Lake Views

Modern Media Family

noreply@blogger.com (Wade Savoy) — Mon, 05 Mar 2012 15:03:00 +0000

There comes a time in every parent's life, a time when his little girl is on the cusp of adulthood, asking that one question every parent dreads: "Dad," she says, the innocence seemingly slipping from her eyes, "what is Soylent Green?"

In a thoroughly modern media family this pressing question need not go unanswered. After watching the movie trailer on YouTube and suffering through the shrugging apologies that accompany any plot summary of a 1970s sci-fi flick, my daughter wanted to watch it on TV and asked the next logical question: “Is it on Netflix?”

For her, Netflix is TV. We are a member of the growing group of cable cutters, people who have thrown caution--and possibly cultural relevance--to the wind by cancelling cable TV in favor of only the Internet. We use one of many devices available now to stream Internet media directly to our TV, where we pick from a queue of movies and TV shows we actually want to watch. Gone are the mindless, gray minutes of channel surfing, as well as the even more stultifying commercials.

My daughter has no concept of tuning in at a prescribed time to watch a program. For older shows, she can pick any episode she wants over any season. For some shows on the air now, she has to wait a year to see the current season, but I don’t think she even notices because to her a season is as relevant and useful as a Flowbee. When I try to explain that we used to wait weeks and even months to see episodes, she assumes a quizzical, sad look generally reserved for the institutionalized.

For us, the true riches of Internet TV lay not with current content but with a vast back catalog spanning the history of movies and TV. When my daughter drops a seamless reference to The Munsters or The Addams Family, I tingle with pride. While this may limit her selection of a future mate to someone with the social faculties of a hermit crab, at least he and I will have plenty to talk about.

Alas, Soylent Green is not included in the Netflix streaming catalogue, one of the shortcomings of such Internet services, which, unlike their DVD counterparts, have to wrestle digital rights from copyright owners. A friend and fellow cable cutter relies on RedBox to supplement Internet streams, but Redbox carries a too current and uneclectic selection for our needs. There is, however, an unlikely--and free--savior for cable cutters in this Age of Electrons: the library.

If you haven’t been in a public library since the Carter administration, you are missing out on the best media center around. Libraries aren’t just about books anymore. In addition to stocking DVDs of the latest movies and TV shows, my library loans ebooks and lets us download audio books right to my iPhone. Notably, there are three times as many library branches in my area as Blockbuster stores--assuming those stores aren’t to be among the casualties of the Netflix-induced bankruptcy Blockbuster underwent. We bike to our branch, it’s so close, and we can search the shelves of all the branches online. The website’s not as slick as Netflix’s, but it’s functional, letting us have items delivered to our local branch--and, besides, I appreciate my institutions with a little must in the air.

We logged on and, lo and behold, the library has not one but two copies of Soylent Green, and, to my delight, both copies were checked out. Which means, there is hope that some kid nearby is in training to win the heart and mind of my beloved. It’s going to take more than some ham-handed reference to The Dukes of Hazzard. The chosen one is going to lean in close and, in his best Charlton Heston imitation, declare, “Soylent Green is people!”

Into the Fold

noreply@blogger.com (Wade Savoy) — Wed, 30 Nov 2011 16:57:00 +0000

This story aired during NPR's "Morning Edition" and "All Things Considered," WKRF, on November 30, 2011.

Sometimes you change names to protect the innocent, and sometimes you change names because those people will hurt you. My friend “Mary,” for example, and, well, Mary’s entire family. I met Mary on the first day of Latin 101 when I unwittingly sat next to her. “What are you smiling at?” she greeted me. I was young and innocent and didn’t know better than to hide behind a smile, and I didn’t know that I had been captured in that moment. Mary’s is the kind of sprawling and eccentric Southern family that has gravity, the kind of family that inspired William Faulkner and Flannery O’Conner. The kind of Southern family that’s probably not being made anymore.

Before each encounter with Mary’s family, Mary would blanket me in warnings regarding various members. For example, I was to avoid even eye contact with the siren sister who was once rushed to the hospital only to discover that--surprise!--she was pregnant and in the throws of birthing an international soccer player’s baby. I was to guard my pockets from the kleptomaniac brother and to skirt the wrath of the domineering older sister. I was also to be aware of the various perceived offenses of the in-laws and to be mindful of their shunning.

Then, there was old Aunt May, whom the children among themselves referred to as Uncle May. Perhaps it was the short-cropped hair and polyester slacks. Or the gruff, airy voice that sounded like the death-rattle of a burdened animal.

Unsurprisingly, the deepest, darkest scandal of Mary’s family revolved around Uncle May. You see, it was widely suspected that rather than being the sister of Mary’s father, Uncle May was, in fact, his mother by Mary’s own grandfather. Incest in the bosom of the family, which seemed to cow even Mary’s uproarious clan.

True to her position as matriarch of a grand Southern family, Uncle May was the keeper of history, and she could recite, without prompting, the family’s lineage in tones that bespoke former gentility, giving no hint of the family’s subsequent descent to the lower middle class. When I first met Uncle May, she examined my family tree with the unrelenting thoroughness and mild distaste of a proctologist.

In light of such color, Mary assumed a deceptively quiet demeanor, thus my defenselessness when sitting down on that first day of Latin. With scandal in her blood (perhaps literally), Mary went on to marry that Latin professor. Although Mary assiduously avoided taking his classes from then on, their May-September romance caused the expected stir on campus. I was thrilled to be friends with such Bohemians but affected a boyish obliviousness.

Their wedding might be described as a small affair, but for the overwhelming presence of Mary’s family. I was the only person to stand in the wedding, serving several functions, including safekeeping the rings. To the delight of the family, Uncle May from that day on referred to me as “da ring bearer.”

Sometime after the wedding, Mary and her husband conscripted me to help tame Uncle May’s overgrown yard. Uncle May, suffering numerous ailments, was largely a shut-in. When we arrived, Uncle May cracked the door very slightly and from within the dark depths greeted us with, “I’ve been throwing up all day.” Mary’s charm, it seemed, came honestly.

Such was the height of Uncle May’s grass that we had to tie a rope to the mower, which I pulled over my shoulder as Mary’s husband pushed. Uncle May reported to the family, “Da ring bearer was pulling the lawnmower with a rope in my front yard!” And thus my small part in the story of Mary’s family was secured.

I occasionally look back on that story with more than a bit of nostalgia. It really was a simpler time, when much could be accomplished with a strong rope and a good disposition. Life is more complicated now, and I sometimes pine to know my place as I did then, even if my place was as an appendage to Mary and her family. I used to tell Mary that she had to write a good Southern book about it all. She hasn’t yet, so I’m giving her this nudge, even if it does means entering the witness protection program.

Turning the Page on a New Era of Reading

noreply@blogger.com (Wade Savoy) — Tue, 11 Oct 2011 13:29:00 +0000

This story aired during NPR's "Morning Edition" and "All Things Considered," WRKF, on October 11, 2011.

Amazon.com announced last May that it now sells more e-books than hardback and paperback books combined. For the industry as a whole, e-book sales are up over 1000% in the last three years. And I can't help but worry about used bookstores. Most of the people participating in the inevitable growth of e-book sales probably don't realize that they do not, in fact, own the books they download. They only have a license to use the books, much like the software licenses we all click through without reading, which dramatically changes our relationship to books.

Before delving into how all of this impacts used bookstores, let me confess that I love used bookstores. A friend and I occasionally spend Sundays working our way through the plentiful used bookstores in the French Quarter. On one such visit, I engaged in a level of verbal blasphemy that would curl the toes of a bishop when my friend plucked an old hardback edition of The World According to Garp from a shelf moments before I got to it. It's possible that I also questioned her parentage, more than once.

My bias notwithstanding, the shift from paper to digital books, like the shift from DVDs, CDs, and other physical objects to their purely digital forms, crosses a legal line and fundamentally changes our relationship to these traditional types of media. When you buy a physical copy of some creative work, like a hardback book, you can dispose of that copy in just about any way you want. You can give it to a friend, sell it to a used bookstore, burn it in a ritual fire. We have the first sale doctrine under copyright law to thank for that. The copyright owner's ability to control the distribution of a particular copy of her work generally ends with the first sale of that particular copy. Used bookstores, used CD stores, and Blockbuster stores are all made possible by the first sale doctrine.

But there's a way around the first sale doctrine, a way that software companies have used for decades. Rather than sell you a copy of their software, they only give you permission to use the copy for certain purposes. That is, they license the copy to you rather than sell it to you, which doesn't trigger the first sale doctrine.

Those Kindle e-books downloaded from Amazon? They are licensed, not sold, and that license says this: "Unless specifically indicated otherwise, you may not sell, rent, lease, distribute, broadcast, sub-license or otherwise assign any rights to the Digital Content or any portion of it to any third party." In other words, there will never be a used e-book store. Imagine how you would respond if the clerk at your local Barnes & Noble insisted that you sign a contract stating that you would not actually own the book you just plunked down and were prohibited from giving it to a friend or selling it when you were done reading it.

I am not an alarmist: paper books will survive digital media just as radio survived television. I also recognize the benefits of e-books. Set aside the generally lower cost (Amazon sells many e-books for $9.99), the wider availability, or the life breathed into the book industry, and consider my friend and former English teacher. She can progressively increase the text size on her Kindle as her eyes fail her, and the weighty tomes she likes to read have been reduced to just a few ounces. For help given to this important and worthy person, I say, "May God bless and keep the Kindle."

