: Code 2.0

The Promise for Intellectual Property in Cyberspace

The Promise for Intellectual Property in Cyberspace

It all depends on whether you really understand the idea of trusted systems. If you dont understand them, then this whole approach to commerce and digital publishing is utterly unthinkable. If you do understand them, then it all follows easily.

Ralph Merkle, quoted in Stefik, Letting Loose the Light (1996)

In what we can call the first generation of digital technologies, content owners were unable to control who copied what. If you have a copy of a copyrighted photo rendered in a graphics file, you could make unlimited copies of that file with no effect on the original. When you make the one-hundredth copy, nothing would indicate that it was the one-hundredth copy rather than the first. And as weve described again and again, in the original code of the Internet, there was nothing to regulate how or to whom copyrighted content was distributed. The function of copying as it was developed by the coders who built it, either in computers or networks, aimed at copying not at copying with specified permissions.

This character to the function copy was not unique to cyberspace. We have seen a technology that presented the same problem, and Ive already described how a solution was subsequently built into the technology[13]. Digital Audio Tape (DAT) technology was thought to be a threat to copyright owners. A number of solutions to this threat were proposed. Some people argued for higher penalties for illegal copying of tapes (direct regulation by law). Some, such as Richard Stallman, argued for a tax on blank tapes, with the proceeds compensating copyright holders (indirect regulation of the market by law). Some argued for better education to stop illegal copies of tapes (indirect regulation of norms by law). But some argued for a change in the code of DAT machines that would block unlimited perfect copying.

The tax and code regulators won. In late 1992, as a compromise between the technology and content industr ies, Congress passed the Audio Home Recording Act. The act first imposed a tax on both recorders and blank DAT media, with the revenues to be used to compensate copyright holders for the expected copyright infringement enabled by the technology. But more interestingly, the Act required manufacturers of DAT technology to include a Serial Copy Management System, which would limit the ability of DAT technology to copy. That limit was effected through a code inserted in copies made using DAT technology. From an original, the technology would always permit a copy. But from a copy made on a DAT recorder, no further digital copy could be made. (An analog copy could be made, thus degrading the quality of the copy, but not a perfect digital copy.) The technology was thus designed to break the copy function under certain conditions, so as to indirectly protect copyright owners. The net effect of these two changes was to minimize any harm from the technology, as well as to limit the functionality of the technology where it would be expected that functionality would encourage the violation of copyright. (Many think the net effect of this regulation also killed DAT technology.)

Something like the same idea animated Stefiks vision[14]. He was not keen to make the quality of copies decrease. Rather, his objective was to make it possible to track and control the copies of digital content that are made[15].

Think of the proposal like this. Today, when you buy a book, you may do any number of things with it. You can read it once or one hundred times. You can lend it to a friend. You can photocopy pages in it or scan it into your computer. You can burn it, use it as a paperweight, or sell it. You can store it on your shelf and never once open it.

Some of these things you can do because the law gives you the right to do them you can sell the book, for example, because the copyright law explicitly limits the copyright owners right to control your use of the physical book after the first sale. Other things you can do because there is no effective way to stop you. A book seller might sell you the book at one price if you promise to read it once, and at a different price if you want to read it one hundred times, but there is no way for the seller to know whether you have obeyed the contract. In principle, the seller could sell a police officer with each book to follow you around and make sure you use the book as you promised, but the costs of this control would plainly exceed any benefit.

But what if each of these rights could be controlled, and each unbundled and sold separately? What if, that is, the software itself could regulate whether you read the book once or one hundred times; whether you could cut and paste from it or simply read it without copying; whether you could send it as an attached document to a friend or simply keep it on your machine; whether you could delete it or not; whether you could use it in another work, for another purpose, or not; or whether you could simply have it on your shelf or have it and use it as well?

Stefik describes a network that makes such unbundling of rights possible. He describes an architecture that would allow owners of copyrighted materials to sell access to those materials on the terms they want and would enforce those contracts.

The details of the system are not important here (it builds on the encryption architecture I described in Chapter 4)[16], but its general idea is easy enough to describe. As the Net is now, basic functions like copying and access are crudely regulated in an all-or-nothing fashion. You generally have the right to copy or not, to gain access or not.

