Pinterest Copyright Infringement: Yeah, so what?

The latest hot startup in the photo-sharing space is one that is also creating a lot of controversy about copyright infringement. Pinterest lets users create "boards" of images they find from around the Web. Users “pin up” these images, and share them with friends and strangers.

“Is this copyright infringement,” you ask?

Well, imagine exactly the same website that let's users upload music or movies. Do you think the music labels or movie studios would permit this? Pinterest would be shut down before they could get their first dollar of venture capital.

“But they’re photos, not music or movies!”

Yes, and photos have precisely the same copyright protection.

“Ok, wise guy, then why hasn’t Pinterest been shut down?”

Simply put, there’s no one there to stop them, at least not with the same effect and scale as music labels or movie studios. And the reason is reflected in your very statement: society simply regards photos as “different” from movies; they don’t see Pinterest’s use of imagery as copyright infringement.

And this is a natural feeling to the common person. Everyone shoots pictures all the time; it takes milliseconds; most people don’t invest any thought or intent. By contrast, music and movies require considerable time, effort and expense to produce. So, there’s a difference.

And herein lies the unresolved problem: the law is the law, and photos are copyrighted works, regardless of the time, skill, or anything else necessary to create them. Accordingly, photos are supposed to enjoy the same legal protections as music and movies.

“I see. But, most people want and expect to share their images with others.”

Yes! Their images. Pinterest isn’t letting people share their own photos; they’re sharing other people’s photos.”

“Ah, I see now.”

Very good, Grasshopper.

As a society, we permit this kind of infringement, which explains why there are no large, powerful, influential organizations representing the interests (and the copyrights) of photographers. People simply regard photos as different.

A case in point can be found in this article on chow.com, discussing people’s reactions when they found their recipes were being “pinned” to Pinterest, along with the photos of their foods. The complaint was that their intellectual property (cooking recipes) were being stolen; the recommendation: “Just allow the photo to be shared, not my recipe!”

You see? Never mind the pro photographers whose pictures were being infringed; they’re not part of the conversation.

“Ok, so what about those professional photographers? How are they hurt?”

I’ve been a photo industry analyst since the mid 1990s, and I’ve seen the industry suffer more from “piracy” than the film and music industries combined. Every single publicly traded stock photo agency has either gone out of business or withdrawn from public trade. Getty Images is the last profitable company of any significant size, and even then, its pay to photographers has been drifting lower for over ten years to maintain that status. A series of studies from Picscout – a photo-tracking service for stock agencies and photographers – finds that 90% of commercial websites use at least one photo in a manner considered to be “commercial use” without the copyright holder's authorization. No company whose business model is to sell or license photography has had venture capital investment since 2000.

Yet, the shadow economy for photography is enormous. In a study I conducted in 2007 on contract for a potential investor in a photo-related technology, I found that most photo buying and licensing was done on a peer-to-peer basis, mostly in local markets and exchanges, at a scale that suggested the total economic activity tipped at $25B/year. Yet, none of it can migrate online because of the “perception” that photos don’t count when it comes to piracy, and because there was no possible infrastructure to enforce legal protections.

So, yes, the photo industry has been starved to near extinction, compared to what it could be if it similar legal representation that the music and movie industries do.

“My gosh, I’m getting sad. But I still want to share photos online.”

Don’t misunderstand me; I’m cognizant and sympathetic to the non-professional side of photography and the social value of sharing images, both culturally and economically – including to those photo-sharing sites like Pinterest. There’s no question that people should be able to share images online with others in an unfettered manner that Pinterest provides, as well as every social network.

But to do so in compliance with copyright law would require a series of rights access that cannot be scaled up to serve the public at large without a centralized (and streamlined) rights clearinghouse. Legally speaking, Pinterest should obtain rights from “everyone,” but it’s not possible because people are uploading other people’s photos. If there were a central clearing house open to everyone – say, like the music labels have – Pinterest could enter into a unified license agreement.

Without such a clearing house, the law is the law, and the courts will eventually be forced to reconcile the law with society’s desires. Well, provided cases are brought to court to press the issue.

This is not new. Copyright itself has been a controversial topic for society (and justice) for years, and continues to this day. On one hand, there are many who believe that copyright protection should be lifted, if not severely curtailed, largely in order to avoid this very problem of the social benefit from photo-sharing. Economists, on the other hand, understand that the creative economy only exists because people can earn a living from their efforts—that "human creativity is the ultimate economic resource." (Florida 2002) If they couldn’t economically benefit from their creations, society would suffer more, since the lack of incentives (and hence, resources) would starve an important and socially valuable industry.

The only legal basis for dealing with this dispute continues to reside in the Copyright Act in 1976, which states that “copyright protection extends to original works of authorship fixed in any tangible medium of expression,” including photography, of course. Tightly coupled with the Copyright Act is The Berne Convention, which states that “Copyright must be automatic; it is prohibited to require formal registration.” Yes, the USA provides added protection that permits authors to register their works with the Copyright Office, which then affords them “statutory damages” in legal claims, which guarantees the copyright holder a minimum of $750 per claim, and up to $150,000 if the infringing party “willfully infringed” (that is, with intent). But this registration is not required in order for the copyright to be held by the person holding the camera, and that ownership comes with rights.

So, Pinterest and other social networks are technically contributing to copyright violation by permitting other users to upload unauthorized copyrighted works. This is called “contributory infringement.” This Wikipedia excerpt explains, “indirect infringement arises when a party materially contributes to, facilitates, induces, or is otherwise responsible for directly infringing acts carried out by another party.”

These underlying legal principles of copyright law are subtle, and few are as educated on it as they like to believe—especially corporate law firms that write the legal mumbo jumbo in “terms of service” agreements (TOS). To wit, Pinterest’s own TOS stipulates that when you upload a photo to Pinterest, you are granting it a "perpetual, irrevocable, royalty-free license to use” your photos on its site and "application or services." While this is applicable if you own the photos you upload, you cannot grant this permission for photos that aren’t yours. That is, you are not the legal authority of someone else’s photos. So, Pinterest’s own TOS is unenforceable on photos that the user doesn’t own, which is pretty much all of them. So, strictly speaking, their TOS is toothless, pointless and moot.

But this is also besides the point: the user violated the copyright, not Pinterest.

So again, who’s to complain? To whom? Against Whom?

One could try to sue Pinterest, which is where their lawyers would quickly seek protection under the Digital Millennium Copyright Act (DMCA), which states that websites that host content uploaded by users cannot be held liable for copyright infringement, so long as the site complies with “take down notices” from those copyright holders. Here, the original owner of the copyright notifies the company with a “take down notice,” and the company is off the hook—no TOS necessary.

Many companies – Pinterest, included – very effectively use the DMCA as the “get out of jail free” card, effectively keeping their business out of legal danger.

But once again, we come back to the subtleties of the Copyright Act. As stated earlier, Pinterest could be liable for secondary infringement, which would make them ineligible to seek protection from the DMCA. For matters relating to copyright, courts would have to decide on the merits of such claims solely on case law developments.

This brings us to landmark cases, such as Napster and most notably, Grokster, where courts have established a three-point test to determine if a website “induces infringement”: (1) whether the majority of the content uploaded by users is infringed works; (2) whether the site provides tools that can only be used to infringe; and (3) whether the use of the works are (a) for commercial purposes or (b) harms the commercial interests of the copyright holder.

In the case of “majority of content,” this part is pretty self-evident.

In the case of the site providing tools that are “only” used to infringe, Pinterest’s defense would have to be based on a finding by the Supreme Court in “Sony Corp. of America v. Universal City Studios, Inc,” where the court found that, contributory liability cannot be imposed unless the technology lacks substantial non-infringing uses. Flickr, for example, only provides an “upload” button that allows users to upload images from their own hard drive. This provides “substantial non-infringing uses.” Indeed, the content on Flickr has most of its images uploaded by the original photographers themselves. Pinterest, however, cannot demonstrate this: their tool does not permit uploading photos from one’s own computer; in fact, it encourages users to pin photos from other sites.