I do worry that the shift from physical copies to digital copies, the shift from having broad rights to dispense with those copies how we choose to being bound up by very limiting contracts, is happening quietly. We're just going along. We are not questioning and we are not insisting that our old liberties be carried into this new age. I do worry that over time, albeit a century or more, the very idea of a used bookstore will fade in human memory without revolt.

New Media in Louisiana

noreply@blogger.com (Wade Savoy) — Tue, 20 Sep 2011 16:15:00 +0000

This story aired during NPR's "Morning Edition" and "All Things Considered," WRKF, on September 16, 2011.

Earlier this year, I had the opportunity to pass on my dream job. Yahoo wanted to hire me as its Senior Director of Copyrights--the kind of thing I left Louisiana 17 years ago to do, a job that didn’t exist here then and, unfortunately, still doesn’t. Moving home after so many years, I’ve found that Louisiana is still not a full participant in the burgeoning digital world.

I’m not one of those people who burned to leave home. I loved my state, particularly the distinctive culture. But the Internet was on the verge of exploding, with the promise of disrupting entire industries. The law was scrambling to keep up, particularly in the area of intellectual property, like copyrights and trademarks, and I wanted to participate.

I made the hard choice to leave. I picked a law school in Chicago with a special program that let me focus on the digital revolution. I continued that concentration at a large firm where one of my clients was--get this--the World Wrestling Federation, which is an oiled-up, heaving mass of copyrights and trademarks. Like most media companies then, WWF was trying to figure out how to leverage the Internet to create new revenue from its content. One of my primary jobs was to make sure that those new markets weren’t already occupied by other people giving away the content for free.

I left private practice to join Walmart at a time Walmart soundly dominated the retail world of traditional media like CDs and DVDs but was struggling to find its footing in digital retail. In 2008, Apple passed Walmart as the top retailer of music, selling more MP3s than Walmart could sell CDs. Walmart recently announced the close of its own online music store, effectively ceding the future of music retail to Apple.

After Walmart, I brought my experience in the online world back to law school to teach in Fort Worth. Digital media had become an integral part of our lives, but many rights we traditionally enjoyed had begun to evaporate. Just try giving away that Kindle e-book you downloaded to a friend. You’ll find that that and other rights didn’t follow us into the electronic realm.

As much as I enjoyed working with students eager to join the revolution, stronger forces called me home to Louisiana: my girls. They live here now with their mother, and I couldn’t bear to be away from them because being their dad is the best thing I get to do. I would like to report that I returned to find Louisiana participating fully in the global conversation shaping our digital future. But I can’t. Which is why I was talking with Yahoo.

That Yahoo dream job does not exist here. Although the kind people at Yahoo initially considered allowing me to split my time between Louisiana and California, ultimately they wanted me there at the seat of the revolution. As much as I love my state, if this were an earlier time in my life, I would be in California now.

Louisiana did make advances while I was away. For example, Louisiana Entertainment now offers tax incentives to movie studios and software companies for creating content here, which is a tremendous step forward. However, even the most basic copyright and trademark work for such projects is most likely done out of state, and don’t even ask about the latest deals with the likes of Netflix and Apple. More content is being created here, but Louisiana plays little part in what happens to that content once it leaves the state.

So what do we do? Laying the groundwork couldn’t hurt. We need to rally our existing resources, like firms doing intellectual property work already, and do a better job of convincing the companies we attract to keep more of that work here. We also need to educate out-of-state firms about the potential for having people here in Louisiana to better serve their clients. And to supply talent for all of them, we need intensive, coordinated programs in areas like new media and intellectual property at our universities and law schools, which is what I left years ago to find.

Of all the places I’ve lived, Louisiana has the richest, most distinctive voice, and I don’t want that voice to be lost in the world to come. Although I’m still trying to figure out how, I want to live here and I want to use my experience to help assure that 10 or 20 years from now our children aren’t facing the same hard choice I am.

Good Coffee

noreply@blogger.com (Wade Savoy) — Mon, 01 Aug 2011 13:31:00 +0000

This story aired during NPR's "All Things Considered," WRKF, on July 30, 2011.

I love good coffee. Growing up in South Louisiana, I of course drank Community coffee, which, as it happens, is good coffee. If you’ve spent any time outside Louisiana, especially before Starbucks took over the world, you know just how good Louisiana’s brew is because you know that to much of the world coffee is just brown water. I didn’t appreciate that until I moved to Chicago for law school. (For the record, I didn’t appreciate a lot of wonderful things about Louisiana until I moved away, which is one of life’s bitter-sweet ironies.)

After I graduated from law school and was working at a firm in Pittsburgh, I got my first coffee grinder, one of the many benefits of receiving a paycheck. I began buying whole beans and trying different varieties. Not, mind you, that flavored stuff. I mean beans from different parts of the world, some grown on mountain sides, some in valleys, some in shade, some in full sun, and each roasted in a wide variety of ways. I found that, true to my Louisiana upbringing, I liked darker roasts with bolder, richer flavors. Sumatra, yum. Ethiopian Yirgacheffe, you bet. But I tried (and still do) all kinds of coffee. Tanzanian Peaberry? What?!

Louisiana coffee, by the way, wasn’t widely available up north. You could find it in small gourmet shops—and, let me tell you, there is nothing quite so strange as seeing a commodity of your childhood being sold for a lot of money to upper-class people. Imagine people paying $15 a pound for Nestle’s Quik. Right. I generally reserved Louisiana’s finest as a treat to enjoy when I travelled home. It was clear, though, that my taste and preferences had been shaped by my Louisiana experience, giving me a great platform from which to build.

After I moved to Pittsburgh, my parents came up for a visit. I had my favorite beans ready and my grinder primed. I was excited for them to try my new discovery. These were, after all, the very people who taught me to love good coffee.

Perhaps it’s obvious by now that they hated it. Hated. It. And they complained. And from that day on, they brought their own coffee with them every time they visited. Even from hundreds of miles away, I could feel the knowing glance they exchanged when they packed that coffee.

It dawned on me what had happened. I thought that for all those years they were teaching me to love good coffee. But they weren’t. They were teaching me to love one very specific kind of coffee, which happened to be good.

I also realized that I liked the lesson I actually learned better than the one they were trying to teach me. I love good Louisiana coffee, which I drink almost every day now that I’ve moved back to Louisiana, but, more importantly to me, I love coffee and enjoy the incredible variety the world offers.

Netflix and Hulu, Saving the Entertainment Industry Despite Itself

noreply@blogger.com (Wade Savoy) — Mon, 23 May 2011 20:13:00 +0000

A former student recently asked me if I think Hulu is friend or foe of the entertainment industry in response to recent reports of infighting between Hulu's owners (including ABC, NBC, and Fox) and its managers. Her question gave me an opportunity to hold forth with some of the thoughts I've had about both Hulu and Netflix, an outsider also under attack by a nervous entertainment industry, drawing a lesson from the history of iTunes and the music industry.

My edited and slightly expanded response:

Companies like Hulu and Netflix will save the entertainment industry despite itself. Ultimately, such companies are good for all of us because they will drag the industry into the future, albeit kicking and screaming. The same thing happened with the music industry and iTunes, and that industry hasn't collapsed. I suspect that more people consume more music given the ease of digital access. The revenue streams have changed and are still being discovered and worked out, but there's still money to be made.

The people entrenched in the entertainment industry are holding on to the old way of doing things because they can't be sure that they, individually, will retain power in any new system. As long as they take that position, they virtually guarantee that they won't retain power, that other companies will pop up to fill the void the industry is creating, much as Google overtook Microsoft online because Microsoft didn't want to acknowledge the change the Internet was bringing to how we use computers. In contrast to Microsoft, Apple saved itself a decade ago by leading the way, not by trying to hold us all back.

iTunes prevailed for two reasons. First, when Apple initially released iTunes (with the first iPod), the software only ran on Mac computers. At the time Apple's computer business was on the ropes, with a very tiny fragment of the computer market, and many people had counted Apple out. Apple was not the juggernaut it is now. I think many in the music industry thought they weren't giving up much at all, just a tiny niche, when they cut deals with Apple. But then Apple took the software and service to Windows computers and found a very eager, very large consumer base.

Which leads to the second reason: Apple filled a vacuum left by the music industry. iTunes took off because Apple made it incredibly easy to buy digital music at an attractive price, something the music industry never got its act together to do. By capitalizing on its innovation, coupling a great device with an unprecedented service, Apple was able to take full advantage of catching the music industry unaware and unprepared.

This is why I had hope for the TV industry when major players in the business launched Hulu. It seemed they had learned a lesson from the music industry and were going to fill the vacuum (representing tremendous pent-up consumer demand for online access) before someone else did. Genius. But it looks like they might not be able to sustain it. The old power brokers are nervous and very well might kill Hulu before it can save them all, and if they don't outright kill it they'll hobble it.

