June 2005 Archives

More Grokster Linkage

The Importance of the Law and IT: MGM v. Grokster: "Beyond just understanding what the court did and didn't do, Ernie [Miller] along with Denise Howell and Charles (C.E.) Petit explore the decision that says Grokster could be found guilty of an "act of inducement" by encouraging (or not discouraging) its users to share infringing files."

Siva Vaidhyanathan, Salon.com: Supreme Court's unsound decision: "Note to technology developers who want to market products that will help people share copyrighted files: Whatever you do, don't end your brand name with '-ster'!"

John Palfrey: The Entrepreneur in a Post-Grokster World: "The entertainment industry and big technology companies, often at one another’s throats in Washington, should be able to get along. In a digital age, after all, they need one another if they are both to thrive. They both got something to cheer about in the Grokster ruling handed down earlier today."

David Post: Grokster Decision, Second Thoughts: "The unanimous Supreme Court decision holding Grokster & StreamCast liable as contributory copyright infringers for distributing peer-to-peer file-sharing software turns out, on close examination, to be not nearly the victory for the entertainment industry it might have seemed at first glance. [This, interestingly, repeats a pattern in these cases – Sony v. Universal Studios (the Betamax case) was not (nearly) as big a loss for Hollywood as it appeared, nor, as I have argued elsewhere, was the Napster case as big a win)."

Nathan Newman: Grokster and Ten Commandments Case the Same: "Essentially, politicians can promote a religion and Silicon Valley can promote technology that can illegally share copyrighted work AS LONG as they don't SAY that's what they are doing. Do it quietly, surround the potentially illegal activity with non-religious symbols or non-infringing uses and, voila, you're legally scot-free."

CRS Reports Online

OpenCRS makes Congressional Research Service reports avilable to the public. It even has an RSS feed.

Washington Post: Hard-to-Get Policy Briefings For Congress Are Now Online: "It's a bit like Napster -- but for policy wonks. A Washington research group has created a Web site where the public can read, submit and download the difficult-to-find public policy briefs members of Congress use to get up to speed on issues."

Today, the Second Circuit reverses the Southern District and rules that pop-up adware does not infringe on a trademark. 1-800 Contacts, Inc. v. WhenU, Inc.:

We hold that, as a matter of law, WhenU does not “use ”1-800’s trademarks within the meaning of the Lanham Act, 153 U.S.C. § 1127, when it (1) includes 1-800’s website address, which is almost identical to 1-800’s trademark, in an unpublished directory of terms that trigger delivery of WhenU’s contextually relevant advertising to C-users; or (2) causes separate, branded pop-up ads to appear on a C-user’s computer screen either above, below, or along the bottom edge of the 1-800 website window. Accordingly, we reverse the district court’s entry of a preliminary injunction and remand with instructions to (1) dismiss with prejudice 1-800’s trademark infringement claims against WhenU, and (2) proceed with 1-800’s remaining claims.

Eric Goldman: Important 2d Circuit Adware Case--1-800 Contacts v. WhenU: "I think the opinion is generally great. The lower court opinion was truly awful, and the Second Circuit clearly and unambiguously rejected that opinion. In particular, the court gave us lots of insights into what constitutes trademark "use" in the Internet keyword context. There has been considerable confusion on this very question, and the Second Circuit's opinion will be persuasive precedent in all future cases throughout the nation."

Brand X

Brand X has two distinct elements-- the internet/telecom aspects and the administrative law aspects. I will focus on the internet/telecom aspects of the ruling and leave the administrative law aspects to the experts.

>National Cable & Telecommunications Assoc. v. Brand X Internet Services

Opinion (Thomas), Concurrence (Stevens), Concurrence (Breyer).

Dissent (Scalia):

Brand X and Administrative Law
As far as the administrative law aspects, the Court ruled that Chevron deference should be applied to the Commission's decision classifying cable modem service as an "information service." Prior inconsistency with past practice does not render an agency rule unreasonable. Such an inconsistency may be an arbitrary and capricious change only if the agency fails to explain the change. Where the statute is ambiguous, the agency's interpretation of the statute will trump a court's prior judicial interpretation unless "the prior court decision holds that its construction follows from the unambiguous terms of the statute and thus leaves no room for agency discretion."

The information service & telecommunications service distinction
The distinction between an information service and telecommunications service is important in determining the authority which the FCC may exercise over a service provider and how the services are regulated under the Telecommunications Act.

Let's start by looking at the text of the statute, in particular the 47 USC §153 definitions of telecommunications service and information service.

(46) Telecommunications service
The term “telecommunications service” means the offering of telecommunications for a fee directly to the public, or to such classes of users as to be effectively available directly to the public, regardless of the facilities used.

(43) Telecommunications
The term “telecommunications” means the transmission, between or among points specified by the user, of information of the user’s choosing, without change in the form or content of the information as sent and received.

(20) Information service
The term “information service” means the offering of a capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications, and includes electronic publishing, but does not include any use of any such capability for the management, control, or operation of a telecommunications system or the management of a telecommunications service.

So, an information service is primarily concerned with transmitting information from a centralized source or sources to individuals, while a telecommunications service conveys unaltered information between individuals on the edge of the network.

Seen from the consumer’s point of view, the Commission concluded, cable modem service is not a telecommunications offering because the consumer uses the high-speed wire always in connection with the information-processing capabilities provided by Internet access, and because the transmission is a necessary component of Internet access: “As provided to the end user the telecommunications is part and parcel of cable modem service and is integral to its other capabilities.” Declaratory Ruling 4823, ¶39. The wire is used, in other words, to access the World Wide Web, newsgroups, and so forth, rather than “transparently” to transmit and receive ordinary-language messages without computer processing or storage of the message. See supra, at 4 (noting the Computer II notion of “transparent” transmission). The integrated character of this offering led the Commission to conclude that cable modem service is not a “stand-alone,” transparent offering of telecommunications. Declaratory Ruling 4823—4825, ¶¶41—43.

From the consumer's point of view, cable modem access is different from DSL access? Even though many cable subscribers are paying for "information services," such as email, web page and newsgroup servers, we do not use these services and only use the cable connection as a dumb way to access information services on the internet. The cable modem connection is just a dumb pipe. Well, except that the cable ISP (like any other ISP) provides DNS service which translates domain names that people understand (e.g. www.iptablog.org) into the IP addresses that computers understand (66.39.34.162).

The Court finds that because cable modem service provides the necessary capabilities to access information services, it is itself an information service.

The question, then, is whether the transmission component of cable modem service is sufficiently integrated with the finished service to make it reasonable to describe the two as a single, integrated offering. See ibid. We think that they are sufficiently integrated, because “[a] consumer uses the high-speed wire always in connection with the information-processing capabilities provided by Internet access, and because the transmission is a necessary component of Internet access.” Supra, at 16. In the telecommunications context, it is at least reasonable to describe companies as not “offering” to consumers each discrete input that is necessary to providing, and is always used in connection with, a finished service. We think it no misuse of language, for example, to say that cable companies providing Internet service do not “offer” consumers DNS, even though DNS is essential to providing Internet access.

In his dissent, Justice Scalia uses some unfortunate analogies to demonstrate why the provision of information services can be separated from the provision of internet access:

Thus, I agree (to adapt the Court’s example, ante, at 18) that it would be odd to say that a car dealer is in the business of selling steel or carpets because the cars he sells include both steel frames and carpeting. Nor does the water company sell hydrogen, nor the pet store water (though dogs and cats are largely water at the molecular level). But what is sometimes true is not, as the Court seems to assume, always true. There are instances in which it is ridiculous to deny that one part of a joint offering is being offered merely because it is not offered on a “ ‘stand-alone’ ” basis, ante, at 17.

