2007.03.17
Here is a new machinima licence from Microsoft, who are gearing up for the release of Halo 3.
Important points:
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No commercial use, not even donations, not even contests, and presumably not film festivals – MS are reserving their ability to get a slice of that lucrative machinima pie.
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You can't grant rights to other people to build on your creations. This is a really confusing statement – they “don't mind if other people help you out”, but the permission comes from Microsoft and not the creator. Does this mean that licensing the finished film is forbidden? How exactly can other people “help” if they have a licence from Microsoft but not from the creator of the new copyright interests in a machinima film?
This licence shows that Microsoft are allowing machinima, but are keeping a very wide discretion on the types of content that can be created. Under a heading “What can't I do?”, the response is “It's tough to predict everything people will do, but there are some things that you can be sure will get our attention.”
The success of the Halo franchise is in a large part dependent on the engagement of the community, including machinima producers. I'm concerned because Microsoft are atetmpting to harness the creativity of their audience in order to promote their games, but are sending a very clear message that only films which are 'safe' are acceptable. Anyone who expects to create a really expressive and slightly gritty film can also expect the heavy hand of Microsoft's copyright lawyers to come down on them.
I'm concerned about the use of copyright as a tool of private censorship, and I'm concerned about companies who encourage and benefit from fan creation but give their fans little or no certainty as to what will and will not be permitted. Also, preventing these creators from even taking donations seems to go a little too far. It's clear that in any of these cases, traditional licence negotiation is going to be necessary, and this is a situation in which Microsoft holds a much better bargaining position than the fan-creators…
2007.03.17
I was at the ACIPA conference at Minter Ellison on 17 February 2007. Philip Ruddock and Helen Daniels explained what the Attorney-General's Department was going to be up to in 2007, now that the copyright amendments have gone through. Some of the projectsthey listed:
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Australia will be pursuing bilateral free trade agreements, including IP agreements, with: China, Japan, Chile, New Zealand, Indonesia, and ASEAN.
2006.03.18
Some people have argued that any unauthorised use of copyright material is likely to prejudice the legitimate interests of the copyright owner, and that market-based solutions, or statutory licences, are the most effective way of ensuring a balance between the copyright owner's rights and the ability of others to use copyright material. Fortunately, this position is supported neither by policy nor by law. The Berne convention requires that use of copyright material doesn't unreasonably prejudice the legitimate interests of the copyright owner. These concepts, reasonable and legitimate, imply a balance which is much more subtle than the simple desire of a copyright owner to be remunerated.
When we talk about legitimacy, we get to the heart of copyright policy. Copyright is not a natural right; it does not exist of its own. It is a false reification to assume that a copyright owner has a legitimate interest in being compensated for all uses of his or her work. Copyright exists for certain limited purposes. In the US Constitution, copyright exists to “promote the progress of science and useful arts”. In Australia, we have no such explicit constitutional limit. But that is not to say that copyright law does not have a purpose or objective.
Copyright law is generally said to exist for one of a number of reasons. From an economic utilitarian perspective, it exists to prevent market failure which results in the underproduction of classic public goods. Because expression is non-rival, in that many people may benefit from it at the same time, classical economic theory tells us that people are unlikely to invest in its creation unless the state provides legislative excludability. Copyright therefore exists as a necessary evil which provides state-granted monopoly rights in order to provide the necessary incentives to create. From an economic approach, copyright must have limits, whether that be because not all creation is economic, or because at some point the transaction costs exceed the incentives, or because the losses due to exclusion from the benefits of a good which can be reproduced at near-zero cost outweigh the benefits copyright owners gain from any increased incentives. The important thing to remember about copyright here is that while it may act in the market, it is not of the market; it is a tool to limit the effects of market failure, subject to our wider social policy.
Another justification for copyright, and particularly moral rights, is personality theory. Descending from Hegel, this romantic theory argues that an expression embodies the personality of the author, because it is through the creation and acquisition of property that a person self-actualises upon the world. Harm to a person's expression, therefore, was direct harm to the individual author, and should be restrained as such. This theory does not focus on economic harm as such, but is instead relevant to undue commodification, or material distortion of expression, or failures in attribution. One of the key limits to copyright when expression is viewed as an extension of the self, is that acquisition of property does not limit the ability of future authors to self-actualise through their own appropriation.
On the other hand, some argue that copyright exists as a property right inherent in labour. Drawing from John Locke's work, an analogy is drawn which seems to require that individuals be granted property rights in the fruits of their intellectual labour. Notwithstanding any difficulties in porting Locke's theory from the physical commons to the field of ideas and expression, proponents of this view often conveniently forget the very important provisos to Locke's theory, which place limits on the ability of an individual to appropriate goods from the commons. The two provisos are (a) that one leave “enough and as good” for others, and (b) that a person not appropriate more property than they can use, which would lead to harmful waste. Applied to copyright, these provisos clearly place limits on the ability of a copyright owner to claim exclusive rights in all uses of his or her works; at a minimum, the ability of future users to innovate and express themselves must be preserved.
