COPYCENSE

Despite the lack of sunshine, wind chill, and wintry mix, we keep it moving. Along with the return of guest editor Kim Hagedorn, this week’s Copycense Clippings returns with a technical and business analysis of Apple’s DRM scheme; J.K. Rowling putting a spell on eBay; a Texas company becoming this year’s NTP; and the danger of legislation that is introduced with cute acronyms as titles.

Article of the Week

RoughlyDrafted.com How FairPlay Works: Apple’s iTunes DRM Dilemma. Feb. 26, 2007. A lot has been said about Apple’s FairPlay copy protection software, but to our knowledge, this is one of the first articles that explains what the software does, how it does it, and the software’s broader implications on DRM and copy-protected digital content. Categories: Computers & Technology; DRM & Copy Protection; Music.

Quote of the Week

“When a politician introduces legislation with a cutesy acronym for a title, it’s always a good idea to double-check its contents.” ArsTechnica. FAIR USE Act Analysis: DMCA Reform Left on the Cutting Room Floor. Feb. 28, 2007.

To the best of our recollection, this (rather ridiculous) acronym trend began in 2001 with the hasty passage of the USA PATRIOT Act, which has been the source of much controversy. Ever since then, American lawmakers have been quick to sharpen their Scrabble skills in an attempt to curry initial positive press for newly introduced bills (We wonder how much time Congressional aides spend on crafting these pithy, acronym-friendly titles.)

As Ars points out, however, the more savvy the acronymed title, the closer one most scrutinize the bill for possible problem passages. We’ve not had a chance to study the FAIR USE Act (H.R.1201) (.pdf) but we note for the record that the legislation was introduced by a bipartisan team of Congressmen (Virginia Democratic Rick Boucher and California Republican John Doolittle), and that the Electronic Frontier Foundation, SLA, the American Library Association supports the legislation, while the RIAA opposes it. Seems like the lines are drawn as they always have been.

What is interesting about the Ars piece, however, is its criticism of the bill for focusing too much on overturning the U.S. Supreme Court’s decision in MGM v. Grokster (which held that the manufacturers that provide “file sharing” software can be held liable for others’ copyright infringement that is conducted while using that software) than overturning the Digital Millennium Copyright Act. Categories: DMCA; DRM; Legislation, Law and Regulation.

Site Check

A Digital Annotated Concept Map of the Fundamentals of U.S. Copyright Law. Southwestern Law School professor Lionel S. Sobel has created an interesting, interactive way to quickly go through the various aspects of copyright law. Categories: Research.

