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The Split (or How The Law Can Learn To Stop Modern Piracy And Illegal Downloads)

Rebecca Giblin, in her seminal book Code Wars, proposes that a major fault of the current US Intellectual Property legal landscape is the several physical world assumptions that it makes, the most significant one being the presumption that “everybody is bound by physical world rules”. She argues that if “certain things were infeasible, impossible, or impractical in the physical world, it was assumed […] that they would be infeasible, impossible, or impractical full stop”. This article aims to posit that the tort of authorization in UK law – the key law preventing online piracy – makes similar presumptions which hampers its success in mitigating online piracy.

Firstly, what follows is a sketch of the modern practice of piracy illustrating how any liability is avoided due to its current decentralised nature.

The tort of authorization requires “a grant or purported grant [that the defendant is conferring] the right to do the act complained of”. In the Napster-age, this was a solid legal barrier, as Napster was both the source and conveyer of copyrighted material. However, with the modern decentralized P2P system (where information is transmitted directly between clients rather than through a central server), BitTorrent software solely acts as a tool, rightfully available for the third party to use in any way he so desires. Thus, it can be said that the ‘software manufacturer does not “sanction, approve, or countenance” the third party infringement’ in the same way that American equivalents would say that ‘the defendant does not have “actual knowledge of the third party infringement at the time it is being contributed”, or the “right or ability to supervise” the third party infringement’.

Furthermore, the tort of authorization under a modern application makes the presumption that the role of the infringing system is analogous with that of a courier by imposing liability not on the actual transfer of the copyrighted material, but rather on the illegitimate claim to the right to transfer the copyrighted material. This is possibly due to the fact that the P2P system is “capable of both infringing and ‘substantial noninfringing’ uses”. Although this analogy may be accurate for BitTorrent clients, as the technology’s design means that it is impossible to determine if BitTorrent Inc, the corporation responsible for the open source code that is the basis for BitTorrent client software, has ‘authorised’ any specific third party infringement, it is clear that BitTorrent Inc has no power to prevent third party infringement at the time that it occurs.

This analogy of the courier becomes problematic with regards to the online databases through which peers find available pirated media, and effectively other ‘peers’ distributing that file. If uTorrent (a leading BitTorrent client) is a ‘courier’, PirateBay and Kat.ph are more akin to ‘Amazon’ or ‘eBay’ – the website where the copyrighted material is found in the first place. As these piratical websites do not ever initiate, supervise, or even come in contact with the data packets being transferred, they therefore cannot be reasonably considered to be ‘couriers’ and consequently also escape liability under the Tort of Authorisation.
Essentially there are two key parties in modern piracy and this segregation of duties means that the transfer of pirated material can happen without either actually initiating, supervising, or purporting to have the right to the pirated material.

In the recent case of Dramatico, the courts, acknowledged this ‘split’ in the contemporary decentralised p2p system, holding that that, due to the reasons above, the operators of PirateBay (and by extension similar websites) infringe the copyrights of claimants in the United Kingdom in spite of the fact that the involvement of these piratical online indexes is prior to any transfer actually happening and involves no contact with the infringing copy. This judgment is likely of little substantive effect though as policing such online databases would prove near impossible. Although these databases are accessible globally, they operate from servers which could be based anywhere in the world. For instance, the servers for PirateBay are located in Sweden, Belgium, and Russia. This, in itself, would pose significant jurisdictional issues.

Conversely, this judgment could be seen as indicative of the law evolving in the right direction. Prior to Dramatico, film piracy was treated as a unified, rather than the fragmented activity that it currently is. In acknowledging ‘The Split’, the judgment in Dramatico suggests that the law is finally catching up to the reality of modern piracy. ‘The Split’ results in two distinct foci for the law to have – the indices and the software. It is fair to suggest that the law has been too focussed on the indices, attempting to tackle it with the blunted Tort of Authorisation, rather than on BitTorrent clients. This may in fact suggest that the cause of the laws inefficacy may be something much simpler and elemental than the Giblin’s physical-world limitations – the law could have the wrong focus.

But why does the law focus on the indices as opposed to the software facilitating piracy? It may be because online indices like PirateBay may seem to be easier targets – evidenced by the fact that there were more than 150 million client installations worldwide in 2007 as opposed to the total tally of 93 indices blocked under the Digital Economy Act 2010 since the first restrictions started in 2012. However proxy websites are notoriously easy to establish and jurisdictional issues hamper any conclusive victory against piracy. Another possible argument could be that fighting against PirateBay makes for good political rhetoric. PirateBay, Kat.ph, and other online indices are the ‘faces’ of piracy. For instance, Kat.ph is the 66th most visited website on the Internet. One could go so far as to say that these online indices are in fact representative of the practice as a whole, and this is the reason why they have endured the brunt of the law’s focus. But any success against these would be very unlikely and uneconomical. This is well illustrated by the vast resources expended by Sweden and the MPAA in the aforementioned tango with PirateBay.

If the law is to enjoy any actual success in its goal to mitigate piratical action it needs to realign its focus from the indices to the actual software. This would require stark departures from the Amstrad judgment and a dereliance on the Tort of Authorisation. Although this may be seen as unlikely to happen, it is not impossible. Similar departures from House of Lords’ judgments to create new forms of liability have happened in the past, for instance with R v Gold & Schifreen and the consequent Computer Misuse Act 1990. Many obstacles may still be faced if the law is reformed to refocus its efforts against BitTorrent clients and BitTorrent Inc. itself. For instance, hypothetically, if any liability could be imposed against BitTorrent Inc., or the creators of clients based on BitTorrent code, the low barriers to market entry could make such liability difficult to enforce. This will not necessarily mean that any such reform would be devoid of merit though as there may still be a substantial nominal deterrent effect.

