In this edition #33…

December 12, 2011

In our last edition of 2011, we present an outline of the 2011 CMCL conference ‘Keeping Secrets in Times of Weak Law’ with a run-down of the panels on Cybersecurity, Trade and Commercial Secrecy, and Privacy.

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Julian Thomas presents an account of Steve Jobs’ particular and extraordinarily successful mode of innovation, and reviews Walter Isaacson’s ‘Steve Jobs: The Excusive Biography’.

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And then a brief note from our editors.

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Keeping Secrets in Times of Weak Law

December 12, 2011

By Tiffany Wong, Oscar O’Bryan and Jake Goldenfein

Keeping anything secret seems like a challenge in today’s radically altered media landscape. Digitisation has abolished the cost of reproduction and networked environments expose information to actors with the capacity to leak, steal or vandalise for whatever purpose motivating them. Law hardly seems to have a role in a space where technological know-how trumps not only the regulation of secrets but also the digital architectures that protect them. But does that mean that law should retreat from regulating information, or rather, is it a time for redoubled analysis of law’s relationship to information and perhaps an open mind when looking at options for reform. Rather than harsher penalties and more vigorous enforcement, do we need more transformative approaches for dealing with the reality of our age of communicative abundance?

This year’s CMCL conference, ‘Keeping Secrets in Times of Weak Law’ answers the call for a critique of law’s role in keeping secrets and the institutions that determine when secrets should remain so.

Jake Goldenfein presented on the different forms of WikiLeaks and how its latest iteration of publishing uncensored and unredacted documents without institutional (mainstream media) oversight may be the only mode of transgression that can fulfil its ideological mission. Dan Hunter, Julian Thomas and Alana Maurushat constituted the Cybersecurity Panel, discussing the relationship between states, secrets and law. The session was chaired by David Lindsey. Philip Williams, David Brennan and Susan McMaster made up the Trade and Commercial Secrecy Panel, chaired by Beth Webster, discussing the economic arguments in the trade off between incentives to produce and incentives to enjoy information. And the Privacy Panel, chaired by Jason Bosland, included Megan Richardson, Michael Rivette, Michael Gawenda and the Honourable Michael Kirby, who discussed Lenah Game Meats – 10 years on, and the possibility of a statutory cause of action for privacy in Australia.

Cybersecurity

Dan Hunter, director of the Institute for Information Law and Policy at New York Law School, gave the Cybersecurity keynote, asking some pertinent questions about secrecy and security in the age of the Internet. In particular, why WikiLeaks was such a lightening rod for criticism and whether ‘control’ is the correct paradigm to inform the policies behind regulating secrecy.

The debate over WikiLeaks set the context for Hunter’s presentation. In asking why WikiLeaks, especially its release of unredacted cables was so derided by the institutions related to the rule of law (journalists, lawyers etc) Hunter critiqued those institutions for being unable to see the reality of today’s communications infrastructure and practices. Instead, Hunter claimed, those institutions rely on an ethic of control that propelled the ratcheting up of copyright laws since the Internet became publicly available 20 years ago, as well as informed the news media’s derision of WikiLeaks publishing without their oversight.

Hunter suggested that WikiLeaks may be a precursor for a change in policy regarding government secrecy and disclosure and asked what modern day information policies and practices should look like given the Internet and technologies like WikiLeaks. Regarding copyright, Hunter claimed control was not what creators sought and regarding secrets, Hunter alluded to substantial evidence suggesting administrators over-protect information in ways that are profoundly undemocratic. Now that we live with the idea of radical transparency as something we cannot really do anything about, Hunter claims we have to craft a policy that gives up on our misguided concerns about control despite the new dangers that may provoke.

Respondent, Julian Thomas, director of The Swinburne Institute for Social Research, discussed the extent to which the Internet has decentralised, diffused or democratised secrecy– and where WikiLeaks fits into this new equilibrium. Thomas claimed that the Internet has made states both less and more able to control information, where networks of freedom and networks of control lay alongside each other. WikiLeaks operates in this new networked society, claims Thomas, according to the model described by William Dutton as the 5th estate emerging from the network of networks. While sharing some features of the traditional press, the 4th estate, Thomas claimed this 5th estate is more than simply a supplemental ‘new’ media but operates in a space, where institutional and amateur expression are side by side, as are networks of freedom and networks of control exist within what Manuel Castells describes as the space of flows (not a space of places) where people find knowledge outside of institutional sources.

