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Feb. 28
Andersen Auditorium, Haas School of Business

3:30-5:00
Impacts of DRMs on consumers
Chris Murray, Consumers Union (moderator)
Julie Cohen, Georgetown Univ. Law School (paper on DRM & privacy)
Joan Feigenbaum, Computer Science, Yale University
Raymond Ku, Seton Hall Law School (paper on private copying)
Anita Ramasastry, Univ. of Washington Law School (paper on consumer protection issues)
Tomas Sander, Hewlett Packard

Chris Murray (moderator): My thunder was stolen because I too hate the word consumer and wish I could get my organization to rebrand itself and eliminate that from its name; it's a bit of an uphill battle. I think its right that consumer sort of connotes passivity: feed us, water us, entertain us and as Larry pointed out what's exciting about the digital future is that that's no longer our role. We are all potential creators, potential innovators, and so I think what we are going to look at today is some of the ways in which having a mental shift in starting with consumers in our DRM designs would maybe get us to rethink a few things. We are going to talk about effects of DRM design on fair use and privacy and perhaps if I can editorialize just a second, I would like to challenge the notion that someone has the proxy of consumers to assume that what they really want is Hollywood content at all cost even it that comes at the cost of general purpose computing and the open architecture of that. So with that, I think we are going to start with Joan Feigenbaum, who is a professor of computer science at Yale. Next, we will have Anita Ramasastry who is the associate director of the Scheidler (sp??) Center for Law, Commerce and Technology and a professor of law at the University of Washington followed by Julie Cohen who is a professor of law at Georgetown University and also on the advisory board of EPIC (Electronic Privacy Information Center) and Raymond Ku who is a professor of law at Seton Hall and is currently visiting at Cornell. Finally, we will have Tomas Sander who is a research scientist at Hewlett Packard. Joan, please kick us off.

Joan Feigenbaum: Okay, so I thought I was going to be able to make some pretty provocative remarks but I think that in one form or another just about everything I was going to say has been said. So let me put a slightly different twist on it. Until about five or six years ago when I started working on an NRC panel that Pam Samuelson was also on and many distinguished people, including many distinguished lawyers, this was the Digital Dilemma Report for those of you who have had read of it, I had never even thought about copyright law. I never had even an inkling of how complex, of what a seething cauldron of controversy it was. I always thought the whole thing was pretty simple. SO over the past few years, since I started that project, I've been looking a lot at copyright law and my perspective is not that of a lawyer, its that of a computer scientist, a consumer to some extent: I have to confess to not being a big consumer of popular entertainment content but I am certainly a consumer of some of it, a user of computers, a consumer and generator of intellectual property and more recently I have been the teacher of an electronic commerce course for non-majors, for Yale undergraduates and we cover online content distribution as a potential form of ecommerce. It's not clear there's that much success yet in that business here but anyway so I just want to make are four remarks on copyright law from these points of view. One of the reasons I was incredibly confused when I first heard about the DMCA and anti-circumvention legislation and exceptions to anti-circumvention legislation, I was thinking geez is that two negatives or three negatives or what are they talking about. I sort of figured that if you are a distributor and you are building a mass market content distribution system then as we say in computer science part of the specification of that system would have to be that it would enforce copyright law or that or at least that it would obey copyright law, that you wouldn't have some kind of mass market distributor flouting copyright law openly in some kind of a big rollout of a big business system. Naively, since I had never looked at copyright law, I figured that users, consumers, the public, as Hal Abelson put it very well, had rights under copyright law. There were things that owners of copyright were allowed to do, and were supposed to do and there were things that the public was allowed to do, and was supposed to do. And then I actually read the copyright law and realized that it doesn't really say that. That's what the statute of Anne might have said, that's what the US Constitution might have implied that it wanted the US copyright law to say, but it seems what it actually says is that owners are given some rights, some exclusive rights to make copies, to distribute blah blah blah and users are given exceptions to those rights. The general public is given these loopholes to the user's rights. So you know this is the fair use as a defense, that's something that I found out on my service to that NRC panel. So as a computer scientist, I think this looks very strange and I actually have an hour long talk that I give about logical incompleteness in copyright law but I think just from a systems point of view, not a theoretical point of view, I find it very odd that you would even think about trying to specify a mass market system in this way. If you want to write down specifications, you should write down affirmative, direct specifications. You don't take some large set of your user population and only actually address the specification from that user population's point of view in an indirect carve-out exception way. That's just not the way to do systems specifications. I think from a systems point of view, from a computer science point of view, we should really have copyright law that gives affirmative, direct rights to the public. I know I'm not the first person to say that but I just think there is a computer scientific reason to think that. So here's another computer science and also, consumer point of view: technical protection systems (that's what I mean by TPS). So, there's been a tremendous amount of effort put forth recently by very clever people about defending the rights to reverse engineer things, to rights to circumvent technical protection systems in particular to circumvent to make technical fair use and I agree with all these arguments but I really don't' think we should put too much faith in those arguments as the only way to protect the publics' rights. I think these arguments are correct, but they are insufficient. I think they are insufficient as system engineering, that was my spec slide, I think they are insufficient as a philosophical position. I think that if the public actually has rights in copyright law, keep it to the public rather than fair use, then those rights, if they are part of the copyright bargain they have to be there exclusively, you shouldn't have to hack around the Technical Protection System in order to exercise your rights. And of course, there is always the question of what if someone built a Technical Protection System that couldn't be hacked around, we are not close to that yet but it might happen someday. Okay, there is also systems engineering as opposed to specification. In a recent paper by Mulligan and Burnstein, I know this is not the only content in their paper, but they have the following sentence which is very typical of a lot of what I've heard from a lot of fair use advocates: Fair use analysis therefore requires a fact intensive case-by-case approach. This is characteristic of whole set of arguments that bogged down this whole DRM vs. the public's rights debate by implying at least that you really need to be able to handle everything before you can handle anything. I just really don't agree with that, I don't think that it should be so hard to say that a vast majority of cases, or at least a large set of cases, of what the publics right's are can be recognized and implemented and enforced while also recognizing and implementing and enforcing some owner's rights. I really do think that compromise is possible and I think this is the essence of mass market system engineering is compromise, engineering for the typical case. When I served on this panel with all these distinguished lawyers, some of whom were drastic fair use advocates, some of whom were drastic copyright maximalists, one thing that everyone agreed is that in the old fashioned world of copyright law, the vast majority of fair use cases actually are very straightforward, or at least they were, there's been all this expansion of owner's rights lately but for a while there it was the case that the vast majority of fair use were very straightforward. I don't think that we should bog down in trying to solve all of the philosophical and legal and technical complexities before we field something that recognizes user's rights, I really don't. I understand why it's problematic but I think the Creative Common's view that you can take some middle ground is absolutely right. I believe that there are rights expressions languages that will give you a lot of what you need and I think they can be implemented and used. Ok, so here's from my e-commerce class, another quote from a paper by my former AT&T colleagues, Lacy Meiyer and Sneider, "the best technical protection system is a great business model". So I think unfortunately, this is where the whole subject has been moving forward the slowest, most slowly, from my point of view as a computer scientist, the computers and networks what they really facilitate is massive amounts of copying and redistribution. Computers and networks are really good at copying and distribution and you really want, if you believe in technology and love technology, you really want to use technology to do what it does naturally. And I really think it would be great to come up with an internet content-distribution business that could benefit from uncontrolled copying and redistribution. Now, Hal Varian earlier today, talked about product placement in advertisement, if you think about it this is the old world of broadcast television, there was no attempt to limit how many people watched anything, there was a temporary attempt to limit people's recording it and watching it later but that ultimately died down and I hate to think that's the only kind mass market content distribution business that could benefit from uncontrolled copying and redistribution but that's one of them. Before we give up on using computers to actually do copying and redistribution, it would behoove us to do a little bit more thinking about whether one could actually build content distribution businesses that use technology to do what it does naturally.