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Budding legal theoretician currently doing his time as an auditor. Diverse interests ranging from the aforementioned law to film, literature, and art. Don't get him talking because he'd probably never stop.

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87 thoughts on “The Split (or How The Law Can Learn To Stop Modern Piracy And Illegal Downloads)

  1. That’s just scratching the surface of piracy, though.
    To actually create a functional copyright regime, you need to go after Facebook and Twitter — software that has been “promoted to a monopoly” simply because it is easy to steal data from.

    Your data. My data. Your pictures, my pictures.

    I suppose the Powers that Be are enjoying their access to our data entirely too much to care.

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  2. Having spent some of the last 20-some years thinking about this problem off and on — some of that time professionally — I assert that the outlines of a “solution” are clear. Piracy can’t be stopped; but it can be reduced to an inconvenience on the same scale as produce spoilage for grocers. The studios/publishers can’t win the technology war. They can’t win the legal war. But there are economic models that will reduce piracy to the level of an inconvenience.

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    • This is very true. Like Lessig suggested, a truly successful regulatory framework would have to be a nexus of social, legal, and economic forces. I will probably be looking at the practical specifics of such proposals and the actual ramifications of them being successful in mitigating piracy soon.

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    • This. When people could buy the song they wanted, through any number of online retailers, for about a dollar, music started making money again.

      The problems of digital piracy was never about money, it has always been about control.

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      • I’ve always figured that Steve Jobs’s greatest achievement, even beyond the iPhone, was convincing music labels that selling downloads was a thing that would work–at the very same time you had Napster in the news.

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      • I think its easier to deal with the problem of piracy with music than it is with movies and TV shows. There are lots of old, foreign, or obscure media that might have some audience outside the home country but not enough that would create even a small enough profit to justify a release. At the same time, the title holders do not to release these things into the wild for free and want to combat piracy.

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        • Smart studios sell memorabilia for old/foreign/obscure stuff.
          You wouldn’t believe how much Voltron stuff goes for.
          Or sell an artbook, or something like that.

          People often want to pay for things, even if they aren’t going to pay $50 an episode.

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        • Also, as is the case with e.g. QI, there are potential issues with copyrights that the owners of the show itself have licensed. QI hasn’t paid to show certain images in the US, only the UK, and if they turn a blind eye to US piracy of the show itself, they’re not doing due diligence to protect the copyright holders they’ve licensed from. Thus yearly purges of the back catalog from Youtube and mass bannings of the posters. Not because they necessarily care about the show being viewed in a country they have no interest in marketing to – but because it challenges their core business model.

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    • The studios/publishers can’t win the technology war.

      The thing is, I don’t think they understand that it doesn’t matter if they stop 99.999% of the population from copying their stuff. Because it’s only 0.0000001% of the population trying to remove copy protection to start with! Everyone else is just downloading stuff that already had the copy protection removed.

      But there are economic models that will reduce piracy to the level of an inconvenience.

      And that economic model, for TV and movie, *must* include ‘Able to have permanent ownership without ads, forever’ and ‘Able to watch on any device, even future ones’.

      Must must MUST.

      Those are the *two* main advantages of piracy. If those two things are not addressed, if people cannot say ‘You know, I like the movie Clue so much, I would like to pay $10 and own it forever on every device I have’, piracy will continue.

      The thing is, there’s an obvious model we’ve stumbled on for that: A third party keeping track of the rights you have. You pay the film distributor $10, and they tell one of the five or so accredited depositories ‘Yeah, he owns this’. And you pay that depository $2 a month or whatever to them to pay for your account and them keeping track of all that, and to stream it to you…and if you want, like if they stop supporting your devices or somewhere cheaper comes out, you can move all your stuff (Or, technically, ‘the records you have of owning stuff’) somewhere else.

      I don’t think anyone’s done it with movies or TV shows, but IIRC we’ve tried this a few times with music, where people could upload MP3s, and listen to them anywhere, and the music industry stomped all over it. (Admittedly, that was the *users* telling them they owned a song, which is obviously less secure.)

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      • Smart studios like gog and other places that remove the freaking copyright protection. If you sell a fine game like Deus Ex for $10, the question becomes “why in the hell aren’t you playing the best game of all time”? And, dude, every person who plays it is going to tell their friends — play this game, it’s awesome!

        And, um, a lot of people who pirated the game in the beginning aren’t going to mind paying $5 to have it legally.

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    • I would agree with this.

      The clearest example is TV shows. All the channels I watch have put their shows online; you still have to watch ads (although slightly fewer than on TV, I think), but you can watch a show at any time during the week rather than only at the precise time it airs, eliminating the need for either cable or piracy. Similarly, Netflix is a simple alternative to piracy when it comes to most movies and shows. There’s no equivalent for music, but when individual songs are $1 on iTunes, why not just buy them?

      It’s very telling that the shows that provoke the most piracy are ones like Game of Thrones, which require you to buy both an HBO cable subscription and an HBO online subscription even if you only want to watch one show. Currently, the main impetus for piracy is companies making their products deliberately difficult to access; if they want to prevent piracy, the answer is to stop doing that.