Alana Maurashat, director of UNSWS’s Cyberlaw and Policy Centre, discussed the regulation of hacking worldwide, noting her consultancy to the Canadian government to assist in crafting a reasonable policy in the field of ethical hacking. She saw WikiLeaks’ legacy as going beyond subsequent movements like Anonymous and Occupy, but rather depicted WikiLeaks as the leader, or image, of a whole system of e-government and e-revolutions, often coordinated by groups that have been considerably empowered by today’s technological conditions.

Trade and Commercial Secrecy

Beth Webster opened the panel by contextualising the importance of trade secrecy to Australian innovators, referring to the Australian Bureau of Statistics’ most recent innovation survey. This survey highlighted that 40 per cent of Australian businesses were innovation-active during the 12-month reference period and the most popular method of intellectual property (‘IP’) protection by these businesses was a secrecy or confidentiality agreement.

Keynote, Philip Williams (Chairman of Frontier Economics) offered an economist’s perspective on trade secrecy by posing the key economic problem arising from the protection of trade secrets: the trade-off between two incentives — the optimal incentives to produce information and the optimal incentives to enjoy information.  Economics has been able to articulate this problem, but has struggled to offer guidance for its resolution.

To illustrate this problem, Williams presented a simple economic model: a person spends a year of pain (‘Period 1’) to enjoy a year of gain (‘Period 2’).  The person may justify the pain by producing an asset, such as information, at the end of Period 1.  Enjoyment of that information in Period 2 constitutes the gain.  The person will only bear the pain in Period 1 if they believe that they will likely enjoy the information in Period 2.  Thus the person will likely seek legal or extra-legal protection of the information from appropriation.

Williams noted, however, that the trade secrecy context raised three complications to this model.  First, the creation of an asset does not draw a clear distinction between the two periods of activity — investment and enjoyment — since the asset will likely grow in value during Period 1.  Secondly, the asset may generate benefits for its creator through trade, whether or not the creation process has completed.  Thirdly, if the asset is information (a classic public good) difficulties arise with respect to trade.  In particular, a purchaser must know the information to determine its value — a problem also known as Arrow’s fundamental paradox of information.

Williams applied this model to the facts of Maggbury v Hafele (2001) 210 CLR 181 (‘Maggbury’), a High Court case in which the law dealt with the trade-off between the incentives to produce and enjoy an asset. Williams noted the economic inefficiency of restraining the use of information after that information had entered the public domain.  He suggested that restitutionary damages would have been a more efficient remedy by allowing Maggbury to recover the benefit of its investment and by allowing the use of publicly available information.  The key challenge in calculating the quantum, however, would be to determine the duration of Hafele’s head start, which Hafele gained by first access to the information.

 

The first commentator, David Brennan, engaged in a fuller discussion of remedies for breach of confidence. He highlighted the remedial uncertainties arising from the equitable jurisdiction of breach of confidence — remedies were at the court’s discretion, and equity provided weak guidance on the assessment of quantum.

In noting these problems with equitable remedies, Brennan argued injunctive relief would serve little purpose, given the defendant’s destruction of confidentiality; an account of profits could involve accounting problems since the significant intermingling of the defendant’s resources with the information; and equitable compensation, calculated on a counterfactual basis, might be dismissed by courts as too imprecise a measure of damages.

Brennan concluded by making suggestions for law reform.  To strengthen legal protection of confidential information and to deter the wrongful disclosure of such information, he submitted that an all-proceeds remedy would be preferable to injunctive relief where there was a breach of confidence which was: (a) in bad faith; (b) the wrongdoer benefited from the breach in an ascertainable and proximate manner; (c) the secrecy of the information has been destroyed by the breach; and (d) there was no market-based objective measure of harm.  Depending on the nature of the party’s breach and benefit, the appropriate remedy should be a constructive trust, and/or an account of profits without allowance for the wrongdoer’s contributions.

The second commentator, Susan McMaster (Senior Legal Counsel with CSIRO), provided the practical perspective of IP creators, including those who received and commercialised confidential information.  Drawing from her experience with CSIRO, McMaster acknowledged both the importance of trade secrecy in the private sector and the effectiveness of sharing knowledge to achieve impact from research results.

