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Cringely Goes Off the Deep End

Via Slashdot and boing boing, Robert X. Cringely's latest idea:

Without having been truly tested, so far I have yet to find a lawyer who sees a serious flaw in my logic...

I call my idea Son of Napster, or Snapster for short...

Snapster is all about ownership. Snapster will be a company that buys at retail one copy of every CD on the market... Snapster will also be a download service with central servers capable of millions of transactions per day...

Snapster has to be a public company. It would have its IPO as soon as possible after all those CDs have been delivered. It must be a public company right from the start of operations... What is critical here for the business success is not the price per share but the broadest possible ownership of shares...

Each Snapster share carries ownership rights to those 100,000 CDs. You see, Snapster is a kind of mutual fund, so every investor is a beneficial owner of all 100,000 CDs. Each share also carries the right to download backup or media-shifting copies for $0.05 per song or $0.50 per CD, that download coming from a separate company we'll call Snapster Download that is 100 percent owned by Snapster...

What I have described is legal, it just leverages technology in a way that has never been done before. There are precedents for group ownership of recordings and certainly the law of mutual funds is very clear. Of course, the RIAA will have a response. They will file suit, probably claiming restraint of trade, but this simply will not stand and it is impossible to believe they could get any form of retraining order. Still, Snapster must have funds to support a vigorous defense -- a defense that has been planned well in advance. The RIAA will also try to have laws passed making Snapster illegal, so an anti-RIAA lobbying effort would also be a good idea.

Either this is an April Fool's joke that's off by a season, or it's the dumbest idea I've ever heard from a high-profile technology columnist.

If Cringely's theory were correct, then corporations could buy one copy each of Microsoft Windows, Adobe Photoshop, or any other copyrighted software title, then load them on a server and allow all their employees to "download backup or media-shifting copies" at will. The answer is that they can't, because to do so wouldn't be fair use, it would be outright theft. No judge in this country would allow a service like this to go forward. Though he writes, "it is impossible to believe [the RIAA] could get any form of retraining [sic] order," a restraining order is exactly what any judge would be legally compelled to provide.

As a Slashdot commentator wrote:

"Would it replace a sale" is a shorthand way of saying, "would you normally need to buy it to do what you're doing?" The relevant law is 17 U.S.C. 107 [cornell.edu], "Limitations on exclusive rights: Fair use":
In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include...

(4)

the effect of the use upon the potential market for or value of the copyrighted work.

I'd say his idea is a slam dunk not-fair-use under section four, as (he freely admits) it would "destroy the potential market for...the copyrighted work." Not fair use, not legal, not a good business idea.
The truly frightening thing to me is Cringely's statement, "I have yet to find a lawyer who sees a serious flaw in my logic." What? Is he serious? If so, I'd like a list of these lawyers published so that I can make sure to never, ever retain them.

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Mark Stephens, AKA Robert X. Cringely, is a smart guy who has good ideas and interesting predictions. Every so often, though, he writes something that makes me wonder, "Is he just saying that to see if we're paying attention?" In... [Read More]

Comments

This kind of company does not need to go public. There is already a utility for this call a "mutual benefit corporation". Its easy to enter and leave a MBC and every member has equal ownership. It was invented so you could easily form a bird watching club and have shared assets or whatnot. The AAA is one of these. Your dues that you pay makes you an OWNER of the company, not a customer.

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