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  3. This is related to the complaint by liberals about the injustices of the supply chains of global commerce, such as Erik Loomis at LGM has written about.

    On one hand global treaties are deliberately fashioned to facilitate the easy flow of capital and property across borders, but regulating that flow to protect rights and dignity and create a positive outcome for everyone has been lacking.

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  4. The, ahem, adult industry’s solutions to deal with this problem are probably going to be the richest sources for engineering solutions to these problems due to the fact that law enforcement doesn’t give a crap about people stealing their product.

    Or, I suppose, it’s more polite and family friendly to talk about how musicians are dealing with this sort of thing.

    So we once lived in a world where there were all kinds of musicians. The ones who were good at playing live, the ones who were good at making albums that needed a big name producer to engage in a lot of heavy pre- and post- production (as well as carefully handling the actual production of the product as it was being made). And, of course, the musicians who did very well for themselves providing private concerts for the wealthy.

    Napster was a huge disruption on the music industry for the musicians who were at their best when they had a lot of pre-production, post-production, and careful management during the album creation in the first place. The album was what people wanted to listen to and the mp3 that you got of the album from the net sounded just as good as the mp3 you got off of iTunes. So the people who made these big albums needed to have albums that were so awesome that you weren’t willing to wait for a decent album to be seeded on the tubes. You had to go out to Sam Goody’s to pick up the album so you could listen to it RIGHT FREAKING NOW.

    But the albums that weren’t so awesome? The ones you could wait a month for? Meh. Those artists didn’t do so well.

    But the artists who performed live? They were pleased to get paid for their live concerts by the people who bought a ticket (and, perhaps, bought a t-shirt or something from the merch table) and saw the bootlegs of their concerts as being advertisements for their next live concert. Maybe there were tens of thousands willing to wait for the bootleg and satisfy themselves listening to that… but if there were a consistent group of dozens of people who wanted to listen to the concert live, well, you could play for those folks and make a somewhat decent living. Do requests for favorite (if obscure) songs, and you would reward the people who bought a ticket for the actual concert itself.

    And the people willing to play private concerts for a single fan (who was willing to pony up the dough)? That’s a lot of money for only a couple of songs.

    So the musicians who weren’t tethered to a particular music distribution haus found themselves able to perform for hardcore fans and make a bit of money, the musicians who were the biggest names found that they could be tied to a particular music distribution haus who had product so amazing that people weren’t willing to wait to enjoy it…

    But the poor folks in the middle there?

    *squick* squash like grape.

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    • Like movies. I’ve seen plenty of articles with complaints that boil down to “either it’s Disney Studios making ‘Batman Versus Godzilla’ for 300 million dollars, or it’s you and your buddies making ‘Batman Cooks Eggs’ for 300 dollars.” Anything that’s beyond the reach of an individual with their own resources needs to be immense, in order to absorb the losses of piracy and still make any money at all.

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      • That is not necessarily true, but more importantly, making money is not necessarily the goal for low and mid-tier filmmakers. For these filmmakers in fact, reputation and distribution is often the currency of success, not money. Many filmmakers at such level in fact rely on piracy to make a name for themselves (e.g. Kiowa Winans and Jamie King).

        Furthermore big studios may also benefit from piracy too (in terms of money specifically). Perfect example Dark Knight Rises – highest grossing film of its year and also most pirated (before the fact). It seems piracy acted as free advertisement – especially of the IMAX features that can’t be replicated at home. However this also works conversely.

        Which leads us to the third party in this equation – you the audience. If piracy forces studios to put out better films in better formats that are qualitatively more enjoyable – we the audience benefit too.

        The bottom line (which will be investigated more soon, I promise) is that when money is seen as the only metric of success of a film or filmmaker, it actually obfuscates the true qualities of the industry. Creativity, Opportunity, and Technological Advancement are all credible currencies for success too – and if we are going to study the impact of piracy on the industry, we ought to study it on these terms too. And if we do… the answer isn’t so clear cut.

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        • “making money is not necessarily the goal for low and mid-tier filmmakers.”

          Ah-heh. Making money might not be the goal of the filmmakers, but the filmmakers generally aren’t the ones putting up the money to get the film made–and making money is the goal of those guys.

          ” Dark Knight Rises – highest grossing film of its year and also most pirated (before the fact). It seems piracy acted as free advertisement ”

          uhhhhh, you’re talking like DKR was some goofy little fan-film that a few guys whipped up in their basement with effects done in Blender, and that if it hadn’t been for piracy nobody would have ever heard of it. That’s…really not consistent with reality.

          “If piracy forces studios to put out better films in better formats that are qualitatively more enjoyable ”

          Or maybe piracy forces studios to focus on the first weekend box-office returns, which means more disposable fluff, more retreads and reboots of existing properties (to trade off of long fandom tradition instead of the risk in creating something genuinely new), and more hype in place of production value.

          Sort of like this article says.

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          • In general, perhaps you are right… but either way the answer isn’t as clear cut as the conventional debate would have us believe.

            More specifically, low-tier filmmakers tend to be the one putting up their own money for their own projects. This happens less often on the mid-tier level admittedly – but the finance strategy for mid-tier movies tends to be more long term with their main source of revenue being through DVD sales and VoD (e.g. Netflix) revenue rather than box office. Ultimately though money is the goal of studios – yes. But not necessarily the only goal. So why is it the only goal/lens through which we assess piracy?