If, for example, I call up a pizzeria and ask whether they offer delivery, both common sense and common “usage,” ante, at 18, would prevent them from answering: “No, we do not offer delivery–but if you order a pizza from us, we’ll bake it for you and then bring it to your house.” The logical response to this would be something on the order of, “so, you do offer delivery.” But our pizza-man may continue to deny the obvious and explain, paraphrasing the FCC and the Court: “No, even though we bring the pizza to your house, we are not actually ‘offering’ you delivery, because the delivery that we provide to our end users is ‘part and parcel’ of our pizzeria-pizza-at-home service and is ‘integral to its other capabilities.’ ” Cf. Declaratory Ruling 4823, ¶39; ante, at 16, 26.1 Any reasonable customer would conclude at that point that his interlocutor was either crazy or following some too-clever-by-half legal advice.

While the law recognizes a de minimis exception for information services provided as part of telecommunications services, Justice Thomas finds that the DNS services offered by cable ISPs classify as a service that offers a capability for "generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications."

This construction does not leave all information service offerings exempt from mandatory Title II regulation. “It is plain,” for example, that a local telephone company “cannot escape Title II regulation of its residential local exchange service simply by packaging that service with voice mail.” Universal Service Report 11530, ¶60. That is because a telephone company that packages voice mail with telephone service offers a transparent transmission path–telephone service–that transmits information independent of the information-storage capabilities provided by voice mail. For instance, when a person makes a telephone call, his ability to convey and receive information using the call is only trivially affected by the additional voice-mail capability. Equally, were a telephone company to add a time-of-day announcement that played every time the user picked up his telephone, the “transparent” information transmitted in the ensuing call would be only trivially dependent on the information service the announcement provides. By contrast, the high-speed transmission used to provide cable modem service is a functionally integrated component of that service because it transmits data only in connection with the further processing of information and is necessary to provide Internet service. The Commission’s construction therefore was more limited than respondents assume.

The Court's opinion allows the FCC to classify cable broadband internet service as an information service, rather than a telecommunications service. The benefit of this classification for cable internet users is avoiding the regulatory requirements of a telecommunications service, including universal service fees. The detriment is that cable providers do not have to open up their networks, insulating cable operators from competition. In contrast, incumbent DSL providers have to provide open access to the local networks, because DSL is a telecommunications service. Cable access is not quite a monopoly service, since it does compete in DSL, except in those areas where only one flavor of broadband access is available.

Another potential problem with this classification is that it may allow cable operators to create non-neutral networks. Generally, internet access works as a common carrier-- once you are on the network, you can access services provided by third parties. If cable internet access is an information service, in the absence of more rules, the cable ISP can restrict access to third party services. Want to use a different email server? Too bad. Want to access streaming video content? Only if comes from a "partner" of the cable ISP. If the cable operators do not have to act as common carriers, the internet may no longer be a true end-to-end network, but a collection of "walled garden" services.

All in all, the decision does little to clarify telecommunications law and regulations. Perhaps Congress does need to step in and update the Telecom Act. After all, in internet time, 1996 is positively ancient. In addition, the US is lagging behind other states in promoting broadband.

In the May/June issue of Foreign Affairs, Thomas Bleha notes that the US no longer leads the world in deploying broadband connectivity: Down to the Wire : "In the first three years of the Bush administration, the United States dropped from 4th to 13th place in global rankings of broadband Internet usage. Today, most U.S. homes can access only "basic" broadband, among the slowest, most expensive, and least reliable in the developed world.... In fact, the United States is the only industrialized state without an explicit national policy for promoting broadband."

Discussion, Links, Notes and Commentary
FCC Chairman Kevin J. Martin: "I am pleased that the U.S. Supreme Court has affirmed the FCC’s ruling. This decision provides much-needed regulatory clarity and a framework for broadband that can be applied to all providers. We can now move forward quickly to finalize regulations that will spur the deployment of broadband services for all Americans."

Susan Crawford: It's More Important Than Grokster: "The consequences of BrandX (also decided today) are more important than those of Grokster. Grokster keeps the status quo in place. BrandX opens up a whole new world of regulatory power... In BrandX, Justice Thomas gets very confused about the internet and ends up essentially announcing that everything a user does online is an 'information service' being offered by the access provider. DNS, email (even if some other provider is making it available), applications, you name it -- they're all included in this package. And the FCC can make rules about these information services under its broad 'ancillary jurisdiction.'"

Susan Crawford: If Someone Asks You About BrandX... "The problem with this classification by the FCC is that the statutory definition of "information service" doesn't fit with what internet access actually is. Information services are supposed to be things that generate, acquire, store, transform, process, retrieve, or make available information across telecommunications connections. The FCC reasoned that cable modem service is an information service because it gives people the ability to manipulate information using the internet across high-speed telecommunications. But that's not really right. Cable modem service allows people to reach online information, but doesn't necessarily allow them to manipulate it."

Tim Wu: Brand X & Network Neutrality: "Hopefully Brand X is good news: it gives the FCC room to try and ignite all-out warfare between cable, DSL, and whatever else. The battles with independent ISPs at some point had become a distraction and a sideshow that may have slowed deployment. Some will disagree with me, but I have long thought Title II or open access requirements for broadband as just a form of protection for a declining industry."

News.com: Cable wins Supreme Court battle: "The cable industry can breathe a sigh of relief, as the U.S. Supreme Court has ruled that cable companies will not have to share their infrastructure with competing Internet service providers."

AP: Cable Companies Don't Need to Share Lines: "The Supreme Court ruled on Monday that cable companies may keep rival Internet providers from using their lines, a decision that will limit competition and consumers' choices."

Grokster

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In MGM v. Grokster, the Supreme Court ruled unanimously that when a distributor of a product capable of both lawful and unlawful uses distributes such a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties.

The opinion of the Court, delivered by Justice Souter, adopts an active inducement standard for secondary copyright liability. Active inducement can be ascertained by looking to the express promotion, marketing, and intent to promote illicit uses of the technology and a lack of evidence that a developer made an effort to filter copyrighted material from the service. The inducement rule "premises liability on purposeful, culpable expression and conduct, and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promise."

The Court finds that Sony is not controlling here, because neither of these P2P services are neutral products merely capable of infringing use, but developed and marketed for the purposes of encouraging infringing use.

In sum, where an article is “good for nothing else” but infringement, Canda v. Michigan Malleable Iron Co., supra, at 489, there is no legitimate public interest in its unlicensed availability, and there is no injustice in presuming or imputing an intent to infringe, see Henry v. A. B. Dick Co., 224 U.S. 1, 48 (1912), overruled on other grounds, Motion Picture Patents Co. v. Universal Film Mfg. Co., 243 U.S. 502 (1917). Conversely, the doctrine absolves the equivocal conduct of selling an item with substantial lawful as well as unlawful uses, and limits liability to instances of more acute fault than the mere understanding that some of one’s products will be misused. It leaves breathing room for innovation and a vigorous commerce. See Sony Corp. v. Universal City Studios, supra, at 442; Dawson Chemical Co. v. Rohm & Haas Co., 448 U.S. 176, 221 (1980); Henry v. A. B. Dick Co., supra, at 48.

...

For the same reasons that Sony took the staple-article doctrine of patent law as a model for its copyright safe-harbor rule, the inducement rule, too, is a sensible one for copyright. We adopt it here, holding that one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties. We are, of course, mindful of the need to keep from trenching on regular commerce or discouraging the development of technologies with lawful and unlawful potential. Accordingly, just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe, 464 U.S., at 439, n. 19, mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability. Nor would ordinary acts incident to product distribution, such as offering customers technical support or product updates, support liability in themselves. The inducement rule, instead, premises liability on purposeful, culpable expression and conduct, and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promise.

...

