 I'm Kay Darling, I'm a fellow here at the Center, and things I'm supposed to tell you are, let me see if I can remember, so the hashtag for this, if you're following online, there's the camera, is hashtag BKC Harvard. Hashtag BKC Harvard, okay. So I will monitor that if there are questions from the internet. I'm also supposed to let you know that those of you who are new to these events should feel welcome to ask questions during the Q&A, you got free lunch in here so you can earn it. And books are available, this is a book talk, you can buy the book, it's what, 29.95, and if you don't have cash on you, as many of us don't, Kerry can work something out with you, and you can also get your book signed, which I recommend doing because it will slightly embarrass Erin, who is a very modest person. But people should, you know, get pushed out of their comfort zone sometimes. Okay, so I'm actually really, really excited to have Aaron Pryzanovsky here today, he is a long time friend and collaborator, and when I met Aaron, we were at this law conference, and he was definitely the most well-dressed person in the room, and I saw him and I was like, this guy's probably a total schmuck. It turns out that I was wrong, so getting to know him, I realized that he's a complete badass in a lot of very good ways, and so he's a professor at Case Western, he does intellectual property law and telecommunications law, and he's also not one of those professors who just writes law review articles, he has actually practiced as a lawyer, he's been in the trenches, he's done, you've done work with the EFF, I believe, and he was also the Microsoft Research Fellow at Berkeley, which is something that I applied for many years ago and never heard back, so he's definitely better than I am, if that tells you anything, it doesn't tell you much. We have co-edited a book together that's coming out in February on the ways that communities and markets innovate without intellectual property law, but he's here today to present his other book, which he actually wrote, together with Jason Schultz, who some of you may know, and I think it's an incredibly important piece of work, it's about the end of ownership in the digital age, and without further ado, I will let Aaron tell us all about it. So thanks, Kate, for the introduction, thanks to Berkman for having me and thanks to all of you for being here today, I'm really excited to get the opportunity to talk to you about this project, it's something that I've been working on, it's kind of been on my mind for quite a long time now, so this book grew out of a series of articles that Jason Schultz and I have been writing since probably, going back to about 2009, I guess, is when we started this work, and the common question that all of these pieces that we had been working on, the question they were all struggling with was really what does it mean to own something in the digital economy? Consumers have, I think, a pretty good idea of what ownership means in the physical world, they understand that on an almost intuitive level because of kind of a lifetime of experience interacting with physical goods. But I'm mostly interested in ownership of information goods, right? So IP kind of complicates that intuitive picture to a degree. Normally we think about IP as a set of rules that govern intangibles, right? They tell us when some creative work is inventive enough to be patented or original enough to be copyrighted or so similar that it is infringing. But from the perspective of consumers, IP is really a set of rules that tell us what we can and can't do with our stuff, right? You know, can you sell that used book? Can you repair your car? Can you brew the brand of coffee of your choosing in your kitchen? For better or worse, IP has something to say about all of those questions, right? So, you know, if you buy a print book like the ones that we have here for sale today, you know, it becomes your personal property, right? It's like your favorite pair of shoes or your toothbrush, you own it, right? And ownership means you can do a lot of different things with it. You can lend it to a friend, you can give it away, you can resell it, you can leave it to someone in your will. And all of those rights that we sort of take for granted come from this principle of exhaustion, right? And exhaustion is basically the idea that once an IP holder sells a copy of a work to someone, they lose their rights. Their rights are exhausted as applied to sort of downstream further uses or distributions of that particular copy. So in copyright law, we talk about this in terms of the first sale doctrine. You know, this doctrine and this principle is embodied not just in copyright law, but patent law and trademark law as well. It's the reason that we have used record stores and used bookstores. It's the reason that we have eBay and public libraries. It's, you know, the reason that we can lend a novel to a friend, right? So as I said, exhaustion has been around in our IP law for a long time, going back in the patent context at least, you know, about 150 years. And it's a fundamental component of IP. And in part, that's because it polices this really important line between intellectual property and personal property, right? I could talk all day about the reasons exhaustion is really fundamental, but I just wanna highlight a few of what I think are the most important things that it does in this system. One thing it does in copyright in particular, right, is that it gives consumers an incentive to participate in the copyright marketplace. Copyright is asking something pretty remarkable of consumers, especially today. It's saying, you know, that free stuff on the internet, why don't you pay us for it, right? Buy my book instead of downloading it for free. Well, why? Well, one reason is that you might be afraid of infringement liability, and that's one possibility. And I think that stick motivates some people. But there's also a carrot. And the carrot is if you pay for this thing, you own it. And by virtue of ownership, you have certain rights that a stranger does not, right? By owning this book, you can read it. You can read it as many times as you want. You can write notes in the margins. You can give it to a friend. You can set it on fire if you want to, right? You can do whatever you want with this thing because now you own it, right? So that's crucial for the copyright system to function, that we have some reason for consumers to participate here, right? Exhaustion's also crucial because it helps keep information costs in check, right? So if you think about the end