Anita Ramasastry:
It's a pleasure to be here this afternoon. I am going to speak about consumers and try to tell you what I think they are, and even though we have this horrible term, I think we are kind of stuck with it. I am not an intellectual property expert, I am a lawyer and when Professor Cohen and Professor Ku were off writing brilliant things about the right to read anonymously and how their copyright in sort of the world of Napster is dead, I was confronting digital rights management because I teach courses on payment mechanisms and how consumers pay for all that content and was working in dark basements with companies like Q-Pass and figuring out for every ten cents the consumer spends what protections have to be in place. But to me, the consumer is someone that I have dealt with every day, because consumers spend money and I was a former regulator and had to figure out how to protect them and protection in the world of finance is pretty straightforward. You didn't have to theorize, you had to protect consumer's money if you were holding it and if you were going to do something with it there were risks you had to disclose. In this new world dealing with the intersection between contract, copyright and digital rights management, I am not sure we all know who the consumer is and there is a lot of exploitation about how we have to go out and really educate that consumer. But I also want to step back and say that I think before we really do that we have to understand that there is a massive disconnect between the discussions we are having here and the consumer and the consumers expectations with respect to what we call fair use and I think is envisioned differently. So my few minutes, my comments is about who is the consumer? Is it the geektivist, the buccaneer or what I would actually argue the Luddite, in this whole debate? So Jack Valenti may think we are calling industry Luddites, but I actually advocate consumers being the Luddites in this story. So content owners or rights holders think of consumers really as just and digital rights management in the following way: the level of use permitted is a matter of license and contract; freedom of contract is a predominant paradigm; and they see the acquisition of content as a purely economic transaction between user and content provider (or an agent) and fair use is not the relevant paradigm, its "fared use" as professors like Tom Bell have mentioned, you meter and pay for what you read, see, and access. The consumer, on the other hand, has been portrayed in many ways. One of the biggest metaphors that we talked about was the Britney Spears downloader 400,000 songs later, the pirater, the scofflaw, the marketplace, and that image resonates in our public consciousness. Another that's been rising to the fore with many of the people in this room who have become activists, coming and storming Congress, is the Geektivist. That's the technologist, that's the consumer who's savvy who champions the public interest. But it's not the everyday consumer. And then there's what industry sees, which is the buyer or licensee in search of cheaper and more goods in Hollywood or somewhere else. But I think we can think of a consumer in a new way and I'm writing about all this because I'm not an economist, I'm this boring commercial law teacher but before that was a legal historian and spent all my time thinking about the social construction markets. So we've spent a lot of time talking about how we need to embed values in DRM (expand) technology; well, we also need to remember that markets themselves are embedded in social constructs. Markets are social, they're not purely economic, and that's what the consumer thinks about every day, not about the economics, sometimes, but more about the social construct. They're concerned about fair use, although they may not know it's fair use, and they're not able to participate in debates over standard setting, so the consumer's not part of the debate in court, in congress right now, or even just on the streets. Over time, the public forum is being lost as a place of exchanging information, and we've had lots of images today about the notion of, the more time we're spending channel-surfing at home as the couch-potato consumer, we're minimizing the social interaction that information flow and exchange is giving us, so I would argue strongly that DRM (expand) is going to take that away and constrict our social interaction even more. So I want to view consumers as the digital Luddite. Luddites, for those of you who remember them from history, in 19th century Britain were the ones that broke power looms when technology was threatening their way of life. And today's Luddites continue to raise moral and ethical arguments against the excesses of modern technology to the extent that our inventions have evolved to control us, rather than to serve us, to the extent that such leviathans can threaten our central humanity. So what I'm saying is that the consumer is someone who, although they can't always articulate it, when they can't do something the way they're used to doing it, they're basically saying I don't want to be controlled by the technology, I want to be able to use it and to create. So industry and consumers are speaking across purposes. The content holder or the rights owner use licensing and economic terms, and as Julie Cohen mentioned in her very insightful work, that is part and parcel of the rise of the new orthodoxy, Lochner in Cyberspace. But for the consumer, fair use is simply just a way of life. If you remember E P Thompson (sp??) from the 1960's, he talked about the weavers, the Luddites, breaking the machinery, but it was less about technology per se, but about the unrestrained check of industrial capitalism that workers were protesting. The idea that the village, the marketplace, and their way of life was being changed by the imposition of technology, and that's what the consumer is feeling now, and if we empower them they can become the digital Luddites in this revolution. Culture is created through consumption. Now most of us think of consumers abstractly as just these passive people who buy, or as vulgar individuals who buy tawdry goods in the bazaar or the marketplace, but we need to remember that we are the consumers and that consumers create culture. As we consume, and maybe we consume non-rivalrous goods, we basically negotiate values, identities, and we negotiate with the use of commodities. And again, restriction of that is not about economic gain or loss, but about restriction of our culture itself. So there are two possible paradigms in this tale. One is that rationalist economic thought prevails, and consumers become passive parts of a global marketplace with little government regulation. And if this occurs, consumers, if educated as a collective group, may rise in rebellion. They can't break the looms, but many can circumvent, and the geektivist is the one that leads them in the charge. The alternative is that social issues reemerge as a dominant concern, and economic objectives become only one means of ordering society. So access through information becomes a paramount value, and thus rights of creators and owners can be limited by laws as needed. So what do consumers stand to lose in the broader context? I'm not going to read this slide. This is the stuff that's typically argued about with respect to consumers, that there'll be less innovation, less development, anonymity will be compromised, fair use will be frozen in time, libraries won't know how to deal with material anymore that they can't access in the future archive when it becomes part of the public domain. But what we need to remember is that our consumer, when we use the word fair use, is experiencing the market not as an economic phenomenon but as a social one, that the market is not abstract but embedded in social life, and that historically we've had a notion of personal use rights, so by denying the consumer historical personal use rights, and then charging them fees to recoup them, we're basically taking away what they perceive of as a socially constructed reality. Courts have also recognized that fair use is part of a socially constructed marketplace, and courts have traditionally used customary practice. Where does custom come from? It comes from the marketplace and social interaction as a way of mediating between rights and duties. And markets are constructed, they're not self-evident, that's what I would argue. And we can only engage in specific exchanges through trusted intermediaries if we have trust, and trust is created through expectations. So what is the social context? The consumer thinks of it as whistling a tune, cutting out a cartoon, photocopying a newspaper article. They don't think of it as fair use, they think of it as daily interaction, and that's where the disconnect is: what the consumer is expecting and what the content provider is saying what's good for them are very, very different constructs. But we also need to remember that markets are what brought us cultural information; that marketplaces are what brought high culture to the masses, and now the marketplace is constraining the masses from what it used to bring them. So consumer rights have been articulated in these ways of rights to copy, time-shift, space-shift, et cetera, but I would argue that they're understood in a much more social and basic way. It used to be, and I'm going to sift through, I've got too many slides here, I'm a boring commercial law professor, it's like the tax code, but that fair use to the consumer when we had contract law, because freedom of contract is what we used to have before DRM, was akin to reasonable expectations, so that at least for the consumer, we could construe what we wanted when we contracted as what we expected in the social marketplace, and even with the contract of adhesion, we had contractual defenses left to save us from problems with our expectations when they were dashed and we bought something. But contract is no longer the sole paradigm. So what do we have left? DRM has taken us out of contract; contract took us out of the social marketplace. And so now I'd argue, although Larry Lessig has told us that we shouldn't go to congress, that, in some respects, they have a duty to protect us. If we don't know what we're buying, and if the thing itself is no longer something that is bargained for through terms that can be challenged, then disclosure, at a minimum, of what the thing is, through labeling and product labeling, is at least a start to begin to provide the consumer with an understanding of what it is they're buying. But I'd argue further and I think Julie Cohen is going to discuss it, that beyond just disclosure and labeling as a way of trying to build an understanding of what the consumer is interacting with, that we also have to think about issues of digital consumer rights, and there are organizations championing that. Those aren't technical standards, they're flexible standards, and where are they built in? You can mandate flexible standards that replicate fair use, and if government does that, then you leave it to the technologists to figure out how it is that we're going to actually make the social marketplace one that's just as important as the economic one. Thanks.

