Laws to Thwart Electronic Theft Miss the Point

Judging by the fury they generate among executives in the computer software, film and movie industries, one might think the “pirates” who illegally copy software programs, CDs and films are literally running around raping and looting.

Industry lobbying groups are obsessed with the piracy problem. Movie companies have proven willing to do the equivalent of burning their own ships to keep pirates from boarding. There’s precious little consideration of the profound changes in the nature of intellectual property being brought about by the Internet.

Now Congress, happy to do industry an easy favor, has weighed in with a pointless new anti-copying law, one that’s sure to have no impact on the problem at hand and amounts to an open invitation to selective prosecution.

The legislation makes it a felony, punishable by up to five years in prison, to make or possess unauthorized copies of copyrighted works with a retail value of more than $2,500. It now awaits President Clinton’s signature.

It’s already a crime to copy software for financial gain, so the new law is not aimed at commercial pirates here and abroad who sell bootleg videos, CDs and computer software. Rather, it’s directed mainly at teenage computer hackers who steal software to impress their friends.

In fact, the bill was designed specifically to eliminate what’s become known as the “LaMacchia exception,” named for David LaMacchia, who was busted in 1994 for distributing stolen software from a computer at MIT, where he was a student. Since LaMacchia was giving the software away, not selling it, a federal judge threw out the criminal charges against him; not-for-profit copyright violations have long been the province of civil law.

Now, I’m not here to defend the hacker subculture surrounding “warez,” as purloined software is known. While I don’t buy what one of LaMacchia’s lawyers dismissed as the “reefer madness” theory of hackers--let them steal software now and they’ll progress to more serious crimes later--I also have no patience for the juvenile arrogance, vanity and idiotic power-tripping that characterize the warez scene.

Moreover, as an intellectual-property producer myself--you’re reading my product right now--I think creators should have control over the distribution of their work. But I also believe that emphasizing a law enforcement approach to protecting copyrights will be self-defeating at best and dangerous to intellectual freedom at worst.

There is one absolutely foolproof way to prevent copyright violations: Take the original copy of the work in question, lock it in a safe and never let anyone see or hear it. If the work is distributed at all, there is some chance it will be copied. The question at the outset, then, involves the risks of copying versus the rewards of distribution.

Among creative professionals and the industries that employ them, the general view is that digital technologies in general, and the Internet in particular, create dangerous new opportunities for intellectual-property theft.

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If selling--or giving away--software programs or CDs requires nothing more than an Internet Web page, and acquiring them is as painless as a mouse click, then there’s bound to be more piracy. True enough.

The flip side, though, is that for precisely the same reasons, the Internet presents dramatic new distribution opportunities. The aim of the software, music and record industries is to take advantage of the latter without suffering from the former.

But that, quite simply, is an unattainable goal. Law enforcement agencies are not going to spend a lot of energy chasing down small-scale bootleggers, nor should they. It’s time-consuming and technically difficult, and there are a lot of higher priorities.

At most, the occasional prosecutor will see headline opportunities in cracking down on Internet crime, leading to arbitrary and ultimately meaningless enforcement.

The technical solutions to piracy--encryption and various elaborate mechanisms being developed to lock data into protected “envelopes” that can be opened for a fee--are not without their downside, either. Most technologies that make it harder for pirates also make it harder for paying customers; that’s why the software industry abandoned copy protection long ago.

For another example of the trade-offs involved, consider the debacle that has arisen from the movie industry’s effort to introduce a digital videodisc system. After years of bickering, the industry agreed on a standard known as DVD, but most studios declined to support it fully until a copy protection scheme could be put in place.

That stalled acceptance of the technology, and earlier this year a competing system known as Divx was introduced. It’s designed around copy protection. But the result is likely to be massive confusion, and customers are sure to stay away in droves.

In the name of copy protection, movie companies are thus undermining what they themselves believe will be a big new opportunity. And they really ought to know better: They tried to block the introduction of the VCR on copy protection grounds, and they’ve benefited immensely from their failure to do so.

Computer industry pundit Esther Dyson suggests that even without copying, intellectual property as traditionally defined is declining in value because there’s too much of it and people have limited time to consume it. Selling individual copies for a fee will thus become less important vis-a-vis other ways that creators make money--live performance, for example, or consulting.

Even if you don’t buy that abstract concept, there’s an easy calculus in many situations that broad distribution, and the copying that goes with it, will ultimately promote sales rather then undercut them. Most people are honest and don’t buy stolen goods. In many cases, those trafficking in stolen software wouldn’t be buying it anyway. And illegally posting a song or movie clip on a Web site can be viewed as a kind of marketing.

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In light of all this, I think what people are really worked up about is not the loss of money but the loss of control. It offended people’s sensibilities that LaMacchia got off: You can’t just have people stealing with impunity! It’s a threat to law and order.

It’s the very existence of the increasingly slick and accessible warez sites, not the business impact of them, that enrages software companies. The same goes for Web sites that post music clips or unauthorized TV stills: Often they are fan sites explicitly promoting the shows, but they’re outside the control of the entertainment companies.

This loss of control, though, is an inherent aspect of the Internet phenomenon. Creators and their agents are going to have to get used to it. And if they’re going to prosper in the digital age, they’re going to have to find more creative responses than calling in the FBI.