Secrecy, McMaster claimed, is crucial to the patent application process since patent registration hinges on the first-to-file system and the development of patentable subject matter through research and experimentation takes a long time. Further, secrecy is required for the commercialisation of public scientific research as investors are incentivised by the exclusive rights created by patent registration.

McMaster raised three key issues concerning the management of confidentiality agreements.  First, it may be unclear whether certain information is confidential.  Secondly, non-disclosure agreements must be drafted and used to enforce confidentiality, rather than to constitute a mere formality before commercial engagement.  Thirdly, a research organisation and its employees must refrain from receiving confidential information from third parties or entering into third-party confidentiality agreements if doing so would place the organisation at a commercial disadvantage.

 

Privacy

 

The final panel of the day, chaired by the CMCL’s Jason Bosland, considered the past, present and future of privacy protection under Australian law. The four speakers brought a wealth of academic, professional, industry and personal experience to panel, making for a discussion that was informative, candid and enjoyable.

The first speaker, Professor Megan Richardson framed the panel discussion around the future direction of privacy law in Australia – does Australia need a statutory cause of action for invasion of privacy, or should the common law protecting privacy interests (breach of confidence, defamation) be left to develop on its own? She noted the ‘careful silence’ of the federal government on the issue, only recently broken by the publication in September 2011 of an issues paper recommending the introduction of a statutory cause of action – a reaction, perhaps, to the resurgence of interest in the ever-expanding News of the World phone-hacking scandal.

Richardson dealt at length with the judicial reasoning in ABC v Lenah Game Meats as to whether the common law alone can protect (individual) privacy interests sufficiently, referring to Gleeson CJ’s discussion and approval of Hellewell v Chief Constable of Derbyshire as an example of the successful utilisation of the doctrine of breach of confidence to protect privacy. On the other hand however, Richardson noted the imperfections of the common law process, requiring plaintiffs to endure the ‘agonising’ process of adversarial litigation to have their interests recognised. She cited the Campbell, Mosley and Giller cases as pertinent examples of this. Richardson suggested that a statutory cause of action could make a positive difference if it were well-framed.

The second speaker was Michael Rivette, barrister at Chancery Chambers, who along with having successfully argued the privacy issues in the Giller v Procopets appeal, also maintains numerous professional and commercial interests in the media and communications sector. Rivette spoke of the continuing influence of the ABC v Lenah Game Meats case upon the development of the law of privacy, both in Australia and overseas. He suggested that the Victorian authority of Giller actually afforded greater privacy protection through breach of confidence than exists under the common law in both the UK and New Zealand. While he acknowledged the potential benefit of a statutory cause of action, Rivette highlighted the drawn-out nature of the law reform process, and said that in the mean time, ‘we have to do what we can with what we have’.

The third speaker was Michael Gawenda, whose perspective on the issues was coloured by his extensive experience as a career journalist and author. Gawenda noted that ‘journalists are in the business of invading people’s privacy’ on the basis of public interest, however he was clear that this end did not always justify the means (this can be contrasted with recent remarks by former News of the World journalist Paul McMullen). In particular he was critical of the idea that the apparent consent of a journalist’s subject to an invasion of privacy might legitimise or validate that invasion. In concluding, Gawenda was sceptical about the ability of the legal system to deal comprehensively with privacy issues, suggesting that perhaps the regulation (formal and informal) and culture of the media industries needed to change as well.

The final speaker was the Honourable Michael Kirby AC CMG. Kirby suggested that a consideration of privacy law should begin with the question: ‘Why do we want privacy?’ – framing the answer in terms of the ability to have control over our personal lives, arguing that personal privacy is important to our ‘fullness’ and ‘flourishing’ as human beings. In this sense, Kirby was of the European perspective that personal privacy is a human right which should be protected by the law. After highlighting the imperfections of the various options canvassed in the recent issues paper – do nothing, expand the role of the Press Council, rely upon the courts to develop the common law, et cetera – he came to the conclusion that the best way forward for privacy protection in Australia is the creation of a statutory cause of action for invasion of privacy.

The session highlighted the numerous stake-holders in the ongoing development of privacy law – the media, the legal profession, celebrities, ‘normal’ people – each with their own perspectives, concerns, and objectives. The task for the Australian law is to consider and balance all of these things in continuing to move towards a more coherent law of privacy.