Julie Cohen:
So I'm going to talk not about fair use at all, but DRM and privacy. And I want to hit on three questions: first, how do we think about consumer's rights to privacy in the context of DRM; second, what role does the law have to play at the back end, establishing remedies for consumers; but third, what role might the law have to play at the front end in facilitating the rise of privacy-friendly DRM if such a creature could be developed. So how do we think about consumer's rights to privacy in the context of DRM? There's an obvious way and a less-obvious way; first, the obvious way, I think, it's clear that DRM technologies have the potential to enable data collection about intellectual preferences on a massive scale. Now, in the US, regulation of information privacy is a very controversial topic and there's a wide range of opinion about whether consumers should have, or users or the public, should have information privacy rights; I tend to be a privacy hawk, but you don't have to be one, I think, to agree that profiling based on intellectual preferences is uniquely troubling. Profiling based on intellectual preferences leads to both troubling consequences at the level of the private marketplace, manipulation of content preferences, and possible dumbing down of content in the mass culture context, and in both the private marketplace and as this information becomes collected and warehoused in databases and has the potential to be accessed and used by government, it creates a massive potential for the chilling of unusual intellectual preferences and for the chilling of individual innovation and self-expression, and I think those are consequences that we need to be concerned about. Again, though, I think at this point they're all quite obvious. The less obvious consequences for privacy that DRM technologies have to do with more than just the collection of personal information and I would like to suggest to you, and this is flushed out in more detail in the paper, that there's a spatial element to intellectual privacy as well and it's deeply engrained in our legal tradition, largely in constitutional privacy cases, but that these constitutional cases ultimately reflect underlying fundamental social values that ground intellectual privacy in part in the freedom to use intellectual goods without constraint of with a relatively low degree of constraint within private spaces. So we see, for example the Supreme Court in the case called Stanley vs. Georgia opining that the government has no business telling a person what he may read in the privacy of his own home. I think it is not terribly problematic to extend that as a philosophical matter to private information providers. Do private information providers have a business telling a man or woman what he or she may read in the privacy of his or her own home? I think not. We see the 4th amendment guaranteeing a right to be secure against unlawful searches of one's property, papers, and effects. So this constellation of privacy notions that are grounded in both spatial considerations and in intellectual considerations. One's papers and effects constitute part of the private space in which one has and expectation and an entitlement to privacy. It's my contention that two rigid constraints on the functionality of intellectual goods can invade privacy even if no information is collected about the privacy of users, although, of course, if information is collected there is a privacy invasion as well. If intellectual privacy is in part a question of breathing space or degrees of freedom to use intellectual goods within private spaces in the privacy of one's own home, then working too drastic a change in that bedrock, philosophical...not a philosophical tradition, but in that bedrock presumption that I think most ordinary people have, just as a matter of course without even thinking about it, is a terribly troubling development and one that we need to worry about as a matter of privacy as well as a matter of liberty. And from that I think follows a couple of conclusions, and these go first to the question what role does the law have to play in establishing remedies for users at the backend when DRM systems work to greater privacy invasion, either through collection of information or through too rigid a constriction of breathing space to use intellectual goods. First of all, it's commonly mentioned that the law has a role to play in establishing consumer protection principles such as the fair information practices that have to do, among other things, with the notice that has to be provided to consumers and the degree of transparency to which consumers are entitled. Within the U.S., the version of the of the fair information practices that tends to be followed is fairly anemic and tends to rely largely on notice and consent that if you assume the market for privacy works well might be okay, but in a market in which consumer's can't participate meaningfully in the standard setting process and in a market with not a lot of incentive to spend enormous amounts of money at the front of designing IT systems for privacy. I think it's a real question whether simple notice and consent principles that characterize much of U.S. consumer protection law are going to get us the privacy protection that we need and that will be effective. I think the fair information practices, even the more robust international version of those practices is vulnerable to some of the same criticisms. I think those practices are important, but they're not enough. Okay, a second role for the law. What about substantive obligations imposed through the common law of tort, what about the invasion of privacy torts. There are common law privacy torts, but by in large they need to enter the digital age and I think it's important for them to do that, I think it is important to recognize, for example, that informational profiles of consumers can constitute likenesses and their use for profit without the individual's permission is inappropriate, particularly so again when intellectual profiling is at issue. I also think it's important to recognize that too rigid constraints on the ability to use intellectual goods within private spaces might amount, if the constraints are rigid enough, to species of intrusion upon seclusion. But I don't think that goes far enough because the common law privacy torts can be waived, and I think in order to develop a substantive theory of privacy to which consumers are due in the digital age, we need a theory about when privacy rates trump conflicting contract provisions or conflicting "contract" provisions, right, contracts embedded in DRM systems. It seems to me that a pervasive private regime that impinges on intellectual freedom in these ways is a matter of public concern. There are lots of public policies that do trump rights to contract. Some of them are listed in the paper, think for example of whether patients can be required to contract out of medical malpractice liability, think about whether you can contract into a state of slavery or contract for sex, you can do that in some other countries of course, but the point is that many important public policies don't recognize this rigid public private divide and I think that it's worth considering very seriously whether intellectual privacy should be one of those important public policies and I would argue that given the importance of intellectual freedom to our culture, it should be. And you can add to that the purely instrumental argument that private information collection facilitates government control total information awareness subpoena of information by Mr. Poindexter and his buddies and that's worth worrying about. In my remaining minute, the third questions, well is that all there is? Is the role of the law limited to establishing substantive obligations by policing at the back end, by affording substantive remedies to consumers after their rights have been violated? I think that that's actually a second best strategy, and the better strategy would be to make sure that DRM systems are designed to protect user privacy in the first place, both by applying standard principles within the information privacy community about minimizing, separating out personal information and minimizing the collection of personal information, but also by designing DRM systems to implement flexible, imperfect control, and here is where Hal Abelson's point about the evils of precision I think is vitally important. What is so important about the need to have precise control of every copy that a consumer might make and why instead could we not recognize a DRM system that internalizes some imprecision, which in turn would enable greater respect for degrees of freedom to use intellectual goods within the privacy of one's own home, within private spaces without having to account for every such use. I think that law has a role to play here as well. I agree with all the people who have said quite forcefully that standards processes are better managed and conducted by private actors and my intent is not to suggest the opposite. I would like thought to take issue with a point made this morning that compared the concept of a digital consumer's bill of rights to a government tech mandate. The notion of a consumer's bill of rights is very different from the notion of a tech mandate. Government shouldn't be in the business of telling anyone what technical standard they should use for systems to be deployed in the private marketplace, but government can be, and I would argue should be, perhaps I'm a little more optimistic that Larry Lessig here, but should be in the business of specifying rates. That's what the law does. And a rate to reasonable protection for one's informational privacy, to a reasonable degree of freedom from constraint to use intellectual goods in the privacy of one's own home, to meaningful participation in DRM standard setting processes for consumer organizations. These are things that don't amount to tech mandates and that need not ultimately cramp the ability of market players to design good tech standards but good privacy regarding and good consumer regarding standards and I think that at the end of the day, that is where our debate should be heading. And now I am out of time. Thank you.