user license agreements that accompany most of the digital products that we buy, and I'll talk about these more in a few minutes, they're incredibly long. They're incredibly detailed. And they impose massive costs on consumers. You actually stop and read all of these legal terms before you buy things. It's a massive obligation. And of course, that's why no one does it, right? The iTunes license is longer than Macbeth. How many people are gonna read that before making a 99 cent purchase? So through exhaustion, right? By insisting that transactions take one of a number of identifiable forms. It's either a sale, or it's a gift, or it's a rental, right? These are classifications that come from our experience with physical goods that we understand intuitively. We don't have to invest those resources in understanding these sort of idiosyncratic bundles of rights. Now, the other thing that I think exhaustion does that's really crucial is it contributes to a sort of sense of consumer autonomy. The idea that you can act without seeking permission with respect to the things that you own, right? So we can make choices about how we use, how we modify, how we transfer products without asking anyone if that's okay. And we can do that by virtue of ownership, right? And we're talking about here products and devices that we use to communicate with one another, to create new things, to move through the world, and actually in some instances to actually survive, right? One of the things we can talk about is the ownership of medical devices that keep people literally alive, right? The stakes can be really high here. So all that said, the main story we're trying to tell in the book is the erosion of this notion of exhaustion and the rights that flow from it. So what I wanna do today is kind of highlight a number of developments that have kind of undermined this really crucial principle. And the first one is really the disappearance of the copy itself, right? The sort of traditional source of consumer rights. So from most of copyright's history, we've interacted with works through physical copies, right? We read hardcover novels, we rented video cassettes, we listened to records and tapes and CDs. And so the thing that we owned was that tangible copy, right? So now today, of course, we occupy a world where that particular unitary physical copy has been deemphasized. It's not nearly as important as it used to be, right? In part because of digital distribution, in part because we've moved from models that are premised on purchasing to models that are purchased on sort of subscription or temporary access, right? So the copy used to be crucial. Copies used to be rare, they used to be valuable, they used to be persistent. And now they're the opposite, right? Copies are everywhere, they flip into and out of existence around us all the time, and no one particular copy has much value whatsoever, right? So I guess I should be clear here. I think sometimes our argument is confused for one that saying all of these new developments in distribution are bad for consumers, right? That we should be skeptical of Netflix or Spotify or the cloud or what have you. And we don't think those developments are necessarily bad or harmful, but we do think they involve a set of trade-offs that consumers might not actually be fully aware of when they make choices in the marketplace. So what we're trying to do in part is just make people more aware of the upsides and downsides of each of these choices. So that's problem number one, right? The thing that consumers own, the sort of token you could hold in your hands to illustrate, to demonstrate your ownership has been de-emphasized, right? Problem number two here is the way in which courts have redefined the notion of ownership, right? So one of the central questions in the world of exhaustion and copyright and patent law is who counts as an owner, right? These are rights that apply to owners. So question number one is, well, who is an owner, right? And it used to be easy to figure that out, to answer that question, right? To know if a consumer was an owner of a particular copy. This was not a difficult or controversial exercise, right? So courts would ask questions like, do you get to keep it forever? Do you have some ongoing obligation to pay or did you pay once and now it's yours? If the answer to those questions is yes, guess what? You own the thing, right? We get an illustration of that here. So this is the first page of a novel published by the Bobs Meryl Company in 1907 called The Castaway. And this was the first time the Supreme Court ever confronted the question of copyright exhaustion. So they publish the book with this notice that says the price of this book at retail is $1 net. No dealer is licensed to sell it at a less price and a sale at a less price will be treated as an infringement of the copyright. So you bought a copy of this book and you sold it for 89 cents rather than a dollar. That makes you a copyright infringer. That's their theory. The Supreme Court looks at this and says, what are you talking about? These people own these books, they bought these books, they can do with these books what they damn well please, right? That's a sort of intuitive understanding of personal property rights. So this kind of proto end user license agreement does not get the Bobs Meryl Company one step closer to its wish of controlling downstream prices, right? That was in 1908. Today things look a little bit different, right? That simple picture of ownership starts to break down in the 80s and 90s and into the 2000s in cases dealing with computer software, right? There lots of courts have said that an end user license agreement that announces itself as a license rather than a sale is enough to avoid transfer of title, to avoid consumer ownership and to avoid this doctrine of exhaustion. Now the law here is a mess. I wanna give you what I think is the clearest illustration of the mess when it comes to answering this really simple and fundamental question of who owns this copy, right? And I wanna do that by contrasting two cases. These are both cases that were decided by the Ninth Circuit Court of Appeals. They were both cases decided by the same three judge panel of the Ninth Circuit Court of Appeals. They were two cases that were heard in the same courtroom on the same day back to back by the same three judges and they are totally inconsistent with each other, right? So the first one is a case called UMG versus Augusto. It has to do with these promotional CDs. These are CDs that record companies will send around to DJs and bloggers and