Category Archives: Legal

Dodd to head MPAA

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Despite an explicit pledge to not become a lobbyist, former U.S. Senator Christopher Dodd [Wikipedia backgrounder] announced today that he will head the Motion Picture Association of America (MPAA):

“I am truly excited about representing the interests of one of the most creative and productive industries in America, not only in Washington but around the world,” said Senator Dodd. “The major motion picture studios consistently produce and distribute the most sought after and enjoyable entertainment on earth. Protecting this great American export will be my highest priority.”

“In several important ways, taking this step represents a continuation of my work in the Senate, from advancing the interests of children and families and creating and safeguarding American jobs to the protection of intellectual property and the expansion of international trade,” said Senator Dodd. [emphasis added]

A lot of outlets are covering this story, including tech outlets (like Wired) and political papers (like The Hill).  However, I was particularly intrigued by the juxtaposition of coverage in The Atlantic and The Hollywood Reporter.  The Atlantic wondered exactly how Dodd was qualified for this new job:

It’s a little bit hard to understand how Dodd’s connections throughout Connecticut, Washington, and the banking industry will prepare him for his new role, but perhaps the entertainment industry knows a different Dodd than us financial reporters.

The Hollywood Reporter suggests at least part of the answer:

While Dodd does not have a lot of experience in Hollywood, he is known to have many friends in show business, and has supported the MPAA on key trade, piracy and other issues. He was also author of banking law last year that included a section sought by the MPAA and others to stop plans for a futures market in movies.

I would add Dodd is qualified to head the MPAA because he can deliver what everyone wants when they hire a lobbyist:  something from the government.  Frankly, the content of Dodd’s work during his years in the Senate doesn’t matter; his contacts do.

I guess it was too much to expect “[t]hat Dodd would forgo a trip through Washington’s ‘revolving door'”.  Looks like he’s going to be able to break out his “thick Rolodex” after all.

Update 3/2/2011: TechDirt picked up the story this morning.

The role of residential segregation in lawsuit over Elgin school district

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The Chicago suburb of Elgin has long been a satellite city with more diversity and manufacturing than the average suburb. The city’s school district, U-46, is the second-largest district in the state and is the plaintiff in a long-running civil suit that is continuing in federal court this week:

The two sides in a long, bitter fight over boundary lines in an Elgin-area school district met in federal District Court in Chicago on Monday, six years after a class-action suit sought to improve learning conditions for minority students.

The students and the families who were part of the original case filed in 2005 have long since left School District U-46, a racially and culturally diverse district of 40,000 students in the northwest suburbs. But the conditions that sparked that initial outrage — overcrowding and poor classroom conditions — continue to persist and are putting minority students at a disadvantage, attorney Stewart Weltman told the judge in his opening remarks.

“U-46 served the needs of white students first, and the needs of minority students second,” Weltman told U.S. District Judge Robert W. Gettleman. “The district knew it had thousands of empty seats in white schools, and yet it forced more and more minority students into overcrowded schools and portable classrooms without running water.”

Attorneys for the school district say race never played a role in the redrawing of attendance boundaries for the district’s 55 elementary, middle and high schools. Instead, they say, the changes were part of a reorganization plan by the district in 2004 to allow more students to attend schools closer to home.

I don’t know the particulars of the case. What the district did sounds like what a lot of American parents might desire: let my children go to schools close to home rather than busing or driving them to schools across the city. Closeness is one issue but the idea of local control or rule of nearby schools is important, even in a large school district.

But as I read this, I am struck by an idea: with the district letting students “attend schools closer to home,” U-46 was letting the wealthier kids go to the nearby nicer schools and the minority kids go to nearby worse-off schools. And if you look at the map of the U-46 boundaries, there is quite an economic range, from Elgin (median household income in 2009: $57,009) to wealthier Bartlett (median household income in 2009: $91,863) and Wayne (less than 2,000 people in the village but a 2009 median household income of $142,321). Therefore, it may appear that the district is not spreading the wealth (in money or children) around the district in a way that benefits everyone. The residential segregation patterns in suburbia, where the wealthier tend to live with the wealthier and the poorer live with the poorer, then get reinforced.

