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About this weblog
Here we'll explore the nexus of legal rulings, Capitol Hill policy-making, technical standards development, and technological innovation that creates -- and will recreate -- the networked world as we know it. Among the topics we'll touch on: intellectual property conflicts, technical architecture and innovation, the evolution of copyright, private vs. public interests in Net policy-making, lobbying and the law, and more.

Disclaimer: the opinions expressed in this weblog are those of the authors and not of their respective institutions.

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February 29, 2012

Who Decides What Books You Can Buy?

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Posted by Alan Wexelblat

If you think the answer is "the publishers" then boy are you living in the 20th Century. Back then publishers did indeed have a more or less complete lock on what you got to read. There were indie publishers and small houses and of course vanity self-publishing, but if you wanted real exposure (in this thing called a "book store" - two words, a store for books, odd to think of that now) then you went through a major publisher. A couple years ago I wrote a piece about the slush pile versus self-publishing; here in 2012 it's clear which has won.

So if the answer isn't "publishing houses" then who are the new gatekeepers? Turns out they're the big names in e-commerce: Apple, Amazon, and PayPal. Let me point to two stories that illustrate the new reality.

First, a story that hit the wires this week (here well summarized by Violet Blue for ZDNet): PayPal has decided you shouldn't read smut it doesn't like. That's right, the company is forcing its merchants that publish and distribute e-books to censor - that is, prevent you from buying through PayPal - books of a certain adult nature. As Blue explains, it's not naughty words that PayPal is objecting to, it's the kinds of stories told in the books. Try to let that soak in for a moment: the dominant online payment processor feels it has the right to tell you and me what sexual fantasies are acceptable, and which are not. Say WHAT?

And lest you think it was only PayPal that engaged in this sort of controlling behavior, let me direct your attention to today's Domino Project column from Seth Godin. In the column, he explains that Apple has decided it will not carry his latest book because that book contains links to listings for other books. Apple presumably feels this might cause some readers to buy those books from Amazon and this might somehow hurt Apple's business? Maybe? I dunno, I'm grasping at straws here.

We've already covered how Apple is using iBook 2 to lock in writers. And we've already covered how Amazon is using its ability to yank content from its listings to strong-arm independent publishers. Feel free to jump back via those links if you missed the first go-round.

What this adds up to is a picture of a broken system. The notion of a book store (or bookstore, if you prefer) as a place to get books has not just been transferred into the digital realm, it has been wholly disintegrated. In this century any corporation can stick its fingers into the stream and pluck out things it doesn't like, divert the flow away from you, and play favorites with its own content to the exclusion of all others. What should be incredibly liberating technologies (print on demand, self-publishing, electronic books) instead become the means for recapitulating the worst behaviors of the previous technology (payola, pay-for-placement).

Comments (4) + TrackBacks (0) | Category: IP Markets and Monopolies

Updates and Short Bits

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Posted by Alan Wexelblat

Rather than stacking up several Blink entries I'll roll them into one, thus:

In response to the decision by Amazon to suspend sales of IPG e-books, SFWA is now directing visitors to its Web site away from Amazon. Best quote: "[W]e would prefer to send traffic to stores where the books can actually be purchased." Oh SNAP!

Scalzi has an update on his "Whatever" blog to the story about Cudo and massive copyright violations. This involves them saying "Oops! Sorry about that!" and trying finally to do the right thing, such as not distributing the CD. Scalzi appears to be in agreement with Hanlon that one should not attribute to malice that which can be explained by stupidity. But just barely.

Finally, Paul Tassi has a new column up on Forbes about Hollywood's plans to use gaming-style DRM for its HD movies. As he explained last time around, Tassi believes that the money would be far better spent in creating high-quality user experiences. Gamers have complained about many of the effects of DRM such as requiring multiple logins and always-connected networked machines. If Hollywood thinks throwing up this kind of obstacle is a recipe for anything other than more viewer frustration they are continuing to live in a different universe.

Comments (0) + TrackBacks (0) | Category: IP Markets and Monopolies

February 28, 2012

Notice the System Not Working

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Posted by Alan Wexelblat

Today's blogroll brought me two stories of situations where takedowns aren't working. In one case an actual DMCA takedown notice was abused; in the other, someone failed to make a Reality Check and really needs to get a notice.

First up, John Scalzi put up a "Whatever" blod entry expanding on a story from Metafilter about Cudo. Cudo is an Australian bargain seller, which is offering an AUD 99 package for an e-reader complete with a CD-ROM full of books to load onto it. Great, except they probably don't own the rights to distribute those e-books. We're not talking about public domain works, here. These include hundreds of titles that Scalzi (President of the SF Writers of America) recognizes as belonging to active SFWA members. Seriously, this is "200-proof stupidity" to use Scalzi's phrase for it.