The third test –commercial profit– also has roots in the legal doctrine of “Vicarious Liability,” where “courts have extended liability to those who profit from infringing activity when an enterprise has the right and ability to prevent the infringement.”

If someone were to go to the effort of showing that Pinterest satisfies all three tests, the company loses its DMCA protections, and must now face the music. This then re-engages copyright law, where the company could be liable for statutory damages if any of the works are registered with the copyright office. (Many pro photographers whose works are generally passed around the most, actually register their works.) Statutory damages mandate a minimum of $750 per infringed work, although a judge can raise the limit of the claim up to $150,000 per infringement if the defendant was deemed to “intentionally infringe.”

One would assume that if a site lost its DMCA protection because it was “inducing infringement,” then a judge would likely also rule that the infringement was “willful.” Hence, the $150,000 per image claim would be a hefty speeding ticket.

“Sounds troubling for Pinterest! Are they in trouble?”

Probably not. And it’s not because they aren’t in violation of copyright law—they are. It’s back to the basic question of “who’s going to sue them?” Unlike music and movie companies that have hoards of lawyers representing their interests and who aggressively shut down websites and file legal claims perpetually, photographers have no one. As individuals, photographers are too unsophisticated to navigate the difficult and expensive litigation process, so it is highly improbable that many will sue. And even if they did, they won’t be able to do so in a critical mass necessary to materially affect the company the way may music labels can. And even if they could, they’d be up against the same free-speech advocates that defended Grokster. This would not be an easy or inexpensive task, and would probably garner a large push-back from society who already regards photos as “different.”

I don’t mean to “pick on” Pinterest, actually. They are but one of many such sites. Polyvore not only satisfies the three-point test of “inducing users to infringe,” but their volume knob goes to 11: They offer even more sophisticated tools to infringe, including software that specifically designed to copy photos from other sites, while also providing no tools to upload users’ own photos, which flies directly into the face of the definition of Contributory Infringement, and satisfies the Supreme Court’s own language on whether the technology has a substantial “non-infringing use.” Worst of all, they are actually selling products, not advertising, which satisfies “Vicarious Liability.”

And their legal problems go beyond just copyright. Users also upload photos of celebrities to adorn the products sold on the site, which could be in violation of publicity laws if there isn’t a model release. (Cameron Diaz’s picture is one of the most popular.)

Polyvore does provide its own photos, which are legitimately licensed -- namely, from the companies selling the products depicted in the pictures. The test is whether the majority of the content uploaded by users are unauthorized. Other factors that appear to implicate their “knowledge of willful infringement” is a statement warning people not to infringe, and the promise they will take down photos if contacted by copyright owners. While one could argue that they are trying to give notice, this is akin to warning labels on cigarette boxes. No one’s fooling anyone here.

There’s no doubt that Polyvore knows its users are infringing, and it’s certainly possible that they are aware that they are also “inducing” infringement, but they are counting on the same two factors that Pinterest is: society accepts copyright infringement of photography, and more importantly, there are no special interest groups that will sue them for “contributory infringement” on behalf of a class of photographers.

“So, as long as society has accepted photography as a non-threatening step-child in the copyright debate, these sites are safe.”

The force is strong in you, young Jedi.

Still, the risk profile could suddenly spike if there were an unintended rise of those who would intend to assert those copyright protections, which could happen if incentives were to suddenly materialize. For example, a SOPA-like legislation.

“Huh? SOPA? Come again?”

Although the Stop Online Piracy Act is dead for now, the music and movie industries are not about to let it go. Something will eventually re-emerge with new and different terms. We’re already seeing a great deal of anti-piracy legislation coming out of Europe, and Congress and others are under a great deal of pressure to do something (probably after the election season).

What needs to be considered is the unintended consequences that might result if they don’t reconcile the incompatibilities between the social aspect of photography and the fact that it’s a copyrighted work. For, whatever law that has the intention of protecting movies and music just might create a financial incentive for new actors to enter the stage and try to represent the interests of the entire class of photographers, professional and otherwise. And the social networks that use photos are far bigger and vulnerable than the usual targets that music and movie studios attack, escalating the size of litigations that could arise.

A poorly drafted SOPA-like law could affect the internet in highly unexpected ways, akin to the sudden and immediate changes we saw in our political system after the Supreme Court’s decision on Citizen’s United.

“So, do you have a better solution?”

Funny you should ask.

I don’t believe one can ever legislate around this problem. There are two economies at play all the time: a legitimate one and an underground pirate economy. The best you can do is create so much incentive for people to participate in the legitimate economy, that the efforts to pirate become less interesting and less profitable, yielding a progressively smaller proportion of that industry’s total economy. Steve Jobs pleaded with the music industry to remove music locking in song files using the argument that people don’t want to infringe, so long as they can get access to what they want at a fair price. When the music industry finally agreed to remove those locks, online music sales spiked. But the music (and film) industries haven’t kept up with cultural and technological trends in how they handle the business side of their industries. They are still trying to solve 21^st century problems with 20^th century attitudes.

It’s not that I disapprove of litigation – it’s the music and movie industries greatest advantage. The legitimate marketplace exists because music and movie companies have the infrastructure to enforce copyrights; this is the stick that gets people to seek the carrot, benefiting the entire marketplace financially and fairly.

When it comes to photography, there is no infrastructure for enforcing copyrights, so there’s no viable marketplace. I mentioned that there needs to be a central clearing house for photo rights management: My solution to that is here.

________________________________

On Fri, Mar 16, 2012 at 4:15 AM, wrote:

When a person makes a board and posts other people's photos, isn't it just like sharing a link on a blog? When you click on the photo it goes back to the original website that it was found, doesn't it? I don't understand how that constitutes infringement, to me it's like a beefed-up hyperlink. Are you saying that they are literally taking photos and uploading them somewhere?

Literally copying content is one form of copyright infringement, but that's not what we're talking about here. The fact that the content is merely "displayed on a website not authorized by the copyright holder" is technically an infringement.

To illustrate, let's take your text, and change the word "photo" to "movie":

When a person makes a board and posts other
people's movies, isn't it just like sharing a link on a blog?

In this case, let's say that those "other people" are movie studios. Here, the the public that views this movie is able to see it on a site that has not been authorized to show the movie. The movie studio doesn't care that the movie also happens to link back to their site, or iTunes, or amazon, or anywhere else. The content itself is displayed on another website without authorization. That is an infringement.

Your question of "link" should not be conflated with "text links," which do not display original content. For example, the text link "click here for this photo" is not an infringement because content is not being displayed.

You may say that "photos are different" because photos aren't like movies, or that movie studios charge money, or anything else. Copyright law does not distinguish between media formats or financial intent or even who the owner is. Copyright law is there to allow copyright holders to choose how their content is used.

Many people think that content can be used unless the copyright holder objects, but that is not the case. Technically, the copyright holder must grant consent first.

I realize this would suddenly make everyone aware that every social network in the world is suddenly in gross violation of copyright, and that's why the legal system and the copyright "process" needs to be updated to reconcile this.

Creative Commons Effect on Photo Licensing

Julie Bernstein asked me the following question: "I am curious if your views on Creative Commons have changed since the four articles you published on this topic in '08."

Julie is referring to these articles (part1, p2, p3, p4) where I describe the CC as a great licensing method for almost all media types except photography.