Netflix is poised to take advantage. The only question in my mind is whether Netflix has gained enough critical mass already to force the industry (movie and TV) to deal with it. The industry is hungry for money because, among other things, DVDs are going the way of the dinosaur, and Netflix has enough subscribers now to offer a large pot of money. Last year it cut a nearly $1 billion, five-year deal with Paramount, Lionsgate, and MGM--and still has money to spare! It's a close balance, though, and I'm very curious to see how it plays out over the next few years. If the TV industry doesn't get behind Hulu, it's going to drive customers into Netflix's waiting arms, giving Neflix even more power in the market.

Recent reports indicate that Netflix and its ready cash are changing the tune of some in the entertainment industry. The Wall Street Journal quotes several media executives, including at CBS and Time Warner, saying very positive things about Netflix. One unnamed media executive set out the simple reason: "You can sit and take a strategic view of whether it's good or bad, and meanwhile all of your competitors are going to be taking big checks. The model isn't going to go away. So, if you can't beat 'em join 'em."

Buying Competitor's Marks for Online Ads Might Be Legal

noreply@blogger.com (Wade Savoy) — Wed, 11 May 2011 15:39:00 +0000

It's nice every once in a while to be recognized for growing up, becoming more capable and mature. One of the most influential federal courts has done just for us that by changing its opinion of Internet users, recognizing that in the last decade we've gone from generally careless online consumers to more sophisticated consumers who are not likely to be confused when a company pays Google to use a competitor's trademark to trigger the sponsored ads and links that have become so familiar on search engines. Context is key, and clearly labeling sponsored ads and links as sponsored ads and links might be enough to prevent consumers from being confused.

Trademark owners are almost never happy when someone else uses their marks commercially, especially if it's a competitor. Over the last decade and more, trademark owners have bitterly complained as new ways for competitors to use their marks have been created on the Internet, none more financially successful than the keyword ad programs that fund Google and other Internet companies. In 2010, Network Automation ("Network") and Advanced Concepts Systems ("Advanced"), competitors selling scheduling and management software, sued each other over Network's use of Advanced's ACTIVEBATCH mark to trigger ads on the Google and Bing search engines. The lower court, assuming as many courts have that Internet users are a fairly careless lot, found that this use of the ACTIVEBATCH mark would likely confuse consumers into believing that the products of the two competitors are affiliated.

Such consumer confusion is at the heart of trademark law, which generally serves to protect consumers from deceptive uses of trademarks. The lower court issued a preliminary injunction prohibiting Network from using ACTIVEBATCH. The Ninth Circuit Court of Appeals overturned the injunction, finding that the lower court had been too anachronistic and inflexible in applying the factors used to determine if there is a likelihood of confusion.

The Ninth Circuit emphasized that keyword ad cases will turn on what consumers actually see on the screen, with a focus on both the text of the ads themselves and their surrounding context. Although the text of the ads in this case did not clearly indicate their source, Google partitions ads from the main search results and expressly labels them as sponsored. The Ninth Circuit sent the case back to the lower court to decided again whether there is a likelihood of confusion, but the Ninth Circuit's language indicates pretty strongly that the court of appeals believes that Google got it right in this case. Those of a mind to buy competitor's marks for keyword ads should be guided by the path set out by the court.

Trademark wonks will note that the Ninth Circuit rejected application of the "Internet troika," the heavy reliance on just three confusion factors (the similarity of the marks, the relatedness of the goods or services, and the simultaneous use of the Internet as a marketing channel), to keyword ad cases, relegating the troika to cases involving use of a trademark in a domain name. Instead, the court identified another set of four factors (the "keyword quartet"?) most relevant to keyword ad cases: (1) the strength of the mark; (2) the evidence of actual confusion; (3) the type of goods and degree of care likely to be exercised by the purchaser; and (4) the labeling and appearance of the advertisements and the surrounding context on the screen displaying the results page. The Ninth Circuit also took the opportunity to expressly reject the notion that such indirect use of a competitors mark is not a "use in commerce," as required to trigger federal trademark law.

Retired NFL Players Sue for Appearance in "Madden NFL" Video Game

noreply@blogger.com (Wade Savoy) — Thu, 12 Aug 2010 20:33:00 +0000

Tony Davis, a former running back for the Cincinnati Bengals and the Tampa Bay Buccaneers, has sued Electronic Arts ("EA") on behalf of approximately 6,000 retired NFL players for use of their likenesses in EA's popular "Madden NFL" video game franchise. Versions of the game allow players to play historic teams against other teams, including modern players, but, Davis claims, EA omitted the names and changed the numbers of retired players to avoid paying for their inclusion in the game.

Davis alleges violation of the right of publicity, which generally protects people from having their likenesses used for commercial purposes without permission. The right of publicity varies by state, with some states not formally recognizing it and others extending the right decades beyond death. In California, where Davis filed suit, the right is in full force and, for someone whose likeness has a commercial value at death (such as a movie star), can last for 70 years after death.

The case likely will hinge on whether the retired players are "readily identifiable" based on their basic statics, even without use of their images or names. Davis alleges that, among other characteristics, EA uses each player's team, position, height, weight, years of experience, and skill level with only minor, if any, modifications. The chart below, taken from Davis's complaint, compares the actual 1979 Tampa Bay Buccaneers with the same team in the game:

Madden NFL Table

Given the popularity of the game, tens of millions and possibly hundreds of millions of dollars are at stake. In a detailed history of the game's development, ESPN reports that the game has sold 85 million copies since inception and has made over $3 billion in total revenue. Davis claims that the 2009 edition of the game on multiple gaming platforms, the versions at issue in the case, earned EA $400 million in sales. EA removed the historic teams from the 2010 edition of the game.

If Davis proves his case, he will be entitled to a percentage of EA's profits from the editions containing retired players. It will be up to experts to argue over exactly what percentage of the game's success is owed to use of the retired players. Davis claims in his complaint that EA pays the NFL Players Union $35 million a year for use of current players so it's likely safe to assume that Davis and the other retired players would be awarded less, perhaps considerably less, than that amount. California's right of publicity law provides a wildcard, however, because it allows an award of punitive damages, which are intended to dissuade EA and others from violating the right and which could far outstrip any profits EA might have to pay.

With the exponential growth in the power of computers and gaming systems and the popularity of reality-based games that feature avatars, such suits will no doubt become more prevalent. Indeed, EA is already in an ongoing legal tussle with college football players, who sued EA last year for the same reason.

John Madden on the early development of "Madden NFL"

Complaint

"Madden NFL" Complaint -

Copyright Office OKs Jailbreaking and Unlocking iPhones

noreply@blogger.com (Wade Savoy) — Wed, 21 Jul 2010 18:39:00 +0000

In a setback to Apple's tight control over the iPhone, the Copyright Office has ruled that jailbreaking is not a violation of copyright law. Jailbreaking involves altering the software that controls an iPhone to allow the phone's owner to install applications that have not been approved by Apple and are not, therefore, available in Apple's App Store. After a process of public hearings and comment, including objections from Apple, the Copyright Office determined that jailbreaking is a fair use under copyright law and worthy of an exception to the provisions of the Digital Millennium Copyright Act ("DMCA") that prohibit circumvention of technical measures that control access to copyrighted works. The Office also provided a separate exception allowing mobile users to unlock their phones to change their wireless carriers (e.g., from AT&T, which has been the exclusive carrier for the iPhone, to Verizon).

The DMCA, in an effort to help copyright owners protect their works in the digital world, outlaws breaking the digital locks used to protect copyrighted works, such as the system that encrypts DVDs and prevents them from being copied as freely as music CDs, which have no digital protection. When enacted in 1998, the DMCA created a great deal of controversy because for the first time U.S. copyright law sought to control access to a copyrighted work, not infringing use of the work. If you break a lock to access a digital work, you can be liable for violating copyright law (the anti-circumvention provisions of the DMCA) even if the use you make of the underlying work is not infringing.

Anticipating possible unintended consequences with such a new approach, Congress required the Copyright Office to consider exceptions to the access-control provisions of the DMCA every three years. The exceptions, including these two that impact the iPhone, last for three years and must be reconsidered and adopted again by the Office to continue another three years. As stated by the Librarian of Congress, "The purpose of the proceeding is to determine whether current technologies that control access to copyrighted works are diminishing the ability of individuals to use works in lawful, noninfringing ways."

In its finding regarding jailbreaking, the Copyright Office recognized that both Congress and the courts have "favored" the interoperability of software and devices. The Office concluded "that when one jailbreaks a smartphone in order to make the operating system on that phone interoperable with an independently created application that has not been approved by the maker of the smartphone or the maker of its operating system, the modifications that are made purely for the purpose of such interoperability are fair uses." Such language no doubt warms the hearts of those who have railed against Apple's controlled, proprietary systems in favor of more open systems.

In considering the separate exception that allows users to unlock their phones to change wireless carriers, the Copyright Office said, "It seems clear that the primary purpose of the locks is to keep consumers bound to their existing networks, rather than to protect the rights of copyright owners in their capacity as copyright owners." Finding no copyright-based reason to deny the exception, the Office issued an exception similar to one it had issued in 2006. The Office was careful to note, though, that its actions did "not establish a general federal policy of ensuring that customers have the freedom to switch wireless communications service providers." Rather, the Office's actions "simply reflect a conclusion that unlocking a mobile phone to be used on another wireless network does not ordinarily constitute copyright infringement" and that the DMCA "should not be used to prevent mobile phone owners from engaging in such noninfringing activity."

