U.S. intellectual property enforcement actions: the report

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CNET News alerted me to yesterday’s release of the 2010 U.S. Intellectual Property Enforcement Coordinator Annual Report on Intellectual Property Enforcement (92 page PDF):

The 92-page report…reads a lot like a report that could have been prepared by lobbyists for the recording or movie industry: it boasts the combined number of FBI and Homeland Security infringement investigations jumped by a remarkable 40 percent from 2009 to 2010.

Nowhere does the right to make fair use of copyrighted material appear to be mentioned, although in an aside on one page Espinel mentions that the administration wants to protect “legitimate uses of the Internet and… principles of free speech and fair process.”

This is the first annual report released by the Office of the United States Intellectual Property Enforcement Representative (official website) since its creation in late 2008 and the Senate confirmation of the first Intellectual Property Enforcement Coordinator (“copyright czar”) in late 2009.  Although it covers a wide range of intellectual property issues, I will mostly limit this post to copyright-related items.

Here are some “highlights” from the report:

1.  Policy statement regarding Internet enforcement actions (pp. 5-6):

The debate over the proper role of government in the online environment extends to the issue of intellectual property enforcement: that is, reducing the distribution of pirated or counterfeit goods online or via the Internet, including digital products distributed directly over the Internet or physical products advertised or ordered via the Internet. The choices made in the area of intellectual property enforcement can have spillover effects for government action, regulation or intervention in other areas. Therefore, this office has given considerable thought to the best approach towards enforcement in the online environment. As outlined below, we believe the right approach is one that combines forceful criminal law enforcement with voluntary and cooperative action by the private sector consistent with principles of transparency and fair process. [emphasis added]

Almost as an after-thought, the report later notes (p. 7) that,

without mandating business models, we believe it is important to encourage the development of alternatives for consumers that meet their legitimate needs and preferences. We note some activity in the marketplace to develop new and more flexible methods of distribution and will look for opportunities to support those efforts.

2.  Summary of the current state of the proposed Anti-Counterfeiting Trade Agreement (ACTA) (Wikipedia backgrounder) (pp. 22-23):

ACTA requires, among other things, that signatories establish effective intellectual property enforcement legal frameworks, including obligations to:

  • establish criminal procedures and penalties for willful trademark counterfeiting or copyright piracy, or importation or use, on a commercial scale, and aiding and abetting criminal conduct, and authorizes criminalizing camcording;
  • establish laws that impose imprisonment and destruction as penalties for criminal violations of enforcement laws;
  • establish civil enforcement laws that enhance the tools available to rightholders to crack down on counterfeiting and piracy, including by providing for meaningful damages for rightholders, the destruction of counterfeit goods and also including appropriate safeguards against abuse and to protect privacy as appropriate;
  • ensure that civil and criminal enforcement laws are equally applicable to copyright infringement occurring online; and
  • establish anti-circumvention laws to protect the use of technological protection measures (digital locks).

3.  Summary of successful efforts to recruit private-sector actors into IP enforcement (pp. 27-28)

We believe that most companies share the view that providing services to infringing sites is inconsistent with good corporate business practice and we are beginning to see several companies take the lead in pursuing voluntary cooperative action.

For example, earlier this year, MasterCard withdrew services from Limewire, a well-known file-sharing site. In addition, MasterCard has done an internal assessment of its processes to address infringing sites and has begun a number of cooperative discussions with rightholders….On December 2, 2010, Google announced a number of steps it will take to make its response time to complaints more rapid, to limit the ability of websites used to sell infringing goods to obtain ad revenue and to increase access to legitimate sites….We need to eliminate financial gain derived from infringement. While some products are sold directly, other sites obtain revenue from advertising. The IPEC is in the process of gathering information about the online advertising business to see if there are means to limit illegal sites from using ad revenue as a business model.