other sort of influential people in the music world for free in hopes that they will play these songs or share them with their audience. And this CD is interesting because of the text here around the side, which you might not be able to see clearly. So let's turn this around and zoom in. Here's what it says. This CD is the property of the record company and is licensed to the intended recipient for personal use only. Acceptance of the CD shall constitute an agreement to comply with the terms of the license. Resale or transfer of possession is not allowed and the CD may be watermarked, which in fact it wasn't. So this is interesting. So they send you these things in the mail for free without asking for them. What happens if you get one and you don't want it? If we believe these terms, you are stuck with it forever, right? Resale, fine, let's get rid of resale or transfer of possession. I can't give it to you. I can't say, this showed up in the mail, I don't want it. Can I put it in the trash? Am I allowed to throw it away? Is that a transfer of possession? I'm not sure, right? So the label say, look, it says right there, we still own this thing and we're telling you what you can and can't do with it. It is not sold to you. It is not given to you. It is licensed to you. And the Ninth Circuit looked at this and said, no, that doesn't work, right? You can't impose these kinds of sort of ongoing obligations, these sort of servitudes on a chattel, right? You can't impose legal obligations that kind of travel around with this disk. Despite this language, the people you sent these CDs to owned them. And they could give them away. They could resell them. And Troy Augusto could find them in the racks at Amoeba Records and buy them for $2 and sell them on eBay for $20. That was his business, right? So here the court kind of sees through this self-serving language and recognizes consumer ownership. Again, same day, same court, same three-judge panel, same question, who owns the five-inch plastic disk inside this box? This time it's not a music CD. This time it is software, right? It's Autodesk's AutoCAD software. And Autodesk makes the same sort of argument. They say, look at our license terms. The license terms say, license not sold. You're not allowed to transfer. And we restrict the kinds of use that you can make of our program, right? So is this a sale or not? In the Ninth Circuit, in this case, it says, OK. Well, to answer this question, we have to use this sort of three-part test. So we ask three questions. One, is there a reservation of title? Do you say license not sold? Two, do you impose restrictions on transfer? They did. Three, did you impose, as a copyright owner, restrictions on the use of the software? And they say, well, look, all three of those questions. The answer here is yes. Therefore, you don't own the software disk. The problem is, if you ask the same three questions about the promotional CDs that we just looked at, the answer there is yes, too, right? So really deep inconsistency here in these two cases. Can I ask my question? Yeah, please. I see one big difference. Music's being unordered and there was no money transfer. It is the same as if I received a book in the mail from Amazon that I never ordered. The federal law says I'm allowed to keep that. So this is a good point. And if you didn't hear the question, it is, what about the fact that this is unsolicited merchandise? And there's actually, there's a federal law on this point that says, if you receive, through the post, unsolicited merchandise, it's yours to keep you own it, right? This is to avoid bad behavior where that is true. The federal postal statute was not the grounds for it. It was an independent basis for the same conclusion. But even just thinking about this from the perspective purely of copyright and the terms of these license agreements, not factoring in the postal code, we get this discrepancy in terms of ownership, right? Now, there are other reasons. There are other things that we might. Amazon's paid for, Amazon's unsolicited. So that's an interesting question, right? Do you have more or less of an ownership interest in a thing you got for free or a thing you paid $8,000 for, right? I actually don't know how to resolve that. It's a really interesting discrepancy, right? Yeah. There's also another interesting issue. Sometimes you get a similar software at an educational price or some other, especially discounted price and you have restrictions on how you can transfer it or you get a limited use license and you have restrictions on extending it to a larger machine or something. So how do you blend those restrictions in with your current issue? So we do have scenarios where software is sold at different prices to different groups of users, right? And there are lots of pro-consumer benefits to that. You know, if you're a student, you might not be able to pay the full sticker price, so maybe an educational license is really valuable. I think the key question is, what's the body of law we use to address violation of those terms? Does it make you a copyright infringer or does it make you a breacher of contract? And the proof for those violations is very different. The remedies for those violations are very different. I think the way to resolve the scenario you're describing is to rely on the law of contract rather than the quasi-property interest of copyright. So we get this discrepancy between software goods and non-software goods. Part of what I think is going on here is a sense of software exceptionalism that the courts are latching onto, that software is in some really important respect different and that might be one of the reasons that it's different because we have these very different strategies for how we sell or distribute goods to consumers. And part of that has to do with the history of the software industry itself, right? So early in the software industry, it was really uncertain whether there was copyright or patent protection at all. And so licenses played a much more important role early on. That means that the consumer expectations might be different when it comes to software-based works. There are reasons to explain this difference. I don't particularly find them convincing and we can come back to this if people wanna dig into this question a little bit more. But one response to this might be, okay, well, we can separate off the software market and let it play by its own different set of rules, but the rest of copyright law and the rest of the economy can go on kind of as they were before with these notions of personal property and