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Corporations, CDs and Click Thru Licensing Loopholes?

Cliff posted more than 11 years ago | from the things-that-make-you-go-"hmmmm..." dept.

Music 32

oh the irony! asks: "The way the current legal/political/economic climate favors corporations and industry associations like the MPAA and RIAA in questions of intellectual property and copyright troubles me. But it has occurred to me that these tools could be used against the RIAA etc. The RIAA says peer to peer services like Napster were illegal because one person buys a CD and rips it so that a person who doesn't own it can listen to it. So...what if a Corporation buys a CD? Specifically, a corporation is legally a person and can own intellectual property as well as other property. If people are members of a corporation they can then legally use the corporation's property. I am not a lawyer but maybe Slashdot readers could tell me if my idea is legally possible or workable. It would be poetic justice to use Click through licenses and corporate law against the bad guys." Read on for more details on "The Idea".

"What if there was a peer to peer service that had a click through license of some sort that made each user a member of the corporation. The user uploads a CD and it becomes property of the corporation. The user retains the original CD as a distributed back up for the corporation. In return for this service (providing a safe place to store the physical CD, using their harddrive space to store backup copies, using the user's bandwidth to distribute these backups to be backed up etc.) the corporation lets the users occasionally listen to that music and other music the corporation owns as a form of payment.

Users are not receiving a service (downloadable music) they are providing a service (storing digital music for a corporation). They are employees of the corporation that get paid by the right to listen to the music.

This would only work if corporation was non-profit and decentralized, a co-operative of some kind without any ability to have control taken of it by someone who would then try to collect its property (the CD's)."

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IAAL (0)

Anonymous Coward | more than 11 years ago | (#5637943)

just remember to keep your internal corporate lan disconnected from the internet, and hence out of the reach of the riaa goons

I want in! (1)

override11 (516715) | more than 11 years ago | (#5637979)

I have 'backup' space I would like to donate, please sign me up! :)

My Company Policy (1)

Andy_R (114137) | more than 11 years ago | (#5637985)

All software in my company that requires registration is given the name "everybody" and organisation "everywhere".

Maily this is done so we don't get outdated information there when people leaving the company, or the business name changes, but I suppose it might enable legal reselling beyond the shrink-wrap's (highly questionable) restrictions, since the software proudly proclaims "this product is licenced to everybody everywhere" when it loads.

One minor flaw with this is that one unfortunate PHB didn't notice that these were his defaults, and ended up with the e-mail address "anybody@msn.com" - you wouldn't believe number of clueless e-mail complaints and dumb-ass tech support requests that got sent to that address in the brief time that we had it!

Legally a person? (1)

ccady (569355) | more than 11 years ago | (#5638001)

Specifically, a corporation is legally a person
Fortunately, this is not true.

I doubt your idea would truly go far. The argument, as I guess it to be, would be that when the corporation makes a copy for the member to play, it would be creating a copy which is *not* for the purpose of backup. That copy would be infringing on the copyright owner's right, and the corporation would have broken the law.

Doesn't really work (2, Informative)

WolfWithoutAClause (162946) | more than 11 years ago | (#5638004)

Certainly corporations can own CDs; so that much is correct atleast.

However, if the corporation owns a copy of a CD, then only one person can listen at once, otherwise it becomes a 'performance', which you haven't bought the rights to when you buy a CD. However if you only allow one person to listen then that may be ok (but then you're talking about a library copy- IRC there may be different terms for those.)

Secondly, you can't deploy it across the organisation, say with P2P; because you don't have a license to do that- that would be a copy, and the copyright holder has a monopoly on allowing people to do that.


Re:Doesn't really work (2, Interesting)

jkramar (583118) | more than 11 years ago | (#5638032)

However, if the corporation owns a copy of a CD, then only one person can listen at once, otherwise it becomes a 'performance', which you haven't bought the rights to when you buy a CD.

Your argument implies that listening to music without headphones is a copyright violation.

Re:Doesn't really work (2, Interesting)

WolfWithoutAClause (162946) | more than 11 years ago | (#5638066)

Your argument implies that listening to music without headphones is a copyright violation.