These three theories illustrate a more nuanced application to copyright than copyirght maximalists would have us believe. When we consider what the legitimate interests of a copyright owner are, we must consider not only the desire of copyright owners to be remunerated, but also the interests of the public in being able to access and built upon expression. The romantic notion of an author labouring in isolation is patently false – all expression fundamentally draws upon the work of those who have gone before. The ability of future authors to express themselves must be recognised in copyright law, and cannot be simplistically limited to a requirement to pay for each use of prior expression. The theory simply does not support such a reification. The losses to those who cannot afford to pay, the losses to creativity and accidental discovery, and the losses due to transaction costs all combine to a general principle that copyright is not, and should not be, an absolute right.
2006.03.18
This thesis concerns the ability of individuals to engage in transformative use of copyright expression without the permission of the copyright owner. Transformative use refers to the use of existing expression as an input into the creative process, resulting in the creation of new expression that, while still embodying elements of the original work, is original in its own right. This type of creativity is beneficial for society and should be encouraged. Individuals should have the ability to express themselves, and participate in the interpretation of their culture.
My enquiry has shown that Australian law does not facilitate transformative use. Many forms of transformative expression are not currently permissible without the express permission of the copyright owner. Copyright theory, however, is not in accordance with such a prohibition on transformative use. I will suggest some legislative and judicial reforms to Australian copyright law that can have the effect of encouraging transformative expression, while at the same time providing an economic incentive to invest in creative expression and protecting the legitimate interests of creators in their works.
The primary modification I suggest is that the definition of 'substantial part' in the Coypright Act 1968 (Cth) should be read, in accordance with the interests served by copyright, to allow a consideration of the context in which copyright material is taken. The seeds of such an approach are present in modern judicial interpretations; the discussion that follows attempts to show how such an approach accords with copyright theory, and why it should be preferred by the judiciary. Firstly, with respect to the economic rights, transformative uses of copyright material which are not substitutable for the original expression should not be found to reproduce a substantial part of the original. Secondly, questions of substantiality in the moral rights should be interpreted to protect authors from unreasonable commodification of their works. To the extent to which it is unclear how the right of integrity applies to the context in which a work is used, as opposed to the modification of the work itself, I submit that it should be interpreted such that authors have a right to object to the commercial association of their work with a position, product, or service against their will.
Alternatively, I submit that legislative reform to include an open ended defence to copyright infringement could provide much needed flexibility in the Australian system. Such a defence could draw primarily on the US 'fair use' defence, but certain limitations of the US defence could be overcome in an Australian context. Again, as the theory shows, the primary consideration for infringement of the economic rights in transformative uses should be the degree to which the transformative use is substitutable for the original.
Finally, I submit that the reasonableness defence to infringement of the moral right of integrity should be read in such a way as to ensure that the personal interests of authors does not interfere with the legitimate self-expression of future authors. I will show that the theory does not support moral rights to the exclusion of either the ability of future authors to self-actualise. The operation of the reasonableness defence should be clarified to ensure that the legitimate interests of both past and future creators are recognised.
2006.03.18
So, Google is buying YouTube for US$1.65B.
YouTube will probably find comfort in Google's enveloping arms, providing a shield of sorts against potentially fatal copyright infringement suits. Google may have better technology to locate infringing material, or deeper pockets to defend claims, or both.
Google doesn't seem to think that the copyright infringement suits will be damaging:
“The two parties brushed off concerns over copyright issues, saying both companies worked with the safe harbor provisions of the DMCA (Digital Millenium Copyright Act) and were responsive to content owners' concerns.” 1).
Of course, both companies recently brokered deals with major record labels. Google with Sony BMG and Warner Music, and YouTube with Sony and Universal. These deals, which provide for advertising supported music video distribution and the filtering of infringing content, will likely provide not only an interesting business model for video distribution, but also security against potential suits. They're also great steps forwards for the record labels – instead of suing fans and publishers for sharing what is essentially advertising for bands, advertising revenue generating hyperdistribution seems like a good idea.