Raymond Ku:
I didn't get the memo that floppy disks were dead. I'm here to talk about consumer copying and fair use and while I agree that perhaps public copying is a better definition or a better way to phrase this. I wanted to use consumer and also public to distinguish that from commercial copying. I will not stand up here and justify someone sharing music or copying music and charging a price for that in competition with the copyright holder. We don't need copyright to address those problems. The Supreme Court stated many years ago: you don't need a property right to make a rule about unfair business competition. In part what my talk is going to address is the question that we've been talking about, the rhetoric that has come up today, that consumer copying is theft. So that the teenager, we must tell them not to steal when they download Britney Spears, that we have to respond to this with the force of law. Now I'd like also to respond in part to what Alex Alben raised earlier to day that this is a process, this is a necessary process to create markets for creative works. Well, I think Hal Abelson asked the right question, which is: are we creating markets or are we preserving existing markets? Are we talking about making markets function, or are we talking about preserving existing market structures in the face of market changes, market changes brought about by radical changes in new technology. And I will make fair use of Mr. Abelson's other comment today which is that in general, in this area, I think that there are some good rules that he raises which is government, don't regulate, don't mandate, and don't choose winners. But when we say these things we must recognize that that copyright and copyright law, be it copyright law in general or the digital millennium copyright act, is government action and in certain circumstances can be seen as the government choosing who will win in this debate and in this fight over technology and how products should be delivered to the consumer. When I get the slide up we'll be able to do this quicker, but the question of is consumer copying fair use is not a new question. It goes all the way back to, well goes back quit some time, and reached the Supreme Court even in the 1970s in which Williams and Wilkins Publishers sued the United States, and particularly the NIH, for widespread practice of copying medical and scientific journals. I'm just going to continue without my PowerPoint, so please forgive me. Technology: the enabler of creation and communication. Perhaps my problem was not bringing my own laptop here. As I said, consumer copying and fair use, it's not a new question, it's an old one. And in fact when the Supreme Court first looked at this issue, there was a wonderful exchange between Chief Justice Berger and Alan Latman, a very famous and influential copyright professor, when the Chief Justice asked Professor Latman, well does this mean when I go and take a Law Review article and copy it in my chambers and then distribute it to my fellow Justices that I am infringing copyright and therefore breaking the law? And professor Latman came up with a very clever response and one that we still here to day, which is the answer is yes, but we won't sue. And the Chief Justice, without dropping a beat apparently said, you mean you won't sue the Chief Justice or you won't sue consumers in general? As we've seen historically, the argument was that we wouldn't sue consumers in general, why do that, why sue your customers. But as we see, perhaps that model's changing and we're seeing a shift in that philosophy. Well, why is this important when we're talking about digital rights management? Obviously, discussing fair use clarifies the appropriate scope of copyright and the relationship between DRM and copyright. It also challenges the claim, as I will suggest today, that copyright owners are entitled to restrict consumer copying through digital rights management. And it highlights ultimately what is lost by the public if such restrictions are in fact to be enforced by law. Now the primary case, because unfortunately with Williams vs. Wilkins the Supreme Court evenly divided on the question and we had to wait another decade before the court was actually able to render a majority opinion on the subject. The primary case is Sony vs. Universal City Studios. Most of you are aware that it involved the VCR, at the time the beta max, and the question was, was the time shifting, watching television shows at another time made possible by the video tape recorder, fair use? And the Supreme Court ultimately concluded that it was. In the process of doing so, I think it taught us several important lessons about interpreting copyright. One is that it began with an important proposition that said when new technologies render the actual or the specific application of copyright's terms ambiguous, we should be careful in extending copyright under the circumstances. In that the decision, the Supreme Court came up ultimately with the test that it's most famous for which is that the providers of such copying equipment are only subject to copyright infringement if it's not capable of substantial non-infringing use. In the process of doing so it rejected a couple of important claims by both the defense and the copyright holders. It said that findings of fair use are not undermined because consumers derive a financial benefit from the copy. Earlier we heard the idea that this is the equivalent of breaking into Tiffany's and stealing a necklace and that is the kind of theft that we're trying to prevent. The Supreme Court said, no, it's very different. Copyright is justified by a public goods problem associated with creative works. The stealing of a necklace entails different problems. When we steal a copyrighted work, the owner of the copyright still has their own copy and can still sell their own copy, arguably in competition with the stolen or free copy. Fair use is also not limited to transformative or productive uses, right, but include ordinary uses. One argument was from the part of Justice Blackman that well the scholar, if we restrict the scholar's use of intellectual property, society as a whole is going to lose out. The scientist won't create the new invention, the doctor won't find the new vaccine. But the couch potato, how does the couch potato lose if we require them to pay some the copyright owner some fee. Unfortunately, the Supreme Court didn't explain why the consumer loses under those circumstances, it just said that well we don't need to say that you have to be transformative in order to get some fair use protection. Finally, the court focused on the issue of well, what's the damage to the copyright holder. It limited its consideration to actual or original market for the copyrighted work. In the case of the VCR, the market for broadcast programming, it rejected the idea that what we should be looking at is also the new market created for videotapes. That we can license those video tapes and that production and that was a serious loss to the copyright holder. Well, how did this happen? I'll go through rather quickly, this happened, or how did we get to where we are today in which Sony isn't telling us that at least file sharing through Napster isn't at least in part fair use. It's in part attributed to the interpretation of Sony that has arisen since the decision. Fair use is market failure, was proposed by Wendy Gordon before the Supreme Court rendered its opinion and she argued that looking at fair use, we have to look at it as an example of market failure, justified only in instances of market failure. Now arguably, her examples of market failure included not only transaction costs but the presence of externalities, the difficulty for certain people to embody or internalize the value of certain uses of work etc. and as well as anti-dissemination motives. The key to fair use is market failure however, is the idea that the potential for market cures eliminates and undermines the argument for fair use. Private copying under these circumstances or consumer copying, is micro-infringement, we just couldn't get it before. You have probably heard this before, well DRM is supposed to end that. Well, I would like to suggest an alternative model, or alternative economic approach towards this problem and that's suggested by Joseph Schumbader's description of the process of creative destruction and I'd like to argue that that is part of the process of fair use. What is creative destruction? It's a process that incessantly revolutionizes the economic structure. It strikes not at the margins of the profits and outputs of existing firms, but at their foundations. In other words, competition in the truest sense in a capitalist economy according to Schumbader was the creation of new business models, either through organization, thought or technology that rendered prior business models obsolete. New technologies creatively destroy copyright what I will describe under two circumstances. When the copy is not made by the consumer and the creative endeavor does not depend upon funding derived from the sale of copies. Why, as I suggested, there is a public goods problem with information. Copyright is considered necessary because creative works share certain characteristics of public goods. I'm assuming you had that primer yesterday. Free riding by subsequent copiers will lead to the underproduction of creative works. What I'd like to emphasize is the idea that this was always assumed to be necessary to serve two functions, that both the function of creating incentives for individuals to create works of authorship in the first place and for individuals to distribute works. As John Perry Barlow said in much more eloquent terms than I can, that copyright used to protect and did protect the makers of bottles so they could distribute the wine of creation to the public. His argument is that the Internet came along and made the distributors of bottles obsolete. We have created a mega-bottle in the Internet and those other prior forms of distribution, those other models are no longer necessary. Well, that's not always true, we do have to be careful because to some degrees in many ways, certain forms of creation are funded by the sales of those bottles. And we have to be careful when we are looking at new technologies to see whether or not they share the same characteristics as the printing press and those same limitations and whether or not we need to protect both the interest and distribution and creation. So for example, I would suggest with the VCR as our model that consumer copying is not free riding. They are funding distribution, when consumers purchase the video tapes, purchase their VCR's, purchase their cable subscriptions and TV sets, they make it possible to distribute programming as video tapes. Consumers build and maintain the distribution network under these circumstances. Under economic terms this is not free riding on the investment of other distributors. Copying and creation is a different question. Here, Sony is an interesting example of a circumstance in which some creative endeavors do not depend upon the sale of copies as we have talked about, television is funded through alternative avenues. While you might make more money by selling copies, you don't necessarily need to sell copies in order to make television programming. Advertising, selling motion picture tickets, subscription services and public funding all go into the creation of television. Now that might occur in other areas. As I briefly wrap up, Sony recognizes this process of creative destruction; it is consistent with the goal of promoting broad public availability of works. Let me skip to my last slide here and the concern is well, when we look at that, we can see that there are other industries in which that might occur, including publishing of journals, including perhaps music in which I have suggested that artists themselves are most often funded and their incentives for creating music are through ticket sales rather than CD sales. This is not the doom and gloom for creation; it might be doom and gloom for the content industry. Efforts to restrict copying have to be recognized for what they are, they have to be recognized in some instances as the creation of new rights. Now whether or not we thinks those rights are justified is a different question but I would suggest that it is not necessarily justified by copyright. And the story for another day is when we extend those rights, that consistent with Congress' Article I Section 8 power. And I hope Larry shares my optimism that someday the Supreme Court suggests that maybe it's not.