In summary, what the CC has done is create a legally legitimate infrastructure for those who freely share copyrighted works. Before CC, such activity was technically an infringement, because the the publication of creative works requires consent of copyright holders. CC clears up that technicality, which is great. But it has inadvertently given people the impression that it has affected the licensing industry's pricing structures.

CC has not affected the greater licensing market (or prices), largely because of risk: CC has no centralized authority to assure that content is either submitted properly or used properly. Because it's so easy to game the system on either side of the photo (the supplier or the user can sue the other by luring them with a legally misleading scenario), the financial liability for anyone with a lot to lose is simply too high, especially given that traditional license fees are so minimal. So, the majority of image buyers simply stay away from CC.

Now, this is not to suggest there's something wrong with the CC model in principle. I'm a big advocate for it in all other contexts. Indeed, it was born out of the "free software" meme that was popular in the 1980s and 90s, when Gnu Public License (GPL) and other models were the precursors to the "open-source" model we still enjoy today. These are great innovations in licensing because they allow intellectual property to be used for the greater good, while also allowing for commercial use of those innovations.

But CC in the world of engineering is entirely different from photography. Engineering takes a considerable amount of time, resources and (usually) teamwork to produce anything of value that those in the open-source community would use. As such, the kind of content there is proportionally minimal, and each work is substantial and recognizable, making infringements quite easy to spot.

None of this is true in photography -- trillions of images are produced daily, it's impossible to track any given photo, or whether it is "legitimate" (either by the owner or the user).

So, sure, in a world of honest people that want to freely share their content in a peaceful corner of the image licensing market, CC is great. The CC market is growing, but the perception is only as a measurement of itself, not the total licensing market. An article on that topic can be found here:
http://www.danheller.com/blog/posts/total-size-of-licensing-market.html

Lastly, it's natural to ask, "If CC is so easy to game, why haven't we seen it?" The answer is because the market is so negligible. Economists often use crime data as a reality check on the economic activity they think they're aware of. The higher the crime rate, the more economic activity there is, and there's usually parity between that activity and the presumed size of a commodity's market. If there's little crime, the market size isn't big enough to warrant the effort. If CC were to genuinely gain momentum, it would attract those who would game the system for profit, which itself would have a cooling effect, bringing its popularity back down.

For the record, I've proposed that the best way to assuage people's risk concerns about CC is to use the "copyright registration" system. The CC foundation should have a submission system where those who want to submit images for CC licensing would bulk register those images to the copyright office. This gives them the right to file claims on behalf of the copyright owner, which is how major stock agencies like Getty work. Registered images are eligible for higher level of copyright protection, and there are federal penalties for fraudulent use. This means that users of CC images can be protected from invalid claims by those trying to game the system because this is built into the copyright act's provisions. Similarly, authors can be assured of CC compliance because non-compliant users could be subject to an infringement claim. Yes, you can sue someone for copyright infringement, even if the license fee were zero, because the infringement is another form of "breach of contract." Here, the user of a CC image agreed to the terms of CC by (for example) citing copyright ownership. Failing to do so is an infringement of that contract, and is therefore subject to the statutes provided by copyright law.

This would not only allow CC to have actual teeth, but the trust would go up as the risk comes down.

But such an infrastructure would be quite expensive to operate. That'd be a tall order just to create a system that brings the license fee for a commodity down only a few dollars, even if it is only to zero.

The Obama Photo Copyright Controversy

I was recently forwarded Peter Friedman's article titled, Fairey˙s Obama Hope poster copied nothing from Garcia˙s photo that could be copyrighted.

Normally, the arguments in this case are whether Shepard Fairey's artistic rendering of the image is an infringement of a photograph by AP photographer, Manny Garcia. But in this case, Friedman argues that the image doesn't have enough "copyrightable elements" for it matter in the first place. Under copyright law, works are ineligible for copyright protection if they do not contain enough unique qualities that would differentiate them from others. For example, photos of coins are generally not copyrightable unless there are unique angles, uses of light, or other qualities of a "creative" nature. Friedman argues that, while Garcia's photo may contain some elements -- though he also argues they are minimal at best -- Fairey's artistic rendering virtually removes them: that Fairey's image has few, if any, copyrightable elements. His article states, "the poster entirely changes these details by transforming them into a stylized combination of red, white, and blue. Moreover, it is plain the colors of the photograph are in marked contrast to the colors of the poster."

Friedman's logic concludes that if Fairey's photo has no copyrightable elements, then how can such a work infringe on any other work?

While an intriguing question, one that I hadn't heard raised before, the artist in me has a hard time buying into the notion. Fairey's is a very identifiable style, one that Friedman himself applies to his own image, as shown here.

Not only does Fairey's rendering enjoy its own protection under copyright, but the fact that it was derived from Garcia's photo means that Fairey's ability to use the work is limited. No one disputes that. Where the real argument begins is discerning the conditions where Fairey is limited, and where he's not. That is, unless he gains permission from Garcia, Fairey's use of his own rendering is limited to "editorial" uses, such as artistic display, political or social commentary, satire, and so on. On the other hand, "commercial uses" require Garcia's consent, such as when the image to advocate a product or service, or to promote an idea, including political or religious points of view. These are the types of uses that define "commercial use" as described by most state publicity laws. Granted, publicity laws and copyright laws are different, but the definition of terms are consistent.

And herein lies the ultimate question: is the Fairey "Hope" poster a form of protected political speech, or a commercial use? As Friedman points out, political speech is at the heart of the First Amendment, and people's right to express themselves--especially on matters of politics--is always given deference by the courts.

While a true statement, it's not quite that simple. Just because the Fairey image has been used in a political context does not necessarily imply that it's "political speech." And even if it is, the greater question is whether you can appropriate anyone -- or anything -- as a tool in that speech. For example, if the Fairey image were of a recognizable factory worker holding a hammer, and that person was an ardent Republican, we can be very sure that this person would sue Fairey for suggesting that he was an advocate for Obama. And the courts would not even begin to entertain the notion that this use of the image was "protected political speech." The First Amendment has its limitations, and this is such an example.

Although "property" (such as a copyrighted photograph) does not enjoy the same protections as people's rights of publicity, the point of the example was more to illustrate that the use in question is would fail a critical Fair Use test: it's an advocacy piece, and when advocating a political idea, you cannot misappropriate someone's likeness or their property without their consent. The ideas, opinions and expressions have to be yours, and yours alone. You have the right to express an opinion about someone in a political context, but misappropriating their property (or someone else's) for that purpose is not the same thing.

What if Fairey applied his artistic rendering technique to the Pepsi logo and added the phrase, "Obama's Generation." One can imagine that Pepsi would not take so kindly to having their logo misappropriated in such a manner.

Now, if Fairey's work were merely a piece of art hanging in a museum or an art gallery, courts have deemed this as Fair Use, regardless of the price that it may command, or even whether he copied it directly from Garcia's photo. ("Commercial" use is not not measured solely by monetary consideration.) Yes, one can appropriate another work, a person, or a logo without their consent, for purposes of artistic expression.

But which is the Fairey image? Protected art form? Or an advocacy poster? We have competing notions, but which carries more weight? To reconcile this logjam, courts often take into account is the predominant use? Is it used more as an art form? Or as a form of advocacy?

Or is Fairey just out to make a buck?

Picscout's IRC - commenting on other people's comments

When Picscout announced its new Index Registry Connection (IRC), the blogosophere has been abuzz, and with it, personal emails directly to me requesting public commentary.

Though I'm no longer affiliated with Picscout (past VP of marketing), I feel compelled to chime in on the subject. However, I obviously have information and insight that I'm not at liberty to discuss. This is a bit frustrating because some of it would help dispel some of the myths and misunderstandings that many people have about the IRC. However, there are a few things I can say that will merely help steer people in the right direction, at least insofar as their overall understanding of the stock photo market and the IRC's relationship to that. A great deal of this is based on blogs I've posted over the years, all of which pre-dated anything Picscout is doing today.

