COPYCENSE

“StreamCast Networks, the creators of the Morpheus file-sharing software, is alleging in a lawsuit that auction house eBay is profiting from peer-to-peer technology that rightfully belongs to it.

“StreamCast claims in a lawsuit filed Monday in the U.S. Central District Court in Los Angeles that Niklas Zennstrom and Janus Friis, the duo who developed the technology behind companies Kazaa and Skype, of breaking an agreement to give StreamCast the first right to purchase their FastTrack peer-to-peer protocol.

“FastTrack was the network on which Morpheus’ file-sharing application once operated and is also the technology foundation of Skype’s voice over Internet Protocol (VoIP) service.”

Greg Sandoval. Morpheus Makers File Suit Against eBay. News.com. May 23, 2006.

CopyCense™: The law, business, and technology of digital content. A business venture of Seso Digital LLC.

“In 1846, as the new technology of the telegraph system was catching on, newspapers pooled their resources to create a more efficient news distribution system. Jim Kennedy, vice president of strategic planning at the Associated Press, which was born out of those efforts, says newspapers are facing a similar challenge today.

“Translation: It’s time for newspapermen to stop fighting among themselves and cooperate if they want to survive in the era of splintering audiences, and search-engine news gateways, such as the popular news services created by Yahoo Inc. and Google Inc.

“Yahoo News has held the No. 1 news property spot on the Web for the last eight months. Google News was the No. 11 news site last month, with 9.7 million unique visitors, up 19% from last year. Associated Press grew a paltry 1% to 6.1 million unique visitors.

Bambi Francisco. How Newspapers Can Face Online Rivals. MarketWatch. May 23, 2006.

CopyCense™: K. Matthew Dames on the law, business, and technology of digital content. A business venture of Seso Digital LLC.

About two months ago, I was waiting for a train when my eyes ran over a billboard poster for the then-upcoming film “Akeelah and the Bee.” While looking at the poster, my mind wandered back to a broadcast of “The Charlie Rose Show” I saw the previous week, during which a substitute host interviewed actor Laurence Fishburne. By the time he appeared on “Charlie Rose,” Fishburne had appeared in virtually dozens of press outlets promoting his new film, a drama about a girl and her quest to prepare for a spelling bee.

I found it odd that Fishburne was receiving so much “play,” given that he never had been a large star. Certainly, Fishburne is a fine actor, whose credits include feature films “Mission Impossible 3”, “Mystic River”, and “Boyz In The Hood”, “King of New York” and “Cornbread, Earl and Me.”

Despite his continued excellence, though, Fishburne never had received the promotional push for any of his prior work that seemed to match his visibility prior to the opening of “Akeelah.” Even Fishburne’s iconic turn as Morpheus in “The Matrix” trilogy was consistent with the high level of his previous work, but his performances weren’t so transcendental that they would ensure a spike in his Q rating.

But the credits at the bottom of the “Akeelah” poster revealed a clue that would explain Fishburne’s pre-film promotional visibility. It turns out that Starbucks (yes, the coffee and retail conglomerate) invested an undisclosed sum in “Akeelah” in exchange for a undisclosed equity stake in the film, which was released by Lion’s Gate Films.

The investment is another indication of Starbucks’ growing influence way beyond the cup, as the company’s tentacles ultimately spill onto popular culture. The Seattle-based company has invested heavily in the music business, and in 2004, it shared in eight Grammy awards given to music CD Ray Charles: Genius Loves Company. The Charles disc (which surely got a boost from Jamie Foxx’s outstanding performance as the musician in the biopic Ray) sold more than 800,000 copies from Starbucks stores, nearly 25 percent of the disc’s total sales. Last year, Starbucks stores sold a total of 3.5 million CDs.

According to MovieWeb, “Akeelah” has grossed $15.7 million since its April 28 release. Certainly, these are not blockbuster numbers, but they are notable given that the film stars not one, but three African-American actors (none of them named Denzel Washington); a solid, but unspectacular director (Doug Atchison); and a story line about a black girl preparing for a spelling bee.

(The relatively slow, dramatic story line is a stark contrast to the summer season’s normal fare of sex and action, although some may argue — credibly — that the presence of a young black girl in the title role is more dramatically compelling than, for example, a young white girl in the same role.)

Further, MovieWeb reports that “Akeelah” is still being shown on more than 1,900 screens. More than any other number, the screen count is a strong indication of Starbucks’ marketing power beyond overpriced, high-calorie drinks and coffee beans.

Bruce Horovitz. Starbucks Aims Beyond Lattes to Extend Brand. USA Today. May 19, 2006.

See also:

Mark Rahner. The Savvy, Sultry Starbucks Sound. The Seattle Times. April 17, 2006.