Taking the letter of the law, I think that that is correct. In practice, unless you are playing it for people who actually want to listen, and probably paying for it, you'd be vanishingly unlikely to run into problems.

Re:Doesn't really work (1)

gi-tux (309771) | more than 11 years ago | (#5639041)

Cool, then let's deploy that version of the law against all the folks that force me to listen to their music while I drive :-) WOW a good use of the RIAA, in enforcing sound polution laws.

I REALLY NEVER thought that I could find a good use for those guys. Now what can we do to keep the MPAA busy too. Is there some way to turn them against billboards and bad advertising signs?

Re:Doesn't really work (1)

unitron (5733) | more than 11 years ago | (#5640390)

"...force me to listen to their music while I drive..."

Are you the owner of the vehicle which you are driving or a someone hired to drive it?

Or did you mean the idiot next to you at the stop light with a subwoofer where his spare tire ought to be?

Re:Doesn't really work (1)

zcat_NZ (267672) | more than 11 years ago | (#5643180)

Hell yes. Hit those 'boom car' drivers with annual performance royalties!! And soon, please!!

Re:Doesn't really work (1)

octalgirl (580949) | more than 11 years ago | (#5638765)

All commercial organizations that want to play or stream music that is copyrighted, to a large number of people, must pay a license fee to places like ASCAP. [ascap.com] That is what muzak (spell?) in elevators is all about. Businesses pay for that music to be heard. Even stores that sell CDs must pay for the very music that they play in their stores. So in theory, yes a company could certainly purchase CDs and P2P them, but technically they would be required to pay the same fees as if they were putting it out over the loudspeakers.

Even Happy Birthday [umkc.edu] has copyright.

Re:Doesn't really work (1)

sarabob (544622) | more than 11 years ago | (#5639841)

Alternatively, ASCAP could be your friend...

"Broadcasting a request show to a single person" is the name, and approx $390/year per stream is the game.

(as per http://www.fitzroydearborn.com/chicago/radio/sampl e-ascap.php3, the ASCAP fee is "$390 for all other noncommercial outlets.")

Add a dash of DSL-style overselling/"contention ratio" and I reckon you could get instant access to all ASCAP material for about $10/month on the assumption of 4/1 contention.

Any takers?

Re:Doesn't really work (1)

Rick the Red (307103) | more than 11 years ago | (#5638448)

You're right, this proposal wouldn't work. But it's a good place to start.

How about this? What if we created a P2P system similar to the proposal, but with a distributed library of corporate-owned copyrighted works. It could be any copyrighted work -- books, music CDs, DVDs, whatever. Then, like a public library (or Hollywood Video), only one employee would be able to check out any given copy at a time. However, this being a high-tech electronic library, as soon as you're finished with it the copy would be immediately available for another employee to check out. So, if you're listening to a music CD, as soon as you finish track 1, that track is available for another employee to hear while you go on to track 2. If you're reading a book, as soon as you finish chapter 1 it's available to another employee while you read chapter 2, etc.

Naturally, you'd need more copies of the most popular stuff than in the original proposal, but you'd still need far fewer than one copy per employee. Also, you could have a points system for ranking employees (hey, aren't employees ranked at your place of work?) which rewards those who contribute more works, and/or who contribute the most popular works. The reward could be higher placement in the "reserve" queue. The backlog list (the stuff in high demand) could be used to help determine employee ranking, and it would be published so employees would know what works to add to the library to improve their personal ranking.

The user interface could tell you the expected wait for the requested item and suggest alternatives: "Stairway to Heaven will be available in approx. 25 minutes. May I suggest Oops, I Did It Again, which is available immediately?"

Re:Doesn't really work (1)

vericgar (627150) | more than 11 years ago | (#5640379)

Now where do tax laws fit into this scheme? If they are able to listen to the music as compensation for storing it then wouldn't that be taxable "wages"?

Re:Doesn't really work (1)

Rick the Red (307103) | more than 11 years ago | (#5640682)

Sure -- the IRS gets to listen to 23% of the music.