In sum, this case is significantly different from Sony and reliance on that case to rule in favor of StreamCast and Grokster was error. Sony dealt with a claim of liability based solely on distributing a product with alternative lawful and unlawful uses, with knowledge that some users would follow the unlawful course. The case struck a balance between the interests of protection and innovation by holding that the product’s capability of substantial lawful employment should bar the imputation of fault and consequent secondary liability for the unlawful acts of others.

In a concurring opinion, Justice Ginsburg (joined by the Chief Justice and Justice Kennedy) writes that, even though the Court bases its ruling on the active inducement standard, Grokster and Streamcast may still be liable under the Sony Betamax standard. Ginsburg supports adopting the "percentage of use" interpretation of the Sony test advanced by the copyright owners, that supports a finding of liability for technology developer where the potential non-infringing uses of that technology are so far outnumbered by the potential infringing uses.

Even if the absolute number of noninfringing files copied using the Grokster and StreamCast software is large, it does not follow that the products are therefore put to substantial noninfringing uses and are thus immune from liability. The number of noninfringing copies may be reflective of, and dwarfed by, the huge total volume of files shared. Further, the District Court and the Court of Appeals did not sharply distinguish between uses of Grokster’s and StreamCast’s software products (which this case is about) and uses of peer-to-peer technology generally (which this case is not about).

In sum, when the record in this case was developed, there was evidence that Grokster’s and StreamCast’s products were, and had been for some time, overwhelmingly used to infringe, ante, at 4—6; App. 434—439, 476—481, and that this infringement was the overwhelming source of revenue from the products, ante, at 8—9; 259 F. Supp. 2d, at 1043—1044. Fairly appraised, the evidence was insufficient to demonstrate, beyond genuine debate, a reasonable prospect that substantial or commercially significant noninfringing uses were likely to develop over time. On this record, the District Court should not have ruled dispositively on the contributory infringement charge by granting summary judgment to Grokster and StreamCast.

In another concurring opinion, Justice Breyer (joined by Justices Stevens and O'Connor) supports the interpretation of the Sony substantial non-infringing use test proffered by the technology developers-- that the non-infringing uses must be substantial on their own without considering the specific percentage of infringing and non-infringing uses. Justice Breyeer agrees with the Ninth Circuit's ruling under the Sony standard-- that approximately 10% non-infringing use is more than sufficient to constitute substantial or commercially significant non-infringing use.

Here the record reveals a significant future market for noninfringing uses of Grokster-type peer-to-peer software. Such software permits the exchange of any sort of digital file–whether that file does, or does not, contain copyrighted material. As more and more uncopyrighted information is stored in swappable form, it seems a likely inference that lawful peer-to-peer sharing will become increasingly prevalent.

And that is just what is happening. Such legitimate noninfringing uses are coming to include the swapping of: research information (the initial purpose of many peer-to-peer networks); public domain films (e.g., those owned by the Prelinger Archive); historical recordings and digital educational materials (e.g., those stored on the Internet Archive); digital photos (OurPictures, for example, is starting a P2P photo-swapping service); “shareware” and “freeware” (e.g., Linux and certain Windows software); secure licensed music and movie files (Intent MediaWorks, for example, protects licensed content sent across P2P networks); news broadcasts past and present (the BBC Creative Archive lets users “rip, mix and share the BBC”); user-created audio and video files (including “podcasts” that may be distributed through P2P software); and all manner of free “open content” works collected by Creative Commons (one can search for Creative Commons material on StreamCast).

There may be other now-unforeseen noninfringing uses that develop for peer-to-peer software, just as the home-video rental industry (unmentioned in Sony) developed for the VCR. But the foreseeable development of such uses, when taken together with an estimated 10% noninfringing material, is sufficient to meet Sony’s standard. And while Sony considered the record following a trial, there are no facts asserted by MGM in its summary judgment filings that lead me to believe the outcome after a trial here could be any different. The lower courts reached the same conclusion.


Justice Breyer goes on to discuss whether the Sony standard should be modified, and looks to three factors:

  1. Has Sony (as I interpret it) worked to protect new technology?
  2. If so, would modification or strict interpretation significantly weaken that protection?
  3. If so, would new or necessary copyright-related benefits outweigh any such weakening?

To answer his first question, Breyer finds that the Sony rule has "provided entrepreneurs with needed assurance that they will be shielded from copyright liability as they bring valuable new technologies to market." The Sony rule is beneficial because it is "strongly technology protecting," "forward looking," and "mindful of the limitations facing judges where matters of technology are concerned."

To develop a stricter interpretation of the Sony standard would make it substantially more difficult for companies to bring innovative new technologies to market if those technologies have the potential to be used for copyright infringement.

The second, more difficult, question is whether a modified Sony rule (or a strict interpretation) would significantly weaken the law’s ability to protect new technology. Justice Ginsburg’s approach would require defendants to produce considerably more concrete evidence–more than was presented here–to earn Sony’s shelter. That heavier evidentiary demand, and especially the more dramatic (case-by-case balancing) modifications that MGM and the Government seek, would, I believe, undercut the protection that Sony now offers.

To require defendants to provide, for example, detailed evidence–say business plans, profitability estimates, projected technological modifications, and so forth–would doubtless make life easier for copyrightholder plaintiffs. But it would simultaneously increase the legal uncertainty that surrounds the creation or development of a new technology capable of being put to infringing uses. Inventors and entrepreneurs (in the garage, the dorm room, the corporate lab, or the boardroom) would have to fear (and in many cases endure) costly and extensive trials when they create, produce, or distribute the sort of information technology that can be used for copyright infringement.

Finally, Justice Breyer does "not doubt that a more intrusive Sony test would generally provide greater revenue security for copyright holders," but when balanced against the gains produced by encouraging innovative new technology, it is difficult to conclude that the benefits to copyright owners would "exceed the losses on the technology roundabouts."

For one thing, the law disfavors equating the two different kinds of gain and loss; rather, it leans in favor of protecting technology. As Sony itself makes clear, the producer of a technology which permits unlawful copying does not himself engage in unlawful copying–a fact that makes the attachment of copyright liability to the creation, production, or distribution of the technology an exceptional thing.… In any event, the evidence now available does not, in my view, make out a sufficiently strong case for change.

Links, Commentary, Crticism, Etc.
William Patry: The Court Punts: " I don't know about others, but I view the Court as having punted: they decided mainly an issue that wasn't in front of them (inducement) and didn't decide the one that was, the effect of Sony in the Internet era. I think this happened because neither the Ginsburg camp nor the Breyer camp could get two others to join. There were three for the picking, Souter, Scalia and Thomas. The two concurring camps have diametrically opposed views of the case, totalling six Justices. What does this do to the influence that the 'unanimous' Souter opinion has? I think it greatly undermines it, resulting, as predicted in a muddied, murky future."

SCOTUSblog Grokster discussion with Ian Gershengorn, Ed Felten, Charles Petit, Susan Crawford, Douglas Lichtman, and more.

The Wall St. Journal Grokster Roundtable with James M. Burger , Michael Geist, Denise Howell, Ernest Miller, Thedore Olson, John Palfrey and Cristopher Ruhland.

The Picker MobBlog with Randy Picker, Doug Lichtman, Jessica Litman, Jim Speta, Julie Cohen, Larry Solum, Lior Strahilevitz, Phil Weiser, Ray Ku, Stuart Benjamin, Tim Wu, Tom Hazlett, and Wendy Gordon

Via über-blogger Ernest Miller, Notes on Pro-Grokster Press Conference and Notes on RIAA and MPAA Press Conference.

Eric Goldman: Grokster Supreme Court Ruling: "I think the Supreme Court reached the only logical result. It had to find for the plaintiffs. I say this because there was simply no way for the Court to ignore that Grokster and Streamcast were facilitating massive copyright infringement. As the court says, 'the probable scope of copyright infringement is staggering' and 'there is evidence of infringement on a gigantic scale.' If it ignored these facts, it was simply going to force Congress to act."