Clippings

• IPKat. Another Setback for Amazon 1-Click. Feb. 28, 2007. Amazon.com is continuing to patent its 1-Click e-commerce method after the European Patent Office refused their request due to the lack of solutions to technical problems. Amazon.com is expected to appeal the decision. Amazon.com holds U.S. Patent No. 5,960,411 for the 1-Click method, causing widespread furor about patent law’s inapplicability to computer software. Last spring, the U.S. Patent & Trademark Office announced it would re-examine the 1-Click patent after a New Zealand inventor claimed the technology was based on a prior patent. Categories: Computers & Technology; International; Patent; Web & Online.
• Technology & Marketing Law Blog. Lycos Not Liable for Objectionable Message Board Posting – Universal Communication Systems v. Lycos. Feb. 28, 2007. A Florida court ruled (.pdf) in favor of defendant Lycos based upon a provision of the Telecommunications Act of 1996 that gives safe harbor to Web publishers in the event others post libelous or defamatory remarks. Plaintiff Universal Communication Systems brought action against Lycos stating that Lycos was encouraging users to engage in illegal behaviors and trademark infringement. Categories: Cases & Litigation; Trademark; Web & Online.
• Ellen Nakashima and Alec Klein. New Profiling Program Raises Privacy Concerns. WashingtonPost.com. Feb. 28, 2007. Again, beware the cutesy legislative titles. The Department of Homeland Security is testing a new data-mining program to locate terrorist activity. The Analysis, Dissemination, Visualization, Insight, and Semantic Enhancement (ADVISE) program sifts through information about average Amercians looking at such things as hotel and flight reservations. ADVISE uses mathmatical algorithms to discover hidden relationships. Lawmakers (and, probably, citizens) are concerned that citizens’ privacy will be violated. We’re more concerned that little has been known about the program until now. Categories: Databases; Politics & Government; Privacy & Security.
• Technology & Marketing Law Blog. Search Engines Defeat “Must-Carry” Lawsuit–Langdon v. Google. Feb. 26, 2007. Courtesy of Silicon Valley Watcher, this Delaware decision (.pdf) analogizes search engines to newspapers, opining search engines have a First Amendment right to reject ads. Categories: Broadcasting & Journalism; Cases & Litigation; Web & Online.
• Boing Boing. USB Device Lets You Spy On Other’s PC Activity. Feb. 26, 2007. Snoopstick from CYBERsitter, a USB device, downloads hidden software when inserted into a Windows machine. The software allows the owner of the USB device to monitor the activities of the other machine from anywhere. Very disturbing! What has happened to trust and privacy? Categories: Computers & Technology; Privacy & Security; Tech & Devices.
• Jack Malvern. Potter Author Sues eBay Over Pirate Book. TimesOnline.co.uk. Feb. 26, 2007. J.K. Rowlings throws pixie dust on the India outlet of eBay, which was enjoined from selling illegal copies of her work. This poses a problem for eBay because if they successfully remove illegal copies of Harry Potter books, other authors and publishers could demand the same treatment. But if eBay’s removal efforts are unsuccessful, the company could be held in contempt of court. Category: Books; Infringement; Web & Online.
• Marguerite Reardon. Skype Petitions FCC for Open Cellular Access. News.com. Feb. 22, 2007. The cellular lobby likely will use every ounce of power to ensure that Skype and other VoIP providers never will be able to access their networks. Categories: Law, Legislation & Regulation; Tech & Devices; Web & Online.
• Louise Story. Google in Content Deal With Media Companies. The New York Times. Feb. 26, 2007. It must kill Big Content that they feel compelled to do business with Google, instead of just suing away the competitive and technological challenges the company poses. Categories: Broadcasting & Journalism; Film; Multimedia; Music; Web & Online.
• Martyn Williams. Apple, Samsung, Sandisk Sued Over MP3. InfoWorld. Feb. 26, 2007. That was the sound of the other shoe dropping after Texas MP3 Technologies won a $1.3 billion judgment last week over Microsoft. We wonder if the defendant companies will go the same pansy route that Blackberry-maker RIM took in its patent infringement battle with NTP. (RIM whined to Congress to intervene.) Surely, the amount of iPods on Capitol Hill rivals the number of Blackberry devices. Categories: Cases & Litigation; File Sharing, P2P & Downloads; Patents.
• ZDNet Education. Copyright Infringement By Your Students Is Your Problem. Feb. 26, 2007. Before we read this article, we assumed it was another press release disguised as a “news story,” and planted by the RIAA, Association of American Publishers, or similar Big Content outfit. It seems not to be. Instead, the author identifies himself as an IT official at Indiana University. We would agree with the article’s central premise: higher education seems to dole out few and light penalties when it comes to allegedly illegal file sharing. We also agree that framing the activity as a potential security threat is a better way to present this issue to students than presenting the activity as an ethical or legal problem. Categories: Cases & Litigation; Education; File Sharing, P2P & Downloads; Privacy & Security.
• Greg Sandoval. BitTorrent to Open Digital Media Store. News.com. Feb. 23, 2007. We find it odd how most news outlets (including News.com) have framed this story. The angle they have reported is BitTorrent’s evolution from rogue outfit to upstanding citizen, almost like watching Michael Corleone move the family from strong-arm protection rackets in the Bowery to receiving a medal of the Order of St. Sebastian. We see it differently. How about framing this story as Big Content having wasted so much of their (and other people’s) time and money on lawsuits, only to end up where they could have — and should have — years ago: using peer-to-peer technologies as a distribution network for their own content? Categories: File Sharing, P2P & Downloads; Multimedia.
• Michael Geist. U.S. Copyright Lobby Out-of-Touch. BBC News. Feb. 20, 2007. Razor sharp Michael Geist discusses the International Intellectual Property Association’s annual intellectual property report and how it forms the basis of the U.S. Trade Representative’s Special 301 report to Congress. Categories: International; Law, Legislation & Regulation; Politics & Government.
• Graeme Wearden. U.K. Government Rejects Calls for DRM Ban. News.com. Feb. 20, 2007. We used to think that public outrage would cause policy change. Perhaps this is no longer the case, or maybe this outrage wasn’t vociferous enough. In any event, we continue to be sure that until governments use data from sources other than global copyright holder groups, the core debate about intellectual property will not change much. Categories: DRM & Copy Protection; International; Law, Legislation & Regulation; Politics & Government.
• Security Fix. Microsoft to Tighten Anti-Piracy Noose in Vista. Feb. 20, 2007. The WashingtonPost.com‘s Brian Krebs explains the economics behind Microsoft’s hard line anti-copying stance concerning the new Vista operating system. Categories: Business & Commerce; Computers & Technology; DRM & Copy Protection.
• Edvard Pettersson. Disney Loses Court Ruling Over Winnie the Pooh Rights. Bloomberg.com. Feb. 16, 2007. A very juicy story about a procedural ruling that allows the owners of the Winnie the Pooh character to sue Disney; the plaintiffs reportedly are seeking up to $2 billion in damages. Categories: Cases & Litigation; Images, Art & Photos; Licensing & Permissions.
• James Inverne. Masterpieces Or Fakes? The Joyce Hatto Scandal. Gramophone. Feb. 15, 2007. William Barrington-Coupe, the husband of the late Joyce Hatto, has conceded to releasing other’s music under his wife’s name. His plagarism was discovered when an iTunes user went to download one of Hatto’s CDs and the pianist was listed as someone completely different.(Hatto died last year of cancer.) Other such examples have emerged. It appears that digital manipulation was used in an attempt to conceal the origins of one of the tracks. Categories: DRM & Copy Protection; Infringement; Music.

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Technorati Tags: CopyCense, CopyCense Clippings, copyright, DRM, K. Matthew Dames, licensing

Shame on National Public Radio for broadcasting as “news” RIAA’s press release announcing that it would reinvigorate lawsuits against law students and, perhaps, colleges and universities because of allegedly illegal trading of digital music.

Wendy Kaufman, a veteran who has been reporting for NPR for quite some time, violates several core journalistic principles in presenting this “story.” First, Kaufman uses a sole source for the “story.” Even in today’s news environment — where bloggers routinely eschew sourcing, and even established newspapers present confidentially- and single-sourced stories with alarming frequency — a sole source story is lazy at best, contemptuously unprofessional at worst.

Second, the source Kaufman quotes twice in her reportage — RIAA president Cary Sherman — is a highly interested party whose primary purposes for being interviewed are to disseminate a message concerning prospective organizational actions, and framing that message as news in an attempt to legitimize a broader commercial initiative by a consortium of private businesses. In other words, Sherman is a lobbyist who has “an ax to grind.” One of the first rules of journalism is a reporter never present as news the sole, exclusive opinion of a party with an ax to grind. Worse than contemptuously unprofessional, doing this slides toward unethical. Kaufman has enough experience to know better.

Third, Kaufman presents no reportage that challenges or disputes the story’s central contention: that there is a correlation between the music industry’s economic health and college students’ music trading activity. For a moment, let’s put aside salient factors such as (1) in this most recent threatened litigation campaign, the RIAA is alleging infringing behavior without proof; (2) the RIAA does not have the names of students it claims are illegally trading music files; (3) and that the RIAA is asking universities to send threatening letters to students based upon a set of IP addresses. (To her credit, Kaufman reported points two and three.)

Recently, Copycense readers were informed of a comprehensive study published in the Journal of Political Economy that empirically dismisses the correlation between so-called file trading and music company sales.

We repeat the paper’s core conclusion:

[T]he estimated effect of file sharing on sales is not statistically distinguishable from zero. … On the basis of all specifications presented in this paper, even our least precise results, we can reject the hypothesis that file sharing cost the industry more than 24.1 million albums annually (3 percent of sales and less than one-third of the observed decline in 2002).