It will be interesting to see how the case turns out. On one hand, I’m sure the district has an interest in keeping wealthier families and areas within the district, something that may have been aided by this 2004 decision. On the other hand, the larger school district is supposed to be providing the same opportunities for all students.

 

On “shooting creatives” and “winning eventually”

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Copyright law is everywhere these days, even in the popular (i.e., non-specialized) press.  And it’s in the pop press where things get interesting:  all of the legal niceties that IP legal specialists drone at each other quickly get reduced to bracing, real-world takeaways.

Take this recent piece by Roger Moore, a movie critic for the Orlando Sentinel, who makes some unintentionally wonderful arguments for copyright reform:

Orlando attorney John Rizvi of Gold & Rizvi, P.A., specializes in [intellectual property] law, and he spends part of his time shooting down what creative people think they know about copyright and that nebulous concept known as “fair use.”

Stop right there.  Did he say “shooting down” and “what creative people think” in the same sentence?  This already sounds like promoting science and the useful arts to me.

Sigh.  What else?

Moore also quotes from Marshall Leaffer, a “Distinguished Scholar in Intellectual Property Law at Indiana University and the author of ‘Understanding Copyright Law'”:

Leaffer cited as an example [of fair use in action] a conceptual artist who made and sold photographs of Barbie dolls posed in provocative ways. He was just doing a parody, right? He figured he’d be safe.

“Mattel sued him,” Leaffer said, referring to the doll’s maker. “He won. Eventually. But it cost him a lot of money.”

Let me reemphasize what Leaffer skips right past.  The artist won. Using Barbie was a fair use.  But the artist only won “eventually”.  And “it cost him a lot of money”.

What can we take away from Moore’s article?  I humbly submit we should reform the monstrocity that is U.S. copyright law.  Why?

  1. We need to stop shooting down creative people.
  2. We need to make sure that artists acting well within their rights simply win, not “eventually” and after years of financially ruinous litigation.

The spin-to-truth ratio is rising

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Mike Masnick over at TechDirt pointed me over to a “study” put out by Rick Falkvinge, a member of the Pirate Party, who claims that

for every job lost (or killed) in the copyright industry due to nonenforcement of copyright, 11.8 jobs are created in electronics wholesale, electronics manufacturing, IT, or telecom industries — or even the copyright-inhibited part of the creative industries.

Masnick has at least as many problems with Falkvinge’s methodology as I do, but the content industry plays this game too.  See this example of similarly muddled reasoning over at The Copyright Alliance Blog, which attempts to connect almost 14 million illegal downloads with the 2,000 production jobs in L.A.  Are readers really supposed to think that Hollywood blockbusters are imperiled?  If so, the Alliance Blog probably shouldn’t have picked as its example a movie that’s made over $800 million worldwide.  (At the box office alone.)

I think Masnick’s analysis is spot-on:

I don’t think anyone actually believes [Falkvinge’s] numbers are accurate. But it’s using the same basic methodology, assumptions and thought processes behind the studies in the other direction. You can also, obviously, claim that Falkvinge is biased. He is. But is he more biased than the entertainment industry legacy players who do the other studies? It seems clear that the industries are likely to be more biased, since they have billions of dollars bet on keeping the old structures in place. I think both studies are probably far from accurate in all sorts of ways, but if you’re going to cite the entertainment industry’s claims based on this kind of methodology, it seems you should also have to accept these claims. [emphasis added]

Numbers can be powerful weapons.  But it helps if they actually mean something and aren’t simply empty rhetorical flourishes.

There’s IP in Olympics

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There’s two interesting intellectual property tidbits that arise from Russia’s recent announcement of its three official mascots for the 2014 Winter Olympics.

First:  Don’t Privatize Santa

Ded Morez, the Russian equivalent of Santa Claus, had led in early polling [to decide the mascot] but was pulled from the ballot at the last second when Russian organizers feared that their country’s folk hero would become official property of the IOC [International Olympic Committee].