Last week at the AoIR conference, Damien O'Brien (a colleague here at QUT) gave a presentation which outlined why he thought YouTube would fairly readily be found liable for copyright infringement under Australian law. This is going to be interesting to watch to see how Google fulfils its objectives of providing high quality user-focused services, while at the same time ensuring that it does not expose itself to liability (i.e., keeping the labels happy). Hopefully we'll see user sharing and innovation increase, and won't feel the guiding hand of industry in our interactions. What a shame it would be if lip-syncs were quality controlled to fit the band's image, or if fair -use / -dealing decisions were made by agents of the labels, or only 'safe' play with media is permissible. With the marketshare of YouTube and the sheer power of Google, their decisions are going to have a very significant effect on the way people interact with video media in the near future.
2006.03.02
NCSoft and Cryptic Studios are the creators of a popular Massively Multiplayer Online Role Playing Game (MMORPG) in which players create superheroes and do battle with the forces of evil. Marvel are publishers of comic books, one of the two production houses credited with creating, or at least resurrecting, the superhero genre.
Marvel alleged that NCSoft had “created, marketed, distributed and provided a host environment for a game that ‘brings the world of comic books alive,’ not by the creation of new or original characters but, instead, by directly, contributorily and vicariously infringing upon Marvel copyrights and trademarks.”1) Marvel pointed to the character creation process in City of Heroes, which allows players to design their own superheroes, and, with some work, replicate to some extent the likeness of well known protagonists of Marvel’s comic books. Marvel alleged that the flexibility in the character creation system empowers users to infringe their valuable copyrights and trademarks.
The claim is alarming. For years, children have role-played with the characters that form their popular culture. Content producers have used advertising and merchandising so extensively that it is difficult for a child not to be immersed in a world populated by representations of these characters. These same companies encourage children to buy licensed merchandise in order to role-play with their favourite characters. For years children have played not only with that merchandise, but also with home-crafted representations – drawings, paintings, a handmade cape or costume, the possibilities are only limited by imagination. This sort of play is either a symptom of, or fuel for, the popularity of the characters depicted, and is encouraged by the production companies. However, once this role-playing moved into the digital environment, Marvel brought suit for copyright infringement.
It would be unthinkable for a production company to sue children for dressing up as their favourite comic book character and playing in the park. A shift in context to a digital environment is little different conceptually. If Marvel were successful, the ability to role-play online would have been removed to a large extent. It is difficult to reconcile how Marvel can on the one hand bombard children with images and merchandise of their characters, in the hopes of encouraging them to play with those characters, and on the other hand, bring suit to restrict those same children from playing with those characters in an unlicensed setting.
The case was settled out of court in the United States in December 2005. The terms of the settlement were not disclosed, but no changes to NCSoft’s City of Heroes character generation process are to be made. Whilst this may be a win for NCSoft in this case, the fact remains that a similar case brought under Australian law may be significantly more difficult to defend.
Superhero comics, and potentially the superheroes themselves, are original artistic works for the purposes of Part III of the Copyright Act. Liability for primary copyright infringement will occur when a player of a game can be shown to reproduce the characters, or the characters as a substantial part of the comics, in a material form, or to communicate a substantial part of the characters or comics to the public.2) ‘Material form’ includes “any form (whether visible or not) of storage of the work or adaptation, or a substantial part of the work or adaptation, (whether or not the work or adaptation, or a substantial part of the work or adaptation, can be reproduced)”.3) This broad definition will cover the creation of a character in a game, as will the definition of ‘communicate to the public’ in a multi-player game (to “make available online or electronically transmit”).4)
In determining whether the characters have been reproduced, the Court will look for objective similarity between the in-game character and the original superhero, and the establishment of a causal link between the original work and the in-game character.5) Where the two characters are objectively similar, a causal connection may be inferred by the popularity and level of exposure of the original, even if the person is copying subconsciously.6)
Where only some features of the character have been reproduced, the plaintiff will need to show that those features are substantial. The question of substantiality with respect to Part III works is determined primarily by reference to the original features that have been reproduced. Determining whether a substantial part has been reproduced will again be determined by the qualitative value of the part taken, but the emphasis is on the originality of the reproduced portions. Reproduction of a large quantity of unoriginal features is unlikely to constitute reproduction of a substantial part,7) but reproduction of a small portion of original material which resulted from a high degree of skill and labour is likely to be substantial.8)
Given the recent restrictive approach taken by the Federal Court in relation to substantiality in Part IV subject-matter,9) the features of a superhero are likely to constitute an important part, or a highlight, of the artistic or literary work of a comic book. Unless the court takes into account the type of use made of the player character, it is likely that they will be seen to infringe copyright in the original superheroes. Australian players will not be able to rely on a fair dealing exception to infringement.10) The logical conclusion is that the players will be liable to the original owner. However, owners of copyright are understandably reluctant to sue their fans for copyright infringement. It is much less embarrassing and more convenient to achieve the same result by suing the producers of the game for secondary liability.