Additionally, we recall that National Public Radio contributing correspondent Rick Karr has reported a number of stories (both for NPR and as a contributor to the PBS television show NOW) in recent years that calls into question the same correlation that the JPE article conclusively dispelled when it was published in mid-February.

Why, then, did Kaufman and NPR editors fail to present such information as a counter to the RIAA’s position?

But don’t assume we’re right. We ask that you compare Kaufman’s RIAA report with Brian Naylor’s report on the proposed Sirius-XM Satellite merger, which immediately followed Kaufman’s report on the March 1 edition of NPR’s Morning Edition show. We believe that after you compare the two reports, you’ll also conclude that Kaufman’s report is seriously flawed.

This begs the question: after all this time — with so much compelling data, evidence, and scholarship that indisputably rejects the entertainment industry’s attempts to correlate allegedly illegal trading of music files and reduced album sales — why does the press continue to perpetuate this framed issue?

Wendy Kaufman. Music Industry Takes Anti-Piracy Effort to Campus. National Public Radio. March 1, 2007.

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The Copycense Clippings train keeps on rolling this week, with stories about copyright infringement in the blogosphere; the intersection of trade policy and intellectual property; and the allegation that House Speaker Nancy Pelosi is a “pirate.” (We couldn’t have made that one up if we wanted to.)

Article of the Week

Peter Gutmann. A Cost Analysis of Windows Vista Content Protection. Feb. 18, 2007. (Last update) Have you seen one of the latest “I’m a Mac, (and) I’m a PC” commercials (entitled “Security”), in which a Secret Service looking guy repeats the communication between the two actors and asks the PC “Cancel or Allow?” Well this article affixes a price to that “Cancel or Allow.” Essential reading for systems administrators and anyone interested in the economic costs affixed to DRM. Categories: Computers & Technology; DRM & Copy Protection; Research.

Quote of the Week

“The bottom line is that a copyright is a bundle of rights that should, in my opinion, always be protected by a contract. Who owns the rights and who doesn’t depends on what your contract says, what’s agreed to and many other factors you have to hammer out with your service provider.” Aurora Brown. Web Services, Contracts and Copyright. WebProNews. Jan. 18, 2007.

Granted this article was better posted in Clippings 1.04, which we earmarked as a catch-up edition, but we present it here as our Quote of the Week (QoTW) for the following reason.

It’s not so much that Ms. Brown’s quote is full of sage advice. Instead, we bestow upon Ms. Brown our QoTW designation because her quote really gets at one of the central issues in the digital economy: the extent to which a negotiated, private contract, adjudicated under state law, overrides the federal law of copyright. To us, many of key issues in the broader digital copyright debate — including duplication prohibition software (framed and otherwise known as “digital rights management” — come down to this very issue, at some point.

We agree copyright is a bundle of rights; we are not sure we agree that those rights always should be protected by a contract — even if contemporary conventions lean toward wrapping copyright protections within the terms and conditions of a private contract. We believe doing so sets of a dangerous precedent: namely that contracts can trump federal copyright law at any time. ProCD vs. Zeidenberg notwithstanding, we think that’s simply wrong.

Random Thoughts

So, really the Oscars awards ceremony means little to us. But we had to smile when Forest Whitaker and Martin Scorcese finally — finally — received the acclaim both have deserved for so long.

CommuniK. Clippings

Rose DesRochers – World Outside My Window. Copyright Infringement is Alive & Well in the Blogosphere. Feb. 26, 2007. This post hit home for us because a few of our colleagues have asked us how to handle Web sites that copy their content verbatim. In the typical situation, we suggest a nice, but strongly worded letter to the site’s Web administrator, followed by a DMCA takedown notice to the site’s ISP if the content is not removed within 24 hours.

We know what you’re thinking: for the past two weeks, we have been routinely crushing ISPs and other Web sites — including GoDaddy and Google — for caving in to what seemed to be weak DMCA claims. So let us be clear about our position.

We don’t like using the DMCA takedown provisions. We think ISPs have chosen to interpret these provisions in a lame manner. We know the procedure has been abused. But we do not (and will not) hesitate to use these laws properly, or recommend that others use them properly, if direct, person-to-person notice faila to resolve what are pretty straightforward problems of copyright infringement. Categories: DMCA; Infringement; Web & Online.