            I never implied that DKR was not a big budget blockbuster – I believe it being successful was inevitable. But it’s level of success was not anticipated by anyone. And it is also not the only instance of piracy and box office “seeming” to have a complementary relationship. Avatar is another example. The Hobbit Trilogy. Perhaps I wasn’t clear when I posited this argument above. What I was suggesting essentially was that the quality of a film is actually a very strong force to mitigate the effects of piracy. There is no example of a good film (or any film at all) failing to make money because of piracy. Prime example – John Wick. Most pirated on the month of its release but made no money at all – not because of piracy, but because of poor marketing strategy, critical reviews, and too long spent on post production.

            Basically, when you actually look into it intricately, you realise that the ‘link’ between piracy and box office returns is simply conjecture.

            Last point – I agree. 100%. This however is a more modern strategy due to the greater establishment of franchises in cinema now. And it is another qualitative argument – because although whether the films as a result are quality on a high-brow, high-art level is contentious, it cannot be denied that they are making the films that fans want to see. The audience have more influence on the process as a result.

            However, it is actually not as rare as one would think for studios to push out new, inventive, and creative projects (consider the typical awards-season releases as a small set of examples). And these movies typically perform well financially. Because (perhaps I am being idealistic here) I believe quality always triumphs. Is piracy a force pushing for further creativity in the industry? Perhaps inadvertently. Because film is essentially a beautiful experience – and the more difficult it is to recreate that experience at home (3D, IMAX, 70mm, Dolby Cinema) the more people will likely flood to the cinema. But if the cinema becomes the only option in a monopolistic way – there is less of an incentive to reinvent.

            Thank you, a well structured and very thought provoking comment. Keep ’em coming.

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            • “he finance strategy for mid-tier movies tends to be more long term with their main source of revenue being through DVD sales and VoD (e.g. Netflix) revenue rather than box office.”

              Hey-ho, guess what gets killed by piracy?

              “This however is a more modern strategy due to the greater establishment of franchises in cinema now.”

              Piracy was a thing well before “franchises” started to be big.

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  5. Our model for How The Music Industry Has Always Been is itself, a novel invention dating to the phonograph.

    Before the physical record of a song could be preserved and given the title of property, a piece of music that was performed was free to anyone who could hear it.

    In the movie About A Boy, the central joke was that Hugh Grant’s character was a layabout spoiled cad who had never had to work a day in his life because his father back in the 1960s or so wrote a novelty Christmas jingle.
    Just that, nothing more, and the insanely profitable jingle created a perpetual money machine of unearned riches.

    Similarly, in Mark Twain’s “Connecticut Yankee”, he writes about a “sheep-witted fool” son of a land baron. The baron’s grandfather was a peasant who had built a brewery, and the King was so impreseed he gifted him with a title and lands. And ever since, the family had enjoyed the rents and wealth that the land produced, courtesy of the peasants who actually worked it.

    The point was to challenge the absurdity of inherited wealth, asking why anyone should accept the property claim of the sheep witted fool who had done absolutely nothing to earn anything.

    So why do we accept that the children, grandchildren, and future generations of Presleys should enjoy the neverending wealth that comes from recordings of “Jailhouse Rock”?

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    • So why do we accept that the children, grandchildren, and future generations of Presleys should enjoy the neverending wealth that comes from recordings of “Jailhouse Rock”?

      Until very, very, very recently, the answer was “Somebody’s gonna”.

      Until very, very, very recently, the choice seemed to have been between “the descendants”, “the distributors”, and “the government”.

      Or some combination thereof.

      Arguing over whether we should have included the descendants carries with it the somewhat unpleasant implication that only some combination of the distributors/government should have profited from what the artist created.

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      • Yet the notion that people who were kidnapped from their homes and enslaved, who were clearly due compensation, should have passed those claims onto their descendants seems to offend the people most for strong property rights and most vociferously opposed to the death tax. Why is that, I wonder.

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      • Yes, that’s exactly what I am saying.

        Or at least, we (all of us as citizens) should have a discussion about why and when property rights and inherited wealth are recognized, and when the claims can be mitigated, limited or even extinguished.

        For instance, not long ago, a writer held copyright only for a limited time, then poof, the rights to that property vanished and went into the public domain.

        This is why anyone can write a story about Sleeping Beauty, so long as its not about THAT Sleeping Beauty by Disney, or the other Sleeping Beauty by Anne Rice.

        Why should it not be the same for the descendants of farmers and factory owners, that after a generation or two, the wealth is transferred to the public domain?

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        • “Why should it not be the same for the descendants of farmers and factory owners, that after a generation or two, the wealth is transferred to the public domain?”

          Let’s flip the script and ask why IP should not work that way.

          And–why the weasel words? Why “a generation or two”? Why not right away when you die?

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          • Why indeed.
            How did we decide to create copyrights in the first place, then increase their length into now near-perpetuity?

            How did that happen? Was there scientific discovery or something?

            Basically it happened the same way that all rights were created- “we” kinda, sorta, felt intuitively that these things exist, and that it would be a good idea if they were given the protection of the state.

            So when and where state recognition of property rights evaporate, should be the end result of along conversation/ debate/ argument among citizens.

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              • That link is a perfect place to start. Perhaps of interest to Chip too may be the actual motivations behind the Statute of Anne. This – being effectively the inception of Copyright in the modern sense – was enacted by King Henry during the English Reformation to further validate his detachment from the Pope and the Vatican due to their rejection of his new marriage. It was done to limit the freedom of the distribution of information from them. So somewhat ironically, the birth of copyright wasn’t about protecting the author at all, but rather about shutting him up. Nor did it have much to do with natural rights but rather its utilitarian value to holders of absolute power. Obviously it has evolved into something more complicated philosophically and beneficial to everyone in many ways, as the link above details.