Tomas Sander:
All right. Okay, so I want to start out on a positive note. I think the reason we are here is a very joyful one at least that I think it is because all of the advances in digital distribution. I think digital distribution has already and will even more so will create a media consumption paradise for consumers like we haven't had it before. And that is something I think...at least I am very happy about this. DRM is like a little piece of technology that is wrapped around this but the underlying thing we talk about is certainly this and the maximizing the value of this. The reason that this is even going to get much better than it is today is, certainly all the usual suspects of dramatic advances in available bandwidth to consumers, cheap storage, advances in wireless technology, and general computational power that you can have anytime, anywhere have access to almost any content you want, technically, and this is I think great. But now we have a lot of people here who worry and worry was a little bit the tone of many of the presentations and...now I worry. Yes, and what people worry about is that there will be some kind of Draconian DRM system that is going to expel us from that paradise that we're in or that it seems we're getting ourselves into. And this Draconian DRM is not only existing but somehow it is forced upon consumers and all of us and that this is going to bring an end to this and end essentially the civilized world as we know it as it refers to intellectual consumption, that is a term we have. I actually think that the Draconian DRM is a ghost kind of and the reason it's a ghost is that nobody's built it yet, but a lot of people here are assigning properties to it. For example, it can restrict and limit consumers' actions and they can't do anymore fair uses anymore, even if they wanted to, make them pay for everything, create consumer profiles, and all of this shoved down their throat. So I think it's a ghost because it doesn't really exist and it has this kind of mystical qualities and I love Julie's additional mystical quality from her presentation which was spatial privacy. I read her paper, it's a great paper, I recommend it, but where it is essentially that you're sitting there and your computer is watching you because it's restricting you and what you're doing. I though this is really the DRM ghost and it's now in the computer and it's watching even if that information is transformed to no one else. So I was wondering, can it help the lawyers? Can we make this real? Can we build such a Draconian DRM system? Nobody in the tech or content industry wants it, but it seems that in the legal community it is of high interest. So I was asking myself how we can do this and I came up actually only with one design principle on how we can do this and I think it is actually possible to built a secure DRM system and the way to do it is to put in all the anti-user devices that eventually render content a piece of DRM technology and to make this device secure and tamper resistance so that only content that is accompanied by appropriate license will actually be displayed. This is in my view an almost 100 percent secure system because, for example, the antilock hold disappears so if you grab content from somewhere and try to feed it back into the system, these devices won't display it anymore because it doesn't come with a license and this license is easy to do, cryptographically they can forge them. And also the stuff from P2P networks would run anymore because it wouldn't have a license. So this type of technology would put a complete end to this and this would be like the Draconian DRM system. I my view it's also the only way to build a complete Draconian DRM system but I'd be happy to take suggestions from other people. So such a system we will have, but I agree that we'll never be there in practice for a number of reasons, not just infrastructure reasons, I mean just to built this would be so extremely expensive, but I don't want to go on to this, I want to stay more on the fundamental principles. And one of the key reasons why I think that Draconian DRM in that sense cannot succeed is because there is one key application requirement that has actually always played a role in institutions like SDMI and so on. And that is that the key requirement is that content handling devices always have to handle protected content, DRM protected content, and unprotected content simultaneously because there is so much unprotected content out there. For example, the content we create ourselves, lots of music, lots of other files, also wedding videos. So this needs to be enabled by devices and this is not only you asking about this is also, for example, the whole consumer electronics industry asking for that and they won't give up on these sort of things. This key requirement implies that consumers will always have a choice between this Draconian system and the classical systems which won't go away until we have ubiquitously employed DRM and, as was very nicely argued in this Darknet paper, certainly also the pirated content from P to P networks and the paper argued that there is a good chance that P to P networks, it will be impossible to shut them down completely. And so consumers will always have this choice between this Draconian network and these other networks and certainly the conclusion is simply that a system without consumer acceptance can simply not win and many people in the industry said that years ago. So such a Draconian system which has been envision here, or has been asked for, I grantee will never ever be in the marketplace. This is something to be I think...I find it very comforting that this is the case even, it won't be in the marketplace, even if the government demands it, even if there is a government tech mandate that says the system is supposed to be built because then, okay, you get for us to build watermark detecting devices, but they won't solve the underlying problem, they will make the devices more expensive and HP and IBM and other people scream. They won't solve the problem and it essentially won't change anything. I actually think that also the trusted platform technologies cannot solve this fundamental problem and do not have that capability. So there isn't really anything that will eventually give us a Draconian DRM system that consumers cannot resist if they don't like it. So that's my point on that and I want to quickly talk about privacy, namely that there is certainly a myth about DRM systems that DRM systems necessarily have to be privacy invasive and I think that the truth is that you don't really need personally identifiable information from users to make a DRM system run. So if you have pseudonyms which could, for example, be device identifier, software identifier, keys, these pseudonyms are sufficient technically I think built a DRM system and to run it reasonably for risk management purposes where you want to revoke devices, or in general, to ensure system functionality for the users. So it isn't really that bad that every DRM system needs to collect lots of information to technically work and there's certainly complications, for example, that the only payment mechanism we have on the internet is non-anonymous, so that means that somebody who buys something from the internet, let's sat from Amazon.com, can be linked by the DRM technology provider to the pseudonym and what is done by it, but this is a different that we cannot avoid and has nothing to do with DRM, it's also when you buy a physical book from Amazon, someone can know what's going on. And the second thing is that there are actually things like anywhere anytime access where you want to store, for example, your rights or your content centrally, where you even want to give your information or something about you because you get additional value out of it. And typically these applications that drive consumer's privacy has never been a killer application. All the start-ups that we saw who worked on it, they failed. But, for example, this anytime anywhere access could be a killer application that consumers really like and that's what's going to rule the way how we're going to go. So still I think overall privacy friendly DRM systems are possible and what you need is, okay there is certainly information collection, there's something you get from the web retailer or somewhere else. What you need to make sure is that these entities and information do not get linked together and that you have good backhand handling and protection of consumer information and there certainly laws would help. We do have them in Europe and I think they're pretty good and I think trusted platform technologies, TCPA and Palladium and so on, can help to get more assurance into these things. And this approach is probably the one that I bet is actually going to happen so I would invest in any company that has this business model, fair use, and anonymity, and so on, because this is what we're going to see and because it's consistent with privacy laws which we see like the business driver in this whole privacy area and I think actually gives consumers strong privacy guarantees. Thank you.

