that damages could be $150,000 per song, or more than $1.5 million per CD.

This amendment is likely to have a chilling effect on innovation in media technology. It is difficult to determine whether a new product will run afoul of current copyright laws until precedent has been established. However, if the potential statutory damages for copyright infringement were to be increased, it is certain that companies would be even less willing to undertake innovative projects.

This amendment could also amplify errors in court decisions. Losing parties would be less willing to appeal a court holding against them because the statutory damages awarded could be even higher on appeal. Indeed, in the recent case of UMG Recordings, Inc. v. MP3.com, Inc., the court awarded statutory damages of $25,000 per CD. Appealing under the proposed amendment would mean risking damages of $1.5 million per CD (compared to $150,000 per CD under the current law) and would surely have further reduced MP3.com's willingness to appeal.

Individual consumers are also adversely affected by the proposed amendment. People are as likely to be deterred by $150,000 per CD statutory damages as they would be by $1.5 million per CD statutory damages, so the deterrence effect of the amendment is likely to be negligible on most individuals. However, if the court erroneously rules that a consumer has infringed on copyrights, the social costs of this error (as measured by the cost to the consumer) are potentially magnified by this amendment.

The objective of statutory damages is to deter copyright infringement. This amendment seeks to bolster the deterrence effect, but its costs may just be too high.

Over the weekend, at the Austin City Limits Music Festival, you'll have the opportunity to sign a petition to ask your Congressional representative to Keep the Music On, and oppose the Copyright Modernization Act of 2006.

What can you do?

• You can add your signature to the following petition, which will be delivered to Members of Congress.

• Learn more about the CMA by reading our policy blog and checking out these in depth reports: 1 | 2