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              • You want me to expound and speechify even more?
                Jesus man, what sort of masochist are you?

                Seriously, I use the word “conversation” literally, as in, this isn’t an attempt to create some sort of Rawlsian General Theory of Justice Regarding Property, whereupon I construct an intellectual theory of logic and supporting evidence.

                I mean we as a society debate this, using our priors and biases and intuitions and reach a consensus about property, inheritance, patent and copyright.

                I’ve kind of laid down my opening markers:
                1. That property rights grow weaker with size, and somewhere north of a billion dollar value, all wealth can be justly confiscated;
                2. That inheritance, like patents, have a limited shelf life, and after a couple/ few generations the wealth can be confiscated into the public domain.

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                • “That property rights grow weaker with size, and somewhere north of a billion dollar value, all wealth can be justly confiscated”

                  Why would a vegetarian come into a discussion about the proper way to cook a steak?

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    • The general answer: to encourage people to be Presleys etc.
      The more specific answer: because the laws and financial controls necessary to interdict the transmission of privilege from one generation to the next are politically unpopular and highly difficult to enforce.
      And another general answer: Because the succeeding generations that follow rich successful people have proven highly adept at diffusing and dispersing the wealth back into the general populace. Thus the phenomena of annoyed successful people putting their wealth into trusts and other such vehicles thus both creating jobs, investment and also straight jacketing their descendants to a degree.

      But that being said intellectual property rights specifically could certainly bear some considerable rejiggering without losing their core incentive purposes.

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      • There are generally two attitudes I’ve seen toward the concept of an inheritance.

        “An Inheritance is something that you get from your parents.”
        vs.
        “An Inheritance is something that you leave to your children.”

        If you see an inheritance as a lot more like the former, you’re a lot more likely to resent it.
        If you see an inheritance as a lot more like the latter, you’re a lot more likely to respect it.

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          • When I was young enough to encounter trustafarians not yet old enough to know to keep that information tamped down tight, I resented the hell out of them.

            Now I find myself sad that the only stuff I’ll be likely to leave my nieces/nephews is a paltry sum that isn’t likely to pay for even a year’s worth of college for their own kids and a buttload of reading material and, if I haven’t effed up, the inclination to read it.

            Out of all that, the only thing likely to be worth anything after a year or so is that last one.

            But I find myself vaguely offended at the thought that I shouldn’t give the paltry sum to the nieces/nephews (or that they should be taxed on the reading material).

            I suppose I see the argument that they don’t “deserve” the paltry sum or the books or whatever. But I don’t see the fact that they don’t “deserve” these things as a reason that I should be prevented from giving these things to them.

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            • If I do my job right, what I will leave to my son is the ability to be his own success, such that whatever real property I may have to pass on will have more emotional value, than economic.

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              • Oh, yeah. I hope to fully infuse my nieces/nephews with all sorts of intangible capital. I’m already doing the hell out of that.

                I’d just also like to give them some dang money. Maybe figure out a way to hide it from them until they hit 35 or something.

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                • You can. You’d be surprised how easy it is, particularly with the collusion of their parents. Suffice it to say there was a really big demand for financial services that amounted to “My relative gets some of my money at a time and a manner that I define specifically” is very big and you don’t have to be loaded to avail yourself of them.

                  But I earnestly hope you don’t need to worry about such things for a long long time.

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                  • That’s essentially what my parents did. When I was out of work, the income from the trust they set up for me, together with unemployment, basically allowed me to maintain the lifestyle of an urban professional until I could land another position. If I sometime soon (1) marry a woman who is (2) young enough to have children with me, those children will be in the same situation. It’s explicitly set up so that no one can buy Lamborghinis, but if there are e.g. unexpected medical bills, there’s a way to draw from principal.

                    And if I don’t marry, looks like Doctors Without Borders or someone like them will be getting a nice donation in 25-30 years.

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        • Jaybird:
          There are generally two attitudes I’ve seen toward the concept of an inheritance.

          “An Inheritance is something that you get from your parents.”
          vs.
          “An Inheritance is something that you leave to your children.”

          You’re missing a third option, which is to view it as just another example of a market exchange or transaction, albeit a seemingly one-sided example.

          An inheritance is simply a particular example of a gift. And a gift is just a particular example of a transaction. You may be wondering what the other side of the transaction consists of, what is being “purchased”, and my best answer would be “whatever.” People do things for various reasons and gifting is no different. Most likely it’s just a warm feeling of satisfaction or maybe it’s a cynical ploy to incur an obligation of some sort.

          If you see an inheritance as a lot more like the former, you’re a lot more likely to resent it.
          If you see an inheritance as a lot more like the latter, you’re a lot more likely to respect it.

          It’s not necessary to infer resentment on those who propose to tax inheritances, even if such tax amounts to confiscation (admittedly a bit heavy-handed IMHO). One instrumental or prudential justification (propounded by one or another of the Saintly Founders, I forget which one) is to forestall the formation of dynastic wealth on the theory that such dynasties of wealth will inevitably translate into political dynasties mirroring royalty. Considering such families as the Roosevelts, the Bushes, the Kennedys, and possibly now, the Clintons, such concerns wouldn’t seem to be totally unreasonable.