Tiffany Wong is an LLB/BMus candidate at the University of Melbourne.

Oscar O’Bryan is holds an LLB from the Melbourne Law School.

Jake Goldenfein is a PhD candidate at the Melbourne Law School.

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The success and failure of Steve Jobs

December 12, 2011

A review of Walter Isaacson, Steve Jobs: The Exclusive Biography, Little, Brown, London 2011.

By Julian Thomas

Malcolm Gladwell’s recent New Yorker piece (14 November 2011) offers a familiar, contrarian view of Steve Jobs’ career and significance. The key theme is drawn from Walter Isaacson’s extraordinary new biography: the dazzling successes of Jobs, together with his signal failures as a technology entrepreneur, were not the result of great vision or technical genius. Instead, Jobs’ significance lies elsewhere. He was an adept appropriator of other people’s ideas. He unfailingly recognized failure in other people and things. He had a perfectionist love of “closed systems” — that is, he could not relinquish control over the uses and applications to which Apple’s devices might be put. So the machines that Jobs introduced and helped invent – the computers, phones, tablets, and music players – embodied both his strengths and weaknesses; they were and are distinguished by being both brilliantly designed and obstinately difficult to adapt, extend, or modify.

The last three decades of computer history, and the debates that have raged over innovation and control in the technology business, are the background to Isaacson’s book. In a sense he has written, almost inadvertently, a biography of a certain kind of intellectual property. The foreground narrative is a rich new source of Jobs folklore, and this is what occupies Gladwell, and presumably many other readers. Some, maybe most, of these new stories confirm the nightmarish picture of Jobs’ manic, profligate pursuit of technical innovation. Again and again, Isaacson’s protagonist drives himself and others to extraordinary lengths by his oppressive, relentless, contemptuous, and sometimes ridiculous perfectionism. Towards the end of the book, Jobs’ expresses his disappointment in President Barack Obama, whom he thinks is reluctant to offend people. “Not a problem I ever had”. In Gladwell’s version, Jobs’ real significance is as a flawed example of a specific kind of technology developer and marketer. He is the archetypal ‘tinkerer’, not an original inventor, but an improver and tweaker of other people’s ideas. His skills are ‘editorial’, not inventive; his products are derivative, their development driven not by an original vision on Jobs’ part, but by his caustic, unerring grasp of the weaknesses of his competitors. Nothing Jobs did, in this account of things, was entirely new. The Mac’s great original selling points, its graphical user interface and bitmapped screen, were borrowed from technology developed by Xerox. The first versions of tablet computers were produced elsewhere, as were smartphones and music players.

Jobs’ tale, then, is about adaptation and appropriation, and these attributes, for Gladwell, turn out to be the essence of economic progress. Far more than the breakthroughs of visionary inventors, it was the work of engineers and technology entrepreneurs in taking ideas from elsewhere and improving them that powered the industrial revolution in Britain through the nineteenth century. As a tinkerer in this vein, Jobs achieved great things. But his tinkering has an unusual characteristic: his perfectionism, which was necessary to his success, also led him to jealously refuse others the freedom to adapt and modify that he enjoyed.  He was a tinkerer who perversely created obstacles to the tinkering of others, whether amateur users, or firms wanting to make products that would work with his. He resisted suggestions that the early Apple computers should include more (or any) expansion ports for third party add-ons; he struggled with the idea and consequences of licensing operating systems at Apple and NeXT; he tied the iPod to the iTunes store, and would not allow other music stores access to the device. And now, in the case of the newer iPhone and iPad, the development and distribution of third part applications is strictly controlled through the App Store. At the same time, Jobs is enraged when others copy his ideas: he sues when Microsoft copies the Mac’s “look and feel”; he goes ballistic when Google launches the mobile operating system Android, which he believes steals ideas from the iPhone.