Although some see the Copyright Office's findings and actions as making a clear statement against some of Apple's business practices, the overall effect should not be overstated. After all, there are no reported incidences of Apple actually pursuing legal action against a customer for either jailbreaking or unlocking an iPhone, although Apple has always maintained its right to do so. Even with the new exceptions, Apple can still pursue users under contract law, rather than copyright law, for violating the user agreement that governs the iPhone and its software, although the Office's weight can now be added to arguments that enforcing provisions prohibiting jailbreaking and unlocking is against public policy. And practically speaking, while the Office's actions will help to make jailbreaking and unlocking iPhones more mainstream, most iPhone owners will not venture into the world of hacking their phones, especially when doing so voids their warranties.

Text of Federal Regulation Setting Out Exceptions

Text of the Regulation -

Recommendations of Register of Copyrights to Librarian of Congress

Register of Copyrights Recommendations to Librarian of Congress -

Apple's Response to Proposed Exceptions

Apple Response -

Amazon Sells More E-books Than Hardbacks, and I Worry About Used Bookstores

noreply@blogger.com (Wade Savoy) — Wed, 21 Jul 2010 18:39:00 +0000

Amazon announced this week that it now sells more e-books than hardback books, and I can't help but worry about used bookstores. Most of the people contributing to the inevitable growth of e-book sales probably don't realize that they do not, in fact, own the books they download. They only have a license to use the books, much like the software licenses we're all used to clicking through without reading, which changes our relationship to books.

Amazon reports that over the last three months its customers bought 143 e-books for every 100 hardback books Amazon sold. With Amazon's price drop on its Kindle e-book reader last month, which led to a tripling of sales of the Kindle, that number rose to 180 e-books for every 100 hardbacks sold in the last month. Although Amazon has attempted to focus the attention these numbers generate on its own device, Amazon also (wisely) sells e-books on other platforms, such as the iPad and iPhone, which likely contribute substantially to the growth of its e-book sales. Apple has its own e-book store for the iPad and iPhone, which adds to the trend toward digital delivery of books. Just 28 days after launching the iPad, Apple reported that 1.5 million books had been downloaded (not necessarily sold) from its e-book store.

Before delving into how all of this impacts used bookstores, let me confess that I love used bookstores. I spent a recent Sunday with a friend touring all the used bookstores we could find in the French Quarter. (I highly recommend Crescent City Books and Beckham's Book Shop, by the way.) I also engaged in a level of verbal blasphemy that would palpitate the hearts of a houseful of Cardinals when my friend plucked an old hardback edition of The World According to Garp from a shelf moments before I got to it. It's possible that I also questioned her parentage, more than once.

My bias notwithstanding, the shift from paper to digital books, like the shift from DVDs, CDs, and other physical objects to their digital equivalents, crosses a legal line and dramatically changes our relationship to these traditional forms of media. When you buy a physical copy of some creative work, like a hardback book, you can dispose of that copy in just about any way you want. You can give it to a friend, sell it to a used bookstore, burn it in a ritual fire, etc. We have the first sale doctrine under copyright law to thank for that. The copyright owner's ability to control the distribution of a particular copy of her work generally ends with the first sale of that copy. Used bookstores, used CDs stores, and Blockbuster stores are all made possible by the first sale doctrine.

But there's a way around the first sale doctrine, a way that software companies have used for decades. Rather than sell you a copy of their software, they only give you permission to use the copy for certain purposes. That is, they license the copy to you rather than sell it to you, which doesn't trigger the first sale doctrine.

Those Kindle e-books downloaded? They are licensed, not sold, and that license says this: "Unless specifically indicated otherwise, you may not sell, rent, lease, distribute, broadcast, sublicense or otherwise assign any rights to the Digital Content or any portion of it to any third party." In other words, there will never be a used e-book store. Imagine how you would respond if the clerk at your local Barnes & Noble insisted that you sign a contract stating that you would not actually own the book you just plunked down and were prohibited from lending it to a friend or selling it when you were done reading it. Right.

I am not an alarmist: paper books will survive digital media just as radio survived television. I also recognize the benefits of e-books. Set aside the generally lower cost (Amazon sells many e-books for $9.99), the wider availability, and the life breathed into the book industry, and consider my friend and former English teacher. Her eyes and hands are failing, but she can progressively increase the text size on her Kindle as her eyes grow worse, and the weighty tomes she likes to read have been reduced to just a few ounces. And, as she likes to point out, she has no interest in anything published after 1920 so everything she reads is in the public domain and can be downloaded for free from Amazon. For help given to this important and worthy person, I say, May God bless and keep the Kindle.

I do worry that the shift from the world of physical copies like books to digital copies, the shift from having broad rights to dispense with those copies how we choose to being bound up by very limiting contracts, is happening quietly. We're just going along; we are not questioning and we are not insisting that our old liberties be carried into this new age. I do worry that over time, albeit a century or more, the very idea of a used bookstore will fade in human memory without revolt.

Google and YouTube Win in Viacom Suit, Finally

noreply@blogger.com (Wade Savoy) — Fri, 25 Jun 2010 03:32:00 +0000

Over four years after Viacom sued Google for infringing videos uploaded by users of Google's YouTube, a federal judge ruled yesterday that Google is protected from liability for copyright infringement by the Digital Millennium Copyright Act ("DMCA"). Viacom claimed at least $1 billion in damages from YouTube users uploading its movies and televisions programs, such as "The Daily Show with Jon Stewart" and "SpongeBob SquarePants," and it has announced it will appeal the decision.

The court agreed with Google that YouTube is protected by the "safe harbor" provisions of the DMCA. These provisions proscribe a kind of dance between a copyright owner and an Internet service provider that, if performed correctly, effectively absolves the service provider of liability for infringing content posted by its users. In the dance, the copyright owner must present a formal notice to the service provider identifying, among other things, the work it owns that is being infringed and where the infringing copy can be found. The service provider must then promptly remove the allegedly infringing material. The court noted that "the present case shows that the DMCA notification system works efficiently: when Viacom over a period of months accumulated some 100,000 videos and then sent one mass take-down notice on February 2, 2007, by the next business day YouTube had removed virtually all of them."

Despite Google's swift action, Viacom argued that Google was not entitled to take refuge in the safe harbor because Google had general knowledge that its system was being used to infringe copyrights. Indeed, internal emails between YouTube executives in YouTube's early days (before Google bought the company) indicates that they were generally aware that users were posting infringing content and the value of that content for attracting traffic to the site. See the email unsealed from court records attached below for an example. Notably, the email is not as smoking as Viacom might have liked because it also shows concern for copyright issues and a commitment to follow the notice and take-down provisions of the DMCA.

After a close reading of both the language of the DMCA and the congressional record surrounding its passage, the court concluded that general knowledge of infringing activity is not enough to deny access to the safe harbor: "[I]f a service provider knows (from notice from the owner, or a 'red flag') of specific instances of infringement, the provider must promptly remove the infringing material. If not, the burden is on the owner to identify the infringement. General knowledge that infringement is 'ubiquitous' does not impose a duty on the service provider to monitor or search its service for infringements."

A review of the circumstances that led to passage of the DMCA reveals why knowledge of specific instances of infringement is called for. There were two warring camps: the copyright owners and the Internet service providers. The copyright owners were upset because service providers were often very slow to respond or entirely unresponsive to their reports that users were posting infringing content. The service providers complained loudly that they would have to hire enormous teams of copyright lawyers to review each thing a user posted to their systems to determine if the item was in the public domain or being used fairly or licensed. (According to the court, over 24 hours of video are posted to YouTube each minute. There aren't enough copyright lawyers to review all of that!)

Congress was called on to strike a balance. Too far in the copyright owners' favor and they would risk driving up the cost of being on the Internet so high that innovation would stop and only the wealthiest could afford access. Too far in the service providers' favor and they would risk stifling the creation of new content because creators would fear having their works stolen online. The solution? The dance of the DMCA. In exchange for promptly removing infringing content from their systems, the service providers could effectively step away and leave the battle to the copyright owners and the users.

Viacom's interpretation of the DMCA would undermine the very purpose of these provisions, shifting the burden to service providers to police each item posted by users on their systems and determine whether each is in the public domain, a fair use, licensed, or otherwise not infringing. (Such as the clips that Viacom had to ask the court to remove from the case when it came to light that Viacom employees themselves had surreptitiously uploaded them to promote Viacom shows.) Such policing wasn't tenable 12 years ago when the DMCA became law, and it's certainly not tenable now that the Internet is orders of magnitude larger.

The burden of policing copyrights has always gone hand-in-hand with the benefits of owning them. It is Viacom's burden to identify instances of infringement, and it is then Google's responsibility, if it wants to avoid liability, to listen and respond attentively. That's the dance. Although Google is often the one to make strained arguments that allow it to do all manner of things with the intellectual property of others (such as digitize the world's books whether the authors want it to or not), here it is Viacom arguing against the language of the law and the underlying purpose for it.

The decision in Viacom v. Google, No. 07 Civ 2103 (S.D.N.Y June 23, 2010)

viacom v google

Internal email between YouTube executives discussing infringement

YouTube email

Police Department Loses Domain Name to Angry Speeder

noreply@blogger.com (Wade Savoy) — Tue, 08 Jun 2010 20:04:00 +0000

After receiving a $90 speeding ticket from the Bluff City, Tennessee, Police Department, Brian McCrary stumbled upon the kind of revenge most speeders can only dream about: He noticed that the Department's website domain name had recently expired, bought it, and set up a website of his own at the address to protest the city's new traffic camera that busted him.