What we know, and what Picscout has announced, is that they are in the first stages of a technology that will someday be used as the foundation for new business models yet to be discussed. Those who've expressed concern about the IRC at this point have done so based on rather erratic speculation. According to Picscout, the IRC is just an index. It's currently being populated, and they are building an API for application developers to attach to the index to get information about images. Yes, Picscout has made a preliminary prototype that uses this API -- the firefox plug-in -- but one can assume that more applications will have access to that API at some point in the future.

But this hasn't caused some unfair and somewhat simplistic criticism of the browser plug-in. It has been ridiculed as a "bad way to reach image buyers" and that "no one really wants to add a plug-in just to see who owns an image." True, but Picscout didn't characterize it that way. It's just a prototype sample to demonstrate how the IRC can work. One can reasonably assume that, over time, many third-party applications that use images -- especially those used by image buyers -- could incorporate this API as well. There's nothing secret here; this is precisely why technology companies build APIs.

There are also those who've critiqued the basic premise of an IRC. That's like criticizing Google and Yahoo for creating technology that "scans and indexes the web." As image-recognition algorithms evolve, it's natural to index images and track on the web. That there may also be an added element that points to a "licensing agent" for those images not a "good or bad" thing--it's just something people can use. It can become better or worse depending on many other factors.

For example, similar models are already in use. All major media publishers (music, film, video, and news organizations) employ some sort of recognition technology to identify their content, which is then used to track their copyrighted content online. That some of them have been used in unpopular ways is true, but it's simplistic to throw the baby out with the bath water. There are also benefits to those mechanisms; they enable device-makers and others in the supply chain to create popular and useful tools to play such content on devices ranging from MP3 players to TV set-top boxes. The ease and convenience of instant-viewing of movies, songs and other content is a direct byproduct of such technologies applied in non-combative ways.

The difference with PicScout's IRC is merely that Picscout doesn't "own" the content they crawl and index, as opposed to media publishers that only do their own content.

But there's another important difference that the IRC does that other publishers don't do -- it provides for a new pathway within the communication channel for a potential "user" to legitimately acquire arbitrary content. I spoke of the inevitability of this sort of thing back in 2007 and 2008 when I outlined business models that would evolve as image-recognition engines such as Picscout's and Idee's grew powerful enough. In fact, my entire article, The Economics of Migrating from Web 2.0 to Web 3.0, predicted precisely the kind of IRC model that Picscout has now announced.

It's true that Picscout hasn't yet announced details of its intended business models, but just like the inevitability of the IRC in the first place, there's a very limited number of business options available, each of which are similarly predictable. (I identified a variety of such models in the article above.) The real question before us is not what Picscout might do, but how well they do it. Choosing the right partners, technology back-end, marketing, and competitive differentiation will all be instrumental in their success. After all, both Google and Yahoo attempted the same technology and business models, but only one succeeded.

Another concern I've seen raised by some industry watchers is how the IRC will affect stock pricing. John Harrington's post was one of several that expressed concern over the inclusion of CC (Creative Commons) images into the index. (CC attribution allows publishers to use images for free, in exchange for credit attribution). The concern that CC images are "free" and will thereby affect market prices is mis-attributed. I've written extensively about the myths of how "free" affects pricing--you can read them in the "Pricing and Profit" section of my blog. Those articles basically highlight common and repeating events that show how open-market pricing mechanisms has a tendency to optimize price points. Don't get me wrong--there is a concern about CC images, but it's not because CC images are free.

The problem with CC images is more tied to the legitimacy of the images in the first place. This, too is something I've written about a lot before, but I can summarize the basic problem this way:

The CC is used mostly by consumers who neither understand or care one bit about the legal complexity and liability that can come from publishing CC-attributed images.

It's also the case that those who CC-attribute their images don't believe their images would ever be licensed. Lastly, CC photographers don't think about it--they just assign CC attribution with indifference, much the same way one clicks on the Agree button on license agreements for new software purchases.

It's important to recognize the mindset of people who currently use CC-attribution because it forecasts how their behaviors might change under different market conditions. And that's where the IRC comes in. If the IRC shows that people can monetize their images in ways that were previously unavailable to them, they wouldn't be so indifferent to CC. In other words, CC photographers do not universally share the political focus and determination that Lawrence Lessig has. They are not an army of political adversaries that have it out to dispense with copyright. Most CC photographers are largely unaware that they're part of someone else's agenda. The simple smell of money--of easily accessible money--will convert most CC users into regular photographer-contributors.

Because of this, I think it'd be good for Picscout--and good for photo pricing--to be inclusive of the CC community. But there's another, entirely different problem with CC that negates this advantage... for now.

The problem is, where there's profit, there's also greater incentive to game the system. As such, CC presents a significant risk. The misunderstanding and indifference by the consumer public about CC is what allows bad actors to step in. You can read about that in more detail here. The game is to give a CC attribution, and then deny that "you" are the one who gave it. Either the photographer or the user of the image can do this dishonest act. An arbitrating judge would never discern between a lying photographer looking to swindle the publisher, or a lying publisher, looking to swindle the photographer. In the event of a dispute, the dishonest player usually is the one who wins because he knows the game.

Therefore, users of CC images have to trust that the CC attribution on the images they publish is legitimate, and that's not very practical. Combine the effects of these bad actors with the social phenomenon that consumers are in the habit of attributing the CC license to any image they touch--including those they do not own--the result is a time-bomb waiting to explode: when all those mis-attributed images are used by naive publishers seeking to use "free images" through the the IRC, the lawsuits start flying.

It's not as though "most" CC images are mis-attributed. The problem is that it's an unknown number. And the risk for Picscout is that even a small number can result in a PR nightmare. If a disproportionate number of images in its index are CC-attributed, it'd be like being in a dark room full of thieves when the lights go on: you not only can see what's been stolen from you, but who stole them. If most of the goods are CC images, people learn to avoid the room if it attracts thieves. Buyers would do more than just withdraw from using CC images, they'd avoid Picscout's IRC entirely.

The same would not be said of "traditional" infringements--in fact, quite the opposite. If the large majority of the IRC index contains validated works from credible suppliers, the IRC's reputation not only goes up for the buyer, but it would attract more business partners. Here, infringement claims would be regarded as proof and legitimacy of the system.

The issue of CC credibility points to another important factor in IRC's success: managing copyright in general. First, I'll dispel the silly notion that the IRC can be used as a vehicle for easier and more frequent infringements. The IRC is not a search engine, and infringers wouldn't use the IRC if their intent is to infringe. The IRC is just used to identify information about images a human finds through other means. That is, you already have the image--you just want to know how to properly license it.

The legitimate question is whether the IRC actually helps increase licensing. And this gets to a critical point people have asked that Picscout has yet to answer: Will infringements be pursued? As a general point of interest for industry watchers, protection of copyright is one of the most critical cornerstones of copyright economics. There's a direct relationship between copyright enforcement and compliance, which itself is due to the direct relationship between copyright compliance and social norms.

In other words, most copyright infringements are because certain behaviors are regarded socially acceptable--the norm. Infringements of photography are not usually because people want to save money through stealing. To understand the economic effects of this, understand that music copyright compliance trends finally turned positive when music labels struck deals with music companies to create ways for consumers to buy music more easily. And that wouldn't have happened had the music labels not been aggressive in pursuing infringers. I address that issue thoroughly in my article, Proposal for Privatizing the Copyright Registration Process, where I write:

...there's a lesson in behavioral economics: Consumers don't fear copyright infringement consequences, companies do. Markets don't grow by educating individuals about copyright; compliance is achieved--and business grows--by creating convenient and automated mechanisms that make both access to and use of content easier. The recent announcement by Apple and record companies to remove copy protection mechanisms in songs further reflects this economic reality.

