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“Can IP Be Protected in the Internet Age?” Panel Recap from Russian Economic Development Conference

In June, I attended the St. Petersburg International Economic Forum (“SPIEF”), organized by the Russian government’s Ministry of Economic Development. This was a major event drawing thousands of participants to St. Petersburg, including the heads of state from Russia, China and several other major countries. The conference was designed to advance Russia’s economic development, which seems to focus on natural resource extraction from Siberia. However, the conference included a few Internet-related panels, and conceptually they fit nicely with the theme of how Russia can develop its economy.

I participated on a panel entitled “Can IP Be Protected in the Internet Age?” Right away, I trust many of you find the titling odd. This is the kind of panel we had in the United States in 1996 and 1997. I can’t imagine that anyone in the United States would organize a panel seriously asking that question in 2011. But the question seemed oddly appropriate given Russia’s awkward status as a developed nation that bears some commonalities with the economies of the developing world.

Putting the titling aside, this was easily one of the most bizarre panels I’ve ever been on. The panel consisted of SIXTEEN presenters for a 75 MINUTE panel. Yes, you read that right. Doing the math, each speaker was allocated a little over 4 minutes (not surprisingly, some ran over). I should add that the Russian government paid thousands of dollars to cover my travel expenses so I could participate in this panel, making this a jaw-droppingly high per-hour rate for my time!

They sat the 16 panelists around a round table. You can see the room set-up in this photo. As you can see, it was a tight fit around the table. You can also see the monitors overhead and the videocameras pointed at the table; so audience members who couldn’t see the speaker (for example, because they sat behind the speaker) could watch on the overhead monitor. At the peak, there may have been about 60 people in the audience (although I’m not sure how many of those were staff members). In the back left is the translator booth—about half the speakers spoke in English; the other half in Russian. One final thing to note is that everyone you see in the photo was an SPIEF staffer, meaning that the ratio between staffers and panelists approached 1:1. You’ve heard the stereotypes about Russian efficiency; this panel seemed to exemplify it.

Because there were too many panelists for the time allotted, not surprisingly the panel devolved into a series of short position statements not dissimilar to the “interaction” at an OECD workshop or other international forum. Some of the later speakers commented on the remarks of earlier speakers, but there was no audience Q&A or panelist back-and-forth. The panel moderator was Igor Drozdov, Director for Law and Legal Matters, Skolkovo Foundation, and he had the unenviable task of herding too many cats in too little time.

I’m not exactly sure why the panel was organized as it was, but it turns out, this event became another iteration in the dialogue between the Russian and United States governments over Russian copyright law. Because Russia’s economy is still developing, Russia isn’t faithfully toeing the US line on draconian copyright laws. Techdirt does a nice job summarizing some of the recent considerations for Russian copyright reform—something about baking Creative Commons into the copyright statute, which doesn’t really make sense but reflects the theory that not every copyright owner needs nuclear-grade copyright rights. It’s the kind of discussion we could never have in Congress because US copyright law is exclusively on a one-way ratchet to become more draconian. The US government isn’t responding to Russia’s flirtation with weaker copyright laws with smiles, and some of that tete-a-tete spilled over to this panel.

I’m going to relay my notes from the panel, but my usual caveats apply—these are my impressions of the discussion, not faithful transcriptions, so you should double-check before quoting or relying on my summary. In this case, capturing the discussion was even more difficult because I was working on very little sleep and relying on the English translations for the Russian speakers, and the translators cut out during a few speakers. If you want to watch the panel yourself and draw your own conclusion, go here. You can also read the organizers’ official summary, which doesn’t really capture the dynamics. You can also see the organizers’ pull quotes.

Miriam Sapiro, US Deputy Trade Representative, started the discussion. Her bio and a Q&A where she lists her work on ACTA as her favorite moment—uh oh. Her remarks were what you would expect from a US trade rep. She rattled off the typical content owner talking points: IP theft is no less illegal than the theft of tangible property; IP protection is essential in the Internet era; legislation should provide for secondary infringement when service providers have the object of promoting infringement.

She tossed out a few Russia-specific quips, including:

• a concern about mandatory licensing of content to a monopolist—presumably a warning that Russia should not officially embrace Spotify as a private statutory license;
• an expectation of vigorous government enforcement against Internet infringement, including cyber-lockers and BiTorrent.
• advocacy that Russia should join the WTO—and ACTA.

Svetlana Mironyuk, Editor-in-Chief, RIA Novosti. She expressed frustration with the work required to police their rights against UGC, which she says requires a team of 20 lawyers. They brought only 1 case, which they won, but she said the victory doesn’t solve the whack-a-mole problem, and enforcement actions aren’t good public relations.

Tom Rubin, Chief Counsel for Intellectual Property Strategy, Microsoft Corporation. Tom offered up the DMCA online safe harbor as a good example of how rightsowners’ and technologists’ interests can be balanced. It has promoted vibrant online innovation, helped proliferate legitimate commercial platforms, and led to voluntary cooperation between content owners and technology platforms that supplement the legal rules. He said there is a problem with rogue websites that have no legitimate purpose—these should be easy for content owners to remove. Creative Commons and other permissive licensing schemes are a complement to copyright law, not a substitute.

Oliver Metzger, Senior Copyright Product Counsel, Google Inc. IP enforcement works well when there is a shared responsibility between IP owners and websites. IP owners are in the best position to know when there is an infringement. We should not require websites to monitor UGC. Monitoring is hard for big companies and a crushing obligation for small ones. He pointed to Content ID as an example of a voluntary IP enforcement mechanism that YouTube has adopted.