Michael Madison: Grokster Redux: "So, innocent design + “culpable intent” = liability for indirect infringement. Is this such a bad thing? In the short term, I don’t think that it makes much difference in the dynamics of litigation. In the longer term, I think that courts can handle this, which makes me a little more sanguine than those who think that intent-based standards merely provide a road map for the bad guys."

Cathy Kirkman: Grokster ruling and the tech industry: "The outcome seems fairly close to the amicus brief filed by the Business Software Alliance, out of the fifty-five amicus briefs that were submitted. The BSA’s amicus brief advocated upholding the Sony doctrine with a reversal based on additional acts of encouraging the use of the technology for infringing purposes. The BSA also asked the Supreme Court to confirm that customary contact with customers, such as advertising, product support and upgrades, is covered by the Betamax exemption."

Rebecca Tushnet: More questions than answers: "That said, I am concerned that not every court is as careful as Justice Souter – this was a problem with his opinion in Campbell v. Acuff-Rose, which quite clearly says that satire can be fair use (though it has comparatively less advantage in the fair use analysis than parody does) but which has widely been overread to say that parodies win fair use defenses, but satires don’t. I fear that similar uncertainties will follow the Grokster ruling. In fairness, though, I can’t imagine a plausible majority opinion that wouldn’t leave many thorny questions."

Ernest Miller: Some Notes on Grokster :"The opinion emphasizes three main factors as "clear" evidence of intent. However, the first makes little sense and the next two are otherwise legal actions that only become evidence of intent if there is already evidence of intent."

Lorne Manley, New York Times: Court Rules File-Sharing Networks Can Be Held Liable for Illegal Use: "The case, which pitted the entertainment industry against technology companies in the continuing battle over the proper balance between protecting copyrights and fostering innovation, overturns lower court decisions that found the file-sharing networks were not liable because their services allowed for substantial legitimate uses. The justices said there was enough evidence that the Web sites were seeking to profit from their customers' use of the illegally shared files for the case to go back to lower court for trial."

Roger Parloff, Fortune: The File Sharing Fight's Not Over: "The U.S. Supreme Court ruled unanimously today in favor of an alliance of movie studios and record producers that brought a landmark copyright infringement suit against two providers of popular peer-to-peer, file-sharing software. Although the opinion, written by Justice David Souter, represents a clear victory for the entertainment industry, the ruling is narrow and does not necessarily spell doom for other providers of peer-to-peer file-sharing software."
Lyle Denniston, SCOTUSblog: New challenge to file-sharing designers: "The Supreme Court’s unanimous (but in some ways divided) ruling on the use of copyright laws to try to stop the massive sharing over the Internet of music and movie files posts a significant legal warning to software designers, but does not turn them into complete copyright outlaws."

IPKat: Grappling with Grokster: "The IPKat isn't used to all this economic-style analysis dictating the direction of cases and hes not sure how good it is for the predictability of the law (although in this case he wonders if the Supreme Courts legal framework that it put in place here might well have stood up without it). By focusing on secondary infringement based on an intent to induce infringement, the Supreme Court has neatly side-stepped the issue of the limits of the rule that there is no secondary infringement where the method for infringement also has a legitimate use."

Chris Riley at Lawmeme: "My (only partially joking) reaction to this is that my job security as a future cyberlawyer is assured."

And, from Wonkette: The Supremes Are Trying to Break Your Heart: "Bachelor, close to his mom, brings his own lunch to work -- we always suspected David Souter was the 'emo justice.' Now we know for sure."

Compulsory Licensing Reform

As previously reported, Register of Copyrights Marybeth Peters testified before the House Subcommittee on Courts, the Internet and Intellectual Property and set forth a proposal to revoke the statutory compulsory license for making and distributing phonorecords of non-dramatic musical works.

The statutory compulsory license is a boon for recording artists, because it allows artists to record new versions of any previously recorded song for a set rate. Recording artists have the benefit of access to non-dramatic musical compositions and do not have to deal with a hold-out problem. Songwriters can not choose not to license their works and are precluded from attempting to extract a higher price.

The Register's proposal appears to still effectively eliminate the hold-out problem, but may allow a Music Rights Organization (MRO) to extract a price premium for licensing covers of especially popular songs.

Section 115(a)(2) of the Register's proposed statute reads:

A music rights organization that offers a license to perform one or more nondramatic musical works publicly by means of digital audio transmissions shall offer licensees use of all musical works in its repertoire, but the music rights organization and a licensee may agree to a license for less than all of the works in the music rights organization's repertoire.

So, the MRO can offer rights to cover all musical works in its repetoire for a set rate, but exclude certain "premium songs" from that rate and set a higher rate for those works. A recording artist might be able to cover "Octupus's Garden" or "More than a Feeling" at the "standard rate," but be forced to pay a premium rate for "Yesterday" or "Since U Been Gone."

Is such price discrimination necessarily a bad thing? Not necessarily. After all, this is allowing a regulated market to develop. The statutory compulsory rate requirement prevents songwriters from capturing all the value in the copyright. Why shouldn't the writer of a popular song be able to charge a higher price?

The Register's proposal limits some of the harshest potential effects for recording artists. By requiring that a license is made available to any one artist on the same terms available to all others, this proposal should be sufficient to prevent a MRO from creating discriminatory access to songs.

Perhaps this proposal does not go far enough. It replaces a compulsory license with a highly-regulated market. But there is no quid for the recording artists' quo. Recording artists still have legislatively granted access to non-dramatic musical compositions, but there is no corresponding right to access to sound recordings for samplers and other artists who create music based on other recorded works. The recording artists have the benefit of the statutory scheme providing access, but have no corresponding requirement to grant access.

Other reactions and cross-blog discussions:
Cathy Kirkman, Silicon Valley Media Law Blog: More on proposed 21st Century Music Licensing Reform Act: "The legislation could be called the 'MRO Empowerment Act of 2005', as it benefits the music rights organizations (MROs) by legislatively entrenching them in the role of collective licensing bodies and eliminating their antitrust constraints. Licensees of music rights would benefit from one-stop shopping for licenses of digital audio transmissions, but they are severely disadvantaged by the elimination of the compulsory license and statutory rate ceiling."

Ernest Miller, The Importance Of: Forget Grokster? A Recording Industry Bombshell from the Copyright Office: "Wow. My jaw dropped when I read the announcement. Essentially eliminate 17 USC 115. Did I already say, 'Wow'? This would be a radical and, in my view, welcome change in copyright law. I have long been a critic of the mechanical reproduction compulsory."

The 463: Bigger than Grokster? "This is big because regardless of what comes out of all the sound and fury in the post-Grokster world, we're eventually going to need to come back down to earth and find ways for users to enjoy content and fairly pay for it. The Copyright Office may have started leaving bread crumbs for us to find this end goal."

Lawrence Lessig: The Register wants reform: "Apparently the Register believes performers no longer "need unhampered access to musical material on nondiscriminatory terms." What progress."

Ernest Miller: Lessig on the Proposed 17 USC 115 Reform: "And, maybe, more musicians (and record labels) might favor less copyright if they didn't have such easy access to making covers. They might be a bit more sympathetic to other artists who don't have similar privileges and might want to clear rights for snippets of audio in a documentary, for example. I mean, why should record labels care about copyright reform? They've got their mandatory license and complete copyright control over the rest. They've got the best of both worlds. They get to copy what they want and stop people from copying their stuff."

Joe Gratz: Lessig Gets It Wrong On Register’s 115 Reform Proposal: "The practical effect of the Register’s proposal is to force ASCAP, BMI, and SESAC (now referred to as “Music Licensing Organizations” or MROs) to offer blanket licenses for reproduction and distribution along with the blanket licenses they already offer for public performance. Access to all works licensed by the three MROs remains unhampered, and even becomes easier."

