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Re: Top EPO Figure: Patents Are Moot in Age of Cooperation

On Aug 14, 10:59 pm, Homer <use...@xxxxxxxxxx> wrote:
> Verily I say unto thee, that Mark Kent spake thusly:
> > And the same extension argument can be placed on the recorded CD
> > argument. If you've bought a CD, then presumably, downloading someone
> > else's rip ought to be okay.

It's only OK if the person giving you the rip has a license to
redistribute the software.  Remember, the CD is licensed exclusively
for personal use.  You could share it with other members of you
family, but you can't legally share it with friends if you know that
their intent is to copy the medium, because that would make you a

If you loan someone else the CD so that they can LISTEN to it, you are
transferring the license to the other person.  When they give the CD
back to you, to LISTEN, they are transferring the license back to
you.  If EITHER of you make a copy before making the transfer, then
that makes you a PUBLISHER, and you are in violation of the copyright

> > Unfortunately, the music/film industries don't see it that way,
> > mainly because it's quite difficult to police.

The notion of "Fair Use" has virtually disappeared since 1977, when
the copyright law was revised to include the ability of a copyright
owner to dictate the exact terms of using the copyrighted software.
If the license terms are available in ANY FORM, anywhere, especially
on the packaging used to ship or display the copyrighted material,
then those are the only terms that apply and the judge will not
override that license.  Exceptions include criminal uses, for example
if a license tells you to smuggle restricted materials to terrorist
countries, that would be illegal.  If the publication was part of a
blackmail or extortion scheme, the license terms would be illegal.

> The problem is that the "IP" industry sells /licenses/ as though they
> were /products/. Either I'm "licensed" to view particular content or I'm
> not. If I pay for a license /once/ then I should never have to pay that
> license again, but the way the "IP" industry works is that they demand
> that I pay the /same/ license for the /same/ content, over and over again.

Specific rights to copyright works have been under the control of the
copyright owner for years.  For example, if you want to use the script
of a popular play or musical in a theater, you must purchase a license
for each performance, in addition to purchasing the scripts from an
authorized publisher.

That actually goes back to the 1900s, when tin-pan alley composers
attempted to protect their copyrights to music by forming the American
Society of Composers, Arrangers, and Publishers.  The organization was
able to establish legal precedents that protected their right to
collect royalties for the performance of music written by the ASCAP
members.  Later, copyright law was revised to formally protect these

In the 1970s, the advent of low cost VCRs made it possible to purchase
or rent a movie, copy it to another VCR, and share it with someone
else.  Federal court judges had ruled that it was legal for an HBO
subscriber to record a feature length movie and store it and replay it
as often has he liked, but it wasn't legal for him to invite 20-30 of
his close friends over to the house and watch the movie with him.

There were also issues with computer software.  Since the copyrighted
works were being stored in magnetic form (disk or tape) or in PROM, it
was very difficult to identify whether or not a copyright violation
had even occurred.  Attempts were made to copyright hex dumps or
disassembler dumps of the compiled version and compare them to the
dissasembled code.

In 1976, congress passed the revised copyright act, and this have
copyright holders the right to state the exact terms of usage in a
license.  It also permitted them to control derivative works, and it
gave them the right to set any terms related to how the software was

Bill Gates' father was a brilliant lawyer.  I don't know if he had
anything to do with authoring the law, but he certainly figured out
how to exploit the law.  Bill Gates III, the son quickly learned from
his father how to "License" the software, and how to avoid having the
software declared "work for hire".

Almost from the beginning, abuses of the copyright licenses began.
Bill Gates threatened to port the licensed software to MITS' most
feared competitor at the time.  In effect, this was extortion.

Music publisher began squeezing night clubs for larger percentages of
the take.  Disco became popular because a good DJ could play the most
popular dance music so loud that it was almost like having a live
band.  The clubs argued that this was "Fair use" since they were
paying  for the records.  Once the copyright law was revised and went
into effect in 1977, the publishers could demand much higher royalties
from these clubs, since the music was a key element of their business.

> /That/ is extortion, pure and simple.

