There's been quite a rumble in the publishing community in the wake of this week's ruling by the U.S. District Court in Arizona in favor of Pamela and Jeffery Howell, defendants against a lawsuit raised by the Atlantic Recording Corporation for their alleged role in copyright infringement. Atlantic, with RIAA backing, was seeking a summary judgment against the Howells claiming that they had put music files on the KaZaa file sharing service, and by doing so violated Atlantic's rights to distribution under copyright law. That word "distribution" turns out to have become the pivotal point in a key decision that puts copyright law in its true perspective.

The key finding by U.S. District Judge Neil Wake is a simple but fairly profound observation. Wake notes that although statues and court precedents state clearly that a distribution of content is a publication, not all publications are distributions. Specific to file sharing, the defendants claim that they did not put any music in the KaZaa file folder designated for file sharing - and that the record company's claim that more than 4,000 files had been designated by them for download was due to a glitch in the KaZaa software that made their music files, present in a folder not designated for sharing, identifiable by others in the KaZaa network. So although these songs were made to look as if they were available for distribution by KaZaa, they were not by any intent of the defendants. The Howells also pointed out that their computer was accessible by others who could have made their files exposed to the KaZaa network.

The judgment reasserts that copyright is really not about the right to make copies but rather about the right to distribute copies of protected works for use by others. Implicit in that position is that individuals or institutions making copies for purposes other than distribution are not subject to copyright law. In other words, if you're using copies for your own licensed purpose, you're not a distributor: distribution is when you willingly make a work available for distribution and it's actually distributed. In the instance of the Howells, the judge perceived that through whatever happenstance an index saying that copies were available for distribution was not the same as saying that any specific person was actually distributing copies.

Though there is already a growing body of legal decisions that seem to be weighing against RIAA efforts to discourage individual consumers from copying content, the Howell decision is notable in that the judge went to particular pains to delve into the technological "hows" of file sharing as well as into legal precedents. In doing so, Judge Wake has challenged publishers pursuing such suits to recognize that the more that they go into these suits the more that they create a wide portfolio of rulings that begin to flesh out the full reality of electronic content use - a portfolio that over time has weakened rather than strengthened their claims to inhibit content copying. Put simply, the more that these suits continued, the more circumscribed their claims become and the more that their presumption of complete power over copying will weaken.

Already many in the music industry have recognized that trying to inhibit copying per se is counterproductive, as it weakens their ability to build brand value with consumers swapping from one platform to another at will to consume content. If your customer gets a new mobile phone, do you really want to hassle digital rights management issues when they try to transfer their music files to the new phone or do you want them to still be able to love the artists that you have in your stable? Increasingly being able to sustain passion for a brand is winning out over the absolute right to prevent copying. Distribution enables a relationship with a content brand: once that relationship is established, the relationship becomes more marketable than the content itself over time.

Music publishers are beginning to get a far stronger sense of building marketable relationships with audiences as the key to their future profits. Digital watermarking techniques are one key element of moving away from fortress-like content packaging and towards being able to understand the value of the relationships being formed with content as it moves from one context to another. If a CD is copied but nobody cares about it, that's probably a bigger problem in the long run than someone copying a CD and discovering that people care about it very much - and will give you opportunities for revenue that spring from that distribution. Managing copyright via asserting distribution rights is still a very key mechanism for enabling revenues, but the future is in recognizing that you're far better off in the long run taking advantage of free distribution to get content into the hands of people who are likely to be your most valuable customers. Once it's there, have your content packaging ready and able to start the value conversation.

Labels: copyright, distribution, legal, RIAA, suit

The Associated Press' position in the news world is in some ways stronger than ever, building on both traditional newspaper portals and the growth of online-only news venues such as Yahoo, Google and social news outlets. But it's also a challenge for AP and other wire services to define a path towards long-term growth as the variety of outlets that can generate and distribute news on the Web outside of their purview accelerates. An earlier lawsuit against Google for their use of news from AP on member sites yielded a settlement in AP's favor, so it's no surprise that AP is trying again with a new lawsuit against Moreover, Verisign's content mining service for media and enterprise clients.

In the AP statement on the suit AP notes that AP discovered the extent of Moreover's practices while negotiating with it to provide content management services to the AP's members. Oops. The main bone of content seems to be that, like Google, Moreover is fairly efficient at harvesting news from AP from member sites for its clients, claiming that headlines could be appearing in Moreover within two minutes of their hitting a news Web site. This hits a little too close to AP clients who want to be the source for breaking news headlines. Adding to AP's perceived pain is Moreover's revenues gained from ad-supported and subscription services, including what AP claims is Moreover's use of story texts and photos.

Cleverly the suit claims that Moreover's uses of headlines violate fair use laws by merely copying them instead of transforming them into a unique form and format. Given that fair use is used primarily for publications to use limited direct quotation of sources in news articles and other original works this seems like a stretch at best in relation to fair use law. By this definition any page of search results would be suspect, even though one could argue that each page of search results represents an original work of authorship through its organization of content into a unique compilation as proscribed under U.S. Copyright law. Search engine companies have been reluctant to test this concept in courts, however, as globally the interpretation could vary significantly. So this type of threat has been an effective tool for brining technology companies to the bargaining table for AP.

Although AP's suit covers no apparent new legal ground it's use as a negotiating tool targeting a content harvesting company is an important new wrinkle. Although Web mining technology is in many ways little different than search engine crawlers its use to build applications beyond mere search results means that more value-add applications based on these technologies are becoming targets for copyright enforcement. It opens up many questions for both Web miners and providers of mashups and embedded content services. Services such as Sphere, which serve up embedded link references through its own crawling services, have become very popular with publishers trying to provide value-add content links to their sites, and these could become potential targets for AP-like lawsuits as well. Notably AP is targeting relatively mature businesses but with its use of the Attributor content tracking technology any service could become a target potentially.

While AP may have some legitimate foundations to their concerns at the end of the day this is yet another company with distribution at the heart of their content business model struggling to understand how to position itself in a marketplace where distribution is in essence a free service. Like music publishing companies trying to position the value of their services for potential clients AP's aggressiveness in monitoring and pursuing potential copyright infringement provides them with a legal enforcement angle to their content licensing services that can help to justify premium prices for their services. But also like music publishers may come a point when the talent recognizes that they're pretty good at making money without distribution-oriented middle men.

But AP is far smarter than music publishers in pursuing licensing deals through their surveillance efforts with companies that are likely to be able to pay in proportion to the commercial value of their services. Notably Moreover was an early entrant into content harvesting so its relatively mature base of enterprise and media clients gives AP a reasonable target to pursue that's more likely to settle on commercial terms than to go to the mattresses to defend matters on principle alone. In this sense AP is approaching situations like the Moreover suit as a rather aggressive business development effort - one that's not likely to endear AP content to the burgeoning embedding industry but one that may have some commercial effect for now but which may erode interest in AP as a business partner over time. In the meantime the stage is still wide open for virtual aggregation services that manage copyright issues effectively for both enterprise and media services to keep suits like AP's from becoming licensing nightmares.

Labels: aggregation, AP, copyright, fair use, harvesting, legal, mining, Moreover, suit