Lessig: Wow -- I said that? "My criticism was about the potential for discrimination. The Register is almost exactly right to say 'But in determining public policy and legislative change, it is the author - and not the middlemen - whose interests should be protected.' Almost exactly right, because in my view, we should be determining not just 'the author' but 'the authors' -- the ecology of creativity enabled by copyright's rules. The wonderful and powerful claim in the 1967 testimony is that granting fewer derivative rights to composers than we grant to, say, book authors, produces a wider range of music creativity. I find this argument to be compelling."

Miller: "Non-Discrimination in 17 USC 115 Reform: "One of the problems with 115 is that it creates a mandatory license for the composition, but no corresponding requirement for the sound recording to be similarly licensed. As I noted, the recording companies get the best of both worlds. Complete access to any composition and the ability to exclude similar use of their sound recordings. I would probably have a much different take on 115 reform if the record labels had a "share-alike" requirement to take advantage of the compulsory."

(Also posted at the Induce Blog)

More broadcast indecency video

This is not going to be an all-out vlog, because bar review calls, but let's take a look at another FCC ruling concerning broadcast indecency. In particular, In re: WBDC Broadcasting, Inc. This ruling concerns the episode of Angel broadcast on Nov. 19, 2003.

The complaint singles out two scenes:

angel_clip1.png

Spike is on top of Harmony, their clothes are on, but his body rocks back and forth and their breathing is heavy. She tries to speak, but he tells her not to spoil the moment -- her eyes start to bleed, and suddenly she turns to her vampire self and bites his neck

angel_clip2.png

Spike walks in on Angel and Drusilla. He doesn't see it Dru at first -- only Angel's hips moving back and forth.

The Commission rules that these two scenes are not "patently offensive," because the cited material is not sufficiently graphic or explicit. Neither scene contains any nudity. The scenes are merely metaphor.

The three main factors that the Commission uses to evaluate indecency are:

  1. the explicitness or graphic nature of the description or depiction of sexual or excretory organs or activities;
  2. whether the material dwells on or repeats at length descriptions of sexual or excretory organs or activities;
  3. whether the material appears to pander or is used to titillate, or whether the material appears to have been presented for its shock value.

Both the Angel ruling and the Arrested Development ruling discussed in the previous vlog go to the explicitness factor and follow the general rule that mere insinuation is not indecency. The mere suggestion of sexual acts or indecent language are insufficient to constitute indecency. See the Industry Guidance On the Commission’s Case Law Interpreting 18 U.S.C. § 1464 and Enforcement Policies Regarding Broadcast Indecency.

More of these video entries and vlogs will follow when I get video of the television programs which were the subject of indecency rulings.

Note that these videos were taken from the episode as broadcast in syndication. The original broadcast was in letterboxed widescreen format.

Earlier this month, the Sixth Circuit reaffirmed its decision in Bridgeport Music, Inc. v. Dimension Films, where it ruled that there is no de minimis use defense to digital sampling of a sound recording.

Get a license or do not sample. We do not see this as stifling creativity in any significant way. It must be remembered that if an artist wants to incorporate a “riff” from another work in his or her recording, he is free to duplicate the sound of that “riff” in the studio. Second, the market will control the license price and keep it within bounds. The sound recording copyright holder cannot exact a license fee greater than what it would cost the person seeking the license to just duplicate the sample in the course of making the new recording. Third, sampling is never accidental. It is not like the case of a composer who has a melody in his head, perhaps not even realizing that the reason he hears this melody is that it is the work of another which he had heard before. When you sample a sound recording you know you are taking another’s work product.
This case also illustrates the kind of mental, musicological, and technological gymnastics that would have to be employed if one were to adopt a de minimis or substantial similarity analysis. The district judge did an excellent job of navigating these troubled waters, but not without dint of great effort. When one considers that he has hundreds of other cases all involving different samples from different songs, the value of a principled bright-line rule becomes parent. We would want to emphasize, however, that considerations of judicial economy are not what drives this opinion. If any consideration of economy is involved it is that of the music industry. As this case and other companion cases make clear, it would appear to be cheaper to license than to litigate.

When the court emphasizes that its decision is not "driven by consideration of judicial economy" or that it did not "pull this interpretation out of thin air," perhaps it deserves a closer look at where this rule is efficient.

To some extent, the Bridgeport decision only codifies current industry practice, which requires clearance of any recognizable sample, regardless of whether the use might be allowed as de minimis taking or as fair use under copyright law.49 This ad hoc licensing regime is inefficient, time consuming and expensive. A single use of a three-second sample in a new major label recording may cost $1500 in recording license fee.2 A sampling artist may expect to pay up to $5000 for a looped sample of three seconds or less. 51 A looped sample greater than three seconds can run into the tens of thousands of dollars.52 Licensing of a musical composition may typically require the author of the derivative work to turn over between 15% and 66% the new work's musical composition copyright to the sampled work's author. This is charged to the sampling artist as an advance on payment of royalties.53 The sample clearance budget for a major label hip-hop album typically accounts for $60,000 of a $300,000 recording budget.54

These figures are only approximate industry averages. Individual copyright owners may choose to license samples at significantly higher rates or hold out from allowing their material to be sampled at all. A bright-line rule and risk-averse attitude towards small samples may encourage rent seeking from copyright owners. The ad hoc licensing regime has had a distinct effect on the development of music that relies on sampling. A work incorporating samples does not stand in as a substitute for the sampled work. Sampling may not harm the market for the original recording. In fact, the practice of sampling may lead to a demonstrable increase in demand for works that have been sampled.55

Although the Sixth Circuit is convinced that its bright line rule will have no discernable effect on creativity, some of the more prominent users of sampling have changed the way they create music because of the requirement to clear each and every sample. On “Paul’s Boutique,” released in 1989, the Beastie Boys pioneered the use of dense sampling. However, subsequent Beastie Boys albums have not followed this same technique, because of the high transaction costs necessary for a label to clear the work for release. “We can’t just go crazy and sample everything and anything... It’s limiting the sense that if we’re going to grab a two-bar section of something now, we’re going to have to think about how much we really need it.”56 In addition to expense, these requirements force artists to spend time cataloging each use of a sample within a recorded work, “It’s very tedious. We have to sit there and basically break out every single component of every track that we do and make a list of the sources for everything.”57 Chuck D of Public Enemy found that the sample clearance process forced the group to change its sound:

Public Enemy's music was affected more than anybody's because we were taking thousands of sounds. If you separated the sounds, they wouldn't have been anything--they were unrecognizable. The sounds were all collaged together to make a sonic wall. Public Enemy was affected because it is too expensive to defend against a claim. So we had to change our whole style, the style of It Takes a Nation and Fear of a Black Planet, by 1991.58

The Sixth Circuit attempted to mitigate the harsh effects of its ruling by noting that “there is a large body of pre-1971 sound recordings that is not protected and is up for grabs as far as sampling is concerned.”60 Prior to 1972, Federal Copyright law did not protect sound recordings. However, not all pre-1972 sound recordings are in the public domain. Rather, these recordings are protected by a variety of state statutory and common law copyright regimes.

In order to use a sample from a pre-1972 recording without infringing, a sampler will first need to determine whether a pre-1972 recording is subject to state or common law copyright and navigate the confusing and contradictory realms of state copyright law. Until 2067, when federal copyright law will preempt state copyright law, the status of public domain recorded music. 61 The public domain provides few viable alternatives for samplers seeking to avoid the information burden and high transaction costs of licensed sampling.

(These last few paragraphs are pulled directly from a short and generally mediocre law school seminar paper, hence the footnotes with the funky numbering.)