Re:Doesn't really work (1)

dfinster (65564) | more than 11 years ago | (#5638491)

The parent post is correct as I understand the law. Here is a informative article that goes into more detail about what rights and fees a company may have relating to playing music or television on premises.

http://news.bookweb.org/news/534.html [bookweb.org]

The fees are broken down by square footage and number of speakers. A short example from the article:

"Let's take the example of a small bookstore, under 2,000 square feet. The store plays CDs through two speakers, and does not have live entertainment, does not sell CDs, nor does it have a café. This owner will pay an annual sum of $488 in licensing fees: $177 per year to ASCAP (which bases its basic annual fee on the number of speakers); $141 per year to SESAC (which bases its basic annual fee on square feet); and $170 per year to BMI (which bases its fees on square feet)."

You got to pay (1)

tsa (15680) | more than 11 years ago | (#5638014)

In Holland you have to pay BUMA-STEMRA if you let your employees listen to music, even if you are a non-profit organisation.

No way this will be legal (2, Interesting)

Tom7 (102298) | more than 11 years ago | (#5638017)

The reason that copying CDs is illegal is that they are copyrighted, and copying and transmitting copyrighted works without the author's permission (except in cases of "fair use") is illegal. Though a corporation is certainly welcome to build a CD library and loan out physical CDs to its employees, copying them digitally is just a plain ol' copyright violation.

Re:No way this will be legal (1)

cpt kangarooski (3773) | more than 11 years ago | (#5638701)

Though a corporation is certainly welcome to build a CD library and loan out physical CDs to its employees, copying them digitally is just a plain ol' copyright violation.

Naw. Space shifting is a fair use. However, they'd be in some trouble if users could access a work simultaneously.

Re:No way this will be legal (1)

Tom7 (102298) | more than 11 years ago | (#5640495)

My point is, there is no "loophole" to be had here. It is the copying that is in question, not the license status of the person who receives the copy. So, if they had controls in place to ensure that only one person had access to the CD at a time, then perhaps they'd be in the clear -- but if the intention is to make a fake corporation with a license pool of all CDs, it obviously won't fly.

Corporate purchase != corporate liscense. (2, Interesting)

gmiller123456 (240000) | more than 11 years ago | (#5638031)

Even if a corporation purchases it, it's still a single liscense and you're not entitled to the right to back it up under the DMCA.

Are the moderators using some sort of filtering for approving Ask Slashdot questions? Seems like if you have DMCA in the question, it automatically gets approved.

Re:Corporate purchase != corporate liscense. (2, Interesting)

cpt kangarooski (3773) | more than 11 years ago | (#5638725)

There is no license. It's just owned. Frankly the concept that software can be licensed generally (in the EULA sense, not site licenses or the GPL which is different anyway) is hotly contested.

Some legal problems (3, Informative)

Twylite (234238) | more than 11 years ago | (#5638033)

Nice idea, but it won't work. You are up against two legal problems: an employee and an employer are separate people; and the employment relationship is a non-trivial contract.

You are right in saying that corporations are juristic persons and can own property. Many corporations own licenses for software, for example. But to allow employees to use those licenses, the license must be assigned to a specific employee.

This is still a legal minefield: some licenses have conditions regarding assignment to other persons, duration of assignment, or even assignment to an instrument (a particular computer). It is generally recognised that an employer has the right to assign property to an employee for use in the course of his/her job, and to reassign that property as dictated by operational requirements. This constitutes fair use on the part of the purchaser.

But fair use and assignment do not give the employer the right to allow unrestricted or simultaneous use of intellectual property that is not owned by the employer (i.e. IP that has been purchased, such as a book, CD, or software).

The same is true for members of corporations -- the relationship between the corporation and a member is still a relationship between different persons having legal status, so a right afforded to a corporation does not necessarily extend to a member of that corporation.

The second problem regards the incorporation or employment. To say the least, a click-through "I agree to be employed" is not sufficient. No court will find that the contract of employment is valid unless the employer is clearly employing, and the employee is being employed and remunerated. While the latter may be true in this case, the former is not satisfied. Similarly the incorporation of a company does not occur on an ad-hoc basis; there are legal procedures that must be followed to introduce members.

Even then, you have to contend with the fact that may people in IT have contracts that prevent them from having other jobs at the same time ... not to mention that this practice is questionable under common law.