ownership, right? And here's the problem with that, right? What's depicted on this slide? Maybe it's an airplane, a car, and a watch. It's just three different shapes and sizes of computers, right? That's what we're looking at here. Software is everywhere. You cannot quarantine software to the market for little disks of AutoCAD software, right? So I wanna move on and talk about a kind of related problem here. And that's digital rights management, right? The kind of software-based restrictions that dictate how you can use products and content, right? Now, the early examples of DRM, things like this, CSS and the region coding system for DVDs, they were sort of at least plausibly connected to reducing copyright infringement or at least regulating works that we think about as kind of within the core of what copyright is interested in. These measures were largely about market segmentation, price discrimination, elimination of arbitrage, but there was a story to tell about how they promoted the goals of the copyright system. It did not take long until we kind of reached the logical breaking point of the DMCA. Lexmark has been on this sort of decades-long crusade to stop people from refilling ink cartridges for their printers. And one of the first tools they tried to use was DRM and the DMCA, right? So they had code on their printers that would detect whether or not you were using an authorized Lexmark cartridge. If you were using a third-party cartridge, if you were using a refilled cartridge, the software would prevent you from using your printer. Now, luckily the Sixth Circuit heard this case rejected the DMCA claim here that has not stopped Lexmark. They've moved on to patent laws. Their preferred means of restricting how consumers use their product. If you notice the little green triangle at the top of the box, it says return program cartridge. What that means is that Lexmark will sell you this cartridge at a discount so long as you abide by a license that restricts refilling or remanufacturing the cartridge. And if you have the audacity to refill your cartridge with ink, they don't say you've breached a contract, they say you've infringed their patent, right? This case, that logic was recently upheld by the Federal Circuit. Cert petition has been filed in the case, the Solicitor General's Office, maybe about two weeks ago filed a brief supporting the cert petition in this case. So we might hear more on this question from the Supreme Court. This is my favorite recent example of DRM. This is a patent that Apple recently got on using this infrared light technology to disable recording camera use on your iPhone. So those little boxes labeled 590 send out this infrared signal, your phone picks up that signal and when you go to hit the record button, your phone displays this message that says, sorry, recording has been disabled by some third party, right? So this is great, if you're a band that doesn't want people recording your videos and putting them on YouTube or you're like a comedy venue that doesn't want people putting new comedy routines up on YouTube or if you're a cop and you don't want people to record what you're doing, just build this into the lights on the roof of your police car, right? All of a sudden, all those pesky videos of police doing things, they shouldn't go away, right? This is an example of how technology can be used to turn your devices against you, the things you think you own. Don't follow your instructions, right? So it's really easy to make fun of the internet of things. Does your air freshener need an app? No, no, the answer is no in case you're wondering. Would you like to spend 11 hours trying to make tea with your smart tea kettle? This is my favorite, the smartress. The smartress sends an alert to your mobile phone whenever someone is using your bed in a questionable way after that questionable use you can follow up with the Bluetooth-enabled pregnancy test, right? Like we could do this all day and it would be entertaining, right? But that's not the real problem I see with the internet of things. The real problem I see is the internet of things is really the internet of things that you don't own. We know that the cloud is just someone else's computer. Well, the internet of things is just someone else's computer in your house or on your wrist or in your body, right? So we see all sorts of efforts to restrict ownership of physical devices. This comes from Cisco's website. Cisco explains in this frequently asked questions document that if you buy used Cisco hardware, you do not own and are thus not entitled to use the software that is embedded in it. By the hardware they say sure, but you've got to come to us to get a license for the software that actually makes the thing operate. John Deere's been telling farmers the same thing, right? So the modern tractor has dozens of electronic control units that have embedded software that make the thing work, right? And without access to that code you can't do things like repair your John Deere tractor. Well, who owns the software that's embedded in a $50,000 tractor? According to John Deere, it's not the farmers that paid $50,000 for the tractor. They told the copyright office recently that quote, the vehicle owner receives an implied license for the life of the vehicle to operate the vehicle. We own the code, but we'll let you use it, right? I don't know how reassuring that is. GM's been saying the same thing when it comes to cars, right? Here's another example of sort of machine mutiny. This is the Curig 2.0 coffee maker that came out a couple of years ago. Like Lexmark, they don't want you to buy cheap off-brand coffee. They want you to buy their expensive branded coffee. And if you make the mistake of buying the wrong brand of coffee, here is what your machine tells you. Oops, oops. This pack wasn't designed for this brewer. Stop being cheap. Go to the store, buy our coffee, and until then, no coffee for you, right? This machine is refusing to make your coffee, right? We might see this as problematic. You might remember this example from a few months ago now. Nest remotely disabled the Revolve Home Automation Hub. They issued this press release that essentially said, hey, you know that device you bought for 300 bucks that controls all the other smart devices in your home? We don't really like it anymore, so we're just gonna kill them all, right? The app won't work, or sorry, the app won't open and the hub won't work. So remember that when Google tries to sell you a car. I wanna talk really quickly about one more problem, because I wanna hear from all of you, but I think