Domain names are registered with domain name registrars for a year or more and must be renewed to prevent them from returning to the pool of names available for the public to register. The local paper reports that the officer in charge of the Department's website has been out on medical leave so he missed the five email renewal notices sent by the registrar before the expiration and two more sent after the expiration. “It just slipped my mind,” Police Chief David Nelson told the paper.

Although it's tempting to think that such an oversight could only happen in a technically unsophisticated small-town police department, Microsoft is among the others to have suffered a similar fate. In 2003, it failed to renew its UK domain name for the popular Hotmail email service, potentially rendering thousands of UK email addresses useless. Fortunately for Microsoft, a good Samaritan registered the domain name and returned it without incident.

Chief Nelson reports that he has turned the matter over to the city's attorney, but it's not likely that the attorney will be able to recover the domain name. While there are fairly strong ways, both under trademark law and under the domain name dispute resolution policy that governs most domain names, to prevent trademarks from being used illegally in domain names, it would be difficult to establish commercial rights such as trademark rights in the name of a police department. Even if the city could argue trademark significance in the name, a substantial body of case law has established that use of a trademark in a domain name for a complaint site is protected.

The lesson to learn from both the Bluff City Police Department and Microsoft is that domain names are valuable assets that must be tracked. Rather than rely on renewal notices being sent to a potentially absent employee, domain name owners should calendar their own renewal dates. Those with patent or trademark portfolios will find that ability in most modern software used to docket their intellectual property assets.

View Larger Map

BP Buys Keywords to Spin Oil Spill Disaster

noreply@blogger.com (Wade Savoy) — Tue, 08 Jun 2010 16:53:00 +0000

Adding a modern page to the PR book on handling corporate disasters, BP has bought search engine keywords related to the Gulf oil spill to help counter the tide of bad publicity. A quick test of Google, Bing, and Yahoo, three of the largest search engines, shows that BP has bought the top sponsored listings for "oil spill." The ads invite surfers to "Learn More about How BP is helping." While online advertising to promote products and services is a common tool for marketers, the public relations people are getting into the game to help control the images of companies during crises.

Notably, but not surprisingly, the second sponsored links on both Google and Bing are for law firms.

Google

Bing

Music Swapper Cannot Hide Behind First Amendment Anonymity

noreply@blogger.com (Wade Savoy) — Mon, 07 Jun 2010 21:37:00 +0000

An anonymous, file-swapping defendant failed to convince the Second Circuit Court of Appeals to kill a subpoena that would force his Internet service provider to reveal his identity to Arista Records and other record companies. Although the Court acknowledged the importance of anonymous speech and the value of the Internet in the exchange of ideas, the Court ruled that the "First Amendment does not . . . provide a license for copyright infringement."

The record companies sued several anonymous defendants after tracing their music swapping activities through file-sharing networks back to the Internet Protocol ("IP") addresses issued to the defendants by their ISP, the State University of New York at Albany. The IP addresses, coupled with the exact times and dates the investigators accessed the directories of shared files on the defendants' computers, would allow the University to identify the individual users. The record companies served a subpoena on the University to obtain the names and contact information of the users, and the defendants moved to quash the subpoena. The lower court refused to do so, and one of the defendants, "Doe 3," appealed.

The Court approved of the five-factor test used by the lower court to determine whether a subpoena should be quashed to protect anonymity:

the concreteness of the plaintiff's showing of a prima facie (i.e., legally sufficient) case of infringement;
the specificity of the information requested;
the absence of alternative means to obtain the information;
the need for the information to advance the plaintiff's case; and
the objecting party's expectation of privacy.

The defendant primarily argued that the record companies had not provided strong enough evidence to allow the subpoena to issue. Pointing to the level of specificity of the plaintiffs' allegations, including the IP address, dates, times, and files found on defendant's computer, the Court rejected the argument. The Court concluded that "Doe 3's expectation of privacy for sharing copyrighted music through an online file-sharing network [was] simply insufficient to permit him to avoid having to defend against a claim of copyright infringement."

As other courts have done, the Court side-stepped the issue of whether evidence that a defendant merely made files available for distribution, rather than evidence of actual distribution, is enough to violate a copyright holder's right of distribution. The Court found that the record companies had, indeed, alleged actual downloading and distribution, which were enough to carry the claim of infringement.

Although it is noteworthy that an important Court of Appeals has ruled that the First Amendment provides little anonymity protection for those who illegally swap files online, the outcome of this case is not surprising. The technology exists to track down file swappers, and if copyright owners don't become lazy and are diligent in both the use of that technology and the presentation of their investigations to courts, the emboldening cloak of anonymity will be false comfort to infringers. It is also good to have the Court adopt a solid test to help balance anonymity with copyrights and, ultimately, to check overzealous copyright owners.

Arista Records LLC v. Doe 3, No. 09-0905-cv (2d Cir. April 29, 2010)

Arista Records v. Doe

Amazon Now Ties Walmart for Second in Music Sales

noreply@blogger.com (Wade Savoy) — Wed, 26 May 2010 19:51:00 +0000

Marking the continuing shift of retail music away from brick-and-mortar stores to online merchants, Amazon now ties Walmart for second place in total U.S. music sales, according to figures released today by market research firm The NPD Group. iTunes, which took the top spot from Walmart in 2008, still leads with 28% of all U.S. music sales. Amazon and Walmart, which both sell CDs and digital music, each have 12% of the total U.S. market. Digital music gained 5% since 2009 and now represents 40% of the market, which must concern Walmart as it struggles to translate its former dominance in the music market to the online world.

Other forms of media, such as movies and books, are experiencing the same shift online. While Amazon and iTunes have very aggressively pursued those digital markets, Walmart has historically floundered in its efforts to market digital movies and has no discernable plan for books or other forms of media. After years of trying to develop largely fruitless in-house solutions, Walmart announced last February that it will buy online entertainment provider Vudu, which streams movies over the Internet to specially equipped TVs and Blu-ray players. It will be interesting to see if Walmart can transcend the established power centers within the company to integrate Vudu and to leverage Walmart's tremendous consumer base.

Other findings from The NPD Group's research:

iTune's share of the U.S. digital market rose only 1 percentage point since last year to 70%.

Amazon's share of the U.S. digital market rose 4 percentage points to 12%.

Walmart leads U.S. CD purchases with 17% of the market. Best Buy is second with 14%, and Amazon follows with 11%.

I’m Not Quitting Facebook. Yet.

noreply@blogger.com (Wade Savoy) — Wed, 26 May 2010 13:21:00 +0000

I was a reluctant late-comer to Facebook, in large part because I am a private person, the kind of private person known to delay checking my mail if it has meant not having to play 20 questions with my neighbor. I could not fathom the drive to broadcast the details of my life—or that anyone would be interested in the details of my life—and I couldn't understand how some people seem perfectly capable of forgetting that they are speaking publicly, like a fellow professor's student who first friended her and then bad mouthed her class on Facebook. Perhaps it's a cell-phone mentality that lets people hold what should be private conversations in public spaces, which has more than once tempted me to chime in, "We can hear you—and don't forget to take all the antibiotics."

A friend lured me in with promises of photos of children growing up, impossibly up, too far away. Although she subsequently has utterly reneged on the implicit promise to keep me in ample supply of heart-wrenching photos (I'm looking at you, Jane), I am now just as hooked as the next person. I've moved around too much and have left too many friends behind that I don't keep up with enough, with commensurate guilt attached. And there are my old English teachers, and witty people from high school each one of whom I'd gladly meet at my mailbox, and did I mention the offspring? They're all in there, in Facebook, and I'm glad for it.

I did take precautions. I crawled into every nook and climbed every cranny of Facebook's settings and locked down the privacy controls as tightly as physics would allow. I soon learned, though, that Facebook makes a habit of superficially trying to appease the obsessive among us by launching even more privacy controls but routinely sets the defaults for these new controls to place more information into the public than before. If one wants to put normally private information on public display, or even if one chooses to be as negligent about it as my colleague's student, that's well and good. Facebook's practice, however, catches too many people unaware, causing them to unwittingly expose conversations, photos, videos, and things all of us should hope never to see. And all of us, we should remember, includes not just strangers, not just our professors, but our employers, both current and potential.

Imagine the smugness with which I recently read about Reclaimprivacy.org, which will scan your Facebook privacy settings and report your exposure. Now, imagine the surprise with which I discovered that even I in my neighbor-avoiding paranoia had a few remaining cracks. Mind you, I'm not documenting a stellar life of debauchery on Facebook, but I have offspring of my own and generally avoid showing photos of them to perfect strangers with our address attached. I've done my part to contribute to the nearly one billion goofy photos added to Facebook each week, adding to the ocean of 48 billion photos now residing on Facebook's computers. Facebook, it turns out, is a sieve, not a boat, and my bailing efforts are rewarded with more holes. It's bad enough when I give away my own personal, private information because I've overlooked something in the 170 privacy options Facebook now offers, but if I don't flip the right switches my friends can give away my information for me if they aren't as paranoid as I am. How many boats can a body bail?