Clippings

• Noam Cohen. Which Videos Are Protected? Lawmakers Get a Lesson. The New York Times. Feb. 26, 2007. Nancy Pelosi: pirate. We love it when stupidity like this happens. Maybe then Congress will begin to think twice about these asinine laws they have been passing in the name of “protecting the information economy.” (No, we don’t think so either.) The more important issue, though, is the copyrightability of government works, which relates to the public domain. Categories: Bundle of Rights; Infringement; Law, Legislation & Regulation; Public Domain; Web & Online.
• Andhra Pradesh. Special Court for Video Piracy Cases Sought. The Hindu. Feb. 26, 2007. It takes a heavy, swinging pair to go into another country and demand that it create a special court to deal with the complaints of a handful of foreign, private companies. But emboldened by the Special 301 process and the help of the U.S. Trade Representative, Big FIlm can do just that. Categories: Film; International; Law, Legislation & Regulation.
• Michael Geist. Open Access: Reshaping Rules of Research. Toronto Star. Feb. 26, 2007. The razor sharp Michael Geist discusses how the open access movement is affecting scholarly research. Categories: Education; International; Open Access; Research.
• Stephanie Ho. U.S. Trade Rep Urges Greater Chinese Copyright Protection. VOA News. Feb. 25, 2007. Any time you hear “trade” and “intellectual property” in the same sentence, pay close attention. This trend is what William Patry has called in a recent interview with us “a corrosive factor in democracy.” The practical problem in this instance is that the U.S. cannot walk all over the Chinese and get what it wants (which is, primarily, American corporate access to the Chinese markets.) Still, keep tabs on this issue, since it will bear on how the U.S. deals with other countries. Categories: International; Law, Legislation & Regulation.
• Brad Stone. Software Exploited by Pirates Goes to Work for Hollywood. The New York Times. Feb. 25, 2007. If Big Content had the foresight to do this, oh, five or six years ago, it woulda been a contenda. Now, the initiative has to challenge iTunes’ dominance and the specter of Big Content-sanctioned, DRM-less music and movies. Instead of a win, this move is yet another example of how lost the content companies are in their ability to manage. Content: File Sharing, P2P & Downloads; Film; Music.
• Ars Technica. EMI to Apple, Microsoft: Ditching DRM Is Going to Cost You. Feb. 25, 2007. We should have known Big Music couldn’t wean itself off the teat of cold, hard, immediate cash. Can’t you just hear Joe Pesci at his Goodfellas best saying “F*** you, pay me”? Categories: DRM & Copy Protection; Music.
• Jessica Mintz. More MP3 Patent Suits Due? MercuryNews.com (via The Associated Press). Feb, 24, 2007. Not even Microsoft can ignore a $1.3 billion jury award in a patent lawsuit. Is the award absurd? Possibly. Will this lead to some proposed changes in the patent system, perhaps through the U.S. Trade Representative? Probably. Categories: Cases & Litigation; Infringement; International; Patents.
• Sumner Lemon. Apple, Cisco Settle iPhone Dispute. Macworld. Feb. 22, 2007. Both companies have the right to use the name? That sounds odd. But Apple is in an interesting position. We are guessing that ever since the iPod became the most popular consumer electronics device since the Sony Walkman, companies other than Apple have been registering all sorts of domain names and trade names, hoping to play a game of “Gotcha!” should Apple develop a product and want to use the iWhatever branding. Now, if Apple files either a domain name or an intent-to-use trademark application on some of these ideas, they risk losing secrecy, which is to that company as kryptonite is to Superman. Otherwise, though, you risk the sort of action they just settled with Cisco. Categories: Tech & Devices; Trademark.
• Elinor Mills. FAQ: Serious Challenges for Sirius-XM Merger. News.com. Feb. 20, 2007. As always, solid reporting from News.com, here on the proposed Sirius-XM “merger.” But we must acknowledge BusinessWeek, who called this back in December. Categories: Antitrust; Broadcasting & Journalism; Web & Online.
• Wes Phillips. The DRM Beat Goes On. Stereophile. Feb. 18, 2007. This very good article provides a good scorecard to the commentary that ensued after Steve Jobs called for the elimination of DRM, and points an accurate finger at Jobs for what some consider the pot calling the kettle black. Categories: DRM & Copy Protection; Music.
• Paul Meller. EU to Push Online Publication of Scientific Data. Infoworld. Feb. 15, 2007. Even though Big Publishing’s sexiness quotient is considerably lower than Big Music’s, the Web’s continued disruption of the publishing industry is as interesting — and potentially, more important — than the same disruption occurring in the music industry. Categories: Books; Open Access; Science & Medical; Web & Online.
• Convergence Culture Consortium. Google Hands Over Names to Fox in 24 Piracy Controversy. Feb. 15, 2007. We anticipate that businesses such as GoDaddy may bend over and spill clients’ information based upon an errant understanding of the DMCA, or an ignorance of it. We expect Google, however, to know better. Why is it that online businesses have become willing to be so utterly spineless in the name of the DMCA safe harbor? Categories: DMCA; Privacy & Security; Web & Online.
• Digital Markets. Google: Is Robots.txt Really a Copyright Infringement Defense? Feb. 13th, 2007. Interesting post by Donna Bogatin, who takes Danny Sullivan to task for reporting that suggested that use of certain metatags could keep search engines from spidering certain Web sites. (Both posts are related to Google losing a copyright infringement decision in Belgium to Copiepresse.) I’m not sure Sullivan went so far as to suggest that such technical coding may (or should) serve as an affirmative defense to copyright infringement, but together, the Bogatin and Sullivan posts point to the need for tech reporters to really understand copyright law much better than they do. Categories: Cases & Litigation; Infringement; Web & Online.
• Seltzer.org. My First DMCA Takedown. Feb. 13, 2007. No one — not even knowledgeable law professors — are immune seemingly ridiculous and legally questionable DMCA takedown notices. Categories: Broadcasting & Journalism; DMCA.
• Ellen Nakashima. Congress Seeks ‘Bite’ For Privacy Watchdog. WashingtonPost.com. Feb. 13, 2007. “Key lawmakers want to replace a White House privacy and civil liberties board created by Congress in 2004 with one that is more independent of the president. The idea is to make the board more like the one envisioned by the bipartisan 9/11 Commission.” Well, how about that? A privacy board independent of POTUS. What a novel idea. Categories: Privacy & Security; Law, Legislation & Regulation.
• ArsTechnica. Microsoft Launches PlayReady Interoperable DRM Platform for Mobile Devices. Feb. 12, 2007. PlayReady is Microsoft’s inroad to the subscription/pay-per-view mobile market. The new platform is geared for music, photos, ringtones, videos, and other media distributed through subscription or other fee-based means. It will be backwards compatible with their previous platform, Windows Media DRM 10 in addition to being interoperable with other DRM using content providers. Microsoft will be demonstrating the new technology at the 3GSM conference in Barcelona. Categories: DRM & Copy Protection; Tech & Devices.
• ArsTechnica. EU May Require “Cooling Off” Period For Online Music Sales. Feb. 12, 2007. The European Commission is seriously considering making all digital media sellers have a “cooling off” period – time for the customer to return the purchased media. This will cause huge problems for those selling music via the Internet because they will have to create a way to allow buyers to return individual tracks. The issue here is that by allowing buyers to return individual tracks there is no way of putting a stop to burning the song to a CD before returning it. Categories: International; Law & Regulation; Music; Tech & Devices.

Copycense™: Creativity & Content.™ A venture of Seso Group LLC.

Technorati Tags: CopyCense, CopyCense Clippings, copyright, DRM, K. Matthew Dames, licensing

In this edition of Clippings, we go retro — covering some of the stories we missed from the end of last year through January.