Eric Goldman, Associate Professor, Santa Clara University School of Law. My remarks: Copyright protection is a good thing. Unfortunately, this leads to the mistaken assumption that more copyright protection is better.

In the Silicon Valley, much of the innovation takes place in the “unregulated spaces,” i.e., the cracks in the regulatory structure. (I know many people have advanced this argument, but I acknowledge Mark Lemley’s recent evangelism of this point). Regulation often creates barriers to entry, in many cases at the request of incumbent players.

In contrast, expressly creating unregulated spaces, through safe harbors and immunities, can spur entrepreneurship around those safe spaces. For example, the 17 USC 512 notice-and-takedown scheme. Service providers still feel the takedown process is onerous, but at least they know the rules of engagement and can find profitable ways to implement it, which has led to UGC success stories like YouTube.

From the perspective of content creators, there’s an emerging recognition that copyright isn’t their only solution. Information asymmetries are unstable on the Internet (an application of the idiom that “information wants to be free”), which reflects the nature of information as non-rivalrous. Many content creators are embracing the instability of information asymmetries by treating non-rivarlous content as marketing for rivalrous goods and services. As just one example, bands voluntarily post recordings of their live performances as marketing for future live performances.

Ivan Zasursky, Head of New Media and Communications Theory, Faculty of Journalism, Lomonosov Moscow State University. I didn’t get any notes from him.

Andrei Loginov, Plenipotentiary Representative of the Russian Government in the State Duma. I’m not sure what his title means, but he spoke from a librarian’s perspective. He noted that content creators’ interests aren’t always commercial, and increased commercialization of Internet content can increase piracy.

Yuri Lubimov, Deputy Minister of Justice of the Russian Federation. The traditional copyright owner’s rhetoric is that we should do more to bust pirates. He thinks we should consider different perspectives. Paper-based rules are increasingly outdated. There is a decrease in the circulation of traditional media, and TV content is eroding in quality. We may not want to enforce existing rules; instead, we should anticipate when copyright rules will fall apart by finding new ways to monetize content in new technological environments. We can’t protect content using the same means as we used to protect paper-based content. If we don’t develop new methods to monetize content, then the old system will fail and a new system won’t come online.

Kevin Lawric, President, Sony Europe and Africa. He acknowledged that rightowners had made bad decisions for years. [We all know this is true, but it’s still refreshing to hear from a music exec.] He pointed to Spotify as a success story that was aided by government nudging. He gave the example of Sweden and Pirate Bay. The government pressured the illegitimate sites, and the legitimate services (Spotify) got licenses.

Ekaterina Chukovskaya, Secretary, Deputy Minister of Culture of the Russian Federation. Her talk seemed especially interesting but it was hard to tell with the translation. She started out by noting that IP owners have different perspectives. They understand the best monetization model for them, and we should give authors the right to do what they want, including sometimes not taking the full package of copyrights. [I believe this is part of the idea of baking Creative Commons into the statute.]

She also appeared to be interested in revitalizing formalities. She indicated there was thought about a digital registration process that libraries could implement. The author could register his/her interest; but if not, the author lets it go.

[At this point we had gone about 70 minutes of the 75 minute panel and we still had 5 speakers left. For reasons that weren’t entirely clear, Miriam Sapiro said she had to leave. There was no graceful way for her to leave. She could have just left, but there were Russian government officials around the table and they might have perceived her departure as US government disinterest in the discussion. At the same time, announcing her departure consumed more time from speakers who hadn’t been given their chance. She decided to do the latter and shared a few parting words:]

Miriam Sapiro (again). There is consensus around the table that (1) protection of IP is a universal right, (2) rightsowners, and not the government, should make the decision what to do with their rights. [In fact, I don’t think there was any consensus around the table. The Russian government representatives were saying some pretty funky things that we’d never hear a US government official say in his/her official capacity.]

Benoit Ginisty, Director General, International Federation of Film Producers’ Associations. “Free” isn’t a sustainable business model, and it disturbs concepts of right and wrong. Their content is a value driver for ISPs.

Alexander Maslov, State Secretary, Deputy Minister of Telecommunications and Mass Communications of the Russian Federation. They surveyed Russian users. 80% will support pirated content despite its dangers, but 83% don’t object to advertising, and many will pay if they can get timely access to content (no windowing). So there’s no reason to be pessimistic if lawmakers adapt their laws and IP owners adapt their business models.

Tim Renner, Managing Director, Motor Entertainment GmbH. Intellectual property rights on the Internet are illusory. All control is lost. We need to ramp up legal options like Spotify. There will always be geographic locations where pirates can find a safe haven, so it’s not possible to stop them.

Peter Jenner, Producer, Music Manager, ex-Manager of Pink Floyd and The Clash, Visiting Professor in Music and Entertainment Industry Economics. We need to find business models that are consistent with consumer behavior. We need to work with consumers, not against them. Consumers have different levels of enthusiasm for content, so content owners need to be more subtle with their pricing. We can compete with “free” by making content “feel like free,” such as a flat tax paid through IAPs. He asked where the money to Spotify is going? It’s not going to the artists. If consumers don’t feel like the money is going to the right people, they are less willing to pay. [I’d like to see some social science backing that assertion up.] He also advocated for developing content registries as a formality.

Artemy Troitsky, Russian rock journalist and music critic. Talented artists and scientists will never stop, but we need to remove intermediate publishers from the system and we need to overcome greed. [The translation was garbled so I didn’t catch what he was saying at the end, but something in his conclusion made the crowd go wild—his impassioned remarks produced a rousing ovation from an otherwise completely passive audience. Maybe the audience was just happy to reach the end of a frenetic and completely non-interactive panel before dark.]

By Eric Goldman, Professor, Santa Clara University School of Law

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