Analysis:  I don’t know the intricacies of Russian IP law, but, here in the U.S., a public domain figure like Santa wouldn’t become re-protected just because a corporate entity used it (at least in theory, though some would argue that such behavior constitutes a large portion of Disney’s business model).  On the other hand, it’s probably best to never turn IP over to the IOC that you ever want to use again.  Under U.S. law, the IOC doesn’t bother with protecting its Olympic-related IP via general copyright and trademark laws (like everyone else).  Rather, they are personally, directly, explicitly written into the federal statute.  See 36 U.S.C. § 220506.

Second:  Plagiarizing the Past?

[T]he creator of Russia’s last Olympic mascot [Summer 1980] says [one of the new mascots constitutes] plagiarism….”This polar bear, everything is taken from mine, the eyes, nose, mouth, smile,” he told a Moscow radio station. “I don’t like being robbed.”

Analysis:  I’m going to let Chris Chase from the original Yahoo! article take this one:

Yes, both bears have eyes, noses, mouths and smiles, as do all cartoon bears. There’s only so many ways to draw an anthropomorphic cartoon bear. You don’t see Winnie the Pooh with snarling fangs, you know?

One is white and has a scarf. The other is brown and wearing an Olympic ring belt buckle. Other than the fact that they’re both from the ursus genus, there aren’t many similarities. The Sochi mascot may be unoriginal, uninspired and bland, but it’s not a copy.

Sounds like a great, practical description the merger doctrine to me.

Hard numbers

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As I’ve mentioned before (including yesterday), everybody seems to be beating up the legal job market these days.  The American Bar Association apparently decided that it was time to inject some actual numbers into the discussion:

[Most prior discussion has] been based in great part on the tools of journalism: anecdote, instinct and the oft-competing wisdom of any experts we can find.

With this issue, however, the ABA Journal is offering our readers a new—and we believe different—view of the business and the profession.

We’ve teamed up with a nationally recognized expert on trends in the legal profession, William D. Henderson of the Center on the Global Legal Profession at Indiana University’s Maurer School of Law. We asked Henderson, a pioneer in the empirical study of the legal industry, to identify and map the movements of jobs and money.

There’s a separate page that allows county-by-county data searching.

Here’s the thing:  based on my look at the publicly available U.S. Bureau of Labor Statistics data, underlying the ABA’s “report”, I’m not quite sure what the ABA has added to the discussion here.  Sure, they’ve generated some colorful graphs and county-by-county maps.  But as far as I can tell, all (and I do mean all) of this data has been around since at least May 14, 2010.  And it’s not like the ABA has done much analysis here; they’ve basically just sorted the size of salaries out by metro region and announced a few “surprises”.

Even more problematically, I’m not sure there are many clear takeaways due to the inherent shortcomings of this data.  Per the bottom of the article’s main page:

The [U.S. Bureau of Labor Statistics] data are a representative sample of employed lawyers. The sample includes lawyers employed in law firms, state and local government, federal government, in-house lawyers in businesses, and nonprofits. Lawyers, as defined by the BLS classification (SOC), “represent clients in criminal and civil litigation and other legal proceedings, draw up legal documents, and manage or advise clients on legal transactions. May specialize in a single area or may practice broadly in many areas of law.” Equity partners and solo practitioners are not included in the survey. [emphasis added]

In other words:

  1. This data leaves out solo practitioners — fully 35% of all lawyers according to Harvard Law School’s research.  Analysis:  these salary numbers skew high.  (I suppose the lack of focus on solos isn’t too surprising since only about 7% of all solos belong to the ABA anyway.)
  2. This data only applies to employed lawyers.  Analysis:  This article tells us nothing about the marginal earning prospects of unemployed lawyers, including recently graduated J.D.’s who are “temporarily” employed in other industries (e.g., as servers in restaurants).