Chris Murray:
Well, I'd like to open it up for questions. I guess we'll start up here.

Questioner 1:
I'm not a vender, I'm just a consumer, and I used a wireless network to download an mp3 file just now from a legal vendor. I used to work for them. They're called emusic, they're owned now by universal. I downloaded Ringo Starr, "It Don't Come Easy." It seemed appropriate. It was one of the top hits on the emusic charts and even though emusic predominately has independent record label music, Universal, it's apparent, has been licensing stuff in their back catalogue and I was very flattered to see that they had many Grammy nominees on the website actually. So it's not just junk music, it's actually pretty decent music, but it is independent stuff. So it seems to me there's no need for DRM. Consumers can buy with their credit card music legally and you can look at the emusic website, Universal music group is licensing more music to the subsidiary music, so it's a matter of time for consumers to vote with their feet. And music has been happily making money, in the black, the past two years. Now don't hold me to that, that's what my friends down in San Diego at eMusic tell me, so we'll really see what their accounting is. AOL now spends yesterday with musicnet. You can't transfer files onto a portable device, so we'll get to that later. CNBC, the financial news network hammered them for that, they announced the announcement. I think it's great because they're offering content from other record labels, not just Time Warner. It's a positive step forward, but as a person who dealt with the secure digital music initiative for two years, I don't see the need for DRM to give consumers what they want and what they're willing to pay for and legal eCommerce. So why are we here?

Julie Cohen:
I think I'm taking that to be a comment that's generally supportive of this panel.

Questioner 1: I tried hard to form a question. I really couldn't.

Julie Cohen:
So, yes. Next question.

Questioner 2: Fred von Lohmann, I'm an attorney with the electronic frontier foundation and Tomas, I have a deja vu feeling here. We've spoken about this before and I am one of those who worry. Some would say I'm paid to worry. But let me talk a little bit about my worry about consumers in fair use in the DRM future. I've heard a lot about the market protecting consumers and, okay, I think it's probably true that it would be very difficult to wrest settled expectations out of the hands of consumers, although for those of you who think time-shifting will be here forever I encourage you to read the DCTP 5C license that's being pushed for the broadcast flag, but let's assume that's fixed. The next problem is what about consumers that don't have market power, the blind archivist computer security researchers, and I take a bit of optimist from Julie Cohen's view that maybe the government will step in and perform a consumer protection perhaps, and they have historically in copyright laws. So if I'm feeling optimistic today, perhaps the government can fix that. The thing that really makes me worry, however, is that the most valuable fair uses for consumers haven't been invented yet. I think it goes without saying that the greatest things coming are the things we don't even think about yet. In 1972 no one would have though time-shifting was a fair use that should be aggressively protected because no VCR had entered the American mass market at that time. So my question is this. If we really want to preserve fair use for consumers, how do we do so in a way that preserves all the fair uses that haven't been invented yet? What DRM measures permit people to do the things that no one's thought of yet?