That cornerstone of economic viability--pursuing infringements--must be real and present in some form, or there is no economic infrastructure to sustain a licensing business model. What makes this problem hard for photography is that, unlike music, which is protected by music companies, the common photographer does not attempt to protect his image copyrights. Worse, photo agencies do not step in to protect images the way music companies do in any significant manner. Even large stock agencies are puppies compared to the pit-bulls of the music industry when it comes to protecting copyrights. And photo industry trade associations literally do nothing--this, compared to the recording industry trade associations that vigorously pursue infringements.

Photography infringers steal because there is no social norm dictating otherwise. Most are totally unaware that they are doing something wrong. The IRC can lead a potential buyer to a licensing agent, but unless that agent is also prepared to protect that asset, social norms won't change. And people don't build new technologies to support licensing mechanisms unless they know social behaviors will participate in that system.

While the IRC can be used as an infringement tracker, it's unknown as to who is going to pursue infringements. And that's the elephant in the middle of the room. If the culture of stealing images doesn't change, too few people will use the IRC sufficiently enough to justify investment in its growth or participation by third parties that have to choose whether to invest time, money and resources into supporting the Picscout API.

By contrast, if someone does pursue these licensing/infringement conditions, it gives incentive throughout the entire supply chain to participate. Buyers would be more diligent about licensing images to avoid infringement suits, causing more photographers to use the system to track their images, causing more agencies to get more images into the system to increase the rate of licensing, and more third party applications will build IRC access tools into their programs.

In summary, all the critiques of the IRC that I've read are premature. But that doesn't mean there aren't serious questions and challenges ahead.

Photography and Public Domain: Part 2

Synopsis

The general perception of "Public Domain" is that if something is available unfettered on the internet, it's free and can be used however one chooses. Most people's perceptions of photographs is like that of random scribbles thrown out for fun, amusement, socializing or to communicate simple, generic information. Most people are unaware when others are using their photos. Nor do they care if they find out. In fact, they're often honored. Virtually no common consumer is paid when others use their images in ways that should require their permission. These collective facts give pause to the investment community for participating in a wide-spread infrastructure that would create licensing mechanisms for photos (such as there is for music). (The only such infrastructure is comprised of a small set of stock photo agencies that do not target the broad consumer market.) This then leads to a great volume of photos that are left both unmonitored and unmonetized, yet are still used in ways that should require consent from copyright holders. The lack of understanding of copyright and Public Domain means that a great number of images are infringed, intentionally or otherwise. Given that, the stage is set for malicious players to exploit these conditions by fraudulently misrepresenting the "status" and/or the "owner" of an image. This can be either to entrap infringers (by suing those who publish such works), or to infringe upon works and defending claims of infringement by saying that the works were declared "Public Domain." Fraudulent misrepresentation of copyright status is not only profitable, but it's the type of scheme that can be easily scaled up due to the enormity of images on the internet and the widespread ignorance and apathy the public have to the problem. The economic ramifications have lead to a stealth kleptocracy that few people are aware of, all within a sub-economy that few participate in. This creates a negative economic feedback loop that perpetuates the problem, further distancing any possible interest in solving it. The solution is not a matter of the law, nor awareness of the law, nor understanding of the law. It lies in the underlying mechanisms and incentive programs defined by the government that would encourage public participation, and would stimulate investment in the infrastructure that would allow fair-markets to compete lawfully.

In part one of this two-part series, I discussed how the term, "Public Domain" is finding its way into the mainstream press. But the topic is a bit obtuse, and press coverage is frequently biased and misinformed.

One of the unintended consequences of this is an erosion of people's general understanding of Public Domain, and by extension, copyright itself. This has had important ramifications on economic and legal events affecting all industries related to intellectual property. It might seem like a stretch to connect the dots in such a dramatic way; this article walks through those connections, beginning with an overview of how the public behaves today, and ending with proposed solutions to the problem.

As will be illustrated by examples and reports below, the vernacular use of the term "Public Domain" has become synonymous with "publicly available." Most people think that if they can copy stuff from the internet in an unfettered fashion, there's an implicit "grant of use" permitted by the author. This, unlike music files, which most people know as being illegal to download without payment, even though some do it anyway. The perception of photos is perceived quite differently; most are surprised to learn that images carry the exact same copyright restrictions and protections as music does. After all, how can a snapshot taken by an infant while he dunked his father's expensive digital camera into the fish tank have the same legal protection as a newly released song by The Rolling Stones?

Oddly enough, they have identical protections in the eyes of basic copyright law. Of course, few people know this. In fact, most believe that unless expressly stated otherwise, photos found on the net are free to use in any manner one chooses. An example of this is reflected in this New York Times article called, Flickr as an Interior Decorating Tool. Here, the author discussed how she likes to go to Flickr and print out her favorite photos to decorate her walls. (Hint: this is technically a form of copyright infringement.) The author's act is more than just reflective of the general public's misunderstanding of how copyright applies to photography, but the article perpetuates these misgivings and helps further establish its acceptability--the social norm.

A UK study further illustrates this through empirical research, drawing the same conclusions. This study became itself a topic in the blog, Plagiarism Today, which concluded that if copyright is to be better understood, "it needs to be built on the back of a robust understanding of common law."

That conclusion, however, misses an important and critical truism about societal behaviors: people don't comply with most civil laws because they are aware of them or even understand them. They comply because compliance is often "built into the system" by default. There are a variety of mechanisms built into day-to-day life that make legal behaviors not only easy, but second-nature, which are reinforced by social and economic "reminders."

A current example of this can be found in how people deal with online music. When Napster was first introduced, people infringed on music universally, all but ignoring cries of foul by the recording industry. When the RIAA started suing individuals for downloading music, people's behaviors didn't change; instead, they viewed the music industry with disdain.

It was only when music labels decided a different tack did people's behaviors begin to change: the companies cooperated with device makers to create simple, convenient and automated mechanisms for users to purchase and play music seamlessly and instantly. This was the first event that slowed the upward trend of music piracy, and an increased the revenue generated from online music sales.

The lesson is that copyright compliance it's not about cost, and it's not about legal awareness or education (or even ethics). For consumers, it's about convenience. Once this lesson was learned, the next experiment took place: the removal of copyright protection schemes on songs, allowing people to use their existing purchases on other devices they own. By further assisting users in enhancing the "music ownership experience," the music companies were rewarded by another increase in purchasing trends.

It's very true that law plays a pivotal role here, but it's the larger companies that were driven more by the threats from one another that stimulated the development of those mechanisms that promoted copyright compliance by the masses.

What does any of this have to do with Public Domain? Well, people steal (even inadvertently) when the system doesn't provide mechanisms for easy compliance. The perception that most photography is in the Public Domain is largely because there are no industries--and therefore, no mechanisms--available to the general public of consumers to comply with photo copyrights. With no infrastructure, there's no economy.

At least, not legitimate economy. The reality is that photography is protected, and it does have value, and infringements are lucrative. If no one's there to claim any of these benefits legitimately, it seeds the ground for bad actors to come in.

The Dots that Lead to Trouble: Corporate Infringement

Though the music and movie industry still suffers from stolen works, the proportion of images that are "stolen" (to those that are legitimately licensed) is significantly higher, and is on an upward trend. This, even though the copyright protections for music and photos are identical. But what makes this significantly worse is that, unlike music that's stolen by individuals, photos are stolen by corporations. This type of infringement is a double-whammy because corporate licensing of photos on a per-unit basis can be in the hundreds to the thousands of dollars (compared to a $.99 song); and because the infringement claims against a company can be in the tens of thousands of dollars.