I get that this is “the first installment of a periodic series.”  But come on, ABA.  It’s more than a little disingenuous to claim that “the ABA Journal is offering our readers a new—and we believe different—view of the business and the profession” by “identify[ing] and map[ing] the movements of jobs and money” when you’re simply re-publishing eight month old government data with an arguably misleading slant and without substantive analysis.

Winklevoss twins continue lawsuit against Facebook

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The key conflict in The Social Network (reviewed here and here) is the lawsuit that the Winklevoss twins bring against Facebook founder Mark Zuckerberg. This lawsuit is continuing as the Winklevosses seek a larger settlement:

If they prevail, their legal appeal would overturn the settlement, now worth in excess of $160 million because of the soaring value of the privately held company.

The Winklevosses won’t say exactly how much they would seek in their high-stakes grudge fest with the billionaire Facebook founder, but by their own calculations they argue they should have received four times the number of Facebook shares. That would make any new settlement worth more than $600 million based on a recent valuation of Facebook at more than $50 billion…

Facebook has won multiple court rulings, and legal experts say the Winklevosses are likely to lose this one too…

The controversial origins of Facebook — who actually founded it and how — have been the subject of renewed debate since Hollywood offered its dramatization of the conflicting stories from the Winklevosses, both portrayed in “The Social Network” by actor Armie Hammer, and former Zuckerberg friend and Harvard classmate Eduardo Saverin, portrayed by Andrew Garfield. In 2005, Saverin sued Facebook for diluting his stake in the company and reportedly reaped a $1.1-billion settlement.

Zuckerberg has called the film, which received eight Academy Award nominations including best picture, “fiction.” In it, his character tells the Winklevosses: “If you guys were the inventors of Facebook, you’d have invented Facebook.”

But that’s exactly what the Winklevosses said they did.

The article suggests that the Winklevosses can’t really lose here: if the courts say they shouldn’t receive more money, they still get to receive the initial settlement. We can ask how much The Social Network influenced the decision to seek more money. There were relatively few people in the media who concentrated on the veracity or one-sided nature of this story. For many who saw this Oscar-nominated film, Zuckerberg looks like a jerk.

Of course, this movie and portrayal should have little influence on the courts. And the Winklevosses say they have new evidence for the courts to consider. But I suspect the case was brought in part because of the positive portrayal of the Winkevosses in this film. If this case were in the court of public opinion (and perceptions), would the Winklevosses win?

The Chronicle weighs in

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Now comes the Chronicle of Higher Education to sound off on the problems of legal education:

While schools are taking small steps to incorporate more experiential learning and encourage students to broaden their job searches, they remain “remarkably resistant to change,” said Erwin Chemerinsky, the inaugural dean of the University of California at Irvine School of Law….One reason schools are sticking with a familiar playbook: “It’s a cost-effective method of education,” Mr. Chemerinsky said. “Putting one professor in front of a large group of students is very efficient.” Clinical classes and simulations, which require low student-to-faculty ratios, cost more, he said.

This is quickly becoming every journalist’s preferred subject of Monday morning quarterbacking…

Live event tickets and the first sale doctrine

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Daniel Indiviglio over at The Atlantic discusses the potential for eliminating all secondary markets in live event tickets:

If you have ever sold even[t] tickets through the online resale market StubHub, then you may have received an e-mail last week about the dangers of paperless tickets. It cautions that companies “like Ticketmaster” are moving to restrictive paperless ticketing systems, which could kill the secondary market for tickets….According to the Fan Freedom Project, a group speaking out against this product that StubHub links to in its email, there are essentially two kinds:

Restricted transfer (closed-loop system): Primary ticketing agencies have sole control over sales, restricting the transfer of tickets and allowing them to be resold only on their own proprietary exchanges – and with their price restrictions which are often unrelated to the market value of the ticket.

Prohibition of ticket transfer: You purchase paperless tickets with a credit card and must provide the same credit card and a photo ID at the event venue. A swipe of the credit card at the gate produces a slip confirming the location of the reserved seat. The ticket cannot be transferred, sold or given away to another consumer.