Secondary liability for copyright infringement in Australia arises when a person ‘authorises’ the doing of any act comprised in the copyright.11) Section 36(1A) tells us that, when determining whether a person has ‘authorised’ the doing of any such act, the matters that must be taken into account include:
(a) the extent (if any) of the person’s power to prevent the doing of the act concerned;
(b) the nature of any relationship existing between the person and the person who did the act concerned;
(c) whether the person took any other reasonable steps to prevent or avoid the doing of the act, including whether the person complied with any relevant industry codes of practice.
The meaning of ‘authorisation’ was recently considered in the Federal Court by Wilcox J in Universal v Sharman.12) This case dealt with authorisation of infringement in sound recordings, but the relevant provisions in the Copyright Act for Part III works are worded identically. His honour considered the relevant authorities and extracted some guiding principles. ‘Authorise’ is to be construed according to its dictionary meaning of “sanction, approve, countenance”.13) Authorisation does not have to be a positive step: “inactivity or indifference, exhibited by acts of commission or omission, may reach such a degree as to support an inference of authorisation or permission”.14) Mere provision of the means of infringement is not enough.15) Mere inactivity without knowledge will not be enough.16) Mere knowledge is not enough.17) An implied general permission or invitation does not require specific knowledge.18)
In Universal v Sharman, Sharman Networks was found to have authorised the mass infringement of copyright in sound recordings by providing the software for the Kazaa peer-to-peer filesharing network. The two most important factors considered were that (1) Sharman provided the facilities for infringement; and (2) Sharman had knowledge that Kazaa was being used predominantly to share copyright works.19) Wilcox J did not accept that there was a large proportion of legal filesharing traffic.20) It wasn’t important that Sharman did not have actual knowledge of infringing acts, merely that it knew that a major proportion of traffic must be infringing.21)
Next, Sharman had a financial interest in increasing filesharing, because of increased advertising revenue. Because most filesharing is infringing, Sharman therefore had a financial interest in high rates of infringement.22) Sharman did nothing effective to curb the illicit filesharing on their networks.(Ibid 99.)) Sharman ran some campaigns which implicitly promoted illicit filesharing.23) Critically, Wilcox J found that Sharman could exercise some degree of control over its users.24)
In Universal v Cooper,25) Cooper operated a website where other parties could post hyperlinks directing users to remote websites where infringing sound recordings could be downloaded. The Federal Court found that Cooper had knowledge of the infringing material, his website facilitated the infringement of copyright, and he had power to exercise some control over the links, but did not do so.26) Accordingly, Cooper had authorised the infringement of copyright in the sound recordings, notwithstanding that none of the infringing material was hosted under his control, or that the links to the websites hosting the infringing material were placed on his website by other users.
Although the decisions in Universal v Sharman and Universal v Cooper were confined very tightly to the facts of the cases, we are able to see how the same principles could be applied to find a computer game manufacturer liable for secondary copyright infringement. NCSoft provides the means of infringement, could be shown to know of the infringement (depending on how prevalent it is), and have the power to stop such infringement (MMORPGs are much more tightly controlled than distributed filesharing networks). It is also possible that NCSoft could be shown to engage in tacit promotions of infringement in their advertising materials.
The fact that NCSoft’s game obviously has many non-infringing players may be the crucial point in any such litigation. In this case, the game developer could probably successfully argue that it should not be held responsible for the infringing behaviour of a small number of its players.
NCSoft in this case may be able to escape secondary liability in Australia. However, we must consider whether this is the approach we want to take when we are shaping our digital environments. Are we certain that we only want people to be able to role-play with their favourite media icons in spaces which have been licensed by the appropriate publishers? If a provider of a virtual world made a space (like a park) where players could express themselves as they wanted, should they be liable when a significant portion of those players express themselves in ways that draw on copyright portions of their popular culture?
The disadvantages to such an approach are significant. Primarily, only people who have the ability to pay pop-culture creators have the opportunity to play – at least in the offline world, merchandisers cannot (completely) stop children from using their imagination or someone else’s toys to role-play. Next, we lose a great potential for creative re-expression – the environment must be controlled by the owner or a licensee, meaning that the potential for expression is limited to their ideas of ‘safe’ playing with iconic characters. We also lose the ability for players to mix genres and media – Marvel characters will be segregated not only from DC Comic superheroes, but also dinosaurs, spacemen, and Walt Disney characters. The qualitative value of play is reduced because it is confined to the boundaries of corporate merchandisers.
The better solution is to exempt this type of play from copyright infringement, either by determining that it does not reproduce a substantial part of the original works, or that it should be excused as a fair dealing or fair use of material. Unfortunately, current Australian law does not support such an approach.
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