Chapter Captain MKG: So I think this segment needs to be reconceptualized. Under the law that protects 'trusted systems', fair use has effectively been lost. Various business models that implement DRM type technologies are attempting to enable some fair use - a fair use as defined by the content owner - Napster to Go, TiVo? to go etc. This then changes the fair use issue from being between those who view it as the space that was previously too expensive to meter use and those who believe it is an inherent value, to being a scope of fair use at the permission/generosity etc of the content owner. It becomes a marketing tool, constrained, no doubt, by the business model. Is it just a sop to lure us into a more constrained world?

The fact that the law has sanctioned technology that precludes fair use, the loss of fair use is not only achieved by perfect control & trusted systems. Here, the state worked together with commercial interests to achieve a result arguably contrary to public values.

This segment needs to be gingerly updated to reflect the introduction of the DMCA & recent 'limited use' business models. Comments anyone?

The market failure theory of fair use described here (high transaction costs) leaves out a very important piece: where a particular transaction would be a net-gain for the society as a whole, but a net-loss for the content owner regardless of transaction costs. In these cases the copyright owner refuses to license the work, and generally ends up losing in court: Campbell v. Acuff-Rose (2LiveCrew parody), Mattel v. Walking Mountain Productions (Barbie parody), Suntrust v. Houghton Mifflin (Wind Done Gone parody/satire), and Sony v. Bleem (advertising competing product). Perfect control over price discrimination is unlikely to cure any of these. Moreover, I think this type of fair use is more fundamental than time-shifting or space-shifting (standard targets of the transaction cost fair use debates). Sure, those are important, and they have benefitied the content industry in ways that they didn't forsee, but the first amendment value is much lower than with parody, commentary, or other transformative works that a content owner may be unlikely to sanction. The Ginsberg article mentioned earlier might also fit well here. While she defends the 'perfect control will fix market failures' approach, she does admit that the DMCA 1201(a) protections may go too far in curbing transformative fair use. -dpk