Wednesday, June 11, 2008

Copyleft – another approach of licensing copyrighted materials

In May 2008, Nine Inch Nails, an American industrial rock band and Grammy Awards winner, released their music album for free on the Internet in MP3 format. Everyone is free to download the MP3 files from the website of Nine Inch Nails. Nice Inch Nails licenses the songs to the public under Creative Commons Attribution Non-Commercial Share Alike license.

Why would such a well-known band give out its music for free? What is Creative Commons Attribution Non-Commercial Share Alike license?

What Nine Inch Nails does is simply answering to the changed market needs of copyrighted materials and riding on the wave of copyleft movement. Nine Inch Nails chooses not to “reserve all rights”, but instead to “keep some of the rights”.

What is copyleft?

“Copyleft is a play on the word copyright and is the practice of using copyright law to remove restrictions on distributing copies and modified versions of a work for others and requiring that the same freedoms be preserved in modified versions.”

“Copyleft is a form of licensing and may be used to modify copyrights for works such as computer software, documents, music, and art. In general, copyright law allows an author to prohibit others from reproducing, adapting, or distributing copies of the author's work. In contrast, an author may, through a copyleft licensing scheme, give every person who receives a copy of a work permission to reproduce, adapt or distribute the work as long as any resulting copies or adaptations are also bound by the same copyleft licensing scheme.”[1]

For example, a professional photographer using a copyleft license scheme could elect to give permission to education institutions to make copies of a copyrighted work without paying any royalty fee. Such that a professor could freely photocopy a photo, which was created with a copyleft license, to students without worrying any legal issues. At the same time, the copyright holder could charge a per use royalty fee from any commercial use of the photo.

How could copyleft help your clients?

Most lawyers are accustomed to telling a client that whoever uses the client’ copyrighted work must pay a licensing fee. However, in today competitive business environment, there are too many songs, photos, movies, articles, software, computer games, and other copyrighted works for the public to choose. In intellectual property licensing business, a copyrighted work does not worth much if no one wants to license

Value of a copyrighted work usually decays rapidly. For example, if a movie is not a hit when it is first released to cinema, the movie will seldom become a hit when its DVD is released. On the other hand, if a movie is successful, its DVD release will have a higher probability to be successful as well. The same can be said for the music and software industries.

The key for a successful licensing business is to have a copyrighted work becomes popular in a short period of time, and then take advantage of the popularity to generate licensing revenue. Copyright owners have learnt that if they can loosen certain rights of a copyrighted work, their copyrighted works could have a higher probability to attain higher popularity in a shorter time frame.

A copyleft license could be the key to help your clients.

In the case of Nine Inch Nails, the band allows everyone to download the song for free for personal use. When the songs become a hit, Nine Inch Nails can then license the songs for mobile phone ring-tone or for karaoke use. The band could also allow foreign signers to adapt the songs for different languages. Finally, the band can sell more concert tickets when they have a world-wide tour.

Another example, a software company could allow home users to download, install and use its software for free. However, the software company could charge a per-user licensing fee for installation, use or customization made by a business user. If a home user finds the software satisfactory, the home user may urge the IT department at work to purchase the same software. A no-cost download becomes a revenue generating opportunity.

These two examples demonstrate why adopting copyleft could be a win-win-win for the copyright owner, a commercial licensee and the public.

There is, however, a gap. Declaring copyright ownership is easy. Putting a copyrighted notice and the line “All Rights Reserved” will do all the work. To develop a copyleft license is a bit tricky, especially for those small or independent copyright owners.

Creative Commons – a popular copyleft license

Creative Commons tries to bridge this gap. Creative Commons is a non-profit organization found by Professor Lawrence Lessig from Stanford University. It was officially launched in 2001. Its main goal is to expand the range of creative works available for others to legally build upon and share.

Creative Commons has released six copyright licensing agreements for copyright owners to choose. The licensing agreements stated what kinds of rights a copyright owner keeps and gives up.

The original non-localized Creative Commons licenses were written with the U.S. legal system in mind, such that the wording could be incompatible within different local legislations and render the licenses unenforceable in various jurisdictions. To address this issue, the licensing agreements have been ported to accommodate local copyright and private law. As of February 2008, there are 43 jurisdiction-specific licenses, with 8 other jurisdictions in drafting process,

The six licensing agreements all require a licensee to attribute the licensor, i.e. the copyright owner. However, the licensing agreements differ in the restrictions related to (i) derivative work, (ii) share like and (iii) commercial use.

Derivative work - if a licensor allows derivative work, a licensee can create a new copyrighted work by remixing, tweaking and building upon the original copyrighted work.

Share alike – if a licensor demands share alike, a licensee must license his/her derivate work under the same Creative Common licensing agreement.

Commercial use – if a licensor restricts the use of the copyrighted work for non-commercial use, a licensee is forbidden to use the copyrighted work for commercial use.

In order to facilitate simple adoption of these licensing agreements, graphical icons, similar to the copyright notice, ©, are developed.

  • must attribute the licensor
  • non-commercial use only
  • no derivate work is allowed
  • share alike

The features of the six licensing agreements are listed below:

Attribution - Licensee can distribute, remix, tweak, and build upon the original copyrighted work, even commercially, as long as the licensee credits the licensor of the original copyrighted for the original creation.