When no one but malicious players are aware of this, trouble is around the corner.

The dots that lead up to all this begins with the fact that photo copyrights are owned by individuals, not a small cooperative of large companies that can collaborate on industry-wide practices (i.e., music) and can exert pressure to preserve copyright compliance. Individuals have legal leverage only in protecting themselves, which they rarely do because of their own misunderstanding of copyright and of Public Domain.

Next is the perceived value of photos: most consumers use them for utilitarian purposes (socializing, personal photo albums, documenting inventory, etc.), and photos are taken by any idiot with a camera, not just professionals, like musicians are with music.

The combined lack of perceived value and lack of preventative action then leads to the application of this understanding from one's personal life to one's professional life. That is, consumers also work at companies, and their behaviors at home translate to their job duties. If they use other people's photos (and allow others to use theirs) in their personal life, they behave similarly when using photos in the documents they produce at work.

By comparison, there are few if any copyright infringement cases against corporate use of music. Obviously. Everyone knows music cannot be used in commercial ways without seeking permission from the record label. You never hear of a low-paid intern downloading a song and embedding it in a car ad that's broadcast on network television. Even a consumer that illegally downloads songs from the internet knows better than to do that.

The same cannot be said of photography--studies consistently show that 5-6% of photos sold by stock photo agencies are infringed upon by corporations for ads in high-profile magazine, newspapers and the web. Since stock photo agencies (who do go after infringers) represent only about 15% of all licensed images, one can assume that the ratio of photos stolen from non-professionals is much higher, if only for the fact that most online photos have no preventative measures to stop infringements like stock agencies have.

Even when stock agencies sue, it's not educating society with massively sweeping information campaigns. By and large, people still infringe photos because it is, at worst, considered a cultural faux pas--a social misdemeanor. Akin to wearing white after Labor Day.

A recent story highlighting this involved a Missouri family whose photo became a billboard ad in the Czech Republic. The family learned about the use of their picture only because of a random coincidence -- a college friend in the Czech Republic happened to see the sign. What makes this story so revealing is that it illustrates just how unusual it is that the family found out.

While it's a nice, gentle piece that ran in the "lifestyle" section of newspapers (because no one filed a copyright infringement claim, or sued for violating publicity laws), this might not have been treated so lightly had it been a stolen song. It'd have been in the business section, and more serious analysts would have been doing math to figure out what the impact might be on record industry. The mild news coverage of the stolen photo had a subtle effect on perpetuating the general perception that there's no serious harm done in using someone's photos found from the net.

The last dot in the sequence is the one that completes the picture: enter the con artist. It doesn't take a genius to connect the dots to see that all such copyright violations really are eligible for hefty damage awards, and no one's there to claim them. Because most people don't think there's value in their photos, and the fact that there are billions of photos on the internet, thieves can causally peruse the web in search of photos, and users of photos. Given that the infringement rates are so high, and given that both users and publishers of photos are so poorly aware of copyright, the cherries are ripe for picking.

Crafting a solution to the problem is not just a matter of erasing the dots, nor applying the law better, or making people more aware or educated. It's about instituting mechanisms that allow the free market to provide methods and incentives for people to participate in the system, both as buyers and sellers of this highly under-monetized (and overly exploited) copyrightable work.

In the Beginning...

We begin with the basics. The Berne Convention for the Protection of Literary and Artistic Works states that a work is automatically copyrighted the moment it is produced in a fixed and tangible form. For photography, it means that, the moment the shutter button is released, the photographer automatically becomes the copyright holder. No other action is required--no registration, nothing.

Some people are aware of "copyright registration", but erroneously believe that such registration is required to get protection. It's not. Registration does provide extra levels of protection by allowing copyright holders to receive higher damage awards -- called "statutory damages" -- but this is entirely separate from basic copyright law and the protection it provides. Yet, what copyright registration does is advance people's understanding that copyright is important and valuable. It'll be important to keep this in mind while crafting solutions.

In any event, all photographs are copyrighted (by definition) the moment the pictures are taken. For a work to not be copyrighted is highly unusual, and, in fact, more difficult to achieve in practicality than one might think.

The most common reason would be that its copyright term has expired. See this article for details; it basically lists dates of expiration for when old photos fall into the Public Domain naturally. These photos are those that were shot long before modern copyright law was enacted.

Another way a work can be in the Public Domain is if the photo was taken by a government employee (or contractor) "as a part of that person's official duties". For example, photos shot by military photographers are in the Public Domain.

For everyone else, there is no clear and precise mechanism defined by law or any other government resource for one to release images into the Public Domain. (Foreshadow: this is the source of all the problems.) Therefore, it is virtually guaranteed that every photo you've ever seen on the internet is copyrighted by someone. If you aren't aware of that, you're not alone, and it therefore suggests that most the photos you see online should be licensed (such that the photographer is compensated in some way).

For a work to genuinely be in the Public Domain--a status where a photo has no copyright holder, and therefore, can be used by anyone for any purpose--is extremely unusual. So unusual, that one can pretty much assume that virtually no photos you come across online are in the PD.

In fact, in the research I've done for this article, I found that almost none of the copyright experts I spoke with could articulate a confident explanation of how you can rescind your copyright ownership to a work. In fact, most questioned why I would ask such a question--as though I were leading to something else. One person even refused to answer the question unless I stated why I would even want to do such a thing.

Ironically, the recommended method is oddly and deceptively simple: A copyright holder simply states that his photo(s) are in the Public Domain. Yes, it's true--that's all that's technically required. In Stephen Fishman's book, The Public Domain, he writes,

There is no prescribed formula for dedicating a work to the Public Domain. The author or other copyright owner simply has to make clear his or her intentions. For example, stating "This work is dedicated to the public domain" on a book or article's title page would be sufficient. It's not even necessary to make the dedication in writing. It could be done orally, but it's always best to write something down to avoid possible misunderstandings.

While this is all that the "law" technically requires--and there are many legal cases supporting this presumption--the reality of today's social and technological environment makes the application of such law and prior precedent inapplicable in many developing trends.

Take the case of Capitol Records, Inc. v. Naxos of America, Inc., 372 F.3d 471 (2d Cir. 2004). In essence, Naxos copied mint condition patters that contained classical music from the 1930s and sold it on CD. The music was, for all intents and purposes, in the Public Domain (having fallen out of copyright). The sales of the music wasn't contested at first, but when Naxos' sales grew just a bit too much, Capitol Records finally sued for copyright infringement (under common law) and won.

The legal assessment of this case suggests that, just because something may appear to be in the Public Domain, it doesn't necessarily mean that a user of that work is entirely protected.

An interesting summary and discussion (though a bit sensationalized) can be found here, which includes a notable analysis from Norman Lebrecht here.

While prior legal rulings may hold legal weight and standing, they aren't going to prevent or slow down bad behaviors. Social behaviors trump the long arm of the law when the population's actions surpasses a certain critical mass and there are no attempts to curtail the actions by others.

This is the very problem with the Public Domain concept: it hasn't been updated to reflect today's society--or rather, people's understanding of the term. PD was defined at a time when there was no internet or electronic media of any sort. It also hasn't been perceived to need revision since few people actually proclaim their works to the Public Domain. There is no financial incentive to do so, and the few who've released works voluntarily are usually well-known artists, collectors or philanthropists. Hence, their "donations" were never questioned, or disputed. The authors were credible and their lack of legal action against users of those works further underscored the legitimacy of the works' copyright status. In short, there's rarely ever been serious risk.

The two key notations above are risk and credibility, which go hand in hand with copyright and safety from litigation. Today, if someone wishes to publish most any kind of work--even those perceived to be in the Public Domain--there's risk because the credibility of the claim or the claimant can be in doubt.