Article & Quote of the Week

Cydney Tune and Jenny Yoo. Corporate officer held personally liable For IP infringement by his company. Mondaq. Jan 23, 2007. This is the first we’ve heard of an employee being held jointly and severally liable in an individual capacity for the copyright infringements of his business or employer. While this case is decided in the music realm, it has clear ramifications for printed works as well. Consider the following quote:

From February 1998 through December 2001, ASCAP made numerous attempts to persuade the defendants to obtain an ASCAP license which would allow the hotel to lawfully perform copyrighted musical works in the ASCAP repertory. ASCAP representatives contacted defendants with at least 10 letters, telephone calls and personal visits. The defendants were advised that in order to lawfully perform ASCAP’s copyrighted musical compositions, permission was required from either ASCAP or the individual copyright owners directly. They were also informed of their potential liability arising from the unauthorized public performances. Nevertheless, defendants repeatedly ignored and rejected ASCAP’s licensing offers.

We are almost certain that reproductive rights organizations such as the Copyright Clearance Center will quote and analogize to cases like this one. The position CCC will likely take is that dictum from a federal court case has determined that a “repeated” failure to license works can be cited as a contributing factor in a determination of institutional and personal copyright infringement liability. We’re interested in how CCC will leverage this case, which comes at about the same time the institution named chief operating office Tracey Armstrong to succeed Joseph Alen as chief executive officer in June.

The case is EMI Mills Music, Inc., et al., v. Empress Hotel, Inc., et al. (D.P.R. No. 03-01940, Sept. 20, 2006).

Clippings

• William Triplett. XM copyright suit proceeds. Variety. Jan. 22, 2007. The procedural stance of this decision — denying XM’s motion to dismiss the case before trial — was predictable. What we find interesting is the stance gives increasing current relevance to the Audio Home Recording Act, which has its 15th anniversary this year. Categories: Broadcasting & Journalism; Cases & Litigation; Music.
• Mark A. Fischer & Paul Sennott. Do attorneys follow their own copyright advice? Law.com. Jan. 22, 2007. The issues discussed in this article likely are well-known to Copycense readers, but you’d be surprised how often the most basic copyright principles are unknown — or ignored — in American law firms. Categories: Bundle of Rights; Fair Use & Other Exceptions.
• Victoria Shannon. Record labels rethink digital rights management at MIDEM. International Herald Tribune. Jan. 21, 2007. At Big Music’s annual global trade fair, suits discuss driving a stake through the heart of DRM. The honchos must be feeling rather desperate to openly discuss this tactic. Categories: DRM & Copy Protection; Events; International; Tech & Devices.
• Jim Dickins. Gyms face the music. The Daily Telegraph. Jan. 21, 2007. Mixtape DJs get prosecuted now; are aerobics instructors next? As revenue from music sales continues to fall, expect Big Music to use a variety of economic, legal, and legislative means to recoup that lost income through licensing deals. Categories: International; Law, Legislation & Regulation; Licensing & Permissions; Music.
• ArsTechnica. Privately, Hollywood admits DRM isn’t about piracy. Jan. 15, 2007. “For the movie studios, it’s the moment they have to admit that it’s not the piracy that worries them, but business models which don’t squeeze every last cent out of customers.” We couldn’t agree more. (See our article Remixing the Music Industry.) Categories: DRM & Copy Protection; Film.
• Amanda Bronstad. Turnabout is fair play in Internet copyright litigation. Law.com. Jan. 9, 2007. Traditionally, big law firm firepower was reserved for Big Content plaintiffs, likely because only Big Content plaintiffs could pay the hefty legal fees. Now, it seems that large firm lawyers are more likely to represent defendants in high profile copyright cases, or file amicus curiae briefs on defendants’ behalf in cases in which their clients are not directly involved, yet affected. We think the trend speaks to the extent to which law firms have begun to market and brand themselves more aggressively over the past few years, and being involved in high-profile, newsworthy cases is consistent with that tactic. Categories: Cases & Litigation.
• Daniel Terdiman. The legal rights to your ‘Second Life’ avatar. News.com. Jan. 5, 2007. There several timely, interesting doctrinal issues that arise in this story, including another example of DMCA notice abuse. (Gunther Graef, the husband of Ailin Graef — the Chinese business woman that created the Anshe Chung avatar under attack — later dropped the DMCA complaint.) But the question that jumps out at us is this: when did Web site owners and Internet service providers become so conservative with the DMCA takedown procedures even in the most egregious circumstances? Categories: Images, Art & Photos; Web & Online.
• The Patry Copyright Blog. A new Congress, a new act? Jan. 4, 2007. When it comes to handling copyright developments within Congress, few report on it better than the razor sharp William Patry. This article serves as the pre-game show for the 110th Congress. Categories: Law, Legislation & Regulation.
• Sion Touhig. How the anti-copyright lobby makes big business richer. The Register. Dec. 29, 2006. A professional photographer talks about how user-generated content has crushed the economics of his business, even while (as he claims) publishers fail to pay those users for the content they generate. Key quote: “It’s a race to the bottom, and is a fundamental failure by publishers to invest in their businesses for their readers benefit. It has consequently put massive pressure on professional photographers, who have to reduce their rates, or submit to copyright grabs themselves in order to get work, which is drying up and being replaced by stolen audience content.” Categories: Broadcasting & Journalism; Images, Art & Photos; International.
• InfoWorld GripeLine by Ed Foster. Will more DRM mean fewer audits? December 31, 2006. Be prepared for yet another new acronym: SAM. SAM stands for “software asset management,” a euphemism for a software audit. Software audits are one of those secrets few businesspeople discuss, and we’ll be the first to concede that Copycense has not done nearly enough reporting or writing on this issue. But with the increased and automated features in Microsoft’s new Vista operating system, software audits (and lawsuits resulting therefrom) are likely to be an increased source of pain for chief information officers. Categories: Computers & Technology; DRM & Copy Protection; Licensing & Permissions.

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Technorati Tags: CopyCense, CopyCense Clippings, copyright, DRM, K. Matthew Dames, licensing

Forget Michael Jackson: may we crown Jay-Z America’s King of Pop? His new album, Kingdom Come, was released Nov. 21 amidst the pressure of a well-publicized comeback and a global music sales environment that has been characterized charitably as flagging. No worries: the rapper (born Shawn Carter) sold nearly 700,000 copies the first week, riding the sales figure to the top of Billboard magazine’s album charts.

