A friend sent me a link to a YouTube video that is a tutorial and advertisement for a website that provides "unlimited free games" for xbox 360. This was in the context of an ongoing discussion regarding copyright stimulated by recently enacted changes to the copyright act here in New Zealand. He sent the link with the comment that he understands why the industry wants new rules. He suggested I post my reply, so here it is...
It appears that the xbox360 site is copying games in breach of the copyright holders' copyrights. I understand why those copyright holders would want to enforce their copyrights but it is less clear whether any fundamental change in copyright law is necessary, appropriate or beneficial for society as a whole.
The current law, as it is in most countries (164 signatories to the Berne convention and others indirectly controlled via membership in the WTO) allows those copyright holders who's copyrights are being breached to prosecute the owners of the xbox360 site. No change in the law is required. All they have to do is prove the copyright violation in a court and sue for damages, including their legal costs.
There is a potential problem that copyright holders might prove breach of copyright in court but then find that the guilty party does not have sufficient wealth to cover the legal costs of proving their guilt. This same potential exists in any other civil litigation. In general, it is easy for people to cause harm to others that would be monetized to values far exceeding their net worth. Consider, for example, all the people worth less than a few hundred million dollars and without third party liability insurance for a similar amount who continue to engage in activities which create the risk of fires on a large scale (e.g. owning accommodations, driving to work, camping, etc.). There are many other risks that people take that might result in harm to others.
If breach of copyright were deemed to be criminal activity, the copyright holder would be relieved of a large part of the cost of litigation, which would be shifted to the tax payer. This would greatly reduce the downside risk for the copyright holder. If this were done, it may be necessary to ensure public resources were not wasted on frivolous cases as there would be little to inhibit the copyright holder after the cost of litigation were removed. It would also be necessary to ensure reasonable protection of the accused from the harm of false or frivolous accusation.
Some copyright holders are frustrated by the assumption inherent in the current law that people are innocent until proven guilty in a court of law. This requires them to prove who is violating copyright in order to obtain compensation for damages. Some would prefer to be able to obtain the compensation without the burden of proving who is guilty of breaching their copyright or even that their copyright has been breached. They might also appreciate the restoration of the Greek practice of debt slavery, for dealing with those who are unable to promptly pay their presumed damages.
There are two conflicting trends: one is progressively more legal rights being granted to corporate interests, seemingly on the premise that all corporate profit is inherently good for society, and the other is a growing number of people who are willing to disregard those legal rights. The widespread disregard for the legal rights of copyright holders (the evidence presented by some of the more vocal copyright holders suggests that in the case of copyright this disregard is extremely widespread - for example, to the extent that a universally applied tax and payment to the copyright holders has been proposed) combined with the ongoing trends in legislation makes one wonder if in fact we live in a democratic society. The answer may be that there is a growing discrepancy with individuals between their public personae (in which they support strong property rights) and their private personals (in which they disregard property rights). If this is the case, then this moral disintegration of individuals will lead to disintegration of society and widespread strife.
There was a day when one held land at the pleasure of the king and only land holders had rights. Those days were only slightly removed from the days when those most effective in battle had rights at the expense of all others. We have come a long way, in many countries, to current society based largely in the rule of law applied, in principal at least, equally to all. There is a broad consensus with regard to physical property rights, gained through many centuries of experience with various laws.
Modern technology combined with a very rapid pace of change has created a transient situation in which "intellectual property" can have a very high value. Under current regimes, all copyrights and all patents eventually expire, after which the affected information comes to the public domain. At the moment, an unusually high percentage of information relevant to modern life is recently obtained and subject to copyright or patent.
At the same time, modern technology has reduced the barriers to replicating information to levels that are almost completely negligible. For example, the cost of replicating a movie is now less than the cost of the popcorn that one might eat while watching it.
These conflicting trends have been identified for some time. One of the earliest and most profound expressions of the conflict that I know is that of Stewart Brand of the Whole Earth Catalog and other endeavors.
This is layered on top of the more fundamental and persistent conflict between individual and common interests, well defined in Garrett Hardin's Tragedy of the Commons and elsewhere.
There were many revolutions in the course of resolving land rights and other physical property rights to their current state and, I expect, there will be more in the course of resolving a reasonable state or management for intellectual "property" rights. These are not insignificant issues.
My personal inclination is that neither the interests of society as a whole nor the interests of individuals on average are best served by granting long term monopolies on "intellectual property" as a default. Current timeframes for copyright were established at a time when little new arose in the span of 100 years. Patentable inventions are now arising so rapidly that the pace of change is disruptive to society and exceeds the capacity of many to cope. Further extension of monopolies seems to be of dubious benefit and may be harmful.
To the extent that monopolies are granted and enforced for "intellectual property" (i.e. copyrights and patents) the holders of those rights should be subject to property tax on the value of those properties on the same basis that land owners are taxed on the value of the land they own. This would not resolve all the conflicts but it would redress some of them in a way that is easy to manage. One would, of course, always have the option of turning one's "intellectual property" over to the public domain, after which no further taxes would be due.
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