this one's really crucial. Here's the final problem. And it's a problem that deals with the way these transactions are presented to the public, right? So we've all been to Amazon. We've all bought things from Amazon. We've all clicked the buy now button on Amazon. It's the same buy now button if you're buying a Kindle book, if you're buying a hardcover book, if you're buying a bag of kitty litter, right? Like whatever it is you're buying on Amazon, you're buying through this same buy now button. What does that terminology, what does that marketing language mean to consumers? How do they understand it? That's a question I'm really interested in. And one of the reasons I'm interested in it, a few years ago, Amazon, and I'm sure a lot of you remember this story, Amazon got into a dispute with a publisher about who had the right to sell certain books, right? Among them, George Orwell's 1984, right? And so until they figure it out, they say, okay, well look, we're gonna pull 1984 from the Kindle store. We're not gonna sell any more copies because you gotta figure out who the real copyright holder is. And also all those thousands of copies we've already sold and are living on people's Kindle devices, let's just delete all those, right? So you go to bed owning a copy of 1984, right? The PR department in Amazon apparently had the week off and you wake up the next morning and your copy of 1984 is sort of down the memory hole, right? So what does this language mean? What rights do people think they have when they buy now? So my colleague, Chris Hofnogel, and I decided to study this. So we created a fake internet commerce site and had 1,300 internet shoppers use it and surveyed them about what rights they thought they acquired in digital goods when they clicked a buy now button, right? So this is the button they saw. And this is what they told us. These are the rights that they thought they had. And it turns out for eBooks, MP3s and digital movies, a really high percentage of people thought they had rights, for example, to keep the thing they bought for as long as they wanted, to use it on the device of their choice, to lend it to friends, to give it away as a gift, to leave it to someone in your will, even to resell it. And the answers to all of these questions are at or above the threshold for false and deceptive advertising claims, both under state law, under the Lanham Act, and under the FTC Act. So we think this is a real problem. People are mistaken about the rights that they acquire. And the reason they're mistaken is at least in part because they're kind of porting over these expectations from the physical world that they associate with terms like buy and own and applying them in the digital context. So just to wrap things up, we showed them, instead of a buy now button, this short notice that told them, these are the rights that you get when you click this 599 button. These are the things you can do and these are the things you cannot do. And what we measured was a significant reduction in the levels of consumer confusion. It didn't go away altogether, but they saw this short notice once. They saw it for about 30 seconds or less. And so we think there is a way of addressing this issue. So we're at this really crucial point in the development of the law and really kind of the notion of ownership and personal property. And important choices have already been made that have sort of set a particular trajectory for what these notions are going to mean to consumers moving forward. And those choices have been made for the large part without people fully understanding these issues, not knowing that the ground is sort of shifting under their feet. And so what we're trying to do with this project is really make people aware of these trade-offs. We're not advocating for any sort of particular marketplace behavior. We want people to understand that these choices have consequences. And that's the message that we're trying to deliver. So I could go on, but I'd rather stop here and hear from all of you your thoughts and questions. Thank you for this talk. Sorry, my voice is a little... Thank you for this talk. I think it's really helpful to see this, and especially the study you did at the end. I was wondering, have you done any research or talked to people about what it looks like outside of the US? Because this is a very US-specific analysis. Yeah, that's a great question. And there are a couple of ways to answer it, right? So on the one hand, the conversation internationally has been driven by litigation. So the Lexmark case that I just talked about a few minutes ago, one of the questions there is how do we make sense of sales of patented goods that happen outside of the United States? The Supreme Court in the copyright context a couple years ago decided the Kirtzang decision, which some of you may know, that was a case involving a graduate student in the US from Thailand who imported textbooks that sold in the US for $200, but were available in Thailand for $10 or $20. Imported them, sold them on eBay, paid his way through graduate school, right? And one of the important questions that comes up in this context is what are the broader kind of global implications for a regime of international exhaustion? It's a little bit easier to get our hands on what the consequences are of national exhaustion, where sales within a particular country lead to these kinds of consumer rights. Do those rights cross international borders? And one of the worries that I think we have to take really seriously is that an international exhaustion regime could have dramatic consequences for people in less developed economies, right? And it's a worry that we have to take seriously, right? So if it's the case that you can buy books really cheap in Thailand and import them into the United States and sell them at a profit and undercut the publisher, what happens to that market for cheap books in Thailand? Do they raise prices? Do they pull out? Those were the threats that publishers made. It's a really tough empirical question and I don't think anyone can tell you with a straight face they know the answer to it. If they do, I think they're missing something. I can't tell you the answer to that question. It's a question I worry about and take really seriously. It's really tough to generalize, right? Because there are economies where for books, for example, we see really low prices for books in less developed economies. There are also examples where books are much more expensive than they are in the United States and international exhaustion might actually bring those prices down. I