          But more generally the government imposes taxes on various types of transactions to fund its operations: sales taxes, income taxes, tariffs and duties, property taxes, excise taxes, etc, and even gift taxes. You may not like it, but there it is. IIRC, ordinary gifts are tax-free up to something like $10K after which they are taxed as regular income. Now if an inheritance is just another kind of gift and a gift is just another kind of transaction then it seems to me that it falls to the person proposing that inheritances should pass tax-free to show their work. I’m not saying such justification is necessarily lacking but just that as long as transactional taxation is accepted in general that the case must be made for the exception.

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          • I can’t abstract myself that much.

            I can only imagine myself getting one or giving one.

            I’ve been blessed to be able to transition from wishing that I would get one to wishing that I could give one, though. Fingers crossed.

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          • ” if an inheritance is just another kind of gift and a gift is just another kind of transaction then it seems to me that it falls to the person proposing that inheritances should pass tax-free to show their work.”

            That requires you to start from a position of “everything should be taxed 100%, and if you want less than 100% tax then you need to justify it”.

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    • Even the Soviet Union and other Communist countries found out that they couldn’t get away with a literal 100% estate tax and had to allow people to pass down tangible personal property. A less authoritarian government dedicated to the ideas of private property, freedom, liberty, and the rule of law isn’t going to impose a draconian estate tax system designed to prevent things like the above example in About A Boy.

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      • In his papal encyclical Rerum Novarum Pope Leo laid the groundwork to support the moral basis for property rights.
        The rights were grounded ironically, in the nexus between the laborer and the fruits of his work.

        And most of us, aside from the most radical Bolshevik, can easily grasp the intuitive righteousness of lets say, a worker who through the work of his hands builds a farm and passes it on to his son.

        There is the immediacy of the connection, the modesty of its size, that makes most of us accept it. This is why the opponents of the “Death Tax” use the fabled family farm, rather than Paris Hilton as their poster child.

        But once you get a couple generations out, and the connection to the original wealth becomes tenuous, the intuitive righteousness becomes strained and contrived.

        Why exactly, should Hearst heirs be so wealthy? How does this benefit us, again?
        They have a rightful claim to wealth produced a century ago by George Hearst, but a Native American has no claim to the gold from the Black Hills of Dakota?

        Why?

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        • But once you get a couple generations out, and the connection to the original wealth becomes tenuous, the intuitive righteousness becomes strained and contrived.

          I think you’d need to find an objective way to define working property/capital in such a way that if the grandchildren of the original farmer are still working the land, they don’t face a threat of having their livelihood stripped from them.

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          • I think the case could be made that if the property/capital is directly in use as a ‘personal means of production’ it should not be stripped. This allows for the fruits of ones labor, but still limits the notion of production to owner/operators.

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        • How does this benefit us, again? They have a rightful claim to wealth produced a century ago by George Hearst, but a Native American has no claim to the gold from the Black Hills of Dakota?

          I work for a company whose biggest owner is the Hearst , so personally I am glad that capital was able to remain in the form of a working corporation instead of being sold off to pay an inflated tax bill. But call me crazy cause I like having a job and all.

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          • j r: I work for a company whose biggest owner is the Hearst , so personally I am glad that capital was able to remain in the form of a working corporation instead of being sold off to pay an inflated tax bill.But call me crazy cause I like having a job and all.

            I spent years working for Hearst-Argyle, later just Hearst, television. It’s arguably the best company in local television (not a high bar, I know). But that company was built despite the Hearst heirs, not because of it, and the capital would have been available with or without them.

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        • Why exactly, should Hearst heirs be so wealthy? How does this benefit us, again?
          They have a rightful claim to wealth produced a century ago by George Hearst, but a Native American has no claim to the gold from the Black Hills of Dakota?

          Why would a person have some sort of moral claim to wealth that merely happens to be under the ground near the place where they were born? A poor child born in Florida presumably has no claim to the Black Hills. Why would a poor child born 30 miles from the Black Hills have a claim?

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          • “merely happens to be under the ground near the place where they were born”…isn’t that the same as saying “the land that belonged to them”?

            And you are asking why they are entitled to it?

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            • If you want to start asking why parents should be able to leave wealth to their children because it’s so self-evident that the children don’t deserve the wealth, you should not feign outrage when people ask questions why someone is entitled to something merely because they were born in the vicinity of a particular patch of land.

              I mean, look at this premise: “This land belongs to me because I was born here.”

              That way madness lies.

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              • I think he’s going for some sort of half-assed Socratic dialogue where we are forced to defend the concept of “property” and, in so doing, either define it in such a narrow way that IP no longer fits into it, or else define property out of existence entirely.

                Failing that he’ll use the tack of “well all property is fiction really so we can just make up whatever rules we want for it”, and jump to “…and therefore we can make up different ones for IP”, and he’ll just sort of not talk about the reasoning needed to justify the latter statement.

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                • This whole thing where we have to straddle between “arguing as if we’re the first people who have ever argued this” and “arguing as if we’ve done the required reading” is a major pain the bee-you-tee-tee.

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                • IP is massively different than tangible property. It has been since the very begining.

                  IP is a statutory granted monopoly, the last remainant of when kings would sell monopolies to raise revenue. They are an economic reward for doing something socially useful, whose intention is to increase the amount of intellectual material that ends up in public domain (except trademarks, those are a consumer protection mechanism).

                  The most economically efficient place for copyrightable or patentable material to be in is the public domain (unlike tangible property, ideas are non-rivalous). The IP right is so that people are encouraged to create more of it.