Raymond Ku
I'll respond. One is don't let government intervene. Don't create these legal monopolies that will prevent consumers to the extent they need to to access creative works, however they see fit. I mean, that might obviously be one in the end which the producers of those works are going to respond. If we assume they're rational, they will make works available for the blind if necessary, but they may need a prompt to do that. And if that prompt is some teenager or some college student in a room who hacked their current DRM in order to restrict uses, so be it. As long as in the end works are distributed and works are created. We should let the market deal with those problems instead of using law to intervene and change that market.

Julie Cohen:
I think that the answer is quite simple but hard to wrap one's mind around. The answer is to, again returning to Hal Abelson's point about the evils of precision and the fabulous audience comment about putting a chastity belt on technology, is to abandon the notion that you get the most progress, that you get the best economic engine, that you get the best market, that you get the best anything by designing systems that enable you to know and control as much about everything as you possibly can. It is a very difficult thing to wrap one's mind around because it's almost a bedrock presumption of the liberal rational scientific model this is how you know stuff, this is how you build stuff, but there is no reason why in principal one could not design DRM systems to be leaky, to be imprecise, to shield personal information, to allow a certain flexibility of use, and that should be the focus of further research. In the privacy area, they're too modest to say it, but Joan and Tomas have a wonderful paper laying out all the ways in which DRM systems could be designed to protect privacy and a research agenda for the future. Read the paper and do it you guys and women out there who can do this stuff.

Joan Feigenbaum
I should say about that paper that the title of it is "Privacy Engineering" For Digital Rights Management Systems. We don't pretend to have a complete theory or that you could build a DRM system that would solve all of the problems that have not been posed yet. We're just saying that there are some simple privacy engineering principles that have worked in massive scale systems before. I worked at ATT Labs for many years in the old Bell Labs and the telephone industry is actually very heavily regulated about what it's allowed to do with consumer records, and in particular with billing data. And I saw right in front of my eyes billions, trillions of telephone billing records being handled in accordance with regulations that say you have to observe certain consumer rights. So I know that it can be done and it was some very simple principles that were taken into account everyday. I think on the one hand you're saying how do we ensure that the greatest fair use that has not yet been envisioned yet is protected. I don't think that we can do that. On the other hand, I don't think that a Digital Rights Management system or a content distribution system that respects owners' rights has to be Draconian in order to be effective. I think that owners are being very paranoid. I think that if they would offer a business proposition to consumers that was really attractive, as the first question of this session actually implied they are already doing, that they wouldn't have to control everything all the time. That they could still make money doing digital content distribution with a non-Draconian system.

Questioner 2:
I again wonder that if in 1972 the motion picture studios would have voluntarily introduced technology to permit home taping without control, which obviously is what Sony did.

Joan Feigenbaum:
No, but what happened in that instance, what happened is that consumers demanded it.

Questioner 2:
Only after it was invented. That's the crucial piece. Only after it was invented. If we built a DRM system in 1972 to protect the rights of motion picture studios, I would submit that that invention...we wouldn't have had the opportunity to let the market test that because home recording without restriction wouldn't have been included in the specification.

Raymond Ku:
Oh absolutely. Valenti thought that the VCR was the death knell of the entertainment industry of the day.

Joan Feigenbaum:
I don't think anybody...on the one hand I am here to stick up for consumer rights so in one sense I agree with you but I absolutely do not believe that anybody is going to be able to build a DRM system that is going to be able to prevent invention. I really have a lot of faith in inventors and computer scientists and consumers and technologists. I don't believe this. People have been trying to build secure systems for decades and invention just goes on. We are in a period of creative lull right now technically and intellectually I would say. I just don't think that's going to last forever.

Anita Ramasastry:
I would just, Fred, I agree with you and I've read your fair use by design by materials. I just think leakiness is great, don't mandate and I prefer contract as a way of restricting and at least you have defenses of reasonable expectation, public policy and unconscionably.

Question 3:
Hi, Bob Blakely from IBM here. I just want to worry the vendors for a minute. I think in both Julie's and Anita's presentation there is an implied threat. One of the reasons we have consumer law is because there are certain rights and freedoms that are judged to be so fundamental to human dignity you are not allowed to alienate them, even by contract. Technologies of control, like DRM technology, are force multipliers so even if you give the same technology to individuals as to large organizations, they change the balance of power, the balance of capability and the ability of large organizations to impose on consumers all sorts of controls they have to consent to. It sounded to me like what both of you were sort of saying, if that gets too badly out of balance we will have to resort to consumer law to prohibit some of the impositions on individuals that are imposed by these contracts but I guess my question is once that floodgate is opened doesn't the industry have a lot more to lose? There are lots of things in our contract: implied consent, exclusion of liability, exclusion of implied warrantability for suitability of purpose that could also be examined under consumer law and its not clear to me that the IT industry really wants to go down the consumer law path if all we get out if it is DRM.

Julie Cohen:
I think that's a wonderful comment and I don't disagree with it. I think if the industry doesn't want to open the floodgates of aggressive consumer protection legislation than it should take a more proactive approach to designing systems and standards that protect consumer interests and then maybe we don't have to go there. That would be great.

Anita Ramasastry:
Or alternatively at least be willing, and I think that is happening, to at least disclose so that the consumer understands and if they are voting it with their purchasing power you may never need to get there.

Question 4:
Drew Clark with National Charles Tech. Raymond Ku, I was impressed with your idea of fair use as creative destruction but taking a lead from the law and economics school of Roan Coase and others, that we are trying to get an efficient outcome, you try to internalize the externalities. Sure the beta max decision gave consumers a property right, so to speak in making additional home non-commercial copying, and the DMCA's anti circumvention gave copyright holders a property right in the anti circumvention right. Does it really matter that consumers have one and copyright holders have the other, given that they can contract each other back in various sales?

Raymond Ku:
Even Coase would say that ultimately it does matter in terms of wealth distribution. Ultimately the market might come to an efficient outcome through negotiation but how you set that initial presumption, who has that right to begin with will matter in terms of who has to negotiate. From the consumer's perspective, if the right is one that is recognized as fair use and you then need to go to Congress for example to say and I would suggest that the DMCA is not as clear as the 2nd Circuit fought in terms of court correlate to say that fair use is eliminated as a result. But you have to go to Congress to say look make VCR taping illegal or impose a statutory royalty rate. I mean they have done that in the past but they also haven't done that in the past when it was confronted and brought to Congress. So I think it does matter. Maybe not purely from an economics perspective but from a practical perspective and also one in which, what's the other cost. The cost is are you allowing copyright holders to control new technology? There is another comment I didn't get to make in this but I do make in my paper that the Supreme Court in Sony is very clear that the logical outcome of extending the copyright monopoly when distribution and creation is handled, mean that you allow these copyright holders to control and design new technology. That's what we are debating about here. To what extent shall new technologies be imposed on computers and all of consumer electronics? And is that fair?