do not know the answer, but it's a question that we have to take really seriously. The other international component of this is to think about how these same questions play out in Europe in particular, where there has been litigation and more attention. And there the story is somewhat more optimistic than it has been in the United States if you're arguing in favor of a kind of digital exhaustion regime. There's the used off case which said that consumers can resell digital software licenses. There's been litigation around eBooks as well that while not sort of procedurally final, give some indication that there's an openness to the idea of consumers having rights in digital books that are similar to physical books as well. But again, when you're talking about that question within the EU, that's very different from talking about that question on a kind of global scale. Thanks so much for this talk, it's pretty interesting. And one of the things that I'm curious about is how consumer understanding of this ownership sort of impacts pricing in business because it seems to me that the buy it now is that based on what you explained is trying to convince the consumer they're getting more than they paid for. And so is there a sense that is knowledge diffuses about these bundle of rights or if you presented the way you did that like consumers will be willing to pay less for the smaller bundle of rights or pay more for ownership has that impact to the market? That's a really great question. We tested this because we knew this was a really crucial piece of this puzzle. So it's one thing to say that consumers are misinformed or consumers are confused or even that consumers are deceived but we also have to establish that that deception is material to their decision-making in the marketplace. Would they behave differently if they knew the truth? And we tried to get at that question in a way that would kind of make a positive case for our short notice disclosure. So what we asked consumers, what we asked consumers was would you be willing to pay more for the right to resell or the right to lend or the right to use a particular work on your device of choice, right? To get a sense of what the dollar value is to consumers. And we asked the question in a sort of intentionally in terms of survey design in a conservative way, how much more would you be willing to pay? And we got positive results. The average price increase for each of those three rights that I mentioned was around $3. So people were willing to pay more. Now, of course they're willing to pay more in like imaginary money that's not coming out of their pocket, right? So I mean, you've got to take that with a grain of salt in terms of the actual magnitude of the price increase but I do think it suggests that people do place real value on this. And I think it's an opportunity for people that are trying to sell these sorts of products to the public to actually compete on what kinds of rights you're giving people. Right now there's no incentive to do that, right? Because the lack of rights is sort of hidden from the average consumer. So, you know, one thing I would like to see coming out of this research is digital retailers and copyright holders taking more seriously the idea that there could be a market advantage by actually giving consumers the kinds of products and the kinds of rights that they value. I am also very interested in the study that you did. Did you collect demographic information and do you have any specific findings about that? And also curious as if you looked into the differences in the video game industry about DRM. And yeah. Yes, so our sample, we had 1,300 people that responded to our survey and they were representative of census data on kind of all the big demographic distinctions. It's tough to generalize too much about who had a more accurate understanding of their rights. But I think it's fair to say that white men between the ages of 30 and 50 were the absolute worst at answering these questions correctly. There was a kind of notable sense of entitlement. There was this idea that like, yeah, I get what I want. I want these things. I value these things. So of course I get them. Older age demographics performed better. They were more accurate in their perceptions. Women on average performed better. They had more accurate perceptions. Beyond that, it gets pretty messy pretty quickly in terms of making any generalizations about demographic groups. We talked a lot about doing this kind of work in the video game industry. Frankly, our budget just didn't allow us to do another product category, but if I got to do another one, it's definitely the one I would wanna do because resale plays such a huge role in the video game industry. And I think consumers in that space are much, much more attuned to these issues, mostly because they're engaging in resale and lending and trading a lot more than consumers are when it comes to these other kinds of work. So that's definitely on the short list for follow-up work. Can you talk a little bit about maybe the music streaming services, Amazon video, where the bargain is maybe a little bit more explicit? Do you think that those services are getting things right? Do you think that there are problems with those ones as well? I think there are problems, but I think they're very different sets of problems. So I don't, and I have to say, I haven't tested this. I haven't done real research on this question, but my intuition is people are not confused in this same way when it comes to Spotify or Netflix or other kinds of streaming subscription services. Consumers understand that if I don't pay my bill next month, that stuff goes away. I have to keep paying in order to have access to it. So I don't worry about the sort of deception component of it. And I think there are lots of really great pro-consumer features of those kinds of temporary access models. The price point tends to be much lower. So we get greater accessibility to a much broader cross-section of consumers, which I think is a really wonderful development. So our argument is not that consumers should avoid those options. It's just that they should take seriously the potential downsides. And so some of these examples seem sort of trivial, but in the aggregate, I think they're important. So we've all had this experience where there's a movie on your Netflix queue and you're really excited to watch it when the weekend comes and then it's gone. The license expired and they've pulled it. That's not the worst thing in the world, but imagine the sort of power that gives these sorts of technology