Emory Law News Center

Left to our own devices: Ownership in the digital age
By Andrew Faught | Emory Law | May 23, 2018

Illustration:
Serge Bloch

As a member of Generation X, Emory Law Professor Timothy Holbrook is old enough to recall when CD sales — at their peak in 2002 — accounted for 95 percent of all recorded music revenues. While copyright law forbade him from burning copies for friends, the shiny disc was, otherwise, his to do with as he pleased.

“I could sell that CD, which is why we have used-CD stores and used-book stores,”
he says. “Then someone could buy it, and they would be free to resell it.”

In 2014 came a turning point: digital music downloads and streaming subscriptions overtook CD sales for the first time. The development raised a pointed question.

Who owns what in the digital age?

That’s the dynamic that is shifting,” Holbrook says, invoking Apple’s popular iTunes music library, which limits the number of devices on which purchased songs can be stored. “I think most people are of the mind, ‘It’s my music. I bought it. Why can’t I put it on what I want?’”

The information age, it turns out, is challenging notions of ownership on multiple fronts, from digital music and movies to college library e-books to computerized medical records and new inventions.

In terms of digital resale, the US District Court for the Southern District of New York spoke in 2013. The court ruled in Capitol Records, LLC v. ReDigi Inc. that a consumer could not resell lawfully owned digital materials. ReDigi is an online marketplace for “pre-owned” digital products.

In an era of iPads and Kindles, legal challenges are both inevitable and unfolding. Challenges are even treading into ground previously unanticipated. Holbrook says he expects ownership of 3-D printed materials to be contested, as many of the items created are generated from proprietary digital blueprints.

“There are so many things that have moved from the tangible physical space into the digital world,” he adds. “In some sense, the digital file is distinct from the thing. The gap between what we would historically think of as tangible and intangible has definitely shrunk dramatically.”

Property historically has encompassed land or physical personal possessions; intellectual property (IP) has enjoyed specific protections via patents, copyrights, and trademarks. Ownership of digital materials, for its part, has turned notions of personal property on its ear, bound instead by small-print licensing agreements acceded to willingly or unwittingly by consumers.

In 2018, ownership rules are sometimes squishy, but often restrictive.

“When I download to my Kindle, most likely there is a contract between me and Amazon that dictates what I can and cannot do with that e-book,” says Holbrook, who teaches property law. “Even though I, as the consumer, feel like I’m getting the book, the things I can do with that book may be different (from the physical form). Clearly, I can’t upload it and give it to a whole bunch of people.

“I think what’s really important here is the perception of consumers and the fact that most people probably don’t realize that they may not own the file on their phones or Kindles or iPads.”

Academia is hardly immune to the vagaries of ownership in the digital age.

E-books have been viewed with caution among the country’s college and university libraries. In particular, librarians are concerned about books that are born in digital format (which come with restrictions on how many users may access the materials) — not the digitized book collections (made from existing books) available on Google Books or HathiTrust. The latter are hailed as a logical way to replace physical books — bringing scholarship to students anytime and anywhere — without the encumbrances of licensing restrictions.

In some cases, libraries must force a patron to read a licensed e-book on library grounds, or administrators must pay thousands of dollars in license fees to be able to offer a book to a wider audience.

“Some of these restrictions, called technological protection measures, do impact how students and faculty can use the books,” says Lisa Macklin, director of the Scholarly Communications Office at Emory. “We have a policy that we will still buy a print version of a book because we have heard from our faculty and our students of the challenges they have using e-books.”

Buying a text under what’s known as the first-sale doctrine allows institutions to own and loan a book, make interlibrary loans, or even sell or destroy the item. Licensed e-books, however, often cannot be loaned to other libraries, and publishers can control the amount of time that an item is checked out.

Restrictions have led some academics to warn of onerous demands such contracts put on access to information.

“The key point is ownership,” wrote University of California, Davis, librarian Daniel Goldstein in a column for Inside Higher Ed. “Acquisition of a physical book brings with it a consistent and well-understood set of rights and restrictions that have been clearly defined and relatively stable for more than a century.”

Section 108 of the copyright law allows libraries and archives to reproduce and distribute one copy of a work under certain circumstances (for interlibrary loans, for example). But technology means longstanding dictates — especially as they apply to digital content — are in flux.

The law is not set in stone,” Macklin says. “Part of what we’re dealing with is changing technology, a changing marketplace, and a law that hasn’t changed in a while. So how do we accommodate that in a way that still allows libraries to fulfill their mission without damaging the marketplace? I think that’s the balance that’s trying to be struck by the copyright office.”