Question 5:
Hi, Kao Ping Yee from Berkeley again. This is just a comment addressed at the last speaker who I understand from the presentation was arguing that we don't need to worry too much about draconian DRM systems because free alternatives will exist and consumers will prefer to chose the free alternatives over the DRM ones, so the DRM ones won't succeed in the market. Is that mostly right? Other alternatives will exist that will cause Draconian DRM systems not to succeed by consumer choice. I'm not going to bet that that won't happen. It's entirely possible that consumers will choose the free systems and DRM systems won't succeed. I'm going to argue that it's not that simple because the choices that consumers make aren't all that independent. Computer networks have this property that because they have to interoperate, there is a network effect. If one of your friends decides to use one particular piece of software, chooses one DRM system over another, that has an effect on you, not only on them, because it affects their communication with you. And if it turns out that everyone you work with choose a particular system that influences your decision to use or not use a particular system because you may find yourself in a situation where in order to interoperate you must choose the same system. I think that's analogous to a position where many of us find ourselves today with different kinds of computer software and all I'm saying is that all the choices are not independent so it's not that easy to simply say that we don't have to worry about it because we will just choose the free ones.

Tomas Sander:
But isn't it that the network effect works against the introduction of new technologies that make it so difficult for new technology to get started in the market. Here there are so many economists that can answer that better. But, I wouldn't see at this moment who of my friends or coworkers or others who could force me to use a draconian DRM system on content on which I would like to receive in another form. Either on Kazaa or just buy it as traditionally.

Kao Ping Yee:
That's only true if you don't have organizations that have close symetric control of part of a market.

Tomas Sander:
Let the economists worry about that.

Question 6:
Barbara Simons, I'd like to take issue with two of my good friends on the panel: Joan and Tomas. I have two questions, I'll state them both because I know that time is running out. Joan, I'm a bit taken aback by your suggestion that we can be implementing fair use now in technology, understanding that we can't do it all. I think that raises a lot of issues because there is a big middle ground which we can't define and so if you are going to have a technology unless you want not a termisitic one that flips a coin on that middle ground which I don't think is what you are proposing, then we don't have a way of dealing with those at all. There is a big concern than if we implement something, that will become a standard. If we can define a minimalist fair use, then the minimalist fair use will become the standard because that's what the technology will implement and we will lose a lot of other fair use. That's the one comment to you. Tomas, I just want to say I don't share your optimism as you probably know and I want to get back to Ed Felton's talk. I think something that people didn't really pick up with his talk was that he was bringing up examples that deal with government. He talked about total information awareness; he talked about voting. I am very concerned by the fact that voting machines are being protected by the DMCA; that you can't even look into these machines to find out what they are doing. It's not like there are any alternatives. When the entire state of Georgia has one set of voting machines and you can't find out what that software says, there is no other place to go. It means we don't know if those elections are being fixed or not and we can't find out. If there is anyone who is interested with this issue, there is a frequently asked question sheet outside that talks about some of these issues with voting.

Tomas Sander:
So I'm not completely sure if you want to have this kind of black box behavior, you usually want to not tamper with it, its usually tamper resistant. But in my view, that doesn't mean it can't be inspected in some way.

Barbara Simons:
But I'm saying that under the DMCA it can't.

Tomas Sander:
Btt, you know if voting machines can be inspected, if there are people out there that are interested in making sure that elections are done correctly, then they shouldn't buy them in the first place.

Barbara Simons:
But they are being bought in large numbers in fact and that's what all the manufacturers are saying; that you can't look at our software.

Tomas Sander:
I would rather think, there should be a distinction between making something tamper resistant and that you cannot look into something. You can still verify that code is performing in a certain way and you put it in a secure environment and it runs, you might need a little bit of trust there, but I don't think that's a fundamental problem.

Barbara Simons:
Well, if we lose a vote, then it will be.

Joan Feigenbaum:
I guess I am familiar with the standard argument that trying to put some consumer rights, or the public's rights or fair use rights or user rights or whatever you want to call them, some affirmative statement of rights into the law rather than just have the law stand the way it is now and have a notion of fair use as a defense and a bunch of case law that says what constitutes fair use. I am familiar with this idea and I recognize it as a valid argument that there is always a danger that whatever you define as a floor becoming a ceiling. That's not really the essence of my recommendation, what I am saying is what problem are we actually trying to solve? What is wrong with the situation with the way it is now? As I see it, the fundamental problem now is that there are a lot of people that who perceive the current computing and networked environment as inadequate, the combination of the technological and legal and business environment as inadequate. That entertainment content is just either not available or only available through Kazaa or whatever. I don't actually think that this is as a big a problem as some other people think it is but the response to this seems to be this relentless expansion of owners rights and the idea that you have to build technology that can implement these huge sets of owners right and this is fundamentally wrong. When I look at this a computer scientist, as a user and designer of technology, I say that this is not the full picture, this is not the full set of requirements that we need to consider when we build new software or when we build new distribution systems. We have to have an explicit notion of the public's rights as well as the owner's rights. So I guess what extreme fair use advocates, or what many people say, is no no no don't go there, that's dangerous once you start defining the user's rights you will come up with something that's too restrictive and we will be stuck with it. I guess I don't find that an adequate response. I think if we are going to be forced with to constantly deal with the expansion of owner's rights, we have to say not just we will have exceptions to the anti circumvention provisions, or four negatives or five negatives will be necessary I think we have to say no, we have to recognize there is a structural problem. The public's rights need to be recognized as well, not just the owners rights. Now exactly how to do that technically in law I'm not sure, we have many brilliant lawyers here. This creative commons idea of trying to put something affirmative on the table, we don't know exactly how well it work technologically or legally or economically but put something on the table that actually is an alternative to this extremely cumbersome situation that we have now is a good idea.

Julie Cohen:
I want to say something, the challenge I think we are facing is to begin to imagine and technologically specify an incredibly complex system that occupies Larry Lessig's middle ground.

Joan Feigenbaum:
Why does it have to be so complex?

Julie Cohen:
Because the rights on both sides are incredibly complex, the range of uses and the range of expectations people have are incredibly complex and it turns out that both the DRM fairy and the DRM ghost have rather interesting roles to play in defining the public debate. The DRM ghost is Minority Report, its Tom Cruise walking through the shopping mall and people doing iris scans and beaming stuff to him. The DRM fairy is Star Trek, its being able to be anywhere in the Enterprise and tell the computer what you want to see and what you want to use, it knows who you are and it gives it to you. The Enterprise is a military installation so we don't need to worry too much about the privacy issues involved. It turns out that both of those things are much easier to imagine on a conceptual level that's accessible to ordinary people and scholars alike, and it's rather more difficult to imagine what a system or a set of technical rules in that middle ground looks like, so it may not be technologically complex but it's conceptually complex.

Joan Feigenbaum:
No, I think only if you want to solve the entire intellectual property problem with one new system or with one new license. I think you could start with some very special case like scientific publishing, I think Hal Abelson hit on a very good one where you could come up with a very reasonable and potentially implementable and workable system that recognized owner's rights, distributor's rights and user's rights.

Chris Murray:
And with that I'd like to thank everyone for their attention.