On the flip side was have Techdirt reporting on how important Google search results related to SOPA/PIPA reporting had been blocked out due to a bogus takedown notice. Although the post has been reinstated, it appears that the notice was a targeted action by a company named Armovore whose sole purpose is to send out notices on behalf of others. Given the target of the notice, the timing, and the complete lack of relevance to the claimed infringement, it's hard not to see this as a grotesque attempt to block people from reading things that Armovore's Cartel masters don't want them to read. When a government does it, that's censorship. When private companies do it... can we bring a case for fraud and civil damages at least?

There are a whole raft of problems here, not least of which is the hidden nature of things. Techdirt had no idea its content was being blocked - they only found out by accident. I'd bet that the vast majority of authors whose books are on Cudo's CD have no idea about it either. The second problem seems to be that nobody is applying any thought to these processes. How hard is it to ask "do we have the rights to these books?" or "do you own that copyright your'e claiming is being violated?"

It seems to me that the process is broken and people are not following the laws-as-written. How about we focus on fixing what's on the books and in operation already before we go passing more new laws and further restrictions?

Comments (0) + TrackBacks (0) | Category: IP Abuse

February 27, 2012

In the matter of Anderson v Sherman

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Posted by Alan Wexelblat

I've noted in the past when Nate Anderson provoked the MPAA. This time it's the RIAA and specifically Cary Sherman, its CEO.

In a long thought piece published today, Anderson goes point-by-point through Sherman's latest post-SOPA salvo. Sherman published an item on the RIAA's blog in which he reviewed the (massively negative) feedback he got in response to his NYTimes op-ed. The original op-ed was addressed to SOPA's critics and used some pretty harsh language while supposedly asking for serious dialogue.

Anderson's response to Sherman's blog post is nothing less than heroic. He points out that he is himself a creator, dependent on publishers, copyrights, and all the associated mechanisms to make a living (shades of Wales and Walsh) and then brilliantly deconstructs pretty much everything Sherman has to say.

Anderson also doesn't mince words, calling Sherman's piece "absurd" at points and "quibbling" at others. Crucially, and this is where I think he hits his best home run, Anderson notes that Sherman still is not engaging with the substance of the anti-SOPA/PIPA/ACTA objections. The full-on "no, stop, wrong and here's why" that people all across the spectrum put out in the run-up to the blackout and withdrawal of SOPA seem not to have penetrated Sherman's reality, leading Anderson to conclude that Sherman's claims of defenselessness are "poppycock".

I found Anderson's final section "The path ahead" particularly interesting as an exposition of how Anderson sees the next rounds of the Copyright Wars. As I've noted recently, it feels like we've broken out of a grinding trench-warfare status into something new and potentially much more fluid. Anderson thinks that the Cartel will continue to fail to understand its customers and their anger and so will try to move behind the scenes into lobbying and biting off smaller chunks of the legislative and regulatory pie, hoping for less negative publicity and greater success.

Who was it said that the price of liberty is eternal vigilance?

Comments (0) + TrackBacks (0) | Category: Interesting People

Hines on Amazon Re-Pricing Authors' Books

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Posted by Alan Wexelblat

Jim Hines, whose blog entry I referenced last week, has a new post up detailing yet another bit of obnoxious meddling in authors' self-publishing efforts. According to the post "Who Controls Your Amazon E-book Price?" the answer is Amazon, and you can't do jack about it.

Last time the issue was Amazon hosing e-book readers as part of its war with publishers. This time it's the customer who gets the good end of the deal and the self-publishing author who gets to suffer. The reason is that Amazon not only controls the price you pay for a self-published book but in doing so it controls the royalty it pays the author. If you are someone like Hines and price your book at USD 2.99 then you expect to get royalties based on that price.

Certainly that's how it works with books published by a standard publishing house. Amazon, like any retailer, is free to change the cover price - often by discounting - but it still pays off the publishing house as if it had sold the book at full price. However if you are self-publishing through Amazon then it has sole discretion to discount your book AND pay you royalties based on the discounted amount. Ain't that grand? No one can argue that this isn't part of the Amazon Terms of Service, though the language does seem to leave them a great deal of wiggle room. I am reminded of the blog post from mid-January about Konrath making $100,000 and how necessary it is for him to manage his pricepoints actively, with experiments and data gathering.

As Hines says, "Sometimes going it alone sucks". Major publishing houses may not be the greatest institutions in the world, but they do serve a number of useful purposes. If one is going to self-publish, one really needs to police every step of the process oneself.

(h/t Cory & Boingboing for the original pointer.)