Sure, Mark Zuckerberg, Facebook's founder and CEO, might have once called us all "dumb f**cks" for trusting him (without the courtesy of asterisks) back when he started the company at Harvard, but he was 19 and not yet sobered by a multibillion dollar fortune and the responsibility of helming a company that would one day grow to over 400 million users and give pause to Google and Apple alike. Wouldn't you be more surprised if a young snot at Harvard didn't think we're all dumb f**cks? I'm concerned about what the company does, not what its young founder might think of me. Mostly.

This past Monday, Zuckerberg, trying to stem the upswelling anger of Facebook users, tried to make amends in the Washington Post. Kinda. He admitted that the company grew huge quickly and that "it's a challenge to keep that many people satisfied over time." He also admitted that Facebook's privacy controls might be "too complex" and promised that, "in the coming weeks, we'll add simpler controls." He also promised to make the controls "even stronger." Less complex, stronger controls are great; bring them on. They do, however, miss the point.

Facebook wants to make as much of our information as public as possible so that it has more data to pool for advertisers, and Facebook's default settings tend to do just that. As long as we have to continuously opt-in to privacy, rather than opt-in to public availability, Facebook's privacy problems will continue and the ire of users will burn brightly. Users are tiring of guarding their privacy from Facebook and need, instead, Facebook to guard their privacy for them. Various groups have filed a complaint with the Federal Trade Commission, and one (albeit unscientific) poll of over 15,000 Facebook users found that 30% were highly likely to quit Facebook with another 30% possibly quitting.

Indeed, next Monday has been designated as a day for fed-up users to quit en masse. The movement even has its own website at Quitfacebook.com to help us do just that. Will I be among the resigning ranks? No. Not this time. I'm still new and admiring of the connections that Facebook has helped me to make with people who are important to me. How else would I have found my old English teachers? And what about all the offspring? Although there are eager alternatives to Facebook, these people, my people, aren't there. Not yet. I will continue to monitor privacy, continue to take the bad with the good, but I, too, am growing tired, and I wonder how long a company can stay on top when its users, dumb f**cks or not, are grudging.

FTC Complaint

FTC Facebook Privacy Complaint

Is Apple Big Brother, Inc.?

noreply@blogger.com (Wade Savoy) — Mon, 19 Apr 2010 14:05:00 +0000

It's come to light after Mark Fiore won the first Pulitzer Prize awarded to a purely online journalist that last December Apple rejected Fiore's NewsToons app, which would have brought his editorial cartoons to the iPhone and iPad. According to Apple, "We've reviewed NewsToons and determined that we cannot post this version of your iPhone application to the App Store because it contains content that ridicules public figures." Ridiculing public figures? In editorial cartoons? As Fiore told the New York Times, "That's a tough one to get around if you're a political cartoonist."

As a society we've collectively worried for decades about Orwell's Big Brother watching over our shoulders and controlling the information we receive. We just assumed Big Brother would be the government taking things from us. Instead, it's Apple and we're gladly giving it away for pretty, gee-whiz gadgets.

Apple's draconian control over what can and cannot appear on the iPhone is now, unfortunately, old hat. With Apple poised to revolutionize the publishing and media industries with the capabilities (and market share) of the iPad, its restrictive policies are much more worrisome. "Publishers should think twice before worshipping the iPad as the future platform for magazines and newspapers," wrote Brian Chin of Wired. "That is, if they value their independence from an often-capricious corporate gatekeeper."

Apple now, of course, wants to make amends. Steve Jobs himself, in response to a customer e-mail, admitted, "This was a mistake that's being fixed." The day after the Nieman Journalism Lab broke the story of the rejection, Apple invited Fiore to resubmit his app. The company has not, however, revised its policies. "Sure, mine might get approved," Fiore has responded, "but what about someone who hasn't won a Pulitzer and who is maybe making a better political app than mine? Do you need some media frenzy to get an app approved that has political material?"

Apple prides itself on launching a user-oriented revolution in computers with its 1984 Super Bowl ad depicting the literal shattering of the IBM-dominated world of PCs. But now Apple has forgotten itself, and it's proven that rather than destroy the tyrant it just wanted to step into its shoes. We are, though, still early in the development of new media—that is, new media is called new for a reason. Now is the time for companies to make mistakes, sometimes big mistakes, as Amazon did last year when it, without warning, reached into Kindles around the globe and deleted certain books. However, it's critical that companies learn from these mistakes.

Although there's no real chance that Apple will become the open and unrestricted marketplace of ideas promised by Google and others, we should hope that Apple has felt the deep shiver of what it's done and seriously considers whether it itself is creating the "garden of pure ideology where each worker may bloom secure from the pests of contradictory thought" that it once warned us about.

The 1984 Apple Super Bowl Commercial

Patents on Cancer Genes Thrown Out

noreply@blogger.com (Wade Savoy) — Fri, 16 Apr 2010 18:37:00 +0000

A federal district judge has ruled that isolated human genes are not patentable. With about 20 percent of human genes already patented, this decision has come as a surprise to both the biomedical and the legal communities.

The court invalidated key parts of seven patents issued to Myriad Genetics, Inc., that covered two genes linked to breast and ovarian cancer. Women who have these genes have an 82% risk of developing breast cancer and a 44% risk of developing ovarian cancer, which leads many women with these genes to consider extreme measures, such as radical mastectomies even of healthy breasts. Although it appears likely that this decision will be overturned on appeal to the Federal Circuit, the district court's ruling at least gives us pause in the race to patent genes to consider whether we ought to be doing it in the first place.

With several years of effort and with the help of both public funding and public researches, Myriad identified the two cancer genes and filed for patents in the 1990s. Myriad provides and administers tests to identify these genes that cost over $3,000 per test, and it has actively blocked others from offering competing tests that can identify these two genes.

The plaintiffs in the case are a host of patients, doctors, and public interest groups who argue that Myriad's patents inhibit the development of cheaper and more effective ways to test for and treat breast and ovarian cancer. Although Myriad offers some programs that provide free testing to qualifying women, several of the individual patients named in the suit did not qualify for free testing and either had their insurance refused by Myriad or Myriad refused by their insurance. Women who do receive the test and are found to have the cancer genes cannot confirm Myriad's lab findings or seek a second opinion on the interpretation of the results, which is particularly egregious given the radical treatments they face. Last year the plaintiffs filed this action to challenge the validity of Myriad's patents.

In a surprisingly lucid decision for such a complex area of both medicine and law, the district judge found that Myriad's patents impermissibly covered a product of nature rather than a human-made invention. The Supreme Court itself has clearly established that laws of nature, physical phenomena, and abstract ideas are not patentable but are, rather, "the basic tools of scientific and technical work." Although Myriad had purified the DNA in question by isolating it from other things found in the body, such as proteins, merely purifying a product of nature, the court held, is not enough to establish patentability.

To obtain protection, Myriad had to prove that the isolated DNA was "markedly different" from the DNA found in the human body, which the court found Myriad was unable to do. The crux of Myriad's argument was that DNA is no different from any other chemical and that isolated DNA differs from DNA in the body in a few functional and structural ways.

The court, however, refused to treat DNA as simply just another chemical, focusing instead on the information encoded in its structure, namely how to build, operate, and maintain a human being. That basic information is the same, the court found, whether the DNA is isolated or in a human being, and it is precisely that information that Myriad is interested in and improperly locked up with patents. "The entire premise behind Myriad's genetic testing," the court wrote, "is that the claimed isolated DNA retains, in all relevant respects, the identical nucleotide sequence found in native DNA." If this were not the case, Myriad's tests would not work.

Addressing the underlying but-we-worked-really-hard argument that pervades Myriad's arguments, the court said, "The identification of the . . . gene sequences is unquestionably a valuable scientific achievement for which Myriad deserves recognition, but that is not the same as concluding that it is something for which they are entitled to patent protection."

The court responded even more briefly to Myriad's decimation-of-the-biotechnology-industry argument, pointing out that this decision is limited to the unique properties of isolated DNA (so chemical patents covering drugs won't be affected) and labeling Myriad's predictions as "unfounded." Given the controversy surrounding the decision, it would have been better if the court had said more. In that light, I'd like to say a few more things.

First, and I say this as a more-often-than-not advocate of intellectual property rights, dire predictions of the end of the world as we (or, at least, you) know it are never persuasive. They aren't even mildly useful. In fact, they're probably harmful. Let us recall the little boy who cried wolf.

Others have tried this argument. I recall the database industry's dire predictions surrounding the Supreme Court's decision that phonebook white pages are not creative enough to be protected by copyright law. Have phonebooks died off? On the contrary, I have personally received at one time three different phone books from three different sources covering the same geographic area. Indeed, while writing this very article, someone delivered two phonebooks. I kid you not.

How is this possible? Even though the basic components of a phonebook (i.e., the alphabetical listing of people along with their phone numbers) are not protectable, those basic components are wrapped in advertisements. A lot of them. Each of the books just delivered has a refrigerator magnet glued to the front advertising two different personal injury lawyers, for example. Since the Supreme Court's decision, the Internet itself has turned into one vast database that is largely ad supported. Basic information, even if not protectable itself, can be leveraged in many ways to make money. Where there is a dime, there is a way—and there are a lot more dimes in the biomedical business than in the yellow pages business.