CopyCense: The law, business, and technology of digital content. A business venture of Seso Group LLC. CopyCense and CommuniK. are trademarks of Seso Group LLC.

Editor’s Note: Because of the seeming incongruence in the Ars Technica lead story and the accompanying referral information posted by the Electronic Frontier Foundation (EFF), we are posting a brief explanation about what we think has happened here.

In summary, EFF is seeking to recover legal fees worth nearly $2 million for its work in helping settle a class action lawsuit against Sony BMG for its use of defective and harmful digital rights management software on several music compact discs. CopyCense has covered this issue exhaustively, and has compiled a Sony BMG rootkit Webliography.

The Ars story, which was posted Monday morning shortly after 11:00 AM, discusses the fee objection filed by Debevoise & Plimpton attorneys Bruce P. Keller and Jeffrey S. Jacobson. In its story, Ars notes that the issue “will be argued [Monday] before a judge in New York,” and added that the parties had not reached a final settlement.

The Ars story is unclear whether the fee challenge and the settlement were to be addressed in the same hearing, but it seems likely that both issues would be settled virtually at the same time before the same judge.

On the other side of cyberspace, EFF posted a press release Monday at an unknown time that hails the judge’s “final approval Monday [of] a settlement for music fans who purchased Sony BMG music CDs containing flawed copy protection programs.” EFF’s press release is silent about fee recovery, but that is not unusual: it would be odd for any law firm or legal organization to trumpet the legal fees it received as part of a class action settlement, especially during a time when trial lawyers and their fees are constant political targets for conservatives.

Further, if word got out that EFF earned a $2 million fee, it could hamper the organization’s future fundraising efforts. The public would be likely to think that the organization needs fewer at large donations given its large take in this case. So it is understandable if you read both stories and remain confused. Hopefully Ars or some other outlet will post an update or clarification.

The post was updated on Tuesday, May 23, 2006 at 0831 hours EST. The update includes expanded coverage of the terms and conditions of the settlement. — KMD

“The Sony BMG rootkit case, though long since faded from the headlines, has still not been resolved. Sony responded to the outcry (and the associated lawsuits) by promising swift action, and recalled the affected CDs. It also moved quickly to settle the major class action lawsuits filed against it, but, as we reported earlier, final approval of the proposed settlement is still pending. The final sticking point? Legal fees for the Electronic Frontier Foundation.

“The EFF has requested almost US$2 million from Sony BMG for its work on the case. Most such requests proceed without problems, and in fact Sony is not objecting to a larger amount requested by lead counsel. But it does object to the EFF’s request, and has filed several strongly-worded documents with the court, arguing that if the EFF deserves anything, it should be under US$100,000.

“Sony BMG’s objection centers on the fact that the settlement was largely hashed out by the time the EFF got involved in the case.”

Ars Technica. Sony BMG Balks at EFF Legal Fees. May 22, 2006.

See also:

Anne Broache. Sony Rootkit Settlement Gets Final Nod. News.com. May 22, 2006.

Electronic Frontier Foundation. Judge Grants Final Approval for Sony BMG CD Settlement. (Press release) May 22, 2006.

Electronic Frontier Foundation. Sony BMG Litigation Info.

U.S. District Court, Southern District of New York. Defendant Sony BMG Music Entertainment’s Memorandum In Opposition to the “EFF Group’s” Motion for the Award of Attorneys’ Fees. (.pdf) May 21, 2006.

CopyCense. CopyCense’s Sony-BMG DRM Bibliography (v. 1.1). Feb. 2, 2006.

CopyCense™: The law, business, and technology of digital content. A business venture of Seso Digital LLC.

Digital Chocolate focuses solely on developing games and applications for mobile phones. According to founder and chief executive Trip Hawkins (employee No. 68 at Apple Computer before he left that company in 1982 to start Electronic Arts), “Content is just a means to an end, so there’s something to talk about,” he said. In other words, social connection trumps all.

Accordingly, Digital Chocolate’s creations appear decidedly low-tech, the easiest-to-use games possible without fancy graphics or elaborate storytelling. And its newest games and entertainments are designed to foster conversation and flirting.

Needless to say, plenty of entertainment and media companies do not share that pointed opinion. From Hollywood to the Bristol, Conn., campus of ESPN, companies are spending hundreds of millions of dollars to adapt their current brands in television, movies, games and news and information to the tiny screens of mobile phones, and creating new programming. Ultimately, whoever guesses correctly the kind of bite-sized, time-wasting distractions people want to snack on over their phones could be showered with a bonanza of profits, at a time when technology is squeezing the traditional businesses of media and entertainment companies.

Lorne Manly. For Tiny Screens, Some Big Dreams. The New York Times. May 21, 2006.

CopyCense™: The law, business, and technology of digital content. A business venture of Seso Digital LLC.