Jay-Z operates in rare air for today’s musicians. His albums sell millions. His business assets include a clothing label and a stake in a National Basketball Association club. His reported personal net worth creeps into nine figures. He has become a major product pitchman, courtesy of alliances with H-P and American brewery Anheuser Busch. And two years ago, he became CEO of Def Jam Recordings, arguably one of the most influential hip hop labels in the world.

Go Live, Young Man

But more than anything else, Jay-Z seems to understand the music business better than most of his so-called executive peers. It’s not just that he has a keen eye for promotion. (Featuring NASCAR progeny Dale Earnhardt Jr. and racing sensation Danica Patrick in the video for your newest single? Priceless.) About five years ago, Jay-Z understood that the key to remaining relevant – and rich – in the music business would center on being able to excel at performing live. Jay-Z’s sharpened sense of live performance eventually led to a historic performance last year, when he became the first hip hop artist to perform at London’s Royal Albert Hall.

Given today’s business and entertainment landscape, it is possible that musicians and music business executives may never get rich again. At least they won’t get rich using the business model that has dominated recent memory. For the last three decades, the industry has bet the house on having star acts sell millions of records (hoping to have those sales cover the losses of commercially unsuccessful acts); control the play lists of commercial radio to give those stars maximum exposure; and dominating the means and methods of music production and distribution.

And just as this model seemed to run its course in the eighties, a format change made things same as they ever were. The compact disc, a joint venture between Philips and Sony, ensured a fresh set of sales for new music, and another round of sales for music that had been released previously on now extinct formats such as eight-track tape, cassette tape, and vinyl recordings.

But in retrospect, it is reasonable to argue that the compact disc was the beginning of the end of the music industry as we’ve known it.

Read the rest of this entry »

A mondo Copycense Clippings enters your “In” box this week. Guest editor Kim Hagedorn and the rest of the Copycense crew provide stories on monetizing user-contributed content; Google losing in Belgium; Big Music’s artful reframe of Steve Jobs’ anti-DRM letter; and a “file sharing” defendant accusing the music industry of collusion.

But first, an study that proves the “file sharing” controversy is over.

Article & Quote of the Week

Felix Oberholzer-Gee and Koleman Strumpf. The Effect of File Sharing on Record Sales: An Empirical Analysis. (.pdf) Journal of Political Economy. February 2007.

With no clear theoretical prediction, the effect of file sharing on sales is an empirical question. Most of what we know about the effects of file sharing is based on surveys. … Rather than relying on surveys, this study is the first to use observations of actual file-sharing behavior of a large population to assess the impact of downloads on sales. … We match audio downloads of users in the United States to a representative set of commercially relevant albums for which we have concurrent weekly sales, resulting in a database of over 10,000 album-weeks. This allows us to directly study the relationship between downloads and sales. … We find that file sharing has had only a limited effect on record sales. After we instrument for downloads, the estimated effect of file sharing on sales is not statistically distinguishable from zero. … On the basis of all specifications presented in this paper, even our least precise results, we can reject the hypothesis that file sharing cost the industry more than 24.1 million albums annually (3 percent of sales and less than one-third of the observed decline in 2002).

So let’s put this quote and paper into a broader societal context. This paper is published in Journal of Political Economy (JPE), one of the world’s oldest and most prestigious peer-reviewed academic journals. JPE is published by the University of Chicago, one of the country’s foremost institutions on economic theory and thought, intellectual home of the late Nobel Prize-winning economist Milton Friedman. One author holds an endowed professorship at the University of Kansas, while the other holds a faculty position at Harvard Business School; both hold academic tenure. The study the authors conducted is the first to use actual music download data, culled from log files on file sharing networks.

In short, this study is an empirical, Federer-like dismissal of a decade-long public relations frame that has contended that online music downloads have irreparably harmed the international music industry.

Its only “fault” is that it is published after a decade worth of court decisions that have accepted Big Music’s “data” and “studies” as gospel. Given the authors’ credentials, their methods, and the prestige of the journal, we are curious about how long it will take before American federal court judges begin citing this study in their opinions dismissing “file sharing” lawsuits by the RIAA. We also are curious about the extent to which this study is the tipping point that begins to stem (or reverse) the recent tide of reflexively pro-industry court decisions. Categories: File Sharing & P2P; Music; Research

CommuniK. Clippings

Sarah McBride. Hollywood Weighs Copyright Protections. WSJ.com. Feb. 16, 2007. Steve Jobs’ manifesto caught attention in circles beyond Big Music; it raised eyebrows in Hollywood, too. Sure, Jobs was talking about DRM and music, but as a member of Disney’s board, he may as well have been discussing the film industry’s need to punch DRM’s ticket.

We hypothesize that two critical factors (neither of which were mentioned in this story) have kept films from being as widely prevalent online as music, at least domestically. First, movie file sizes are massive, even when compressed. Second, America is significantly behind the rest of the world in broadband access and speed. (See Thomas Bleha’s 2005 article in Foreign Affairs, entitled “Down to the Wire.”)

Combined, these factors make film more difficult to widely distribute — not impossible, but more difficult. But the central underlying theme of this story is that downloads equal loss of sales. After reading our Article of the Week, above, no Copycense reader should correlate these issues. Categories: File Sharing, P2P & Downloads; Film.

Scott Kirsner. All the World’s a Stage (That Includes the Internet). The New York Times. Feb. 15, 2007. YouTube, show us the money. Now Web sites like Metacafe and Revver are doling out cash to subscribers who post videos. The amount of money the subscriber receives is based on ad clicks. The person featured in this Times article had been viewed more than 1 million times; his “royalty” was $13,000.

But why does this arrangement (and cash yield) sound eerily familiar to the rapacious recording industry contracts that left dozens of legendary musicians penniless, while label and publishing owners added to the Harvard endowment?

Video sharing sites must understand they’re little more than glorified middlemen. Middlemen remain important, even in today’s digital economy, but no longer so important that they can take the lion’s share of the economic pie. And artists and contributors need to recognize this too, and decide whether to hold out for more money, or just not release your material until a fair price is offered. In today’s environment, good unreleased content may more valuable than good content that you’ve sold for a pittance.