Any scheme of this nature ultimately comes down to being some sort of (non-sanctioned) library, and therefore illegal under the basic provisions of copyright. Even if you DID find a way to do it, the courts would also certainly find that you are attempting to circumvent the law, and respond appropriately.

Re:Some legal problems (1)

tangaloor (36819) | more than 11 years ago | (#5638684)

As I took the proposal, the idea was that users become *members* of the corporation, not employees. This would require some sort of formal shareholding arrangement.

Unfortunately, this difference doesn't make the proposal any more legal. By this argument, all the shareholders of a company which had purchased a copy of Microsoft Office could use that copy on their home computers *simultaneously*.

Even if it were restricted to one user at a time (which significantly reduces the utility of the proposal), this would not fly. While the license restrictions on software are more stringent than on music, when you purchase a CD you are buying a license to play the content contained on it---you are not actually buying the content. More specifically, you are buying a *single user* license.

So, two problems (there may be others) with "The Idea":

1. The fact that a corporation is a single legal person doesn't obliterate the individual personhood of all its members. If the members listen to the music individually, it is not the legal equivalent of only the corporation listening to the music (whatever that might mean).

2. The corporation does not own the content. It owns a license to play (and possibly store) the content. The corporation cannot serve the content to many persons simultaneously, even if they are members, employees, or well, anybody.

How about a click thru license for P2P's (1)

DA-MAN (17442) | more than 11 years ago | (#5638230)

How about putting a click through license on the p2p's that makes it illegal for the RI/MPAA to connect to any p2p. Or anyone looking to give/sell information to the MPAA/RIAA, in addition to any law enforcement officials. That way when they have any information in court, they can be sued as well for breaking the click through license.

Re:How about a click thru license for P2P's (1)

HotNeedleOfInquiry (598897) | more than 11 years ago | (#5640221)

Actually not a bad idea at all. It's trivial little stuff like this that gets lawsuits tossed.

Re:How about a click thru license for P2P's (1)

zcat_NZ (267672) | more than 11 years ago | (#5643188)

Oh yeah.. like how this [snopes.com] works? (Clue.. the red dot means it's false..)

Line-ucks Corporation (1)

SN74S181 (581549) | more than 11 years ago | (#5638476)

Well, I guess this means that a shell corporation could be created with all the hardware manufacturers as members. Any hardware vendor who wants their stuff well-supported under Linux but doesn't want to release the source. The new Line-ucks Corporation can then hire 'employees' at a nominal salary of, say seven cents a decade. These 'employees' would then contribute $80 each to the break room coffee fund and get their copy of the binaries of the new closed-source Line-ucks Operating systems.

EmmPeeThree Corporation could also be formed, either as a seperate body or a subsidiary. The subsidiary idea might be best, as then they can share a common corporate logo, featuring a drifter-sort giving the finger to a bearded hippie and his guitar-playing buddy.

Not bad (1)

quintessent (197518) | more than 11 years ago | (#5638828)

Looks like people didn't even catch on to this April Fools post. Hehe.

Re:Not bad (1)

Tom7 (102298) | more than 11 years ago | (#5640509)

This is supposed to be April Fools? I suppose I believed it, but Ask Slashdot always gets this kind of uninformed question, doesn't it?

Re:Not bad (1)

zcat_NZ (267672) | more than 11 years ago | (#5643212)

I don't know that it was supposed to be an april fool's joke; do a quick google search for "Corporations are not people" for a bit of the background on this. A few people have even tried to 'incorporate' themselves to draw attention to the problem that corporations have an unfair advantage; they get all the same rights, are often given unfair tax breaks and handouts, yet have none of the responsibilites and culpability that an actual human being has..

So why not turn it around.. this is just the kind of thinking that we need to get people thinking about the whole stupid 'corporation==person' issue.

3 letters beat 4 (1)

unitron (5733) | more than 11 years ago | (#5640431)

"They are employees of the corporation that get paid by the right to listen to the music."

Employees or stockholders, either way, your problem won't be the RIAA or the MPAA, it'll be all the expense, accounting, and paperwork necessary to place a monetary value on that "pay" and figure out just which laws, rules, and regulations govern it. All of this just to pacify the IRS (and any state and municipal bodies which decide to get in on the act).

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