
Controversial hack to effect change in US Copyright system - EGreg
Hey Hacker News.<p>I guess I often think like a hacker or a mathematician, in that I consider the simple component parts, and imagine them in different combinations, and try to extract general principles of things.<p>Something about copyright has always seemed very anachronistic to me. I mean, I know it's the law, and yet it's so hard to enforce, ever since the means of copying has become electronic.<p>In fact, a monopoly over intellectual property seems somehow inherently wrong to me. Never mind the fact that long-lived software patents are harmful in such a fast-moving industry, or that worked composed after 1930 will likely never enter the public domain, thanks to lobbying of the Congress every few years by special interests to extend the term of copyright. Never mind the efforts by the RIAA that bear a resemblance to extortion. The very principle that someone should have absolute say over who in the world can make a copy or derivative work of something they have released, seems to be flawed. If you don't think so, read on.<p>Certainly changing the situation by argument is not going to be easy. Lots of people may argue one way or the other, but policy is usually decided when issues come to a head.<p>I am considering doing an extremely controversial hack in order to highlight the problems with the copyright system. From what I know, the hack is completely legal, because of the very law that is in place. It can generate a lot of money for anyone who reads this and decides to do it, and at the same time if enough people do it, it will gain media attention and lawmakers will have to rethink copyright policy. But at the same time I AM NOT RECOMMENDING IT TO ANYONE because I am not a lawyer. Check with your lawyer before attempting this. I am just thinking out loud at this point and this is not legal advice or encouragement to action :)<p>Here is the hack:<p>A pyramid scheme is illegal, because it exists solely to make money from new people signing up. A multi-level marketing scheme on the other hand is legal, and the major difference is: there is a product, and the focus is on selling the product, not on signing people up.<p>Well, you say, why not turn a pyramid scheme into a multi-level marketing scheme by simply selling "air" as the product? Well, the product has to be something that people want. Enter... COPYRIGHT.<p>1) Make a copyrighted work of actual value. Say, a computer program, a recipe, an e-book, or just a nice painting.<p>2) Sell copyright licenses in the following way: if any person buys ONE copy of your work, they then can get commissions if they refer buyers to you. That is the ONLY way to become an affiliate.<p>3) Any affiliate can get commissions up to, say, 4 levels deep for copies their buyers helped sell to others, etc.<p>Remember, due to copyright law, you have absolute say as to who has a license to copy the book and who hasn't. You simply set the rules to make it a multi-level marketing scheme.<p>Except what is the difference between this and a pyramid scheme? How much does it cost to copy the book? Practically ZERO. Unlike Amway, Mary Kay, Herbalife and other companies that have done MLM with actual products, this has almost ZERO transactional cost and negligible cost per item sold, and the marketing is viral. The copyright law currently applies equally to electronic copies that cost $0 to produce and tangible physical copies.<p>The economics of this MLM scheme are exactly the same as a pyramid scheme. If someone challenges the legality of this, you just point them here: http://www.copyright.gov/title17/ and explain that you as the copyright owner are the sole arbiter of who can sell your copyrighted work and how, and you are at liberty to compensate whomever you wish for selling your work with a commission.<p>I AM NOT A LAWYER. PLEASE CHECK WITH A LAWYER BEFORE DOING THIS. But it seems to me that selling copyrighted works this way is completely legal. But should it be legal to make what is effectively a pyramid scheme? If not, then perhaps the very principles of copyright today needs to be rethought. And the hackers can trigger it.<p>Anyway, just a thought. 
(Copyright 2010)
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tzs
You talk a lot about how copyright "seems" to you. If you want to change
copyright, maybe you should first try to upgrade "seems" to "is". Generally,
it is a good idea to understand a subject if you want to change it.

There's a good article from Justice Breyer (from before he was on the Supreme
Court) called "The Uneasy Case for Copyright" where he concludes that strong
copyright protection is not justified. There's an interesting analysis of
Breyer's arguments by Landis and Posner (big names in the area of applying
mathematical economics to the law) concluding that as copying has become
easier, Breyer's arguments have become weaker.

These articles could be a good start for someone who thinks like a hacker or
mathematician.

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EGreg
Thanks, good ideas. Do you think the proposed business scheme I said is legal
or not?

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cduan
So if I'm understanding this correctly:

1\. You sell books, and make some money off of the sales.

2\. A commission is paid for each sale, to between one and four "referral
sources."

Isn't this what every author does, except #2 is called an advertising fee?

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EGreg
Yes, the only difference is that to become an affiliate, you must first buy a
book, making it an MLM scheme.

But since the cost of producing and delivering an extra copy of your book is
essentially zero, we have created a legal system with the same economics as a
pyramid scheme. Right? So is it legal?