We understand — and encourage — the need for video sharing sites to recoup costs and make a profit. But all the cool technology in the world means zip if there’s nothing on the site that people want to see. We already have that here in the U.S.: it’s called cable. Categories: Broadcasting & Journalism; Business & Commerce; Film; Web & Online.

Site Check

Know Your Copy Rights. Sponsored by the Association of Research Libraries, this resource is designed to help librarians, educators and other professionals use copyrighted works in academic settings. From our vantage point, the unfinished “Message Development” section seems to be the most promising portion of this site. If it “suggests ways the library could frame a message for the stakeholders that it most wants to reach by articulating the personal and institutional motivations that likely influence each audience,” then this resource could become invaluable. Categories: Libraries & Information Centers; Research.

Clippings

• Samantha M. Shapiro. Hip-Hop Outlaw (Industry Version). The New York Times. Feb. 18, 2007. The Times adds background and context to the DJ Drama/Don Cannon mixtape arrest story. Query us this: how does the recording industry gets access to SWAT teams for the purpose of quelling alleged copyright infringement? At a minimum, it seems odd that taxpayer funds and municipal resources would be spent on this purpose. Categories: Cases & Litigation; File Sharing, P2P & Downloads; Music.
• Aofie White. Google Loses Copyright Case in Belgium. Globeandmail.com. Feb. 13, 2007. Will copyright be to Google what antitrust was to IBM and (to a slightly lesser extent) Microsoft? Categories: Broadcasting & Journalism; Cases & Litigation; Infringement; Web & Online.
• David Litterick. MySpace Moves on Copyright. Telegraph.co.uk. Feb. 13, 2007. MySpace is experimenting with technology that will block video clips that are copyrighted in hopes of hinder costly lawsuits. New clips that are being uploaded with be matched against the digital fingerprints housed in a database. Any clips with matching fingerprints will be blocked. They are currently testing the system by blocking Universal Music Group’s unauthorized clips. Categories: Databases; File Sharing & P2P; Multimedia.
• Matthew Herper and Robert Langreth. Biology Goes Open Source. Forbes.com. Feb. 12, 2007. Novartis and Pfizer decide to give away its genetic research. We’re still befuddled how naturally occurring elements of the human body pass the originality and novelty thresholds to warrant patent protection in the first place. Categories: Open Source; Patents.
• SiliconValley.com (via Associated Press). Business Group Criticizes Russia, China on Copyright Piracy. Feb. 12, 2007. We decided long ago to stop using the doublespeak of “piracy” on Copycense, but we this story was worth posting because it gives good insight into how the content industry has begun using the international trade process as the de facto method of passing intellectual property law. K. Matthew Dames addresses this topic in an upcoming article entitled “Trade Agreements as the New Copyright Law,” forthcoming in the March 2007 issue of Online magazine. Categories: International; Law, Legislation & Regulation.
• Jan Norman. Beware Copyright Mistakes. OCRegister.com. Feb. 12, 2007. In a hyperactively litigious copyright environment, even small businesses must closely watch for copyright problems. Even the suggestion of an infringement lawsuit could sink a business. Perhaps copyright and other intellectual property should be a standard part of contemporary MBA programs. Categories: Business & Commerce; Infringement.
• Jon Healey. The Beat(down) Goes On. LATimes.com. Feb. 12, 2007. The end of the MGM v Grokster case is near. U.S. District Court Judge Stephen V. Wilson rejected MGM’s proposal for a permanent injunction against StreamCast because he does not think MGM should have sole control over StreamCast’s software since the software can be used for non-fringing purposes. There are still a few issues that need to be worked out before the case can be closed. Categories: Cases & Litigation; Computers & Technology; Infringement.
• CIS Blog. 3/5: Privacy and Public Policy Challenges of Social Technology. Feb. 12, 2007. Next month, Chris Kelly, chief privacy officer of Facebook, will be discussing the regulatory and public policy landscape domestically and internationally, what the future holds, and the measures Facebook uses to minimize misuse of their site. Categories: Events; Privacy & Security.
• Bag and Baggage. Of Foxes and Henhouses. Feb. 11, 2007. The entertainment industry is excited about Rep. Howard L. Berman stepping into his new position over the House judiciary committee’s panel on the Internet and intellectual property next month. Berman is known for his support of more stringent protection of copyright and limits for digital copying including transferring digital files between devices (i.e. transferring music from a CD to an iPod). Categories: Law & Regulation; Politics.
• ArsTechnica. Data Privacy Bill Requires Breach Disclosure. Feb. 9, 2007. Senators Patrick Leahy and Bernie Sanders proposed a new data privacy and security data bill, Personal Data Privacy and Security Act of 2007 (S.495.IS) to the Senate this week. The bill will require that companies notify customers if their databases have been breached. In addition, they will be required to allow customers the ability to correct their inaccuracies in their data and the company will be required to disclose what data they collect. The bill also proposes an increase in the penalties to those who engage in identity theft in addition to penalties to companies who purposely do not notify customers of a security breach. Finally, new rules requiring stricter security standards for those using data from commercial brokers and government contractors will be established by the U.S. government. Categories: Law & Regulation; Privacy & Security.
• William Patry. Wacka Wacka Hula Hula. Feb. 8, 2007. This is interesting case from Hawaii. A photographer, Reece, sued Island Treasures Art Gallery for copyright infringement. Reece claims that Island Treasures Art Gallery’s stained glass window of a hula dancer is a copy of her photograph.Judge Seabright denied Reece’s preliminary injunction based on lack of originality, saying only the original element of Reece’s photograph was the timing and decision to take the photograph. The other elements of the photograph and stained glass window were “scenes a faire.” Categories: Cases & Litigation; Infringement.
• Sara Kehaulani Goo and Charles Babington. Google Still Searching For Recognition in D.C. WashingtonPost.com. Feb. 7, 2007. The Post has been crushing Google for the better part of the last year over its inability to quickly ramp up its lobbying operations to K Street-level efficiency. And that point of view is rather unfair, given that Google — despite its market cap — really is new to the whole “skin and grin” game. But given issues like the copyright loss in Belgium (see above), the search giant really needs to get its act together in this arena sooner than later. Categories: Law, Legislation & Regulation; Web & Online.
