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Making Piracy Obsolete Through the Payright System

photo of Michel Bauwens

Michel Bauwens
5th December 2012


* A Policy Proposal by the Pirate Party (U.S.): Make Piracy Obsolete: The Payright System. Primary Author: Erik Zoltán, Massachusetts Pirate PartyContributing Editor: Zacqary Adam Green, New York Pirate Party

Zaq and his colleagues propose:

“This document contains a specific policy proposal designed to address the concerns of the Pirate Party regarding copyright, patent and trademark law. At the same time, it is designed to address the concerns of inventors, artists, musicians, filmmakers and businesses regarding the Pirate Party’s ideas about open culture. My goal here is to show how we will end piracy forever by making it obsolete – we will ensure that creators and inventors are paid for the free and open exchange of their work and inventions. This will not prevent downloading, nor will it impose fees – it is a comprehensive way to allow open culture and ensure that the creators are paid for their work. In brief, the concept is to create an open culture where inventions and works can be exchanged freely and without limitation, while also guaranteeing that innovators and content creators will be paid a fair price for their works and inventions. It provides an open framework where anyone can make money by selling anyone else’s works and inventions, and yet at thesame time where the creator of those works or inventions will receive a kind of payment that compares very favorably with the sort of payment that they could expect today under the “closed culture” of intellectual property monopoly. The policy allows anyone to exchange works and inventions non-commercially for free,at the same time that it contains funding provisions which would guarantee that content creators and innovators would receive ample payment for non-commercial use of their work. (This may sound contradictory, because the conventional wisdom is that these two things can’t possibly coexist.) At the end of this document I will discuss possible objections to this proposal, legal challenges, privacy issues and how we plan to implement these ideas.”

Here is an excerpt specifically presenting the Payright proposal:

“This proposal contains several different components. I will summarize what they are in this overview, before describing each one in detail in their respective sections. Note that this is just an overview, and many specific questions will be answered later in the document.

1. Property Right Reform: Intellectual property rights of all kinds will be redefined in such a way that they allow non-commercial use. Non-commercial use will be unrestricted except that attribution will be required to ensure that the owner is properly compensated.

For commercial use, the creator of an invention or a work has the exclusive right to be paid a creator’s share of gross monetization, but does not have the right to limit how that work can be sold and by whom.

Derivative works can be created by others without restriction, and there will be no way to use trademarks to prevent derivative works. However, the creator of the derivative work will have to share revenue with the creator of the original work and any trademark owner. The section “Property Right Reform” covers this in detail.

2. Payright Content Registry: A Payright Content Registry will be created that allows creators to register their work for protection. The burden of registration will be on the creator, but there will be no initial registration fee and the registration process will be approximately as complicated as using the “Save As” dialog on a word processor. Existing copyright owners will be grandfathered into the new system, but they will need to register their existing works.

Protection for all works will begin on the registration date. Although initial registration will be free for five years, the content owner can optionally pay to extend registration. Extended registration will cost a penny for the sixth year but will double every year thereafter. There will be no specific limit on the term of payright protection, but the cost will eventually become too great and the work will pass into the public domain for economic reasons. The content registry will provide a canonical download location where anyone can access the registered version of the work.

3. Monetization Framework: The payright content registry will include a content monetization framework, enabling anyone to earn money in an unlimited number of ways using other people’s work. The seller of the work will receive a fair percentage depending on the format and the way in which the work is sold. (Specific percentages are mentioned later.) The creator of the work will receive a percentage that is larger than what they’d typically get today in a publishing or distribution contract.

The content registry will provide conflict resolution when ownership disputes arise, and will provide a content feed that anyone can query for either commercial or non-commercial use. It will serve as an infrastructure for various kinds of revenue schemes to help monetize the work. Unlike the current system, the content owner will not need to bear the burden of enforcing compliance with the proposed payright system.

4. Payright Invention Registry: To replace the patent system, a Payright Invention Registry will be created. This will allow anyone to register an invention and to be paid for commercialization of that invention. Existing patents will be grandfathered into the system and will take precedence. A first-to-invent model will be in effect.

As with the content registry, non-commercial or charitable use of an invention will be unrestricted. Anyone will be able to create derivative inventions: they can enhance the original invention with their own additions or changes, and the original inventor will receive a portion of any proceeds. Initial registration will be free for five years, and extension will be charged a small but escalating fee.

Unlike patents, the payright invention registry will contain highly precise descriptions of an invention that leave no room for ambiguity. An inventor will not be able to “shelve” an invention or prevent either commercial or non-commercial use – they will however be able to profit handsomely from both commercial and non-commercial use of their invention, regardless of who uses or promotes it. See the section “Payright Invention Registry” for more details.

5. Development Funds: A Payright Content Development Fund (CDF) will be created, and will be funded in three distinct ways. First, it will receive 50% of the creator’s share of monetization of works. Second, payright content registration fees over and above the amount required to run the payright content registry will go directly into the CDF. Finally, 1% of the US Federal Budget will be allocated to the CDF. The money in the CDF will be paid to content creators to compensate them for noncommercial use of their work, based on the popularity of the work. So a movie that is given away for free and never monetized will still be able to make its creators rich if it goes viral.

An Invention Development Fund (IDF) will be created for the payright invention registry, which will work much the same as the CDF. It will get 50% of the invention owner’s share, plus excess registration extension fees and will also receive 1% of the US Federal Budget. In this way, the inventor of a new invention will receive generous payment for non commercial use of the invention.

The Pirate Party proposes an end to corporate citizenship, which should result in the complete elimination of “corporate welfare,” or at least in drastic reductions to the very large percentage of the budget that falls under this category. For this reason, we should have absolutely no problem finding the money to pay for these two funds, which will amount to a total of 2% of the budget.

6. Objections to Payright. Gaming the system, legal challenges, privacy concerns and implementation plan. A number of possible objections have been raised to the Payright system. The implementation plan anticipates those objections and is designed to overcome possible problems. The primary concern revolves around attempts to game the system, and the entire proposed architecture of the payright system is designed to address this concern. Legal challenges are a major problem with current intellectual property laws, and payright is specifically designed to forestall legal challenges. Payright involves tracking non-commercial use to ensure that creators are paid for their work. This could raise privacy concerns, so the system will contain a bulletproof privacy protocol to make sure that it cannot be used for spying on people. And this system will have to grow gracefully to a very large scale, so a high-level implementation plan has already been devised. The section “Challenges and Implementation” describes all these considerations. It also addresses some objections to the very idea behind payright.

The net effect of this proposal will be a gigantic revenue increase for content creators, publishers, inventors and most corporations — even the ones who oppose the Pirate Party. The biggest losers will be copyright and patent attorneys, who will generally have nobody to sue any more because the payright system itself will handle dispute resolution. However, the invention registration process that replaces patents will spawn an entirely new industry around the precise specification and engineering of new and existing ideas into the system.

Currently, patent holders and copyright owners are aggressively lobbying Congress to close culture even further by enhancing their monopoly rights and tightening enforcement. They also want to extend the term of copyright and patents beyond their already excessive lengths. This pads their own coffers, but has an overall negative effect on the economy. I hope that under this proposal they can switch to lobbying Congress to increase funding for the CDF and IDF, providing a shot in the arm for creativity, innovation and the economy.”

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