                  This is why the recent trend towards copyright term extensions is abominable. The existing terms are already far to long, and only the narrow interests of a small economic elite are served by making them any longer. Tacking 20 years to the end of copyright term does nothing to promote new works, it just preserves a profit margin to those who have already been amply rewarded for their work.

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                  • IP is massively different than tangible property. … IP is a statutory granted monopoly, the last remainant of when kings would sell monopolies to raise revenue.

                    *All* property is statutory granted monopoly. That’s what the entire concept of legal ownership is.

                    IP differs from other property rights in that it is the owner’s ability to restrict people from ‘doing *specific* things to *any* real object that look like things the owner previously did’ instead of owner’s ability to restrict people from ‘doing *any* thing to *specific* real objects that we have declared the owner owns’.

                    The most economically efficient place for copyrightable or patentable material to be in is the public domain (unlike tangible property, ideas are non-rivalous).

                    I suspect, strictly speaking, the most economically efficient place for any specific piece of property, at any specific time, is publicly usable. The entire concept of ownership is the ability to bar others from using something, so presumably, if that *wasn’t* possible, it would be used more. (It might be used less efficiently…but it also might be used more efficiently! We can’t tell that in advance.)

                    Of course, if all property is publicly usable, there is functionally no such thing as the economy to start with. Likewise, if someone knew a specific thing would be publicly usable, less work would go into it.

                    This is why the recent trend towards copyright term extensions is abominable.

                    Actually, the most abominable part of all that is the *retroactive* extension, which can’t be justified at all, under any logic whatsoever. The other stuff is at least debatable. I mean, it’s well past where any *intelligent* person would put it, but it is *hypothetical* debatable. But the retroactive extension seems to assume people can make retroactively things after they are dead if we reward them enough. Which is…not how time functions.

                    The existing terms are already far to long, and only the narrow interests of a small economic elite are served by making them any longer. Tacking 20 years to the end of copyright term does nothing to promote new works, it just preserves a profit margin to those who have already been amply rewarded for their work.

                    Additionally, automatic copyright is not a good idea. Or at least, not *long* automatic copyright.

                    I have proposed, in a past, that we give everyone, say, 10 years of automatic copyright. At the end of that, you want another 10 years, you pay $1 to register. (And just like now, if you want to sue someone, you have to to register before that. But now as a bonus you get another ten years.) At the end of that, you want another 10 years, you pay $10. End of that, it’s $100 for another ten years…

                    And you can go as long as you want. If Disney wants to pay a hundred million dollars to keep Steamboat Willie out of the public domain in 2018 (It was released in 1928.), they should feel free to do so.

                    This is sorta like how it originally was supposed to work. You paid money to register, then you paid more for an extension. In fact, my terms are, at the low end, much *nicer* than the original terms, and solve that annoying ‘Forgot to put a copyright indicator on the work, it’s now public domain’ problem that has resulted in a lot of works *immediately* falling into the public domain, which I think we all agree is a bit unfair.

                    And all this money should go directly to the National Endowment for the Arts and other programs to support creators. We take the money used to keep stuff out of the public domain, we use it to create more stuff.

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              • Oh, so you were just being sarcastic, turning my point around.
                OK, no worries, I missed the signal.

                I don’t believe any land claims are “self evident”.
                That’s my point. Land claims, and the resulting claims to the wealth, are constructed by consensus and negotiated agreements.

                So I would like to renegotiate the consensus.

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                • It wasn’t sarcasm. It was an honest and straightforward question.

                  I’ll grant that I knew(ish) the answer to it when I asked it, though.

                  I’m down with you renegotiating the agreements. I’m just under the impression that you’re going to have to appeal to concepts that are exactly as constructed as the ones you’re dismissing as being disposable because they’re constructs.

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                  • I agree that we would be exchanging one set of constructs for another.
                    And I don’t even think constructed things are trivial or “disposable”. They are important, and meaningful.

                    Looking at the exchange between Brent and David TC above, its apparent that while some people consider the IP rights to “Jailhouse Rock” solid, settled, naturally occurring rights that can’t be questioned, the recording industry itself doesn’t.

                    It sees property rights as flexible, negotiable, subject to constant discussion and realignment.

                    To their favor, of course!

                    So the idea that the claim on wealth created by a silver mine in 1890 can be renegotiated today doesn’t strike me as far fetched or radical.

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  6. “If the law is to enjoy any actual success in its goal to mitigate piratical action it needs to realign its focus from the indices to the actual software.”

    Meh. Good luck with that. It’s pretty well established, I think, that you need evidence both extremely specific and extremely voluminous to get the provider of a tool in trouble for illegal usage of that tool.

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  7. What I don’t quite understand is why some companies are so resistant to the idea of working with a fan base instead of against it.

    The modern tech economy has discovered or come to the conclusion that the modern economy rests on fermium stuff. You have a base product but extras cost money. Pokémon Go is like this. So are many modern dating apps.

    I like BBC history documentaries*. These documentaries are often very hard to watch outside of the UK unless someone uploads it to YouTube. The BBC seems more interested in taking these down instead of creating a YouTube channel or streaming service that has some commercials but lets people watch BBC documentaries. BBC America tends not to show this stuff.

    Now BBC documentaries might be an odd choice because they are for a niche audience of nerds.

    *Unlike History Channel docs, BBC docs are done by real academics and not designed to insult your intelligence.