Further reading:
William Patry: The Sixth Circuit Reaffirms Controversial Sound Recording Opinion:

The original panel opinion, as well as Friday's, are controversial, for at least two reasons. First, the panel adopts a different approach to infringement of a musical composition embodied in a phonorecord than for infringement of the sound recording embodied in that same phonorecord; second, the difference lies in the lack of any requirement of even a de mininis taking for sound recordings. (While finding that a sampling of three notes was infringement, the court demurred on whether sampling of one note would be. I fail to see any basis in the court's reasoning for excusing the taking of one note when three is infringement).

Cathy Kirkman: Digital sound sampling = infringement:

The 6th Circuit has issued an amended opinion in the sampling case of Bridgeport Music, Inc., v. Dimension Films, which confirms the court’s earlier decision last fall and further clarifies its reasoning. The court adopted a “bright-line” rule for sampling of digital music, holding that all digital copying of sound recordings constitutes infringement, subject to any affirmative defenses such as fair use.

Ernest Miller, 6th Cir. Reaffirms - No De Minimis Defense in Copying Sound Recordings:

Congress thought it was being clever when it created a mechanical compulsory license for the creation of phonorecords in order to solve the potential monopoly problem in player piano rolls. But then technology changed, and one could record sound recordings and not simply holes in a roll of paper. This changed the industry even more dramatically (not to mention the advent of broadcast radio), and things got messy.

---
Notes
49 Josh Norek, Comment: “You Can't Sing without the Bling”: The Toll of Excessive Sample License Fees on Creativity in
Hip-Hop Music and the Need for a Compulsory Sound Recording Sample License System 11 UCLA ENT. L. REV. 83, 89
(2004).
50 Id.
51 Id.
52 Id.
53 Id. at 90.
54 Id.
55 See Henry Self, Comment, Digital Sampling, a Cultural Perspective, 9 UCLA ENT. L. REV. 347 (2002); Chris Johnstone, Note, Underground Appeal: A Sample of the Chronic Questions in Copyright Law Pertaining to the Transformative Use of Digital Music in a Civil Society, 77 S. CAL. L. REV. 397, 402 (Jan. 2004)
56 Eric Steuer, The Remix Masters, WIRED, November 2004.
57 Id.
58 Kembrew McLeod, How Copyright Law Changed Hip Hop, STAY FREE!, June 2004, at
last accessed Dec. 14, 2004).
59 See Why Sampling Law Needs to Change, DOWNHILL BATTLE, at
(last accessed Dec. 14, 2004).
60 393 F.3d at 401
61 See 17 U.S.C. §301(c), Capitol Records v. Naxos, 372 F.3d 471 (2d Cir., Jun 21, 2004).

Washingtonienne Privacy Lawsuit

Julie Hilden: Are Accounts of Consensual Sex a Violation of Privacy Rights? The Lawsuit Against the Blogger "Washingtonienne":

Jessica Cutler - better known as 'Washingtonienne' -- achieved notoriety with a web log ('blog') about her sexual exploits, written while she was a staffer for U.S. Senator Michael DeWine of Ohio. When her identity became known, Cutler was fired - but also got what was reportedly a six-figure contract to write a novel, and an offer to pose for Playboy.

The novel, The Washingtonienne, is out now, and Cutler is doing readings. But her life isn't entirely carefree: Cutler still faces an invasion-of-privacy lawsuit, filed last month by Robert Steinbuch, a staff attorney for DeWine.

Apple sued, again

News.com reports: Apple sued over iTunes interface:

A Vermont company has sued Apple Computer, alleging that the interface for iTunes infringes on its patent.

Contois Music & Technology filed suit last week in U.S. District Court in Vermont, alleging that Apple's actions are 'irreparably' damaging Contois. The company seeks a preliminary and permanent injunction, as well as unspecified damages, according to the lawsuit. Contois is also charging that Apple's patent infringement is willful, and is asking the court to take this into account in calculating damages by tripling the amount it would otherwise award.

Scanning and infringing?

The Chronicle of Higher Education reports: Publishers' Group Asks Google to Stop Scanning Copyrighted Works for 6 Months: "The Association of American Publishers has asked Google to stop scanning copyrighted books published by the association's members for at least six months while the company answers questions about whether its plan to scan millions of volumes in five major research libraries complies with copyright law."

Miscellaneous Links

Here are some miscellaneous links that have been sitting in my "to blog" pile for well over a month now. For most of these, I've forgotten the context in which I planned to write about them, so here there are in one big jumble:

Academic Papers
Siva Vaidhyanathan, Celestial Jukebox: The Paradox of Intellectual Property, he American Scholar, Vol. 74, No. 2, Spring 2005

Intellectual property law is both stronger than ever before and weaker than ever before. This article examines some recent works in the field and argues that a complete picture of the field can only emerge when scholars take an ecological, global look at it.

Lawrence Solum, The Future of Copyright:

Sometimes technological change is so profound that it rocks the foundations of an entire body of law. Peer-to-peer (P2P) filesharing systems - Napster, Gnutella, KaZaA, Grokster, and Freenet3 - are mere symptoms of a set of technological innovations that have set in motion an ongoing process of fundamental changes in the nature of copyright law. The video tape recorder begat the Sony substantial noninfringing use defense. The digital cassette recorder begat the Audio Home Recording Act. The internet begat the Digital Millennium Copyright Act. Napster begat Napster. We see the law morph right in front of our eyes, but its ultimate form is still obscure. As a consequence, the future of copyright is up for grabs. We live in a magical, exhilarating, and frightening time: Many alternative copyfutures shimmer on the horizon, sometimes coming into sharper focus and sometimes fading away

Ian Kerr and Janey Bailey, The Implications of Digital Rights Management for Privacy and Freedom of Expression, Journal of Information, Communication & Ethics in Society, Vol. 2, 2004

This paper aims to examine some of the broader social consequences of enabling digital rights management. The authors suggest that the current, mainstream orientation of digital rights management systems could have the effect of shifting certain public powers into the invisible hands of private control. Focusing on two central features of digital rights management - their surveillance function and their ability to unbundle copyrights into discrete and custom-made products - the authors conclude that a promulgation of the current use of digital rights management has the potential to seriously undermine our fundamental public commitments to personal privacy and freedom of expression.

J. Cam Barker, Grossly Excessive Penalties in the Battle Against Illegal File-Sharing: The Troubling Effects of Aggregating Minimum Statutory Damages for Copyright Infringement

In this paper, I argue that there is a constitutional right to not have a highly punitive statutory damage award stacked hundreds or thousands of times over for similar, low-reprehensibility misconduct. I point to the rationale behind criminal law's single-larceny doctrine, identify the concept of wholly proportionate reprehensibility, and use this to explain why the massive aggregation of statutory damage awards can violate substantive due process.

I conclude that massively aggregated awards of even the minimum statutory damages for illegal file-sharing will impose huge penalties and can be constitutionally infirm like the punitive damage award of Gore itself. Yet practical and institutional reasons will likely make this norm underenforced by the courts, pointing to Congress as the actor that should modify copyright law to remove the possibility of grossly excessive punishment.

Uli Widmaier, Use, Liability and the Structure of Trademark Law

Trademark law is in trouble. Six years ago, Professor Lemley
diagnosed the “death of common sense” in the courts’ interpretations of
the modern Lanham Act. Unfortunately, his assessment has proven only
too true. Instead of a unified and well-integrated body of doctrine
sensibly covering all aspects of commerce, the courts have over the past
several years created a specialized “law of the horse” that applies to
prevalent fact patterns arising in the Internet context. This species of
mutant trademark law has “loosed trademark law from its traditional
economic moorings” and drastically, unjustifiably extended its reach.

Podcasts
Justice Talking: Peer-to-Peer File Sharing, a podcast with Dean Garfield (VP of Legal Affairs, MPAA) and Kembrew McLeod (author, Freedom of Expression).

Jeff Tweedy + Lawrence Lessig in conversation with Steven Johnson, Who Owns Culture?.