4.  Statistical summary of (generally) increased investigations/enforcement/arrests/convictions/seizures (pp. 31-32):

  • In FY 2010, ICE HSI intellectual property investigations increased by more than 41% and ICE HSI arrests increased by more than 37% from FY 2009.
  • In FY 2010, FBI intellectual property investigations increased by more than 44% from FY 2009….
  • In FY 2010, courts sentenced 207 intellectual property defendants. More than half—121—received no prison term, 38 received sentences of 1-12 months in prison, 27 received sentences of 13-24 months in prison, 10 received sentences of 25-36 months in prison, 7 received sentences of 37-60 months in prison and 4 received sentences of more than 60 months in prison….
  • CBP and ICE HSI had 19,959 intellectual property seizures in FY 2010. The domestic value of the seized goods—i.e., the value of the infringing goods, not the  manufacturer’s suggested retail price (MSRP) for legitimate product—was $188.1 million. The estimated MSRP of the seized goods—i.e., the value the infringing goods would have had if they had been genuine—was $1.4 billion.

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A final note:  the report trumpets success–a lot.  Examples abound, but perhaps the most amusing is a case involving counterfeit Cisco equipment sold to the Marines for use in battlefield-critical networks in Iraq.  I’m certainly glad that the government caught this, but do they really have to mention it three separate times (on pages 5, 41, and 50) in the report?

Roundup of additional commentary:

Potential expansion for domain suffixes

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Even amidst discussions that the Internet has run out of addresses, there is talk about expanding the list of available domain suffixes beyond the current 21 options. It sounds like these proposals would allow for all sorts of suffixes and this, inevitably, leads to questions about who would get to control certain domains:

This massive expansion to the Internet’s domain name system will either make the Web more intuitive or create more cluttered, maddening experiences. No one knows yet. But with an infinite number of naming possibilities, an industry of Web wildcatters is racing to grab these potentially lucrative territories with addresses that are bound to provoke.

Who gets to run .abortion Web sites – people who support abortion rights or those who don’t? Which individual or mosque can run the .islam or .muhammad sites? Can the Ku Klux Klan own .nazi on free speech grounds, or will a Jewish organization run the domain and permit only educational Web sites – say, remember.nazi or antidefamation.nazi? And who’s going to get .amazon – the Internet retailer or Brazil?

The decisions will come down to a little-known nonprofit based in Marina del Rey, Calif., whose international board of directors approved the expansion in 2008 but has been stuck debating how best to run the program before launching it. Now, the Internet Corporation for Assigned Names and Numbers, or ICANN, is on the cusp of completing those talks in March or April and will soon solicit applications from companies and governments that want to propose and operate the new addresses.

Sounds like we could have some battles on our hands for particular suffixes. Perhaps the companies or organizations with the most money will win.

But many of the options in this article are set up as “good” options versus “bad” options. If given a choice, how many people would want the .nazi domain to be controlled by the Ku Klux Klan? And some of the other options presented in the story, such as whether someone who wants musicians and agents to be able to get .music addresses while the music industry wants to control this for their larger purposes, are less clear. ICANN, the organization who controls the domains, says they have considered this: “For people who might propose controversial domains – such as .nazi, which ICANN officials have worried about – approval will be based on the applicant’s identity and intentions, and on the grounds of “morality and public order.” How in the world will they be able to do this in a way that is satisfying to multiple parties? Is there a way to decide this before the domains are sold or are we simply in for long rounds of litigation?

Conference on faith among Catholic emerging adults

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A number of recent studies have focused on the religion of emerging adults, those who are roughly 18-29 years old and are making the transition from being teenagers to adults. Some of these findings and thoughts about Catholic emerging adults were shared at a recent conference:

Sociologist James Davidson, professor emeritus at Purdue University, said young Catholics “distinguish between the Catholic faith, which they identify with and respect, and the Catholic Church, which they are less attached to.”

Quoting a wide body of research, including his own, Davidson said eight of 10 young Catholics believe there are many ways to interpret Catholicism and they grant more authority to their individual experience than they do to the magisterium.

“They stress the importance of thinking for themselves more than obeying church leaders,” he said. “Instead of simply embracing church traditions and teachings, they tinker with them. They distinguish between abstract beliefs and principles that they think are at the core of the Catholic faith, and more concrete norms and codes of conduct that they consider optional or peripheral.”