Hmm…this sounds suspiciously like book publishers’ plans to undermine libraries and software companies’ recent progress in eliminating the secondary market for software.  Doesn’t anybody want to actually own anything anymore?

Wired’s David Rowan certainly thinks renting rather than owning is the wave of the future, as I discussed in a previous post.  However, Rowan’s analysis focused on the “idling capacity” of personal assets (e.g., a lawnmower that you only use once a week) and how the Internet is helping individuals coordinate more efficient arrangements (e.g., sharing that lawnmower among a wide group of “neighbors”).  The idea here is to increase asset utilization and thus maximize the consumer surplus.  (To round off the example:  lawn mower manufacturers may be upset, but the economy is better off overall since resources are freed for more productive uses than making a ton of lawnmowers that will only be used for 2 hours per week.)

In contrast, eliminating secondary markets in tickets, books, and software only benefits the producer surplus.  It allows de facto monopolies (like Ticketmaster for live event tickets) and copyright monopolies (like those enjoyed by publishers of books and software by virtue of their rightful copyrights) to extend those monopolies over the entire market (since they no longer have to compete with resold tickets, used books, and previously owned software).  Under these circumstances, offering consumers something less than full ownership in their tickets, books, and software doesn’t benefit the economy — it simply increases monopoly, expanding inefficiency and the deadweight loss triangle.

For copyrighted works, the first sale doctrine was supposed to prevent owners from eliminating secondary markets, but that doctrine is under judicial attack.  As for tickets, it remains to be seen whether established industry players like Ticketmaster will be able to further their monopolies by choking off the secondary market.  But it doesn’t look good for consumers — or economic efficiency.

40,000 ways to file a lawsuit

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How do you file lawsuits against 40,000 people you think are infringing your copyrights?  Sounds like the answer is “one at a time”:

Thousands of unnamed “John Does” in P2P file sharing lawsuits filed in California, Washington DC, Texas, and West Virginia have been severed, effectively dismissing over 40,000 defendants. The plaintiffs in these cases must now re-file against almost all of the Does individually rather than suing them en mass.

Let’s unpack this.  Copyright owners often don’t know the names of people they suspect of using the Internet to infringe their works — they only know that such-and-such an Internet protocol address allegedly accessed a pirated file of their content.  In order to match that address with a particular person, they often have go to court to compel an Internet service provider to tell them what account/person is associated with that address.  They can only sue individuals once they have actual names.

Copyright owners have been in the habit of suing thousands of “John Doe” IP addresses in one lawsuit and then using those names to settle quickly:

These rulings may have a significant impact on the copyright trolls’ business model, which relies on being able to sue thousands of Does at once with a minimum of administrative expense. The cost of filing suit against each Doe may prove prohibitively expensive to plaintiffs’ attorneys who are primarily interested in extracting quick, low-hassle settlements.

In my view, courts’ rejection of this tactic brings some procedural balance back to copyright infringement lawsuits.  Copyright owners often sue alleged infringers in courts that are convenient for the owner, and this can effect a substantial injustice.

Perhaps a concrete example is in order.  Let’s assume an individual defendant that (1) is unquestionably innocent and (2) lives in Iowa.  Let’s further assume the plaintiff copyright owner is a movie studio based in California who wants to sue her in Los Angeles.  As a practical matter, this defendant has a difficult choice.  Litigation is always inconvenient and expensive, but hiring a California-based attorney from Iowa and flying out to Los Angeles is probably more than a typical defendant can afford.  Under these circumstances, she may pay the studio a $2,000 settlement even though she’s innocent just to make the matter go away.  After all, it’s pretty easy to burn through $2,000 with a lawyer and travel expenses.

Given this procedural tilt favoring copyright owners, it seems only fair that they be required to file their suits one at a time.  If a copyright owner doesn’t think her claim is even worth a filing fee, she probably shouldn’t be filing that lawsuit in the first place.  Copyright was, after all, designed “To promote the Progress of Science and useful Arts”, not to provide extra-judicial windfall profits to content owners.

Thanks to Matt Berntsen for the original link to the EFF write-up.