That depends on who you are and what you are trying to "borrow".  If
you are a composer, arrannger, or publisher, and you've spent millions
of dollars to promote an artist and the music to get it into the "Top
40" most popular songs, and somebody then wants to pay $20 for a CD
and put it on a web site where he can give away 1,000 copies per day,
that's $20,000 per day you are taking away from the publisher in
record sales, which means it will fall from the "Top Forty" much more
quickly.  Now suppose you have 1,000 publishers each giving 1,000
copies away every day, without paying any license fees.  That's $20
MILLION in lost revenues, and about $6 million in lost royalties for
the Composer, the Arranger, the Producer, and the Performers.

On the other hand, if someone forms a garage band, and puts together a
few songs that sound very pretty, but they can't find a record
producer to produce and publish their work, they might be very
GRATEFUL to have 100 of their friends share 100 copies with their
friends, who then share with 100 of their friends, for 1,000,000 new
fans.  And if those fans are willing to buy tickets to their next
concert, or in other way provide a few dollars per person in revenues,
they will probably write more music that's similar.

On the flip side, if a garage band creates some music that's really
horrible, and nobody likes it, or it gets passed around as a joke,
there won't be much revenue, and they will probably stop making music,
or might try different kinds of music until they can create something
that people like.

> Think of it this way: If you pay a membership fee for a club, lets say
> £300, and in return for that money you receive both membership (license)
> and a membership card (material costs), but you subsequently misplace
> your membership card ... should you have to pay the full £300 fee just
> to get a replacement card?

Normally, if you pay $600 or a membership to a club, you make darn
sure that the club has a complete record of you, and your membership.
That way, if you DO lose the card, you can go back to the club, give
them your name and other personal details, and they can verify your
identity and your membership, and give you a new card.

When you pay $15 for a CD, you don't usually work that hard to
register yourself as the owner of that CD.  Furthermore, it's unlikely
that the CD has a serial number imprinted on it, to verify that you
are the unique owner of that uniquely identified CD.

On the other hand, if you download it from a licensed publisher's
site, the publisher does put a "digital watermark" on the media that
you can't see or hear, but can be traced directly back to you.  He has
also agreed to collect your personal information, including your
credit card, address, phone number, and other indentity information,
just in case you lose the content you have paid for.

Where things get sticky is if you, the licensed purchaser of an
authorized copy from an authorized web publisher, make another copy
and give it to your friend, and your friend gives it to a few of his
friends, you now have 100 or 1000 or 10,000 copies of the song, with
your serial number on it, and at that point, the licensed publisher
has to pay the royalties on those copies.  There is a very good chance
that he will collect those royalties by charging them to your credit

Before you say, "that would be stealing from me", you have to remember
that you agreed to a license in which you promised that the songs you
loaded were for your personal use, and that you would be responsible
for all copies you made of that software.  If you suddenly get a
credit card bill for $10,000 because you gave a copy to your very
generous friend, you might be a little less inclined to "loan out"
copies to other friends.

Digital rights management covers several things.
  Making sure that only authorized publishers publish uniquely
identified copies.
  Making sure that those uniquely identified copies are associated to
      specific user and device.
  Making sure that the "play list" of songs played by the user is kept
up to date.
  Making sure that the royalties paid by the subscriber can be matched
with his playlist (so that the royalties can be appropriately

This way, if one guy listens to music 18 hours a day on his iPod, his
royalties are spread appropriately thin.

If another guy only listens to one Andrew Loyd Webber album just
before going to bed every night, his royalties are spread very thick.

The same goes for your cable TV and DVR, or for your computer and it's

What kind of software would we be seeing on Linux distributions if
Linux users paid a distributor $20/month  for a subscription license,
and provided a play-list of the applications they used, and the amount
of time spent using it?

Suddenly Open Office and other popular applications would have more
revenue to compete against Microsoft, and less popular applications
would still get enough to help them make their applications better.
If you got 1/10th of 1% of $20/month from 100 million users, that
would be about $2000 per month, for a popular library or application.

If you were in the top 40, and were getting say 3%, that would be
about $60,000 per month. Certainly enough to make the software worth
the effort.

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