Liability of Publishing Copyrighted Works

Under copyright law, the publisher of a work assumes all responsibility of liability if the work was not properly licensed from the copyright holder. If the work is not in the Public Domain--despite some random person's claim otherwise--the original copyright holder can file an infringement suit against whoever publishes the work. For a publisher to be truly "safe" from liability, he should get direct consent from the copyright holder. (Bookmark that phrase in your brain--you'll see it again soon.)

You may ask, "What's the real-world threat here? How and why would someone falsely claim that some photo that they don't own is in the Public Domain?"

Remember, the online world is full of malicious people looking to siphon money from the naive and vulnerable. People can be both when it comes to online scams, ranging from the Nigerian email schemes to more modern methods of preying on the jobless (as described by this article in the New York Times).

In the case of "The Public Domain", people's naivete plays right into this, and the malicious agent can leverage this misunderstanding on both sides of a copyrighted work. The less malicious example is less common, and isn't used to siphon money so much as to get a free pass to steal: by falsely attributing a Public Domain notation to a photo he wants to publish, his defense is prepared for later if the copyright holder were to challenge him. "Hey! That's my photo! You infringed." To which the response is, "What? You own that image? When we got it, it said it was in the Public Domain. We can't be held liable for that!"

To a judge hearing this, would he believe the claim? Or would he see through it and realize he's trying to use the image for free--robbing the original copyright holder of his license fees?

Or, perhaps the malicious player is setting a trap: luring an unsuspecting publisher into thinking he can use a photo for free, after which, a bogus copyright infringement claim is filed (with the intent of collecting a settlement)? The exact same exchange between parties -- the same dialog -- can take place when the copyright holder (or the person posing as one) is the malicious agent.

In both cases, misrepresentation of the image takes place. The problem facing any court is determining which side -- the plaintiff or the defendant -- is the malicious player.

What makes the crime all the better is that the judge has to consider a third possibility: that neither side making a false claim at all. The false claim of PD could have been made by an entirely unrelated third party which no one can possibly find. Which of these three scenarios will a judge choose? Would his ruling be consistent across all cases? Would it set precedent for future rulings? No matter what, the advantage is in the hands of the bad actor, because he has little, if anything, to lose.

Making matters more attractive to bad actors is the volume of images. There are billions and billions of photos on the internet, millions of which are passed around so much, it's nearly impossible to know where any one of them originated. By the same token, the original copyright holder probably doesn't know either. Therefore, pretending to be the author of an image is almost guaranteed to be believed.

It reminds me of the now-famous New Yorker cartoon, where two dogs are at a computer, and one says to the other, "On the Internet, no one knows you're a dog."

The Microstock Scheme
This scam with photography is not new; it started a few years ago in using a slightly different scheme, one that was also more profitable at the time than it is now.

About five years ago, microstock photo agencies sprang up in larger masses that gave rise to this problem. These companies are like traditional photo agencies, but are much more lax, semi-automated, and deal with micro-valued photo assets. They sell millions of images submitted by photographers, who in return, receive a percentage of sales. Scam artists started submitting stolen images to these agencies and collecting those royalties. What made this possible is that virtually no stock agencies require proof of ownership, or even that photos be registered with the Copyright Office as an extra level of assurance to image buyers. Stock agencies bear no risk; they have photographers indemnify the agency by warranting that they are the photographer. The warranty may or may not be true, but it doesn't negatively impact the agency, and the bad actor doesn't care--only the buyer is harmed here.

There are already documented cases of this (a few of which can be found using a variety of search terms, such as "stolen photos microstock"). Although most stock agencies don't want to publicize numbers, it's no secret that the problem is getting worse, since the systems are largely automated and there's no way to know whether a submitted work is stolen. It takes very little effort to pull this off, and it's very easy for the thief to shield his identity sufficiently. In the meantime, he collects royalties on the images he submits.

And don't think I'm giving anything away here--cyber-criminals are way ahead of all of us. In fact, the above method is now seen as less lucrative than other related schemes. Most legitimate photographers earn only a meager $10,000 or less per year with most stock agencies, and those are the successful ones. (PDN Newswire publishes surveys every year.)

If you're a thief, you're thinking, why bother with stock agencies and collecting license fees from legitimate buyers, when a greater payload is achieved by threatening copyright infringement against publishers of photos that the con artist has claimed.

Though the problem is far from pandemic, let's not forget the phishing schemes were at one time rare anomalies, too. Once an easy way to make money is found, thieves are entrepreneurial in how quickly they perfect and automate the system. And phishing turns out not to be too different in principle than the scheme here: lure a naive user into believing a frightening claim. "Login to your bank site and reset your password now!" Anyone that would believe that would also believe, "You've stolen one of my images; copyright infringement can be quite expensive, but I'll be willing to settle out of court, saving both of us time and money."

The Creative Commons Scheme
In fact, I cited long ago how this can be done using Creative Commons licenses. The CC is a series of license agreements by which copyright holders permit users to publish their works for free, provided that author credit is given as a byline (among other options the CC optionally provides).

By adjusting metadata in the images to proclaim Creative Commons status, and spreading them around photo-sharing websites rather than stock photo agencies, the game is to entrap licensees who seek CC attributed images, and then sue them once they publish them. As before, the claim is "I never attributed those photos with a CC license! You've infringed!"

The Creative Commons' role in contributing to the growing misunderstanding of copyright is complex and unfortunate. The stated objectives and wider ambitions of the CC are worthwhile, admirable, and valuable to society, but unless handled properly (by paying attention to the side effects of its popularity), it can lose favor if its downsides are realized.

The CC's popularity is more directly augmented by social-networking sites who promote it for their own economic interests: They derive revenue on traffic, advertising, and membership fees--not from content. The more end-users share content online, the more traffic the site gets. The Creative Commons license fuels the rate of photo-sharing, which helps the site, but perpetuates the greater misunderstanding about copyright. The complex agreements behind CC are never read by individuals, who also don't understand the opportunities they give up. Nor is it in anyone's financial interests to warn potential users of CC works that they are assuming some liability in the event the CC attribution is not authentic.

The Public Domain Scheme
How does Public Domain factor into this?

Like Creative Commons, the use of PD works is free. But that's not really the critical detail here. What's shared between these forms of content attribution is that they are the only two ways in which publishers would use works without obtaining consent directly from the creator of the work (or authorized assigns).

Remember when I told you to bookmark the statement that licensees are safest when they get direct consent from the author of a work? Now is where that applies. Again, under copyright law, the publisher bears the liability of using works. And when liability is in play, someone has economic incentive to exploit that legal fact for profit. The consequences are so onerous, that even the threat of an infringement causes wallets to open and cash to come flying out, just to make the problem go away.

What both the Creative Commons and Public Domain have inadvertently accomplished is the creation of a huge liability gap, through which a Mack truck can be driven.

I repeat again that both mechanisms were conceived with good intentions. Of course, it's by design that the Public Domain and the Creative Commons are set up to avoid direct, one-on-one contact between the publisher and the author of a work. This would be the best way for people have their works widely and frequently used by others for free. But this very aspect of those copyright vehicles is leading to misuse and abuse.

And therein lies the paradox. There's an old saying, the road to hell is paved with good intentions. And in the case of CC and PD, the pavement materials used for this road consist of photos and fraudulent claims of ownership and copyright status.

I can speak to this from personal experience. Of the 40,000+ images on my website, I often find anywhere from 1500 to 3000 instances of my images on other websites (not counting those who legitimately license from me) at any given time. And though I can't reliably track infringements on a real-time basis, it's very common for me to find my photos on someone else's site, or on a photo-sharing site like Flickr. In such cases, it's almost always an innocent consumer who's just copying and posting photos they like from various websites they've visited (totally unaware that such copying is a form of infringement). In some cases, I find that my photos' metadata records have been altered in various ways, showing different authors, different locations, and yes, different copyright status, including both CC and Public Domain claims.