Comments (2) + TrackBacks (0) | Category: IP Markets and Monopolies

February 23, 2012

Is Wanting to Pay for Content "Entitlement"?

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Posted by Alan Wexelblat

Fantasy author Jim Hines takes issue with the Oatmeal comic I discussed yesterday.

In a brief blog entry titled "Oatmeal, McGuire, and Entitlement", Hines relates the story of fellow author Seanan McGuire who was apparently subjected to a great deal of abuse because readers were disgruntled that the e-book version of her latest book didn't appear until two weeks after the print version.

Hines avers that he is no fan of DRM, and agrees that HBO is making a mistake with their marketing. However, he takes umbrage at what he sees as entitlement on the part of fans: that sense that they ought to be able to acquire what they want, when they want it, in the formats they desire, so long as they're willing to meet the stated price. Err, um, yeah. And no.

Hines is right - nobody is entitled to buy anything, and certainly there's no cause to attack someone who isn't even at fault for your inability to make an instantly gratifying purchase. But he's also wrong, in that entitlement, or instant gratification, is the major motivating force behind virtually all electronic commerce. The vast engines of marketing and media and expectation have been pushing for the last couple decades toward instant gratification, instant fulfillment, always-on, 24/7/365 shopping. We made of Mammon a god, and you are surprised when his thwarted worshippers rage?

People didn't just up and decide overnight that they were entitled; they have been trained into it over and over. It's not a unique attitude, it's a carefully cultivated outcome of the modern consumerist society. You may not like it but it's hardly surprising.

(h/t +Kee Hinckley for the original pointer)

Comments (2) + TrackBacks (0) | Category: Big Thoughts

Und you VILL Sign Zis Contract Or Else!

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Posted by Alan Wexelblat

Dear publishers, I believe you were warned that wrapping your e-books in DRM was, in effect, handing the Amazons and Apples and Barnes & Nobles of the world a loaded gun that was pointed back at yourselves. Now it looks like Amazon pulled the trigger.

Earlier this week Cory pointed on Boingboing to this piece by Michael Calder on the PublishersLunch blog. In it IPG (Independent Publishers Group - the second-largest independent book distributor in the world) reports that Amazon presented IPG with a new contract and when IPG didn't go along, Amazon yanked all IPG-distributed ebooks from its Kindle store.

Hey, no problem, Kindle users, you can just move your ebooks over to a Nook, right? And continue buying your independent tiles over there, right? Wrong. Don't get me started. You, dear e-book readers, are screwed. You are locked in, locked down, and at the mercy of every sand-throwing bit of childishness that the e-book world can devise. Amazon didn't yank the physical books; had it done so we could trivially get them from another seller. But since those Kindle bits are DRM-locked you can't do anything with them that Amazon doesn't want you to do and moving your reading to another e-book reader is probably #1 on the list of things it doesn't want.

You can read Cader's column for the details if you care. The gist is that Amazon wanted better terms for itself and it's now holding every Kindle user's book purchasing list hostage until it gets what it wants. I don't actually have an opinion on which side is right in this latest stupid dispute. I just wonder why anyone pays hundreds of dollars for an e-book reader so they can put up with this shit.

Comments (0) + TrackBacks (0) | Category: IP Markets and Monopolies

February 22, 2012

When Tim O'Reilly Gets It and the Cartel Doesn't

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Posted by Alan Wexelblat

The Oatmeal comic "I tried to watch Game of Thrones and this is what happened" is getting a lot of talk in social media space, not least because Tim O'Reilly linked to it.

The comic shows a fanboy who has just finished reading the George R.R. Martin book and wants to see the HBO series based on it. He's hip, with paid subscriptions to sites like Netflix and Hulu, as well as iTunes and Amazon accounts and... he can't get what he wants. Even going to just leaves him frustrated. So what does he do? He torrents it.

The user experience is something I've talked about many times here on Copyfight (see here, or here for just two recent examples). I make my living creating user experiences and it's stunningly clear that the Cartel does not understand my domain of expertise at all.

One reason the Oatmeal comic works so well is that its message is simple:

Dear HBO.
The purpose of having a digital version of "Game of Thrones" is not to try and sucker more people into buying your crappy cable channel subscription. It's to make money by giving them what they're looking for.

There are thousands, maybe even tens or hundreds of thousands, of Martin fans out there right now who will happily pay you money for this product, which you can give them. Their wallets are open. They are trying to give you money and you are stopping them. That choice remains as stupid as it ever has been, or maybe more stupid because people are now - more than ever - used to buying at the click of a mouse. And if you continue to be hostile to your potential customers then I am damnedsure not going to be sympathetic to your whining about your supposed misfortunes afterward.