• The Patry Copyright Blog. 2 Live Bankrupt. Feb. 7, 2007. OK, so we had to chuckle a bit when we discovered that Luke Skyywalker, head of the notorious 2 Live Crew, had filed for bankruptcy. But what happens to copyrights within a bankruptcy case can get grisly. Categories: Bundle of Rights; Cases & Litigation.
• Engadget. RIAA Misreads Jobs’ Open Letter on DRM, Thinks He’s Offering to License FairPlay. Feb. 7, 2007. Engadget is one of our favorite sources, but it totally whiffed on this one. The RIAA did not misread Steve Jobs’ letter on DRM; it simply reframed the issue onto a topic that was much more consistent with its traditional “piracy” mantra. Framing and reframing issues is a longstanding, artful technique that RIAA and other Big Content members have mastered. But Engadget should not feel too bad, since bloggers at the Washington Post also missed RIAA’s reframe. Reporting from the nation’s capital — where the frame and reframe is taken to extreme levels on a daily basis — one would think Post writers should know better. For more information on issue and debate framing and how this occurs within the context of copyright media coverage, see K. Matthew Dames’ September 2006 article “Framing the Copyright Debate.” Categories: Broadcasting & Journalism.
• Jared Allen. Country Star Sues Over Rights to keithurban.com. TheCityPaper Online. Feb. 7, 2007. So a painter named Keith Urban is being sued by a country music singer named Keith Urban because the singer says the painter is domain squatting. We’ve seen a lot of domain squatters in our day, and the painter does not seem to be one of them. Unfortunately for the painter, the singer filed his lawsuit in Nashville — the home of country music — and based on the home court advantage of the singer’s choice of forum, the painter likely is going to lose an injunction round. Further, Nashville is in the Sixth Circuit, which William Patry recently noted “is fast becoming the most prolific court of appeals in copyright cases.” Finally, the painter likely doesn’t have the funds to fight the singer’s rather weak lawsuit. Categories: Web & Online; Trademarks.
• Michael Geist. U.S. Movie Piracy Claims Mostly Fiction. TheStar.com. Feb. 5, 2007. See our Article & Quote of the Week, above, for a real analysis of “piracy” claims. (We found the following quote particularly interesting: “In fact, AT&T Labs, which conducted the last major public study on movie piracy in 2003, concluded that 77 per cent of pirated movies actually originate from industry insiders and advance screener copies provided to movie reviewers.”) Unfortunately, lawmakers continue to heavily consider Big Content’s “studies” and “data” when making policy, even to the point of codifying such data gathering into law for the purpose of determining trade and foreign policy. For more information on this phenomenon, see Michael Ryan’s Knowledge Diplomacy, which comprehensively describes how Big Content’s data is the sole source of information that goes into compiling the U.S. Trade Representative’s Special 301 report. Categories: Film; Infringement; International; Research.
• SiliconValley.com. Blackboard Makes Peace Offering to Open Source Community with Patent Pledge. Feb. 1, 2007. Ever since it purchased WebCT, its last significant competitor, Blackboard has been looking to extend its market advantage in several ways — including through threatening patent ligitation. But one thing would stop such activity almost immediately: an antitrust investigation by federal prosecutors. Short of that, a wholesale adoption by universities of open source e-learning systems such as Moodle and Sakai could render similar benefits. Categories: Education; Open Source; Patent; Web & Online.
• Jim Fitzgerald. Teen Accuses Record Companies of Collusion. AP.com. Jan. 31, 2007. Remember Patti Santangelo, the New York City suburban mom who fought back against the RIAA’s “illegal file sharing” allegations? RIAA dropped the lawsuit against her and sued her children instead. One of them, 11-year-old Robert Santangelo, counterclaimed against RIAA, claiming Big Music’s heavy is “conspiring to defraud the courts and making extortionate threats.” Now, normally we’d dismiss this allegation as a the proverbial legal Hail Mary: throw something — anything — against the wall and see if it sticks. But after Judge Lee R. West’s award of attorney’s fees to another defendant mom in a separate RIAA case (see Quote of the Week, Copycense Clippings 1.02), little Robert’s accusations don’t seem that far fetched after all. Categories: Cases & Litigation; File Sharing, P2P & Downloads; Music.
• David Ibison, et al. Norway Declares Apple’s iTunes Illegal. FT.com. Jan. 24, 2007. This information was released before Steve Jobs’ shot across the bow concerning copy restricting technologies. It’s ironic that a democracy would find one of Jobs’ products illegal because of its inability to play well with others. Categories: International; Music; Law, Legislation & Regulation; Tech & Devices.
• Jim Giles. PR’s ‘Pit Bull’ Takes on Open Access. News@Nature. Jan. 24, 2007. So the Association of American Publishers hires an aggressive public relations professional to combat the open access (OA) movement. And (OA) people seem shocked — shocked — at this development? One of the things that continually baffles us is how often proponents open access, libraries, and the cultural commons fail to realize that framing the debate often means everything. And a good public relations official always frames debates to the advantage of his client: just look at how long we all have been talking about “piracy.” Until user group representatives groups realize the power and importance of framing and connecting with the general population so it knows what is at stake, they always will continue to be susceptible to the content industry’s ability to massage the issues to its advantage, both in the press and in the legislature. Categories: Broadcasting & Journalism; Open Access.

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Technorati Tags: CopyCense, CopyCense Clippings, copyright, DRM, K. Matthew Dames, licensing

The Washington Post‘s Brian Krebs, editor of the Security Fix blog, has written an interesting and informative post about the potential security issues inherent in loading Microsoft’s new Vista operating system onto a Mac computing using Parallels software.

The net-net is as follows:

The guest operating system — in this case Vista — has almost full run of the data on the underlying hard drive (the critical system files appear to be guarded). I later found a rather longish thread about this feature at the Parallels user forum.

Security Fix. Perils in Parallels? Feb. 10, 2007.

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