But why take the court's word, or even mine? "[W]e do not believe that the final outcome of this litigation will have a material impact on Myriad's operations." So said Myriad's CEO after the court handed down its decision. Maybe we should believe him.

Second, it is always true that denying someone a monopoly in something will give them less of an incentive to pursue that particular something. This truth, however, says nothing about whether the monopoly should be awarded in the first place. Here, a court has determined that a monopoly should not have been granted based on a sound reading of the law, concluding that the basic building blocks of the human genome—something created by nature, not by human hand—should be left free for everyone to use for further innovation.

And further innovation is precisely why Myriad's CEO could so confidently predict that the court's decision would have no impact. Myriad holds other patents, not challenged in this case, that cover the innovations it made in developing its tests. So, even without being able to claim protection for the genes themselves, Myriad and others will prosper based on what they do with the genes. Discovering the genes will still be important because of what can be done with them, both in the creation of tests and in the development of cures.

We also should keep in mind that being first, even without any kind of protection, is often a moneymaker. Clothing designers, who routinely lament the lack of copyright protection for their designs, experience this first hand. They make their money by being hyper creative, knowing that competitors can quite legally copy their designs and follow them to market in just a few months. A multibillion dollar industry sits atop that bullet train.

Although policy did not overtly enter the judge's decision, let's not forget that lives are at stake—which cuts both ways. While a purely emotional response might argue that money should never be valued over lives, a more rational approach takes into account that providing monetary incentives for innovation can and does result in saving more lives. It's a delicate balance, and we should be grateful for a 152 page decision that slows us down and stops us from rushing off headlong in one direction or the other.

Will this decision stand? There's pretty good money on it being overturned on appeal by the Federal Circuit, which is generally viewed to be pro-patent. However, the Supreme Court in recent years has beaten back Federal Circuit efforts to expand patent protection, and the district judge in this case has provided the Supreme Court with a solid decision to stand on if it chooses.

The Decision in Association for Molecular Biology v. USPTO
Association for Molecular Biology v. USPTO

Pulitzer Awarded to Online Cartoonist

noreply@blogger.com (Wade Savoy) — Wed, 14 Apr 2010 04:26:00 +0000

One of the most sought-after prizes in traditional print media has been awarded to someone whose work does not appear in print. Mark Fiore, who syndicates his own animated cartoons online, won the Pulitzer Prize for Editorial Cartooning earlier this week. Fiorie left print media in 2001 and his work regularly appears on SFGate.com, Slate.com, and other online venues. His win is a boon for new media, not to mention a smart step by the Pulitzer Prize jury to remain relevant as digital media gains in importance.

A few examples of Fiore's work. Find more on his website.

Court Rejects File Sharer’s Claim of Innocent Infringement

noreply@blogger.com (Wade Savoy) — Wed, 14 Apr 2010 02:18:00 +0000

For everyone swapping music online, you needn't bother pleading your youthful ignorance of the law if you're busted. The Fifth Circuit Court of Appeals in Maverick Recording Co. v. Harper has overturned a lower court's application of copyright law's innocent infringer defense to lower the amount Whitney Harper owes several recording companies for downloading 37 of their songs using several file sharing programs, including Lime Wire.

The recording companies sought $750 per song, the minimum amount of statutory damages available under the Copyright Act. (See the Glossary for more details on statutory damages.) The lower court, however, ultimately awarded $200 per song based on Harper's assertion that she "was too young and naïve to understand that the copyrights on published music applied to downloaded music." The Copyright Act empowers a judge to reduce the minimum statutory damages from $750 to $200 if the infringer "was not aware and had no reason to believe that his or her acts constituted an infringement of copyright." 17 U.S.C. sec. 504(c)(2).

The innocent infringer defense, however, has an important limitation. It cannot be used if the copyright owner applied proper copyright notice to its works. 17 U.S.C. sec. 402(d). This limitation provides an incentive to copyright owners to use proper copyright notice even though such notice is no longer required to gain copyright protection. Here, the record companies had applied proper notice to their CDs, and the Court of Appeals ruled that such notice affords "absolute protection against the innocent infringer defense" that cannot be defeated by legal naivety.

The record companies were awarded $750 per song after all, for a total of $27,750. Harper might not be happy with that result, but things could have been exceedingly worse. In other file sharing cases in recent years, juries have awarded much higher amounts: In one case, $22,500 per song for 30 songs ($675,000), and, in another case, $80,000 per song for 24 songs ($1.92 million, later reduced by a court to $54,000).

This case skirted two issues that seem to be gaining traction in recent years and that would have been interesting to have the Court of Appeals address. First, the case touched on the issue of whether merely making files available for transfer over the Internet (by, for example, placing them in the "shared" folder of a file sharing program) infringes the copyright owner's right of distribution without proof that the files were actually transferred. Here, the Appeals Court avoided the issue because it was undisputed that Harper had violated the right of reproduction by downloading music, which was enough for the plaintiffs to win. Second, the case touched on the issue of whether statutory damages under the Copyright Act violate the due process provisions of the Constitution by imposing grossly excessive damage awards. The Appeals Court sidestepped that issue by pointing out that Harper had not properly raised the issue with the lower court. Maybe next time.

The Maverick Recording Co. v. Harper Decision

Maverick Recording Co. v. Harper

Internal Workings of iPad Revealed in FCC Filings

noreply@blogger.com (Wade Savoy) — Sat, 03 Apr 2010 14:06:00 +0000

The world finally gets its hands on the iPad, which goes on sale today. As we marvel at the sleek beauty we've come to expect from Apple, we also have an opportunity to peek inside. Apple's FCC filings reveal the rather inglorious insides of a device that very well might give us a window to the future of personal computing. Although there is certainly an impressive collection of technology in there, I am relieved: Apple's marketing hype notwithstanding, the future of computing isn't "magic" but a progression of smarter and smarter steps. The iPad wasn't handed down from the heavens but is the hard work of bright, imaginative people. The future the iPad hints of is attainable, and that makes me feel better.

ipad internal

Are Bands Running Out of Names?

noreply@blogger.com (Wade Savoy) — Tue, 30 Mar 2010 03:18:00 +0000

As if starting a band weren't difficult enough, many musicians are discovering that naming their bands can lead to legal woes. The Wall Street Journal ran an article recently documenting the lament of rockers, wailers, and folkies alike. John Paul Jones, former bassist of Led Zeppelin, expressed his frustration in naming his new band: "Every other name is taken. Think of a great band name and Google it, and you'll find a French-Canadian jam band with a MySpace page." Welcome to the world of trademarks, my lyrical friends.

Trademark rights in the U.S. are gained by using a mark in commerce. (In contrast, in much of the rest of the world trademark rights are gained by registering a mark with the local trademark office.) Although rights not registered with the U.S. Patent and Trademark Office are limited to the general geographic areas of their use, MySpace, Facebook, and other online forums can quickly vault musicians to a national presence. Even bands who have never pressed a CD can distribute their music online far beyond the local bars they play.

In trademark terms, these bands are gaining rights across the country or, just as easily, stepping on the rights of others who got there first, either other bands or, in some cases, big companies. The Journal recounts a Nashville group's tangle with John Deere over the band name Jane Deere. Renaming a band after running into legal trouble can be traumatic, particularly after a band has achieved renown under the questionable name. After touring with Nirvana and being signed by Atlantic Records, Scottish group Captain America received a letter from Marvel's attorneys. According to an insider interviewed by the Journal, the band's career "deflated" after it was forced to rebrand itself (to Eugenius, which probably didn't help).

The plight of bands is not new in the branding business. I've worked with many marketing and product development people who have railed against the findings of trademark searches that revealed that their chosen names were already being used for similar products or services. I've heard, many, many times, "All the good names are taken!" And I've bitten my tongue many, many times rather than respond, "It's too bad we don't have a staff of creative people hired for the sole purpose of coming up with new and creative ideas!" Bands, in this regard, have it easier because they have much more leeway than others in naming themselves. "They Might Be Giants" is a hard sell for cereal, but it's a great band name (and band).

Post Office’s Use of Sculpture on Stamp Not a Fair Use

noreply@blogger.com (Wade Savoy) — Tue, 30 Mar 2010 03:14:00 +0000

Ever wonder about the copyright implications of putting an image on a stamp? Me neither, but in a case touching on both copyright fair use and ownership the Federal Circuit Court of Appeals in Gaylord v. U.S., 595 F.3d 1364 (2010), has given us the chance to remedy that. The U.S. Post Office issued a commemorative stamp depicting a photograph of the soldier sculptures that make up part of the Korean War Veterans Memorial. Although the government obtained permission from the photographer to use the photo, it did not obtain permission from the sculptor, octogenarian Frank Gaylord. The Court held that the government's use was not a fair use and that the government was not a joint author of the sculptures with Gaylord.

You might think this is a case only a philatelist could love, but you'd be wrong. A meaty fair use case is not to be missed, and this is a pretty meaty one. Fair use is an important exception to copyrights that gives a court the flexibility to avoid a rigid application of the law in a way that would hinder the kind of creativity copyright law is meant to foster. Fair use addresses the tension between the property rights of artists and the ability of artists to build on the works of others.

The Copyright Act provides four factors that courts must weigh to determine whether a particular use of a copyrighted work is a fair use and, therefore, can be made without the permission of the copyright owner. Running through these factors is good for us, like taking vitamins and exercising in sunshine, and is the secret delight of a copyright specialist.