Comments (0) + TrackBacks (0) | Category: IP Markets and Monopolies

February 21, 2012

We Are (the Net| the Media | the People) Winning

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Posted by Alan Wexelblat

The theme for February seems to be retrospective analyses. I hope this isn't boring everyone; I'm finding it fascinating to see the Copyright Wars at last moving into a new phase. I am devouring analyses from everyone I can find, trying to figure things out for myself. Feel free to contribute your links and ideas, too!

Today I'd like to point at two more thought pieces, both of which take on the theme of "who". First, there was a piece on BBC Tech last week from Rory Cellan-Jones, asking "The internet is angry - is it winning?"

Cellan-Jones notes that the large-scale protest venue jumped from the US (anti-SOPA/PIPA) to Europe (anti-ACTA) and that if one is to judge by the size of the visible crowds, the impact isn't evenly distributed. London's visible protestors numbered in the hundreds where tens of thousands of Europeans took to the streets in each of many cities. Cellan-Jones's primary point seems to be that even though Western governments have changed in the face of Internet protests, more authoritarian and recalcitrant regimes haven't. Therefore we're not 'winning'.

Say what? Oppressive regimes don't change in the face of peaceful mass protests, nor in the face of armed rebellions. Just ask the thousands of Syrians... oh wait, you can't, their government murdered them. Seriously, now, what does Cellan-Jones (and similar nay-sayers) want to see?

On the positive side, we have techno-social optimist Jimmy Wales and Kat Walsh (of Wikipedia fame) writing in the Washington Post, "We Are The Media And So Are You".

Wales and Walsh hit hard on the theme of creators, something I noted yesterday. They say:

Wikipedia is not opposed to the rights of creators — we have the largest collection of creators in human history [...] providing unrestricted access to the world’s knowledge. Protecting our rights as creators means ensuring that we can build our encyclopedias, photographs, videos, Web sites, charities and businesses without the fear that they all will be taken away from us without due process.

As creators, then, they claim what they see as their (and our) rightful place in the media industry. If laws are to be written that are for the benefit of the media industry (see once again The Breyer Test) then those laws must benefit... well, us. We who write for Wikipedia, who blog, who post to YouTube, Twitter, Flikr, or in other ways give our time and creative energy to enriching the mediasphere are equally as deserving of legal protection for our honest innovative creations as the Cartel.

What an interesting new idea.

Comments (0) + TrackBacks (0) | Category: Big Thoughts

February 20, 2012

More "Post" SOPA

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Posted by Alan Wexelblat

(apologies to Professor Post for punning thus on his name)

David Post took his Justia piece I mentioned last week and expanded on it for his regular venue, the Volokh Conspiracy.

In the expanded piece he both broadens and deepens his critique of SOPA and what has gone on around and since it. He continues to write for a largely legal-oriented readership, but don't let that discourage you. His analysis is thorough and worth keeping in mind as we move into the next phase of this war.

I wanted to pick one thought from his conclusion for my own comment. He writes:

Copyrighted works are important, culturally and economically, and they are worth protecting. They are not, however, sacred objects that we should protect at any cost.

I wanted to pull-quote this because it highlights a problem in the rhetoric that I've experienced in my own talks on these topics. If I say that I'm opposed to this or that regulation, or to a particular form of enforcement, or to a campaign of mass lawsuits, or whatever, then people leap to the conclusion that I must therefore be in favor of unfettered theft or denial of all rights and remuneration to artists. This is not true - I've tried in this blog to show a third way, to celebrate people and organizations/businesses that are crafting it. I think Post would agree that there are reasonable and appropriate ways to regulate, but SOPA wasn't even close to it.

Comments (1) + TrackBacks (0) | Category: Laws and Regulations

February 15, 2012

Just How Much Trouble Are Google/Motorola/Samsung In?

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Posted by Alan Wexelblat

The answer appears to be: a lot, patent-wise.

You may recall around the end of last year it appeared that Apple was in a world-wide patent war against Google's mobile OS and its incarnation on various devices primarily produced by Motorola and Samsung. Apple didn't seem to be making much headway at first, failing to get injunctions and having some problems with counter-suits.

That may be about to change, at least in the US. A few days ago, Florian Mueller published a long piece on his FOSSPatents blog detailing Apple's latest salvo. Apple is asking for a preliminary injunction against Samsung's Galaxy Nexus, the flagship product in the most recent line of Android releases. Mueller covers the maneuverings in the US cases so far - Apple's first suit hasn't gotten them the injunctive relief they wanted and is on appeal, and most importantly Apple's new lawsuit is based at least in part on four patents that haven't been brought into the fray yet.