Other Articles and Blog Posts
Mark Pesce wonders if piracy is good:

  1. How Battlestar Galactica Killed Broadcast TV:
    Audiences are technically savvy these days; they can and will find a way to get any television programming they desire. They don't want to pay for it, they don't want it artificially crippled with any digital rights management technologies - they just want to watch it. Now. This is the way that half a century of television and a decade of the Web has conditioned them to behave.
  2. The New laws of Television:
    There are two principle components of the new value chain of television hyperdistribution: the producer and the advertiser. An advertising agency is likely acting as an intermediary between these two, connecting producers to advertisers, working out the demographic appeal of particular programs, and selling ad payload into those programs; this is a role they already fulfill - although at present they work with the broadcast networks rather than the producers. There is no role for a broadcaster in this value chain; the audience has abandoned the broadcaster in favor of a direct relationship with the program provider. That said, the broadcasters are uniquely qualified to transform themselves into highly specialized advertising agencies, connecting advertisers to producers; this is something they already excel at.

Chris Anderson, The Long Tail: The Dangers of "Headism": "For too long we've viewed the economics of the entertainment industry through the lens of hits and stars, studios and networks. Just as we are recognizing that the Long Tail is a huge and growing market that was hidden by the scarcity economics of the old distribution systems, we're starting to realize the nature of the goods, the participants and the incentives in this new market are also different."

William Patry: Destruction of Works of Visual Art: "On May 13, 2005, Judge Deborah Batts issued her fourth opinion in Board of Managers of Soho Int'l Arts Condominium v. City of New York et al.... The case raises important issues in perennial battles over public art, in particular whether works of art must remain publicly installed, as well as the perennial battle between art and commerce given the desire of the building owners to use the space for advertising"

Eric Goldman: Billboards in Space "I'm a little late blogging on this, but the FAA has proposed regulations to prohibit billboards in space. Comments are due by July 18."

Covington & Burling: Employee Blogging:

Employers have good reason to be concerned about employee blogs. Blogging’s informal, damn-the-torpedoes style and penchant for contentious issues, coupled with the Internet’s immense reach and the ability to cache and save published comments, make it easy for blogs to run afoul of defamation, copyright, privacy, trade secret and similar laws. Blogging may increase the risk that employees will breach confidentiality obligations, whether inadvertently or by design, and that an employer’s network could be exposed to security threats from third parties. It’s even possible that employers could be found vicariously liable for employee blogs originating in the workplace, on the theory that the employer provided the means to blog but failed to exercise control. Indeed, the mere tolerance of workplace blogging could be viewed as a corporate endorsement of the blog’s content. So, given all that, what - if anything - should employers do about employee blogging?

Knock it off

The New York Times looks at the experience of a trendy handbag designer whose design was ripped off by a mass market competitor at a low price: That Looks Familiar. Didn't I Design It?: "A quick Internet search revealed that, in its winter line, Abercrombie & Fitch was also selling a cable-knit held together with wooden dowels and bedecked in preppy-looking ribbons. To the untrained eye, the bag was identical to those made by [Nicole] Dreyfuss's company, Margaret Nicole of Manhattan. There was just one glaring distinction: the price."

At The Trademark Blog, Glenn Mitchell advises knock-off designers: Can I Knock-Off the Louis Vuitton Cherry Blossom Bag?: "Coming close to a popular design without going over the line is no assurance that the subject of your sincere flattery will not bring all its might and main to make you stop, and that you might not have the wherewithal to withstand such an assault. Nevertheless, here are some general guidelines to follow in creating a lawful imitation (bearing in mind that every situation is unique)."

No Grokster, yet

Who would think that no news would be such big news? Internet law will have to wait again for its big day in Court, as the Court decided six "second tier" cases, while holding off on Grokster and Brand X as well as the other big cases: Kelo (takings); Van Orden and McCreary County(10 Commandments). Even without a decision, the press and blogosphere are buzzing in anticipation.

The NY Times looks at some predictions: The Court of Online Opinion Has Its Say on File Sharing: "Most believe that the Supreme Court will send the case back to the United States Court of Appeals for the Ninth Circuit, which upheld a lower court's decision against MGM and its fellow petitioners last August. Others think that the Supreme Court will side cleanly with the industry. Only a plucky minority said the high court would unequivocally side with the software companies."

News.com reports: Justices to rule on fate of file swapping: "It's been 21 years since the last case of this nature reached the Supreme Court," said Raymond van Dyke, a Washington, D.C.-based copyright attorney. "It shows the change in technology since then, and is an indication that some new directive may be needed."

Eric Goldman predicts that Grokster--and all of us--lose eventually.

Denise Howell answers some questions and suggests links to facilitate your appreciation and understanding of the case. I'll also shamelessly link again to my March podcast about the Circuit court arguments and decision in Grokster.

Finally, Dahlia Lithwick takes An Inside Look at Supreme Court Decision-Making.

Brand X

Forbes looks at what is at stake in Brand X: The Cable Question: "When the U.S. Supreme Court releases its decision on Federal Communications Commission vs. Brand X Internet later this month, it may radically change how businesses sell high-speed Internet access. "

my detritus on oral arguments in Grokster and Brand X: : "I was one of the lucky law students in attendance at oral arguments on March 29th."

Nimmer on Nimmer

The Silicon Valley Media Law Blog: : catches up with David Nimmer, copyright treatise author.

The indecency front

In the Washington Post, Adam Thierer, a fellow at the The Progress and Freedom Foundation (who doesn't like progress or freedom?) advocates against extending indecency regulations to cable and satellite:

A troubling shift is underway in how lawmakers censor media in this country. Sen. Ted Stevens (R-Alaska) and Rep. Joe Barton (R-Tex.), chairmen of the Senate and House commerce committees, as well as Kevin Martin, the new head of the Federal Communications Commission, are proposing to broaden federal broadcast "indecency" regulations to cover cable and satellite television.

Boston Phoenix: The next great indecency threat: "The government's war against what it calls 'indecency' has taken a new and dangerous turn. Since the 1920s, regulators have imposed content restrictions under the theory that broadcasters have been licensed to use a scarce, publicly owned resource: the AM and FM frequencies used by radio stations, and the VHF and UHF bands that accommodate over-the-air TV channels. Rules that punish broadcasters for indecent content... may strike many of us as puerile and unnecessary."

Of course, legislators may have trouble proving that even limiting indecency on cable and satellite are the least speech-restrictive means to limiting the spread of "indecent programming." Both cable and satellite are access-controlled media that empower the individual subscriber to control what channels are available in the subscriber's house.

Esquire magazine tries to push back against indecency regulation: Esquire's Howard Stern, American

The FCC knows no bounds in its effort to interfere in the home entertainment of all Americans and means to plunder our HBO and ravage our satellite radio. Let it be known that this complaint is about much more than the abridged rights of one Howard Stern and rather means to condemn the current atmosphere of censure in which we find ourselves today living. Such an atmosphere is anathema to a free society, in which one has a right to give offense (as long as public safety is not imperiled) and one is free to disregard this speech or counter with an opposing viewpoint.

USA Today examines the chilling effect increased commission scrutiny on indecency regulation is having on broadcasters: Indecent or not? TV, radio walk fuzzy line: "Many radio stations have dropped or edited songs such as the Rolling Stones' Bitch. Some TV networks are covering cleavage and blurring the posteriors of cartoon characters. And even some cable channels, though free from indecency constraints, are reviewing programs more closely to try to stave off regulation."

Darknet

Legal Affairs: This Prince of Darknet: "Sometimes called the Darknet as well, the Scene is no place for amateurs. It is the cyberspace equivalent of the Barbary Coast, an untamed frontier that offers free movies and thrills for the tech-savvy but the prospect of prosecution for everyone else. And from the movie industry's point of view, it is a financial threat that must be stopped. "

The article is adapted from J.D. Lasica's new book, Darknet: Hollywood's War Against the Digital Generation.