While some university libraries’ book acquisitions include only e-books, Emory has not gone that route, Macklin notes. As for the e-books the university does purchase, “We are making a concerted effort to buy the ones that don’t have these technological protection measures, but they’re often considerably more expensive than either the print books or the same book with the technological protection measures.

“It’s a balancing act with the budget,” she adds, noting that some of the books without digital protections can cost double their licensed counterparts.

In 21st-century America, ownership has become murky in other arenas. Tesla cofounder and CEO Elon Musk last year ordered owners of his automotive brand not to use their electric vehicles for ride-hailing firms such as Uber. Musk argued that its “supercharger” stations can’t accommodate private and for-profit uses.

Musk, whose cars are equipped with sophisticated technology, says he has other reasons for not allowing drivers to access computer equipment built into his vehicles. When Hurricane Irma struck Florida last summer, the company remotely controlled software affecting the cars’ batteries. The development gave the cars a farther range to escape danger.

Separately, John Deere tractors are outfitted with software that requires users to only use authorized repair shops when trouble arises. 

One of the more emotionally fraught ownership debates centers on medical records. Until the San Francisco–based McKesson Corporation divested its electronic health record business last year, it housed data on tens of thousands, if not millions, of patients. (The company predominantly operates a network of warehouses that dispense pharmaceuticals and medical surgical supplies around the globe.)

Records that used to be held in paper files now reside in EHRs, or electronic health record management systems.

Perhaps surprising to many Americans, there’s nothing in the law prescribing ownership of EHRs. Meanwhile, there have been government incentives in the past decade to go digital —in part to ease the sharing of information among doctors.

“It’s an interesting legal question that doesn’t necessarily have a clear, concrete answer,” says Bernie Zidar 98L, chief intellectual property counsel at McKesson’s Atlanta operation. “Is it the property of the patient? It’s your history of injury, disease, treatment, and care. On the other hand, the record itself is created by a healthcare provider, like your doctor. There are notes and observations on your health. Arguably, as they are created by the doctor, they should belong to the doctor.

“There’s no United States federal law that dictates ownership of medical records, so in the absence of federal law, state law controls,” Zidar adds. “In the United States, generally speaking, the provider owns your medical record.”

More than 20 states have created their own laws to ensure that doctors own the records.

But there are wild cards at play. What if a healthcare provider is late paying a bill to their software provider? Or refuses to pay all together? The provider, just as a utility can turn off for nonpayment, is entitled to terminate access to doctors. Records ownership suddenly enters uncertain ground.

“The consequences of switching off that access can be very bad for the patient,” Zidar says. “That concerns some people from a policy perspective. But the issue of access is more of a practical issue than a legislative issue at this point.”

Innovation in the information age is another area in which the rule of law is being reconsidered. Liza Vertinsky, associate professor of law with an expertise in innovation and IP, foresees big changes in the way patents are administered.

“I’ve been focusing on artificial intelligence and thinking machines and how that might change the process of invention and innovation in ways that need to be thought about,” she says. “You have a patent system that is designed based on this individual inventor paradigm, and now we have computers working in collaboration with people. Some computers are generating patentable inventions.”

Technically, computers have had the capacity to make their own inventions for decades. Patent law hasn’t addressed the area, however. In an increasingly digital world, “It’s something that’s going to have to be addressed relatively soon,” Vertinsky says. 

The ongoing legal debate, which has gained traction in recent years, has less to do with inventors protecting their creations than it does with the process itself.

Vertinsky cites a seminal paper by Mark Lemley, director of Stanford University’s Program in Law, Science & Technology. The document, titled “IP In a World Without Scarcity,” states that economics is based on scarcity and that “things are valuable because they are scarce.”

Artificial intelligence, 3-D printers, and the internet have “slashed the cost of creation, production, and distribution,” Lemley writes. “I can create without distributing, secure in the knowledge that my works will be disseminated by others who distribute without creating.”

“Rather than saying to the people who created the thinking machines that they have protection, my concern is more with how the system changes and whether the law is equipped to deal with those changes,” Vertinksy says. “These technologies are paradigm shifts that change innovation in a way the law hasn’t fully caught up with or thought about.”

Digital age “ownership,” meanwhile, isn’t without a decades-old antecedent. Users of Microsoft Word, for example, don’t really own the software. A so-called shrink-wrap license, an end-user agreement,  effectively binds the user to company terms once packaging is removed.

Current restrictions on digital content are “sort of the next generation of the idea that we don’t actually own these digital products,” says Holbrook. “We’re given the right to use them. You don’t own it in the classic sense.”

Consumers, perhaps out of convenience, appear to be taking the prohibitions in stride.

“I can just go online, find the item that I want, and it instantly appears on my device in the comfort of my home,” Holbrook says. “Given that convenience, people don’t seem to complain too much.”