Mueller's opinion is that these patents, three of which issued only recently, are quite strong. I have read them over and I must say that I'm impressed. Even though they're 2011 issues they have filing dates of 2005 and 2004, and incorporate patents granted during those years. They also have a truly impressive array of both patent and non-patent prior art cited, some of which goes years back from the patent filing date. If the USPTO allowed these patents in the face of all the listed prior art it will be a real challenge to invalidate them. It will be interesting to see if Google & co try that approach. Of course they will argue that their products don't infringe the patents anyway, but that's also going to be a tough case to make, as Mueller details.

An alternative would be to try to code around them. For example, the '172 patent describes a fairly specific interface for providing word-by-word correction/suggestion as users type:

in a first area of the touch screen display, displaying a current character string being input by a user with the keyboard; in a second area of the touch screen display that is between the first area and the keyboard, displaying the current character string or a portion thereof and a suggested replacement character string for the current character string on opposite sides of the second area; replacing the current character string in the first area with the suggested replacement character string if the user activates a space bar key on the keyboard; replacing the current character string in the first area with the suggested replacement character string if the user performs a first gesture on the suggested replacement character string displayed in the second area; and keeping the current character string in the first area and adding a space if the user performs a second gesture in the second area on the current character string or the portion thereof displayed in the second area.

It seems like using a different method of laying out the screen, or a different keypress for auto-completion, might be a viable workaround.

However, the '604 patent appears to be extremely broad and covers a fundamental technique for finding, ranking, and displaying heuristic search results. Again, I'm no lawyer, but I don't immediately see a way of coding around this patent without losing core functionality not just for Google mobile but for Google's entire search business.

Given my recent note about how patent infringement should be enforced, it's interesting that Apple is aggressively pursuing injunctions. In effect, they're trying to knock out their biggest competitor, and likely no amount of monetary settlement would dissuade them from this plan.

Comments (3) + TrackBacks (0) | Category: IP Markets and Monopolies

February 13, 2012

Three Stories from the Immediately Post-SOPA World

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Posted by Alan Wexelblat

It continues to be exceedingly difficult to track everything that's going on in the Copyright Wars right now. If I may be permitted to abuse military analogies a bit: for a couple years it has felt like the Wars were in trench warfare mode. The Cartel was slowly grinding down P2P companies and suing thousands of its own customers, doing its best to defend antiquated business models and high profit margins in the face of new technologies. Meanwhile, the cultural terrain was shifting. SOPA/PIPA were like a big offensive - had they succeeded they would have been major changes in the technological and legal landscape. And the Cartel failed. Bigtime.

However instead of retreating and licking its wounds the beast pressed back on all fronts, from Chris Dodd talking tough in the US, to C-11 in Canada, and the world-wide threat to liberty that is ACTA. Herewith, then, three perspectives to help you keep the situation in view.

First, techdirt lets us know that the Cartel still hates us all. Contrary to people who said that the Cartel might have learned something, or been the least bit humbled, or come around to the idea that talking before legislating was a good idea... nope, none of that. techdirt dissects, piece by piece, the screed published in the NY Times by Cary Sherman, head of the RIAA. You can read the detailed point-by-point there; I'll just say that an organization which has dedicated years and lost millions of dollars suing its customers is just not going to change its tune overnight.

Second, Tech Review has an interview (which I saw linked from Boingboing) with Aaron Swartz. This is a man who has made a name for himself in the tech world many times over: helping to create the RSS 1.0 standard, helping to found Reddit, and most recently getting in trouble allegedly for using a network closet at MIT to grab more or less all of the JSTOR online database of academic journal articles. If you haven't heard of Swartz's name in connection with the anti-SOPA movement that may be because you (like me) weren't paying attention to SOPA back in September of 2010 back when he was circulating one of the first petitions to raise awareness of and opposition to the bill.

The Swartz interview ends up being somewhat light, and steers clear of his current legal troubles. He does point out, as others have, that the Writers Guild is one of the few organizations in Hollywood that seems to 'get' the Internet, in part because the protracted strike forced many of them onto the net and they've begun to see how they can make money there.

Finally, Prof David Post - who I've blogged about before as a staunch opponent of Internet-killing legislation, has a piece up at Verdict titled "SOPA and the Future of Internet Governance". Post's piece is aimed at the not-necessarily-activist readers of Justia, who are themselves often lawyers or the legally curious.

As an intro piece, Post's article probably doesn't contain any new material for those who've been playing along this whole time. He doesn't mince words, though, calling SOPA "outmoded, unworkable, and unjust" and stating categorically that "SOPA Undermines the Rule of Law" in discussing things such as SOPA's proposed ex parte proceedings. Such language is not just rhetorical flourishing: Post is advocating for a rule of law that promotes and protects freer and more open interchange on the Internet, and reaching out to a potentially large and so-far untapped audience.