But a more sophisticated system of rights could be built into the Net not into a different Net, but on top of the existing Net. This system would function by discriminating in the intercourse it has with other systems. A system that controlled access in this more fine-grained way would grant access to its resources only to another system that controlled access in the same way. A hierarchy of systems would develop, and copyrighted material would be traded only among systems that properly controlled access.

In such a world, then, you could get access, say, to the New York Times and pay a different price depending on how much of it you read. The Times could determine how much you read, whether you could copy portions of the newspaper, whether you could save it on your hard disk, and so on. But if the code you used to access the Times site did not enable the control the Times demanded, then the Timeswould not let you onto its site at all. In short, systems would exchange information only with others that could be trusted, and the protocols of trust would be built into the architectures of the systems.

Stefik calls this trusted systems, and the name evokes a helpful analog. Think of bonded couriers. Sometimes you want to mail a letter with something particularly valuable in it. You could simply give it to the post office, but the post office is not a terribly reliable system; it has relatively little control over its employees, and theft and loss are not uncommon. So instead of going to the post office, you could give your letter to a bonded courier. Bonded couriers are insured, and the insurance is a cost that constrains them to be reliable. This reputation then makes it possible for senders of valuable material to be assured about using their services. As Stefik writes:

with trusted systems, a substantial part of the enforcement of a digital contract is carried out by the trusted system. The consumer does not have the option of disregarding a digital contract by, for example, making unauthorized copies of a work. A trusted system refuses to exercise a right that is not sanctioned by the digital contract[17].

This is what a structure of trusted systems does for owners of intellectual property. It is a bonded courier that takes the thing of value and controls access to and use of it according to the orders given by the principal.

Imagine for a moment that such a structure emerged generally in cyberspace. How would we then think about copyright law?

An important point about copyright law is that, though designed in part to protect authors, the control it was designed to create was never to be perfect. As the Supreme Court noted, copyright protection has never accorded the copyright owner complete control over all possible uses of his work.[18] Thus, the law grants only particular exclusive rights, and those rights are subject to important limitations, such as fair use, limited terms, and the first sale doctrine. The law threatened to punish violators of copyright laws and it was this threat that induced a fairly high proportion of people to comply but the law was never designed to simply do the authors bidding. It had public purposes as well as the authors interest in mind.

Trusted systems provide authors with the same sort of protection. Because authors can restrict unauthorized use of their material, they can extract money in exchange for access. Trusted systems thus achieve what copyright law aims to, but they can achieve this protection without the law doing the restricting. It permits a much more fine-grained control over access to and use of protected material than the law permits, and it can do so without the aid of the law.

What copyright seeks to do using the threat of law and the push of norms, trusted systems do through the code. Copyright orders others to respect the rights of the copyright holder before using his property; trusted systems give access only if rights are respected in the first place. The controls needed to regulate this access are built into the systems, and no users (except hackers) have a choice about whether to obey them. The code complements the law by codifying the rules, making them more efficient.

Trusted systems in this sense are a privatized alternative to copyright law. They need not be exclusive; there is no reason not to use both law and trusted systems. Nevertheless, the code is effectively doing the work that the law was designed to do. It implements the laws protection, through code, far more effectively than the law did.

What could be wrong with this? We do not worry when people put double bolts on their doors to supplement the work of the neighborhood cop. We do not worry when they lock their cars and take their keys. It is not an offense to protect yourself rather than rely on the state. Indeed, in some contexts it is a virtue. Andrew Jacksons mother, for example, told him, Never tell a lie, nor take what is not your own, nor sue anybody for slander, assault and battery. Always settle them cases yourself.[19] Self-sufficiency is strength and going to the law a sign of weakness.

There are two steps to answering this question. The first rehearses a familiar but forgotten point about the nature of property; the second makes a less familiar, but central, point about the nature of intellectual property. Together they suggest why perfect control is not the control that law has given owners of intellectual property. And together they suggest the potential problem that copyright law in cyberspace will create.

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