The NY Times reports: Sony BMG Tries to Limit Copying of Latest CD's: "Music executives say the restricted CD's the music industry has released so far - most prominently BMG's sale of Velvet Revolver's 'Contraband,' last year - have resulted in virtually no consumer complaints. But analysts say that may be because consumers still have such an easy time breaking the restrictions or acquiring the music for free on unrestricted online file-sharing networks"

Digital Media Europe reports that EMI is in, too: EMI targets the 'mix-tape' with 'secure CD': "UK record label EMI announced yesterday it plans to introduce anti-piracy technology to its CDs that will restrict consumers' ability to burn tracks to blank CDs. The technology, from DRM solutions firm Macrovision, will allow CD owners to copy only three full copies of a CD's songs, and the burned discs themselves cannot be copied. "

EFF Legal Guide for Bloggers

EFF: Legal Guide for Bloggers:

The difference between you and the reporter at your local newspaper is that in many cases, you may not have the benefit of training or resources to help you determine whether what you're doing is legal. And on top of that, sometimes knowing the law doesn't help - in many cases it was written for traditional journalists, and the courts haven't yet decided how it applies to bloggers.

This is a simple to read guide to personal publishers' potential problems-- intellectual property, defamation, privacy-- as well as legal protections for the individual blogger-- safe harbor, reporter's privilege and access.

MTAtm

NY Times: You Can Take the A Train, but Don't Take Its Logo - New York Times: "The [Metropolitan Transit Authority] has been trying to crack down on the unauthorized use of its logos, symbols and images. But with only one lawyer to handle trademark issues, it has been ineffective at policing its brand. In fact, time and money are so scarce that the authority hasn't even been able to trademark all its subway route symbols, barely getting past the A, D, F, 1, 4 and 7."

Ronald Coleman: Taking the IP Train: "Evidently powered by the MTA's burgeoning licensing program, it's not a bad idea. No question but that these and the many other powerful symbols used by the transit system are excellent communicators of source, quality and all those other trademarky things."

Hmmm, maybe the MTA needs another trademark lawyer? (ANDREW readies resumé, plans to casually walk by MTA HQ...)

Lately, I have been looking through FCC rulings on broadcast indecency. One recent ruling concerned the television program Arrested Development, which I recently picked up on DVD. Combine the two and you get something that is almost edutainment (except for, well, the education and the entertainment): the first IPTAblog videoblog, or, is it a videocast? Podvideo?

IPTAblog Multimedia Extravaganza: Arrested Development, Indecency and the FCC (Quicktime, 18.8 MB, 5 minutes).

Update (Jun. 14): By popular demand (see the comments below), I've posted an updated version of the vblog entry that mixes the music at a lower volume. Considering that I don't really know what I'm doing when it comes to video, any amateurish results are the direct result of that lack of knowledge.

Data Aggregators Aggregate Errors

Privacy Activism: Data Aggregators: A Study on Data Quality and Responsiveness

This study examined the quality of data provided by ChoicePoint and Acxiom, two of the largest consumer data brokers in the United States, as well as their responsiveness to consumer requests – and found significant areas of concern in both areas.
                                  
100% of the reports given out by ChoicePoint had at least one error in them.

Digital Copyright, in Moderation

The Center for Democracy and Technology proposes a "moderate" scheme for protecting copyright on the internet: Protecting Copyright and Internet Values: A Balanced Path Forward

This paper seeks to outline a general framework for addressing the problem of copyright infringement on the Internet in a balanced fashion. In CDT’s view, a combination of robust enforcement of copyright law to make infringement unattractive and technical protections for online content offers the best possibility of fostering vibrant new markets for content delivery, consistent with innovation and the open architecture of the Internet.

The paper essentially recommends a slight variation on the status quo. This plan woill enforce copyrights by:

  1. Punishing bad actors
  2. Encouraging a marketplace of content‐protective and consumer‐friendly Digital Rights Management (“DRM”)
  3. Better public education by trusted voices

Ernest Miller considers the CDT approach to be balanced entirely on the side of publishers and against users: CDT's 'Balanced Framework' for Copyright Completely Unbalanced: "I think the CDT report favors the stick a bit much, treats citizen/creators as mere consumers, doesn't consider structural reform of copyright law, and doesn't provide much in the way of a carrot, among other flaws."

Ed Felten examines the section on DRM: CDT Closes Eyes, Wishes for Good DRM: "Here CDT’s strategy is essentially to wish that we lived on a planet where DRM could be consumer-friendly while preventing infringement. They’re smart enough not to claim that we live on such a planet now, only that people hope that we will soon."

Patrick Ross, of The Progress and Freedom Foundation, finds more to like in the paper: Minding the Middle Ground:

I remain on the lookout for those seeking the middle ground in the copyright debate, and that search has brought me to an impressive document by the Center for Democracy & Technology. "Protecting Copyright and Internet Values: A Balanced Path Forward" attempts what few are willing to do -- find a balance between copyright protection and preservation of Internet freedom. I find myself largely in agreement with their stated preferences, and while I differ somewhat with CDT on how those preferences are defined, I still welcome this paper to the debate.

Copyright in the Chewy Center

The San Diego Union Tribune reports that Wal-Mart refuses to print photos that look "too professional" without a written release from the photographer because of concerns about copyright infringement. Digital photos can look great, but some labs won't print those that appear too professional:

"Part of what we deal with is people who are erring on the side of caution, because you really don't know what the copyright situation is with the photographer," Noble said. "Nobody really wants to get sued or have their name splashed that they're violating copyright, so processors are taking a more conservative approach."

Because Wal-Mart is more concerned with avoiding any potential lawsuit than with serving its customers, these customers are prevented from extracting maximum value from their creativity. Ofoto has a similar policy and will not print "Professional images" without a release.

Ernest Miller asks Does It Make Sense to Hold WalMart Responsible for Reproducing Photos its Customers Want Copied?

But this type of risk aversion is common in other consumer-oriented media and also affects the relations between publishers and creators.

The creators of Star Wars Galaxies removed a feature that would allow users to play original music in the Mos Eisley Cantina, because of the fear that users might choose to play copyrighted songs and make LucasArts liable. Wired News reports: Music Muffled in Star Wars Game

Lawyers at Sony Online Entertainment and LucasArts envision a legal nightmare if musicians were to re-create music copyrighted in the physical world.

"If we allowed someone to play anything they want, they could play a song by Madonna and then we'd have licensing issues," said Julio Torres, a producer for Star Wars Galaxies at LucasArts. "We don't want to give them the option to try, because the bottom line is, if we open that gate, they will go through it," he said.

Even before Bridgeport Music v. Dimension Films, the common practice in the recording industry was to clear any recognizable sample, regardless of whether the use might be allowed as de minimis taking or as fair use under copyright law.This ad hoc licensing regime is inefficient, time consuming and expensive. The sample clearance budget for a major label hip-hop album typically accounts for $60,000 of a $300,000 recording budget. [See Josh Norek, Comment: “You Can't Sing without the Bling”: The Toll of Excessive Sample License Fees on Creativity in Hip-Hop Music and the Need for a Compulsory Sound Recording Sample License System 11 UCLA ENT. L. REV. 83, 89 (2004).]

In Freedom of Expression, Kembrew McLeod offers examples from the publishing world about risk averse publishers, such as those who require authors to seek permission before quoting more than two lines worth of song lyrics.

So, common practice falls far within the boundaries set by the courts. Publishers tend to be exceedingly risk averse-- generally far more than may be necessary given the current state of copyright law. While court decisions about fair use may reflect the vague boundaries of the law, actual practice generally falls far within the chewy center, which results in expensive transaction costs and other inefficiencies, frustrated creators, and final products that may not fully reflect the original creator's intent.