Like it or not, legislation is often written by lawyers - both Congresscritters and legal people on their staffs - and lawyers often testify to Congress about bills that are under consideration. If more of the legal community can be motivated to understand and oppose bad legislation, particularly in an era when too many in Congress freely admit they don't use and don't understand the Internet, then this sort of advocacy is sorely needed.

Comments (0) + TrackBacks (0) | Category: Laws and Regulations

Patent enforcement entry updated

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Posted by Alan Wexelblat

I've done something I rarely do: I've gone back and re-edited the entry from the 10th on "How Should We Enforce Patents?"

I realized the version that got posted was poorly edited to the point of near-incoherence. Hopefully this version is clearer. I have not changed the intent or links of the posting, just cleaned up the middle paragraph.

I apologize for the crap posting and will try to be better about self-editing.

Comments (0) + TrackBacks (0) | Category: Announcements

February 10, 2012

How Should We Enforce Patents?

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Posted by Alan Wexelblat

Rizza Barnes of UC Irvine sent me a pointer to a new paper by Tomlinson and Torrance addressing this question. Bill Tomlinson is an Associate Professor of Informatics at UCI (and former colleague of mine from MIT days) and Andrew W. Torrance is a professor of law at the University of Kansas School of Law. The paper appears to be a follow-up to their 2009 work, which also used simulation models to compare how different intellectual property regimes would affect the production of new innovation.

You can download the full PDF of the article from the SSRN URL above. The simulations they report on this time compared property rules against entitlement rules and found that (contrary to expectations) the liability rules performed better.

Background: An entitlement rule is one that tries to examine situations where two sides' fundamental rights are in inevitable opposition (e.g. the right to perform an activity that is noisy versus the right of neighbors to have a peaceful silence) and determine who is entitled to their activity or condition, imposing limits on the other party. Entitlements are generally protected by property rules in US law. Liability rules, by contrast, only give the opposing parties the ability to seek a civil case (sue) which of course comes with large up-front costs. To oversimplify vastly it's the difference between calling the cops and calling your lawyer when you're looking for help. Wikipedia, as usual, has a much more detailed explanation.

Tomlinson and Torrance argue that US patent law has recently witnessed a shift away from property rules and towards liability rules and that liability rules do better in terms of promoting innovation. This shift stems from the eBay v MercExchange Supreme Court case in 2006. As a result fewer companies are getting completely enjoined from producing products; instead, they're getting hit with financial judgments. Tomlinson and Torrance construct computer simulations and do human experimental trials to see which way of doing things has better outcomes. Though we tend to think that the lawyerly mess around infringement suits and counter-suits and expensive settlements is a bad regime, it seems like it performs better than the alternative, injunctive, method.

It's an interesting idea, suggesting that the 2006 decision would stand up to the "Breyer test" in Golan. It may also support the general trend to settle rather than fight in patent cases - if companies believe that the end of a (long, expensive) trial is going to be a monetary judgment anyway then it makes sense to take a cheaper settlement deal earlier on.

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February 9, 2012

Could There Be A Legal Secondary Market for MP3s?

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Posted by Alan Wexelblat

The Cartel would like to say "No!" However, a New York judge has said "Maybe." And "Not so fast!"

Quick recap: "First Sale Doctrine" is a uniquely American exemption to copyright, which says that if you legally bought a copyrighted work you are permitted to resell it. The exemption has been narrowed in recent years and it's interesting that this ruling was made in the Second Circuit, which we learned last September had issued a horrible ruling blowing a huge hole in first sale for books. Other cases have attacked first sale as applied to used video games, CDs/DVDs, and other electronic media.

The case at hand, as reported by David Kravets for Ars, has been filed against the company ReDigi a new start-up that began operating late in 2011. The company bills itself as a "modern" used-music store, which allows people to list for sale (or seek to buy) lawfully purchased iTunes MP3s.

ReDigi appears to have gone to some lengths to shield itself from becoming a platform for unfettered (and probably illegal) trading. For example, you can't rip tracks off your CD and list them there. In Kravets's WIRED piece on the start of the lawsuit he details a bit more of how the company works to ensure that only one registered digital copy of a track is made and kept. Once you put the tune up you can't access it on your iTunes anymore and once the buyer has paid, no copy of the track remains in the store's servers.

Of course none of this is good enough for the Cartel, but what else is new.

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February 7, 2012

Cuckoo's Nest

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Posted by Alan Wexelblat

(sorry I couldn't resist that one). Cuckoos, you may know, sometimes lay their eggs in other birds' nests. Now industrial giant Honeywell is accusing 2011 start-up darling Nest Labs of having laid a virtual cuckoo's egg by producing a product that violates at least half a dozen Honeywell patents and may infringe on other companies' designs as well.