So in Gladwell’s account, Jobs was an innovator who lacked the modesty and self-awareness to understand his own role and achievement. He was a ‘tweaker’ (no dishonor in that) who imagined himself a visionary. Famous from early on for his “reality distortion field,” he deceived himself, and became an innovator who stood in the way of innovation. Other contemporary commentators on technology have taken this theme further: Jonathan Zittrain’s The Future of the Internet (And How to Stop It) presents the iPhone as the ultimate ‘tethered device’, designed to ensure Apple’s control over users’ applications and content. For Zittrain, the iPhone is a salutary contrast to the ‘open’ architecture of the classic PC, which, for all its faults, could be far more readily adapted and modified by users and third party businesses. Here we find an old line of argument, that “openness” (and the associated goodness of “open source”) is the real recipe for innovation and inexpensive distribution. In the case of computing, it’s hard to argue with: even deep within the iPhone, there is POSIX, and elements of BSD Unix. The striking thing is that the closed iPhone has itself sparked an amazing wave of innovation. Whole new kinds of software, including locational media and games, educational, creative and social software, have been developed, and are readily and cheaply available for Apple’s devices. The good thing for everyone is that all this new software is now also spreading to a host of other phones and tablets, including the freely licensed (if not precisely open source) Android machines.

Isaacson’s book participates fully in the “closed system” narrative. But it also presents the elements of a more complex and interesting picture, of someone who did possess an unusual intuition for the design of useful machines; and of someone who modified his business strategies as his career progressed. Jobs did want control, and more of it than many of his customers would like, but he also realized he had to make the iPod compatible with Windows machines, and he opened the iPhone to third party developers after originally resisting the idea. He obviously hated Android, but he knew also that Apple had to compete with it. If he was a tweaker, he was (to use a metaphor that would not usually be applied to a Californian) in the Shane Warne league. But I’m not sure that tweaking aptly describes what Jobs did. It should not be difficult to acknowledge that he, together with many others, created novel things, even if they did so on the basis of the work many others had done: after all, that is usually the way. Some of this creating certainly involved adapting, or ‘editing’, but it also required acts of imagination. Gladwell’s generally precise language is vague when he describes Apple’s famous appropriation of the graphical user interface from Xerox: he says Jobs “borrowed the characteristic features of the Macintosh — the mouse and the icons on the screen” — from the engineers at Xerox PARC”.  Whatever that sentence means, in fact Apple successfully and almost completely transformed both the mouse and graphics: the machines it produced in the following years were clearly major advances on Xerox’s Star.

Anyone interested in contemporary debates over innovation and intellectual property will have their own reading of Isaacson’s book, and their own sense of the stakes in Steve Jobs’ daring adventures. Some of the most interesting elements of the story concern the way Jobs re-organised Apple around his characteristically ambitious and romantic idea of connecting the humanities with technology. In a couple of presentations he used the image of an imaginary intersection between two streets: ‘liberal arts’ and ‘technology’. Design and engineering were to be deeply connected in the conception of new products, even if that meant that everything was more difficult, more protracted, more risky, and more expensive. Sometimes in his career Jobs overcooked the aesthetics, but Apple’s results in the end justified the effort. Like much else in Jobs’ story, ideas and aspirations of this kind help us think again about the assumptions we make about computers and their places in our lives, about the relations between technical and creative innovation, the unexpected places we find novelty, and the persistent question of who owns what.

 

Julian Thomas is Director of the Swinburne Institute for Social Research

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And it’s goodbye from us

December 12, 2011

So here we have it. The Fortnightly Review of IP & Media Law: compiled and composed by academics, students and others interested in intellectual property and media law – mostly based in Australia and linked somehow to the University of Melbourne; focused on the topical, opinionated and sometimes contentious; including articles, comments and round-ups of current events (lectures, seminars, law reform activities); interdisciplinary in its inclusion of economic and literary contributions as well as law ones; published fortnightly (usually); available for free on the internet; and with hundreds of followers. It’s been an exciting experiment in collaborative publishing over the past two years, based on the model of one of those popular nineteenth century journals and magazines that were edited and written by a range of authors and served as conduits for public information and debate. But, for all the enthusiasm of those participating in the Fortnightly Review, we’ve reached the limit of the partly-amateur motivated to a large extent by affection for the task at hand. So we say goodbye, with thanks to our authors and readers, to IPRIA and the CMCL for partly sponsoring our publication, and to an Australian Research Council funded project on amateur media which sparked our interest in popular journals and magazines.

From the editors:

Jake Goldenfein
Vicki Huang
Andrew Kenyon
Megan Richardson

Melbourne, December 2011

The Fortnightly Review of IP & Media Law wishes you a good summer break.

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