First, we need to look at the purpose and character of the alleged infringer's new use, which involves consideration of (a) how transformative the use is and (b) whether the use is commercial or not. A court should ask whether the use merely substitutes for the original work (such as a photocopy of a page of text substitutes for the original page) or whether, in contrast, the use adds something new to the original work, serving a different purpose (such as incorporating that page of text into a collage). Although the new use does not have to be transformative to be a fair use, a finding that the use is transformative can very strongly color the remaining analysis, as we'll see.

The lower court found that the government's use of Gaylord's work was transformative and, thus, that this first factor weighed heavily in favor of fair use. The court noted, particularly, the surrealistic effect created by photographing the sculptures during a snow storm, which the court found gave the stamp a different character and expression than Gaylord's work.

The Federal Circuit strongly disagreed. The sculptures and the stamp, the court found, served the identical purpose: to honor veterans of the Korean War. The stamp did not, for example, incorporate the sculptures into "a larger commentary or criticism." If the stamp had made an antiwar statement, we might suppose, the court likely would have seen this factor differently. The court was also unmoved by the argument that the stamp imparted a surreal effect to the soldiers, noting that sculptures themselves, which were originally conceived to have a ghostly presence, contributed to that effect.

The consideration of the purpose and character of the use also includes whether the use is commercial. Although a commercial use can be a fair use, the presence of a commercial purpose (in contrast to a nonprofit educational purpose) usually weights against a finding of fair use. Here, the Postal Service acknowledged making $17 million from the sale of approximately 48 million 37-cent stamps, leading the court to find that the "stamp clearly has a commercial purpose." Given the commercial and non-transformative nature of the use, the court concluded that this first factor weighs "strongly against fair use."

Second, we need to look at the nature of the copied work itself, asking both how creative the work is and whether the work has been published. Fair use is more difficult to establish for expressive or creative works, which are considered to be at the core of copyright protection, than for factual works.

The lower court found that Gaylord's sculptures were creative; however, it gave this factor limited weight because it had found the government's use to be transformative. Here we see the light touch that courts sometimes give a new, transformative use. The Federal Circuit found the government's use was not transformative and so saw "no reason to discount the expressive and creative nature" of Gaylord's work.

The second factor also addresses whether the copied work was published or unpublished. Because of the great deference given to authors to decide whether or when to make their works publicly available, copying from an unpublished work weighs against fair use. Although the soldier sculptures are part of a public, national monument, the court concluded that the creative nature of Gaylord's work weighted against fair use.

Third, we need to look at how much of the original work was taken. A court should consider both the quantity and the quality of what was taken. Using all or a lot of a work weights against fair use, as does using only important parts of a work. Here, the stamp depicted 14 out of 19 soldier sculptures, a substantial quantity. Addressing quality, the lower court again turned to the government's and the photographer's transformation of the sculptures, depicting them partially obscured by snow and making the final stamp image monochromatic, to mitigate this factor. The Federal Circuit pointed out that the soldier sculptures were still the focus of the stamp and concluded that this factor weighed against fair use.

Fourth, we need to look at the effect the new use would have upon the potential market for the copied work. The court should consider not just the actions of the alleged infringer but what would happen if many people did the same thing. The lower court found that Gaylord had made little attempt to commercialize his sculptures and that if he decided to do so in the future the stamp would be an inadequate substitute for the sculptures themselves. In an interesting instance of an Internet case being folded back into mainstream copyright law, the lower court analogized to a case ruling that the creation of image thumbnails by search engines was a fair use in part because the thumbnails were a poor substitute for the original images. The Federal Circuit, for the first time, simply agreed.

After addressing each fair use factor, the court should weigh—not simply tally—the factors. Doing so here, the Federal Circuit found no fair use: "Even though the stamp did not harm the market for derivative works, allowing the government to commercially exploit a creative and expressive work will not advance the purposes of copyright in this case."

The government also tried to argue that it was a joint author of the sculptures, which would have meant that it did not need Gaylord's permission to use the sculptures in a stamp. This was a desperate move on the government's part because joint authors still have to share the profits they make from a work with each other. The lower court's decision indicates that the government, for unstated reasons, thought its obligation to Gaylord was "paid up," but the issue wasn't addressed by the lower court or the Federal Circuit. Both courts agreed that while the government did provide Gaylord with direction and ideas, such input did not rise to the level necessary to make it a joint author.

What went wrong here? How could this case have been avoided? The government, after all, had a contract with the architectural firm it hired to oversee the project stating that the government would hold all rights. That firm, however, did not have a similar agreement with the sculptor it hired, Gaylord—even though its contract with the government dictated that it would obtain agreements from those working for it giving the government the rights it wanted. Indeed, the firm entered an agreement with Gaylord saying that Gaylord retained rights. Oops.

This is a common problem when hiring outside firms, agencies, etc., to do creative work. Kudos to the government for at least having a contract with the architectural firm claiming rights for the government, but that, as we see, isn't enough. It's just as important to make sure that creative agencies have the necessary agreements in place with those working for them. For such a large project, it would be entirely reasonable to demand to review those agreements. This case has been returned to the lower court to determine how much the government's failure to do so will cost it.

The Federal Circuit's Decision

Gaylord v US

The Post Office's Press Release Announcing the Stamp's Release

post office press release

Family Has Right of Privacy in Photos of Decapitated Loved One Spread on Internet

noreply@blogger.com (Wade Savoy) — Thu, 25 Mar 2010 02:46:00 +0000

In a case that highlights how the ease of online communication can overthrow both common sense and basic decency, a California appeals court has ruled that families have a right of privacy in the death images of their loved ones. In 2006, an eighteen-year-old woman was decapitated in a traffic accident. Two of the police officers who reported to the scene emailed photos of the woman's body to their friends and family one Halloween. The photos were subsequently forwarded on and "spread across the Internet like a malignant firestorm," appearing on thousands of websites, and the family even received harassing emails containing the photos from Internet users. The lower court dismissed the claims brought by family members against the officers and the California Highway Patrol, but the appeals court reversed the decision on almost all counts.

Although a person's right of privacy ends at death under California law, the appeals court acknowledged the severe harm that the publication of death images can cause a family and ruled that family members themselves have a right of privacy that prohibits the publication of such images, with some limitations. Noting that this issue had never been addressed by a California appeals court, the court carefully reviewed how other jurisdictions have decided similar cases. While the publication of death images can sometimes be justified for public education purposes (such as video of paramedics trying to save a life) or for news reporting, the court found that "morbid and sensational eavesdropping or gossip serves no legitimate public interest and is not deserving of protection." (Internal quotation marks omitted.)

The court of appeals also overturned dismissal of several other claims made by the family, such as claims for intentional infliction of emotional distress and for negligence. However, the court let stand the dismissal of the family's Section 1983 claim. Part of the Federal Civil Rights Act, Section 1983 (of Title 42 of the U.S. Code) empowers a person to sue a public official who deprives her of a constitutional right. Sidestepping the issue of whether the right of privacy here rises to the level of constitutional protection, the court questioned whether the officers reasonably could have known that emailing the photos would violate a federal right given the dearth of law on the issue.

What is it about email, Facebook, YouTube, etc., that provides such false comfort and robs some people of their senses—and, here, even of their humanity? It's easy to focus on the officers, who acted with, as the court put it, "pure morbidity," but those photos didn't spread themselves across the Internet. Thousands of people forwarded the photos or posted them on websites. While the Internet can serve to connect people in profound ways, we need to be careful of how it dehumanizes us, too, and sometimes makes us forget about the people behind the 1s and 0s.

The Court's Decision in Catsouras v. Dept. of Cal. Hwy. Patrol, 181 Cal.App.4th 856 (2010)

Catsouras v CHP

Later Minor Changes to the Court's Decision

Catsouras v CHP _modifications_

Court’s Tax Ruling Favors Trademark Licensees (or, Kill Me, Kill Me Now)

noreply@blogger.com (Wade Savoy) — Tue, 23 Mar 2010 22:20:00 +0000

I have spent more hours than I care to recount confined in conference rooms with accountants discussing the tax treatment of intellectual property assets and wondering, with increasing desperation, where on my body I could jab my pen to accomplish the quickest death. Sometimes, I have to admit, I would make one of the lawyers working for me go in my stead, laughing a little too hardily as the blood drained from their faces. I'm not proud of that, but survival is a deeply rooted instinct.

This entry, which has already glazed the eyes of most readers, goes out to that poor soul walking down that lonely hall about to face those accountants one more time. Last week the Second Circuit Court of Appeals, in a move that overturned a decision of the U.S. Tax Court, clarified one little corner of the intellectual property tax world: When you license someone else's trademark to apply to your products, the royalty payments that you make can be deducted immediately if the payments "(1) are calculated as a percentage of sales revenue from inventory and (2) are incurred only upon the sale of that inventory."

The Tax Court had held the opposite, requiring the royalty payments to be capitalized. An immediate deduction is generally better because the taxpayer can recover the business cost now rather than having to spread out and depreciate that cost over a number of years (i.e., rather than having to capitalize the cost). So, the Second Circuit's decision is a win for those licensing trademarks to put on their products.

Why did the Court do this? Don't worry about why, unless you have a ready supply of pens and an active imagination.

The Court's Decision

Robinson Knife v. IRS