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    • The BBC has an inconsistent policy towards these things. Sometimes the let entire series stay on Youtube, sometimes parts of series, and other times they fight like mad to get them off. It boils to money. There might be some audience for BBC documentaries outside of the UK or other old, foreign, or obscure media but not to make a profit on. There is also an element of patriotism involved. American media is still very dominate globally and a lot of media companies outside the United States have something that this is for the home audience only attitude.

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    • S’true, the BBC’s inherent schizophrenia complicates the rights issue I commented on above.

      As far as series I’m concerned about: QI doesn’t market to the US, and aggressively prunes pirated content periodically, Only Connect is so niche even in the UK that they’re happy if anyone watches it at all, Doctor Who saturates the airwaves wherever they can to the point where no one needs look to piracy, and Top Gear actually releases about 10-30% of its broadcast content freely as teasers.

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  8. I wish you had said more about the “Similar departures from House of Lords’ judgments to create new forms of liability have happened in the past” part.

    As a non-lawyer, my intuitive sense here is that software is no more or less special than any other kind of tool. If my car manufacturer is not liable if I use my car to transport stolen physical goods to someone, why should my software producer be liable if I use a program to unlawfully transfer data to someone?

    The only possible argument I can imagine is that some software is just overwhelmingly designed to facilitate unlawful data transfers, perhaps similar to arguments people make that gun manufacturers should be liable for murders committed with their products. I find that an *extremely* unconvincing argument when applied to software.

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    • I wish I could have too but the article was already stretching quite a bit.

      The analogy you do make is quite accurate and that is part of the theoretical difficulty behind such proposals. Conversely though, one may suggest that rather than a ‘car’ (whose positive utility vastly outweighs its negative), BitTorrent software may be more akin to drugs – say morphine for instance – that are extremely useful in certain circumstances (e.g. as painkillers in hospitals) but also extremely dangerous when freely available and therefore need to be controlled. BitTorrent code infact forms part of the foundation of many social networking platforms, most notably Facebook. But in suggesting BitTorrent is akin to drugs the dilemma becomes equating the health/physical ramifications of drug abuse with the economic ramifications of piracy. But I am not so sure if this is a difference in type or in degree or if this is actually the criteria determining whether the laissez-faire availability of an asset requires legal intervention.

      It is an intriguing inquiry that your analogy has raised. Thank you.

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      • I’m real skeptical of pushing that kind of standard: potential harm as grounds to restrict code. And the idea of some sort of balancing test for potential harm vs potential benefit strikes me as a real good way to kill innovation.

        On a fundamental, theoretical level, what you’re talking about is killing speech or censoring ideas because they have the potential to cause harm. Code’s just another type of speech.

        On a more practical level, the bittorrent protocol has plenty of positive uses. It allows for mass distribution of anything. At the risk of coming off as a living cliche, I actually do use bittorent to download linux distros. Doing so is faster than if I had to use a 1:1 connection with the distro’s release team, it has less chance for a corrupt download (because several sources for each bit, if I take a network hit somewhere along the way I have alternate source), and it is much cheaper for the distro’s releasers, because the entire ~1 gig upload doesn’t come from their bandwidth.

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  9. I’m disappointed that the author has accepted the term piracy for this, which does nothing but aggrandize the crime. The correct term is copyright theft.

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    • No, the correct term is copyright infringement. An intellectual property right isn’t a normal property, its a statutory monopoly right granted for public policy reasons.

      This might seem like a quible, as intellectual property infringement does resemble theft, but it is very much its own thing with its own characteristics and lumping it under the general term “theft” does violence to these important distinctions.

      This distinction is particularly important to keep in mind in the common law intellectual property tradition which is mostly rooted in long-term economic efficiency. In a very real sense, intellectual property monopolies are granted in the interest of there being a much bigger collective common domain in the future. Approaches which lose sight of this basis tend to cause the system to break down.

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    • As far as semantic quibbles go, Brent F’s elaboration ?? is great.

      However if you think this is aggrandising the crime, wait till you read (perfectly valid and logical) think pieces about how “piracy”, “copyright infringement”, and whatever else is subject to those labels actually benefit studios, new filmmakers, audiences, the industry, and society as a whole…

      No better way to aggrandise a crime than to legitimise it.

      But to return to the semantic quibble – theft in a legal sense only relates strictly to tangible property so that term is inapplicable here. Piracy to would equally be inapplicable but it nonetheless has been used regarding copyright infringement for centuries because it does encapsulate the very sentiment you hold – that of “criminal robbery”.

      Therefore, the term piracy is perfectly valid for the very reasons you suggest that it isn’t. This may seem circular and convoluted which is precisely why I don’t particularly enjoy semantic quibbles most of the time.

      This one is alright.

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      • The distinction is important because there has been a campaign by economically interested parties to miscast IP rights as normal property (thus something subject to thievery).

        I think we can often see the effects of said campaign when we begin to see libertarians start calling for the extension of government mandated monopolies for the benefit of rent-seekers. Or on the flip side, infringers justifying their infringement by how what they did didn’t resemble normal theft.

        Intellectual property is a pretty specialised area of law and public policy, so its understandable that most people aren’t up on the nuances. However, those nuances often lead to important practical policy effects, so they form an important part of informed discussion on the topic.

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        • That is very true. Oh I wasn’t suggesting the semantic debate about the appropriate term for copyright infringement was unimportant.

          On the bright side, at least in the US, the distinctions you draw are being enforced legally (e.g. Dowling v US – 1985, and the Hotfile trial).

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