RE: Space-Shifting [Was: Consideration in a Shrinkwrap Contract]

Tyler Ochoa wrote: "The logical extreme of the "marginal-harm-is-zero" argument is that one copy is sold for a million dollars and everyone else space-shifts for free. That's obviously silly."

Not so silly as it may seem, however. In one software business model we are already beginning to see, application software is not mass-distributed, but a single copy resides on a Web site, and is available for use by multiple users who access the site (for a fee, or perhaps for "free"--which is defined as willingness to be exposed to banner ads).

Robert C. Cumbow
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-----Original Message-----
From: Tyler Ochoa [mailto:tochoa[_at_]LAW.WHITTIER.EDU] Sent: Saturday, October 14, 2000 1:46 PM To: Multiple recipients of list
Subject: Re: Space-Shifting [Was: Consideration in a Shrinkwrap Contract]

>>> Bryan Taylor <bryan_w_taylor[_at_]yahoo.com> 10/11 12:21 PM >>> wrote: One might argue that displacing two sales to the same buyer in different media with one sale must diminish the potential profits of the publisher. I doubt demand for the second copy equals that of the first, but any extra profit exists only because of the inability of the different media to provide usability of the work, and are not a reward for the quality of "the copyrighted work". Competition between an author and his own "installed base" is unavoidable and assures that the copyright reward is focused on the intellectual contribution and not multiple repackaging of the same old thing.
<<<<<

This is the heart of the problem, and the source of disagreement between users and copyright owners. Copyright owners argue that multiple repackaging of the same item is part of the economic reward that they were promised as an incentive to create. Users argue that copyright owners are entitled to be paid only once for a copy of the work, and that the user has the right to convert the work into any other format. Although I respect Mr. Taylor's argument, I think the courts will ultimately uphold the view of the copyright owners.

>>>>>
The error in that argument is exposed by comparison with the claim that re-reading a book deprives the author of a potential sale. The purpose of copyright is to secure a just reward for the use and benefit of the intellectual contribution of the intangible work, not to create a pay-per-use society. Government backed monopoly is not provided for maximum gouging of consumers.
<<<<<

Agreed. But that still doesn't mean that if you want to have one copy at work and another copy at home, you only have to buy one copy. The logical extreme of the "marginal-harm-is-zero" argument is that one copy is sold for a million dollars and everyone else space-shifts for free. That's obviously silly. The key is an acceptable balance between the number of copies sold and the average number of uses per copy. Digital technology changes that balance (by incresing the average number of potential uses per copy sold), so it is not surprising that recalibration is required.

Tyler T. Ochoa
Associate Professor
Whittier Law School

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