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cduan
Here is a definition of a pyramid scheme:

 _pyramid schemes — also referred to as franchise fraud or chain referral
schemes — are marketing and investment frauds in which an individual is
offered a distributorship or franchise to market a particular product. The
real profit is earned, not by the sale of the product, but by the sale of new
distributorships. Emphasis on selling franchises rather than the product
eventually leads to a point where the supply of potential investors is
exhausted and the pyramid collapses._

<http://en.wikipedia.org/wiki/Franchise_fraud>

Seems like, under that definition, the question is whether people are paying
you for the book, as opposed to paying you for the right to engage in the
pyramid scheme.

Remember, copyright law gives you a right to exclude, but it does not absolve
you of other legal obligations. For example, you can commit antitrust-like
violations using a copyright (this is called "copyright misuse"). So if your
scheme is indeed a pyramid scheme that violates the law, then copyright will
not protect you.

That said, I'm just hypothesizing on facts I'm imagining, so obviously consult
a lawyer with any real situations.

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EGreg
It says there:

"pyramid schemes — also referred to as franchise fraud or chain referral
schemes — are marketing and investment frauds in which an individual is
offered a distributorship or franchise to market a particular product. The
real profit is earned, not by the sale of the product, but by the sale of new
distributorships. Emphasis on selling franchises rather than the product
eventually leads to a point where the supply of potential investors is
exhausted and the pyramid collapses."

in this case there is a real product, even though each extra copy costs $0

secondly, we can't really prove one way or the other -- after all the ebook
might be useful for some people, who is to say the "real" profit is earned by
selling the option to be an affiliate and not the product, since you get both
at the same time

and thirdly, ANY copyrighted work needs to be bought only once if the user
keeps the copy in good condition, so the supply of potential buyers will be
exhausted and sales of the book will diminish as the market is saturated

~~~
cduan
Ah, this is helpful, as I think it highlights the point of disagreement. If
you are of the view that an MLM scheme is legal if there is a "real product"
that "might be useful for some people," even if that product is a zero-cost
ebook, then I think that this is oversimplistic and you would have to consult
a lawyer on it. As I mentioned above, the mere fact that you have a copyright
backing a pyramid scheme would not necessarily absolve that scheme of
responsibility. My guess is that other factors, such as how you advertise the
scheme, would be relevant.

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EGreg
Perhaps it is oversimplistic, but it seems to me that the copyright law makes
a category error - it equates a license to make a copy with an actual
"product" with resale value - even though there is an unlimited supply of it,
and in doing so, makes the MLM scheme totally legal.

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iwwr
There are already such schemes in place. They sell a booklet called something
like "How to make a lot of money" for $500 and then if you get enough stupid
people to buy the book, you're in the money. If everyone below you thinks the
same, you make more money. The people at the top end up realizing "the dream".

~~~
EGreg
Does that sound the same as:

You simply make an ebook, sell it, have an affiliate program whose only
condition is to buy the book, and make it a multi-level affiliate program.

~~~
iwwr
Like that, only self-referential (the book is the manual on how to sell the
book); the punters end up trying to recoup their losses by finding like-minded
idiots. Greed and stupidity are great incentives.

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powera
This isn't a hack at all, it's just a standard chain letter-like pyramid
scheme. Legal mumbo-jumbo doesn't change it, and copyright protection doesn't
make it legal.

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EGreg
the license is the good, but thanks to our old friend the COPYRIGHT system,
the license is treated as a bona fide product that you sell. After all,
copying is stealing right? :) Don't pirate my ebook!!

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absconditus
I do not think that this scheme would be effective toward your goal and it may
be illegal, but I am interested in the discussion that it might incite.

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EGreg
The point of this hack is to prompt a rethinking of the copyright law, by
testing what happens when it is used to create an MLM scheme that has all the
economics of a pyramid scheme:

You simply make an ebook, sell it, have an affiliate program whose only
condition is to buy the book, and make it a multi-level affiliate program.

Here is the question: is the proposed scheme LEGAL (as I believe it is)
because of the law's current thinking about copyright licensing, or is it
ILLEGAL, because its economics are exactly the same as those of a pyramid
scheme (minus the initial cost of making the copyrighted work), and thus may
have the same undesirable consequences? And if it should be illegal, then
let's trace it back to WHY copyright enables it to be legal.

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philipkimmey
An interesting idea in theory, but I'm pretty sure this has been addressed:

<http://en.wikipedia.org/wiki/First-sale_doctrine>

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itsnotvalid
However this only apply unto the a copyrighted work without explicit license.
By only allowing the use of the copyrighted work with a explicit license that
prohibits this, you can cancel out this effect (which is what EULA is for)

I AM NOT A LAWYER. PLEASE CHECK WITH A LAWYER BEFORE DOING THIS.

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hasenj
Let's suppose it's legal.

What do you hope will happen? I can't imagine a sequence of events that starts
from your scenario and ends in changing copyright laws.

What sequence of events do you have in mind?

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itsnotvalid
You should start selling this piece using the scheme.

(Copyright 2010)