Attribution Share Alike - Licensee can distribute, remix, tweak, and build upon the licensor’s work even for commercial reasons, as long as the licensee credits the licensor and license the licensee’s new creations under the identical licensing terms.

Attribution No Derivatives - Licensee can redistribute, commercial and non-commercial, as long as the copyrighted work is passed along unchanged and in whole, with credit to the licensor.

Attribution Non-commercial - Licensee can distribute, remix, tweak, and build upon licnesor’s work non-commercially. Although the licenee’s new works must also acknowledge the licensor and be non-commercial, the licensee is not required to license the licensee’s derivative works on the same terms.

Attribution Non-commercial Share Alike - Licensee can distribute, remix, tweak, and build upon the licensor’s work non-commercially, as long as they credit you and license their new creations under the identical terms. Licensee can also translate, make remixes, and produce new works based on the licensor’s work. All new work must carry the same license, such that derivatives will also be non-commercial in nature.
Attribution Non-commercial No Derivatives - This license is the most restrictive, only allowing redistribution. This license is often called the “free advertising” license because the licensee can download and distribute licensor’s work with others as long as the licensee mentioned the licensor and link back to the licensor, but the licensee cannot change the work in any way or use the work commercially.

Creative Commons in Hong Kong

Thanks to Professor Yahong Li and Professor Alice Lee of University of Hong Kong, the draft of Attribution-Non-commercial-Share-Alike licensing agreement has been localized for Hong Kong in December 2007. The draft can be downloaded at http://creativecommons.org/international/hk/translated-license.pdf. Hong Kong legal community is encouraged to comment on the draft. All comments can be sent to cc-hk@lists.ibiblio.org.

According to Professor Li and Professor Lee, the biggest challenge was to adapt the US definitions of “adaptation” for the Hong Kong version. Once the draft is finalized, the final version will be modified for other five licensing agreements of Creative Commons. A Chinese will then be followed.

Criticism

The arrival of Creative Commons at Hong Kong provides a new path for licensing copyrighted works. However, Creative Commons cannot solve all problems. The major criticisms towards Creative Commons are:

  1. Lack of enforcement - if a licensee does not comply with the terms stated in a Creative Commons license, Creative Commons does not offer any assistance in enforcing the license.
  2. Unverifiable attribution - if a rogue claims ownership over other’s copyrighted works and releases the works with a Creative Commons license, there is no mechanism to verify and alert the real copyright owner. An innocent third party, who believes he can use the copyrighted work because of the Creative Commons license, will then infringe the copyright of the real copyright owner.
  3. Only useful for third-tier copyright owners - some argue that only third-tier copyright owners will rely on Creative Commons licenses to promote their work. First-tier and second-tier do not have incentive to give out their copyrighted works for free.

These criticisms are valid, but not only applicable to Creative Commons licenses. Any private licensing agreement between a licensor and a licensee will have similar problems:

i. enforcement - a licensor most of the time has legal rights to go after an irresponsible licensee. It is a matter of business decision whether it is economical to do so.

ii. attribution – a licensee should always conduct due diligence to verify the authenticity of the licensed intellectual property.

iii. usefulness – those at the top will always have the ability to write their own cheques and more bargaining power regardless in licensing agreement negotiation.

Those currently at the middle and bottom of the pyramid could leverage Creative Commons licenses as an alternative path for to move to the top. At the same time, the pool of intellectual property will be enriched by their effort.

Other Copyleft Licenses

Creative Commons is not the only licensing agreements that try to bridge the “all rights reserved” and “no respect”. Another popular copyleft licensing agreement is GNU General Public License (“GPL”). GPL is mainly used by the software development community.

GNU is similar to Attribution-Share Alike of Creative Commons. The main purpose of GPL is to let software developers continuously improve a piece of software. A licensee is required to put a copyright notice and credit to the original author name or licensor. Derivate work must also be licensed under GPL. Commercial use is allowed.

Under GPL, a compiled binary software, which is derived from another GPL licensed software, must also be distributed along with its software source code. This is why this approach is also called “open source software”. This ensures that any improvement made on the software be disclosed and shared.

However, there are cases that licensees did not oblige to the source code distribution term after enhancing the original source code licensed under GPL.

One of the most well known cases was about a WiFi router produced by Linksys, a Cisco System subsidiary, in 2003. The Linksys WiFi router was suspected of containing a compiled binary software that was originally licensed under GPL. This would make Linksys disclose any improvement made on the software available to the public. Linsys initially denied such accusation. Later, Linksys bowed to the negative publicity and decided to release the source code of the Linksys WiFi router under GPL. Once the source code is made available to the public, computer hobbyists have been developing new features for the Linksys WiFi router since then. These new features help the Linksys WiFi router become one of the most popular WiFi routers ever.

Conclusion

As more and more copyrighted materials can be digitalized and copied perfectly, new business models have been developed to satisfy the market needs. Conventional licensing agreements have to be modified to meet the market needs.

All rights reserved approach is not the only licensing solution. Some rights reserved public licensing agreements, like Creative Commons, provide an alternative approach for copyright owners to explore new revenue streams and improve popularity of their works.

Now, it is the time to assist our clients on to take advantage of this new market dynamics.

This article is released under the Creative Commons Attribution-Share Alike License.