In most cases, it's unlikely that those changes were made by the person that presents the page. (I can usually tell by gauging the sophistication or naivete of the person I'm emailing.) Rather, my photos were most likely copied from my site by someone else first, who modified them, and then passed them around the net before the unassuming Flickr user found them.

Could those have been the original malicious players? I've no idea, but one can only speculate what other motivations there may be.

On those occasions where I find my work is being infringed commercially, I always hear one of several excuses by the infringing party in their attempt to absolve themselves of responsibility (and liability): "It said it was in the Public Domain (or had a CC license)." "We got it from a CD that has royalty-free images on it." Or, "Our graphic designer got it from another supplier." "We have no idea where we got it."

As the true copyright holder, I have no idea whether they are telling me the truth. All I know is that I'm not getting my license fees for their use of my image. If their excuses are to stand, they just got away with using a photo without paying for it. One of us is about to get screwed. Who should it be?

It turns out, the law is on my side--it's their responsibility to assure they licensed a work properly from the original copyright holder (or his assigns). Which brings me full circle to the problem. The publisher always assumes risk using photos that they didn't obtain directly from the source. And when most people are so massively uninformed about Public Domain, that risk turns into reality from improper licensing practices.

All this leaves the whole purpose and benefit of Public Domain in doubt: What value is there to it if, in practicality, no one can necessarily trust it?

Solutions?

By this point, you may be thinking of The Orphan Works Act (OWA)--a new proposed legislation that gives limited protection to certain kinds of publishers who may inadvertently infringe on a work because they were unable to identify or locate the author of a work. Though the OWA doesn't actually do what most people think it does, it still doesn't apply here because the bad actors are employing a scheme that involves posing as a copyright holder and threatening a publisher with an infringement suit--not actually filing one.

The legal costs in defending any claim (even a bogus one) is always greater than ending the dispute with a settlement of some sort. Even if an infringer would be protected by the OWA, he still doesn't want to spend lots of money in court defending himself. He will settle.

So, OWA doesn't really protect publishers the way copyright holders have thought it does, nor is it going to be a deterrent for bad actors to fraudulently masquerade as copyright holders. (Besides, the reality of the OWA is that its beneficiaries are different types of organizations, for only certain types of uses.)

So, there's nothing in the current legal system that can really be done to avert these kinds of schemes, given how easy they are to perpetrate and to hide from (especially overseas).

However, history has showed that illicit activity like this is ameliorated when there's a legitimate, mainstream infrastructure that engages the general population. When people are more participatory, they become aware when something appears out of place or suspicious.

The problem with Public Domain is that it's so rare and people are so uninformed about it, people can be lured into a moral hazard. This is a term used in economics that describes how people will do risky things if they perceive they are guarded against the consequences. Here, people think Public Domain applies to things that aren't actually in the Public Domain, so they do risky things with those works.

If people were more engaged in the copyright process, both as creators and users of works, they would be more cognizant of their own behaviors, as well as those of bad actors. To get them more engaged, companies need to invest in systems, mechanisms and infrastructure that creates an economy around photo-based copyright. But the reason none of this exists is because no one can build a business case that gets around all of the unique problems that photography presents (as described at the top of this article).

The only entity that can create such conditions is the government. And this is done not through law or education, or even by financial investment, but by changing certain key policies that give incentive to companies to participate in the system. Their participation spreads to consumers who participate as both buyers and sellers of photo assets.

There are two ways to address this problem. I've already addressed one in considerable depth in my article titled, Proposal for Privatizing the Copyright Registration Process. In short, the government would allow private companies to handle the processing of copyright application forms that people submit with their photos. Currently, a tiny percentage of works are submitted for registration, but if private companies were allowed to process those applications as Copyright Registrars, they would have economic incentive to promote their services, which in turn, informs and encourages consumers to engage in copyright registration. This leads to products and services that people would use to protect their rights--which may include licensing services (like that of a stock agency, but on a massive scale).

The byproduct of such a mechanism would be that people would be far more aware of what copyright is, and where its different from Public Domain, leading to far less confusion about both. Social behaviors would also be more copyright-aware -- people would be more aware of their own photos, which translates to behaviors in the workplace: they'd be more aware of using others' photos as well. This isn't because they'd have a sudden burst of ethics or sympathy, but because they'd be familiar with how the system works. Just as they wouldn't illegally use a song for a TV ad, they also would be aware that they'd need to license an image from the original copyright holder (or his assigns) before putting it in a magazine ad or brochure.

The next thing the government could do -- which could also be independent of the Copyright Registrar proposal above -- is to provide a brand new form for formally releasing the copyright to a work into the Public Domain. This process could be similar to the standard copyright registration form that people use to formally declare their ownership of images. (In fact, there could be a form that combines both to save time for those users who wish to release copyright before even owning it.)

The formal process substantiates authenticity. A potential user of a work he thinks is in the Public Domain would have resources available to him to formally verify it. Similarly, an author could monitor whether his works are being wrongly claimed and classified by others.

The credibility is also backed up by the fact that such registration would be underscored by federal laws, which carry hefty fines for fraudulent claims or representations. (Currently, the fine for fraudulent copyright registration filing is $2500.) It is a long-standing observation that most criminals avoid violating federal crimes, not just because penalties are punitive, but the federal aspect ups the stakes considerably... this, especially if there's a past history of criminal activity, which can even lead to jail.

As a side note, it just so happens that the Orphan Works Act mandates the creation of an online database of copyrighted works. It could very well be extended to include works the people release into the Public Domain.

Obviously, this would have no effect on works that have been in the Public Domain due to expiration. Needless to say, they could very well be treated as they are today, on a case-by-case basis through the courts.

As for the Creative Commons, this is a matter that has nothing to do with the government, or Public Domain, unless the government wished to institute a new derivative form of Public Domain that was a hybrid between copyright ownership and free use and distribution--something like what the CC is. But that's an idea for another blog posting another day.

Anyway, the CC's liability is similar to the PD, but the solution is slightly different because of the lack of government participation. I had proposed a particular approach in a blog entry on January 13, 2008. There, I proposed that the Creative Commons create a registry where authors and publishers alike would register their works (and intentions to use them), so as to authenticate and document who's doing what. That plan was intended to be a stop-gap measure, but it doesn't actually stop a bad actor from fraudulently claiming a work to be in the Public Domain. (There's nothing more unique or preventative about a CC registry that carries with it the heavier weight of a federal crime.)

In other words, CC works still suffer from the credibility question, and that can be addressed by merely requiring that works with the CC attribution also be registered with the Copyright Office. This not only reduces risk for all parties because the credibility of copyright registration is substantially higher than that of a CC registration, but the penalties for violating CC terms and conditions escalates to statutory damages because of the copyright registration. This would effectively bolster the overall perception and enforceability of CC works. They would be better perceived as "safe to use."

The natural objection to such a proposal is that, since few people ever register their works with the copyright office, participation in the CC would dry up. The CC could alleviate that concern by integrating its own registration process with that of the copyright office. That is, by registering with the CC, you would automatically register the work with the copyright office as well.

This tie-in could actually encourage more people to use the CC, both as contributors and publishers of such works.

Summary

My long-standing view of copyright, economics and law is that the "system" works when there are checks and balances that give credibility and protection to the intentions of all who touch copyrighted works: authors and users alike will participate in a system that is less subject to unfair exploitation, which yields positive economic benefits and reduces economic risk. This, in turn, fosters investment into mechanisms that help facilitate and expand on such opportunities.

In the end, the free market will find the balance between what's paid for, and what's free. But without such mechanisms, the state of affairs today is like the Old West: the rustlers rule.