platforms and copyright holders to remove works from public accessibility. There's a work that for whatever reason, a copyright holder thinks is politically sensitive or embarrasses them in some way. They can just make it disappear if we live in a world without physical copies. Try to go out and buy a VHS copy of Disney's Song of the South, right? You won't, right? It's tough, right? Like they want that work to disappear and it is under lock and key and they're never gonna make it available. Should they have the power to deny a disturbing but culturally significant work from public view? Like that's what worries me. When we distribute copies into lots of independent hands where they can't be clawed back, there is an opportunity for sort of archiving, distributed archiving that goes away when we're just kind of relying on access to data on someone else's server. Do you think that it seems that a lot of the decisions around these issues are driven by kind of a sense of fairness, even with the judges and that even when we look at these different examples you give there's kind of a collective, well that's fair and that's not fair even if it's hard to articulate the difference. And so do you think that what's happening now will ultimately shift people's sense of fairness around this and that in 25 years if GM turns off your car when you try to resell it, it won't bother people so much? So this is the danger of rooting any argument in consumer expectations, right? Because consumer expectations shift, they're malleable things, they are manipulable. And honestly that's what we're trying to engage in here. We're trying to advocate for a particular set of consumer expectations in the face of a shift that's going in the other direction, right? So this is a contested space and I think we need perspectives on both sides of that dispute. Fairness is I think really key in understanding this debate. One of the reasons that we have situated our argument in the language and really the rhetoric of property is that it's really powerful. IP rights holders have been incredibly successful in talking in terms of property. That's how they win these cases. They go in and say, we own this software. This software is our property. Because it's our property, we get to dictate how it is used, right? And what I think has been missing from the conversation is the recognition that the property of IP rights holders shares a border with the property rights, the personal property rights of all of us as consumers. And so we talk about property in large part, I think, to kind of tap into those intuitions about fairness. How successful that will be is certainly an open question at this point. I don't know where the mic is going. Thanks for the interesting talk. I'll apologize in advance for the depressing nature of this question. As I was sitting here listening, there were sort of echoes of the privacy debate that you could almost cut and replace copies in digital rights management with privacy and the same discussions about, well, maybe if we label websites more correctly than consumers would make proper decisions and as many, including, Bruce has documented quite well. That hasn't turned out very well at all. What do you think can actually be done to change the trajectory here for ownership? So the parallels to the privacy world, I think, are important and instructive. When we presented our work before we had data on this idea of short notice, this is one of the responses we got was, we've tried that, short notices don't work. Good in theory, they don't seem to make an impact on people's behavior. And I don't know that we can fully explain what's different about this one, but it did make a difference. And my co-author on this project, Chris Hofnagel, is a person who works in the privacy world and is, I think, very attuned to those kinds of precedents. All I can say at this point is for one reason or another, the people that we surveyed seemed to take these concerns about ownership to heart in a way that maybe they haven't in the privacy context. I don't know if it's because they can more readily assign some dollar value to what is being denied them, if the harm is somehow more concrete. It's not like, well, somebody might get some information and then maybe use it for some nefarious purpose that I can't quite imagine. It's someone telling you that book you bought might disappear tomorrow or that movie you might want to watch isn't compatible with that device and somehow that is more immediate, but that's the best explanation I can offer. I think you've basically only touched the tip of the iceberg of a much bigger problem. Let me give you some additional scenarios. A lot of people are doing cloud computing these days where they're essentially licensing software or like Microsoft Office or some database product and they have a lot of their personal data that can be only accessed through that product. Now, the vendor of that product can decide to change their licensing term and now say, well, if you don't agree to this change in the licensing term, you no longer have access to all of your data. So that's a case where it's much worse. In the privacy world, you have this conundrum where you have cases like WikiLeaks or the North Koreans with Sony releasing something that does a lot of harm to someone. Someone got fired at the Democratic National Committee. Sony got very embarrassed and no one seems to have been able to really do much concrete about it. But on the other hand, when Gawker released something about Hulk Hogan, he won a huge award that drove them out of business. So there's a lot of inconsistency in the law when it comes to privacy of personal data that's leaked. But I think the problem is a lot worse than you've pointed out and it may be even harder to solve. So I think the point about data portability is really crucial, right? The idea that when consumers entrust a platform, not only just to store data about them, right? But especially as we have devices that are learning about our behavior, right? Monitoring what we do, building profiles for us about us based on our behavior. I do think there is an increased need for consumers to have some sort of right to access and perhaps control the use of that data. I think you're right, it's a broader problem than the one that we're addressing in this book. We had, to be frank, a chapter on those issues that didn't quite fit in with the scope of the project, but it's on our radar for future work, absolutely. I thank you for this provocative talk. So one can imagine, thanks to you and to others, that the deception goes away