Nest Labs got a lot of publicity for its release last October of a "learning" thermostat - a digital device that uses a number of techniques to regulate your home's heating/cooling use in more intelligent ways, saving you on energy costs. Nest Labs has Tony Fadell, the former chief architect at Apple, as one of its founders, which helped it in the publicity arena, and its designs are said to embody the famous Apple design aesthetic.

Unfortunately, according to a pair of stories on Gigaom, the device may embody a lot more than just an aesthetic. In yesterday's first story, Katie Fehrenbacher detailed the outlines of the case that Honeywell wants to make against Nest and retailer Best Buy, listing seven areas where Honeywell is claiming to a Minnesota court that Nest has infringed.

Then in an update last night, Fehrenbacher posted the juicy details, including naming the six specific patents that Honeywell is using to back up its charges of infringement. Interestingly, Honeywell has also included a third party's (Kohler) product design image, claiming the two are "strikingly similar". Does this portend more suits against Nest, possibly over design patents? Is that "Apple look" perhaps not so unusual or distinctive as last year's gushing commentaries led us to believe?

That, I suspect, is something we'll see settled in court. The market for smart thermostats right now is small, but growing, and Nest has some very big investor names behind it. I don't think they're going to want to dump their investment and like a lot of these infringement suits I think they're going to find it wiser to deal than fight. Whether Honeywell wants to license its patents or use them to keep the hot start-up out of the business is still unknown.

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Tassi Isn't Done Yet

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Posted by Alan Wexelblat

In today's follow-up post on Forbes, Paul Tassi exposes more of how he sees the Copyright Wars. In particular, he's keen to address the notion that he "gets it" and somehow the Cartel doesn't.

Contrary to what I may have implied yesterday, Tassi says that he doesn't believe the Cartel executives per se are dumb, just that they're behaving in un-clever ways. If so, the question is why. Tassi makes the familiar argument that the Cartel is deliberately overstating - if not outright lying and distorting - its losses due to illegal copying. At least, these numbers and reasoning are familiar to those of us who've been in the Copyright Wars for years; maybe they're less obvious to your average Forbes reader.

Finally he points out that the industry's continual focus on blockbusters can have huge distorting effects. A badly performing movie can easily lose a studio USD 100 million or more and yet they continue to invest in ever-bigger and ever-more-costly projects. This, he asserts is prima facie evidence that the industry is not in trouble.

Eh... maybe. Once you've built a business model around blockbusters it can be very hard to climb down. It's not just movies that are built around this - books, music, and drugs are all blockbuster-based business models. Hollywood doesn't seem to know how to do low budget; they seem to leave that to the independents to make and then pick up distribution. If you're built to do a few big things it can be hard to retool to do lots of small things. Also calculating P&L on a movie can be an exercise in black magic; just ask anyone foolish enough to sign a contract for a percentage of a film's net. Theater attendance is dropping and it's not always reliably the case that you can make up lost in-theater revenue via overseas or other ancillary sales.

None of which is to say that I'd defend the Cartel's ridiculously inflated numbers on "losses." I think there's very good evidence to show that they make up loss numbers. Just saying that Tassi's column isn't as spot-on as he might like.

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February 6, 2012

The Next Generation Joins The Copyright Wars

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Posted by Alan Wexelblat

When the Cartel smashed Napster back in 1999 and I first started blogging about Copyfighting, Paul Tassi wasn't even in high school. Now he's writing for Forbes magazine and he has some very definite things to say about where we are and how he and, I think, his age group peers view this conflict.

In an opinion piece titled "You Will Never Kill Piracy, and Piracy Will Never Kill You" he lays out how he sees the Cartel's position in the immediately post-SOPA world. "Doomed" doesn't quite cover it, but "dumb" sure applies.

His argument is one we've made here for many years: service trumps all. ITunes wasn't the first MP3 service and by many measures wasn't the best. But it had a service orientation, disruptive low pricing, and no friction-inducing mechanisms like subscriptions. The user experience was good. Did the advent of iTunes stop people illegally copying music? Hell no. Did it prove that legal music sales could capture billions of dollars right alongside illegal copying? Hell yes.

Of course, the idea for and implementation of iTunes didn't come from the Cartel. It came from a tech company that is used to existing in a world where competitive value propositions rule the day. Tassi's piece argues that in order to survive, and to combat movie sharing via things like illegal torrents, Hollywood needs to refocus on providing a better user experience. Again, this isn't a new argument. But it's being made in Forbes, not on some random blog nobody reads, and it's being made by a guy who grew up steeped in the anti-piracy jihad of the last decade. And if it wasn't clear that he and his generation couldn't give a rat's ass about this jihad before now, it should be abundantly clear now.

