The Demise of Ownership: Digital Content in the Age of Licensing

The UCLA Luskin Center for Innovation hosted a panel discussion on November 5, exploring the concept of content ownership in the digital age. This second event of the Public Policy for Innovation in the Digital Age series featured representatives from the Digital Media Association (DiMA), Mitchell Silberberg & Knupp LLP (MS&K), the Electronic Frontier Foundation (EFF), and the UCLA Library. Approximately 100 copyright and licensing experts, trade organizations, attorneys, students, and professors convened to learn from some of the world’s experts on digital content licensing and ownership.

John Villasenor, Director of the Digital Technologies Initiative at the Luskin Center, moderated the panel and provided context for the discussion. He explained that when consumers ‘buy’ digital content delivered over the Internet, they are not taking ownership of the downloaded copy of that content; instead they are buying a license. Thus, while a print subscriber to the New York Times receives a physical copy of the newspaper, and owns that copy, a consumer purchasing a song on iTunes only obtains a license to that song, and does not own a copy of the content. Panelist Lee Knife, Executive Director at DiMA, explained that for many users, a license feels a lot like ownership. Many people unfamiliar with the topic may be surprised to realize that they do not own their iTunes library, since they paid for it, but may not be bothered by this since all they want is access to the material. But for some users, licensing isn’t enough.

Panelist Corynne McSherry, Intellectual Property Director at EFF, a digital civil liberties group that advocates for the preservation of user rights to access cultural works, believes that licensing can restrict access to the creative commons. “People don’t want to just read books, view movies, or listen to music—they want to tinker, change, re-mix and adapt [cultural works].” McSherry explained that without ownership, consumers do not have the right to transfer the product or create secondary markets with lower-cost options. Additionally, she noted, access to licensed content can be tracked in ways that raise privacy concerns.

The panelists also discussed whether copyright law should be modified to create a digital first sale doctrine, which would allow owners (as opposed to licensees) of legitimate, digitally acquired copies of copyrighted content to loan, resell or otherwise dispose of those copies. The panelists expressed caution—and in some cases strong opposition—to changing the law in this manner.

Lee Knife argued against such a change, explaining that while there are some parallels between the digital and analog worlds, in some respects they are fundamentally different. Under existing law, a purchaser of a lawfully made cassette tape, CD, or DVD has the right to re-sell that physical manifestation of the content, but does not have the right to extract the content and resell it separately. Of course there have always been people who circumvent the law and make and sell pirated copies. But in the days of analog content, that process took time, energy, and money, and the second generation copies were of inferior quality. With digital technology, it is possible to make multiple, instantaneous and perfect copies. Knife said that a dividing line must be drawn between digital and analog, and that the same laws should not be used to govern both.

Panelist Steven J. Metalitz, Partner at the Washington, D.C. firm MS&K, predicted that if a digital first sale doctrine were adopted, copyright owners would raise prices for all material because they would assume that the first transaction would be the only transaction—everyone would get charged the premium price. McSherry also sounded a note of caution regarding digital first sale: “First sale was organized around the notion that people should only be able to access one copy of the work at a time. Distribution and reproduction are extremely difficult to separate…we have a first sale right that’s organized around protecting distribution and doesn’t really grapple very intelligently anymore with reproduction.”

Libraries experience copyright from both sides, as they both acquire and provide access to content. Panelist Angela Riggio, Head of Scholarly Communication and Licensing at the UCLA Library, explained that libraries need to provide 24-7 access to content, and, when that content obtained via a license (as opposed to through purchase of a physical copy of content such as a book), the library needs to ensure perpetual digital access to content if the publisher goes out of business. Riggio also explained that libraries are both licensors and licensees, noting that they areas the “steward of the cultural record, so licensing is necessary but it poses a challenge to their mission.”

Other issues concerning policy and digital innovation will be explored at the event “Digital Media in the Age of the Cloud” on December 3^rd featuring representatives from Google, Microsoft, Warner Bros. Entertainment and more. Click Here for details and to register.