and consumers are completely well informed and at which point maybe there are, as you talked about, there are already times where your consumers are given a choice to rent or buy. Amazon does this for their videos all the time. And so we end up, let's say, with lots of tiers of choices and we get to pay and decide that would, in one sense, buying may be gone, but that sounds like it's a good thing because there's more consumer choice. So I wanna raise the question of, you're arguing from property and you've explained why and it's very interesting. But if we're only thinking about this in terms of property, we could end up with a system where the deception is gone, we have lots more consumer choice, but we end up killing culture because it costs more money now to get something in a way that we can share it and thus build culture around it. Is there anything we can do from the cultural pressure side to try to get back these norms? So this is part of the reason that we make great efforts to try to articulate the value of this notion of exhaustion and the rights that flow from it. And I just touched on them briefly, but preservation and privacy and consumer autonomy and all of these things are sort of wrapped up or at least have been wrapped up in this notion of ownership. And so trying to explain to people why that matters, trying to point out the value of user innovation, for example, things that might go away in a world where we no longer have kind of the freedom to operate with respect to the things that we acquire. It is risky in a sense to make an argument that says, oh, what we really need to do is correct this misinformation in the market and then we rely on people to make better choices. There are some signs of hope, I think. The only, there aren't many, but here's one. The only sector of the music industry that's growing as fast as Spotify is the sale of vinyl records. There are people. Now in absolute, this is growth in percentage terms, not in absolute terms, but there are people and will continue to be people who strongly prefer and are willing to pay a significant price premium for something tangible, for something durable, for something that is theirs. We've, 10 years ago, there were all these predictions that hardcover books were gonna be a thing in the past and that e-books would be dominant. And that story has turned out to be a lot more complicated than a lot of those suggestions that we heard at the time. On the other hand, look, if it turns out that we as a culture do not value these things and we would prefer just to pay $9.99 for access to everything, whatever everything is and we just wanna sit back and consume and not kind of engage and interact, there's not a whole lot that I think I can do about that other than to try to point out the virtues of this other path and see if anyone is convinced by it. I think continuing on that question, but I don't know, I think a world where my tractor or my plane or my wash contains and the heart is something that I don't own. I feel like this is a future that's like the worst part of capitalism and the worst part of communism combined. And so I think it's interesting to think about private property more from something that we really need to be protecting and nurturing. And so I'm just wondering some of your own reflections as you've gone on this journey, are you sort of feeling or identifying values and things attached with our sort of physical world conceptions of tangible ownership that you think are values that we need to be ensuring that basically defending and fighting for as we move to more and more digitally based items? Yeah, that's a really important question. So the arguments, the fact that the arguments are rooted in this language of property I think is at least from my perspective it's really instrumental. Property is not valuable in itself, right? The reason that I think property is so crucial here is that it functions as this sort of standing for individual freedom, right? That it gives individuals the right to make choices without asking anyone for permission, right? You buy this book and you wanna lend it to someone, you don't have to ask a publisher or get a key from a server in order to do that, you just do it. 30 years ago, if you wanted to repair your car you just put it in your garage and you opened up the hood and you did it without asking anyone for permission without having to go to the Massachusetts state legislature and get a right to repair bill passed, right? To engage in this sort of accepted normal behavior, right? And so if we could get beyond the language of property and talk purely in terms of consumer rights or consumer freedom, frankly that's a set of arguments I'm more comfortable with in a lot of ways. But trying to articulate these points within a kind of existing legal and cultural framework, this right now I think is the best language for doing it although I have some reluctance about relying too much on the rhetoric of property. I think this is our last question. Hi, I was just curious if there have been any court cases involving medical devices and if you could give an example? So there have not yet been court cases as far as I know about medical devices but we talk about a handful of examples in the book where we have individual users of medical devices who wanted to improve their functionality who wanted to satisfy themselves about the security and reliability of those devices and that's really tough to do if the code that makes them operate is locked down, right? And one of the things you'll hear in response is, well look, we can't have the average consumer like fiddling with their medical device because there's liability involved. What if they mess something up and what if the device harms them? We're the only people who can be trusted to kind of look under the hood at how these things are operating. And you know who made the same argument about opening up the hood in a literal sense and preventing harm, it was the car companies, right? This is like what Volkswagen was telling the US government when it came to the software on their vehicles, right? And we know how that turned out, right? There is value in having multiple perspectives on these questions and I don't think we can trust device makers to be acting in anyone's best interest but their own. And I think the Volkswagen example is a really powerful one. So to answer your question directly, no litigation so far on medical devices but we do have some anecdotes that I think are cause for reflection. Thank you all so much. I'm happy to stick around if people wanna chat afterwards.