Nearly two years ago I wrote that my most optimistic outcome for the Copyright Wars lay with the next generation. Kids who made remix culture mainstream. Kids who grew up knowing that the digital economy was all about them, marketing to them, getting their attention and if they didn't like the terms of the deal in front of them it was easy to click on to the next deal. I think Tassi is Exhibit A that I was right. Sure, he dings movies and DVDs for being overpriced, just like Roger Ebert and Dan Gillmor. But unlike us old folk he's not just grumbling and then paying out anyway. He's saying "make me a better deal and I'll switch off BitTorrent; fail to make me a better deal and I'm gone."

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February 4, 2012

A Copyright Wars Primer for Libertarians

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Posted by Alan Wexelblat

Copyfighter Jayel Aheram sent me a pointer to his recently published "libertarian primer on the copyright social conflict."

The essay starts with the recent defeat of SOPA/PIPA and works backward to a nice set of links to past important battles in the Copyright Wars. Aheram is clearly reacting to currents within his own libertarian intellectual-thinking tradition, where some have taken sides with the pro-SOPA forces or been "dismissive" of SOPA.

As I am not libertarian, I was interested to read their point of view. In particular, Aheram asserts that copyright itself, by virtue of its government-granted monopolistic status, is an illegitimate infringement on sovereign private property rights. I suspect that others - even other libertarians - might not agree there, though I see the logic that is being followed.

I am reminded of arguments made by Stewart Baker (whom I read through Volokh Conspiracy, itself often a home for libertarian thought). In an op-ed published in the Hollywood Reporter, Baker argues that Tea Party conservatives played a major role in swinging Republican sentiment against SOPA.

Again, there's a definite link between Tea Party streams of thought and libertarian streams of thought, particularly as applies to smaller, non-interfering government. I don't quite buy Baker's strong assertion that this wing of the populace had the most effect, but it's quite clear that when you tally up those who finally came out against SOPA the Republican party was much better represented than the Democratic, which may well be looking at how many dollars the Cartel puts in its campaign coffers.

If Baker is right, then we really do need more pieces like Aheram's to reach out to untapped or skeptical communities and help them see where their political freedoms and Internet freedoms overlap.

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February 3, 2012

A Worthwhile Hour of Your Time (post-SOPA)

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Posted by Alan Wexelblat

After the victory rush of defeating SOPA/PIPA it has felt like attacks were renewed on all fronts. There's the C-11 mess in Canada, and another bad bill proposed in the US Congress. And of course, the beast that is ACTA still lumbers along. Trying to put it all together is daunting, at least for me. If you find yourself similarly confused and overwhelmed, let me recommend you kick back for an hour with Michael Geist's latest keynote talk.

Professor Geist has always been one of the go-to guys for clear analysis of major legislative battles in the Copyright Wars, and a keynote talk has a format that lends itself to engaging summarization. This address, which he just posted a couple days ago, was given at University of South Florida in St. Petersburg. It's just under an hour and I think will help us all think more clearly about the current state of the immediate post-SOPA world.

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February 1, 2012

If I Can't Share, I Can't Dance

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Posted by Alan Wexelblat

John Battelle posted an interesting piece to his Searchblog this week describing a surprising personal experience and its relationship to sharing and culture. Battelle has had a hand in founding WIRED, Web 2.0 (the conference), and The Industry Standard, among other things. He's seen more than a few crowds in his day and has a good feel for them. The Searchblog focuses on search, but also on the intersection of media and culture. So it's a little bit of a surprise to find him writing there about his experiences at a Wilco concert, titled "What Happens When Sharing is Turned Off? People Don't Dance."

As he tells the story, he found it incredible that people at the show were mostly not dancing. He says "It was as if the crowd had been admonished to not be too … expressive." In fact, no one had told the crowd not to be expressive, but the band had gotten the venue to enforce a strict "no smartphones" policy. Deprived of the ability to photograph, tweet, capture, and share the experience, the crowd largely shut down.

Battelle muses on the phenomenon, and how these devices have changed our experiences in the past decade or so. Certainly people moved to bands before there we were mobile phones and nobody brings a mobile to a mosh pit. So perhaps Battelle is putting too much emphasis on the device and its influence on social culture. Or maybe not - maybe a rule like "thou shalt not share" is interpreted - even subconsciously - as "thou shalt not experience fully". Concert bootlegs have existed probably as long as people were capable of carrying recording devices and while some people may be perfectly happy in the moment between themselves and the performer maybe that's an isolated experience. Maybe the majority experience is to become fully immersed and to want to share that joy with friends, both present and remote.

Tape trading, anyone?

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