In essence, Davidson said, “they believe that doctrines such as the Trinity, the Incarnation, Mary as the mother of God, Christ’s real presence in the Eucharist and the need to be concerned about the poor are more important than teachings such as the need to limit the priesthood to men, the need for priestly celibacy, the church’s opposition to artificial birth control and its opposition to the death penalty.”

Catholic young adults are not immune to the complex encounter between the church and popular culture, said participants in a panel discussion on “Sex and the City of God.”…

There is some more interesting stuff here. These discussions sound very similar to the findings of Soul Searching and Souls in Transition: emerging adults are less interested in organized religion but are still spiritual even as this spirituality looks more like “moral therapeutic deism” and they question traditional (or conservative) stances of the church toward social issues.

Will a declining newspaper really lead to a loss of stature for Los Angeles?

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Newspapers across the United States have suffered circulation declines and employee layoffs in recent years. The Los Angeles Times has been no different and was even bought out by the Tribune Company. But can people really suggest that Los Angeles is losing stature because its primary newspaper is having trouble?

Since The Times was sold to Tribune, its newsroom staff has been cut in half. For many Angelenos, the downsizing is just one more sign that their city is losing stature. Add it to the list of other ego-bruising blows, like the loss of its professional football team, the flight of Fortune 500 companies from the city limits and a failed bid for the 2016 Summer Olympics.

“We don’t even have a football team. So what does that tell you?” said Mr. Cheeseborough, a note of resignation in his voice.

The Times’s weekday circulation has been nearly halved since 2000, according to the Audit Bureau of Circulations, falling to just over 600,000 — a far steeper rate of decline than at many other big dailies like The Chicago Tribune, The Detroit Free Press and The Washington Post.

To identify where all the local harrumphing comes from, it helps to understand just how closely the rise of The Times is associated with the rise of Los Angeles as a capital of culture and commerce.

The paper’s founding families, the Otises and the Chandlers, used their fledgling publication to push for the development that helped give rise to modern Los Angeles. Water was first piped into the San Fernando Valley because they arranged for it. Los Angeles Harbor was built in part because of their backing.

The suggestion here is that the newspaper decline is part of a recent serious of public failures. By invoking the founding families of the newspaper and their “growth machine”/boosterism efforts, the suggestion is the out-of-towners who manage the newspaper (from Chicago, no less) don’t care much about the city. And if the newspaper doesn’t care any more, then why should anyone in the city or outside the city care?

This argument seems spurious at best. There could be several things going on here:

1. There is resentment about a Chicago company owning the Los Angeles Times. Chicago and LA have had a long-term rivalry as Chicago almost overtook New York City in population in the 1890s (leading New York to annex all five boroughs into the city) and then Los Angeles grew tremendously after World War Two to overtake Chicago as the “Second City.” This is a matter of civic pride.

2. People who like newspapers or journalists are upset about the demise of the Times while the general population is not. Journalists tend not to like to see the decline of revered outlets. Could this just be journalists upset about the general decline of newspapers? The problems described in this story, less news, more ads, are emblematic of the entire industry.

3. This is simply bad timing. There is not a causal relationship here: the decline of the Los Angeles Times coincides with a number of other events.

In the end, do people really think that Los Angeles’ culture and commerce are going to decline precipitously in the near future because of its newspaper?

The Katrina Cottage versus the McMansion

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After Hurricane Katrina, there was a need for innovative housing designs in order to quickly rebuild the city’s housing stock. One such design was the Katrina Cottage, a 308 square foot dwelling that was quite portable but was well made and fit with existing architectural themes. The Chicago Tribune asked an employee of an urban planning firm who lives in one of these homes why exactly these homes did not catch on:

Q. You’ve said these little houses have a lot of fans who are attracted to their simplicity and see them as the anti-McMansion. Why didn’t Katrina Cottages catch on?

A. Well, you know, this kind of project would be illegal in most places; building codes restrict room size, and zoning codes restrict lot size. It wouldn’t work in a suburban subdivision; it has to be a small infill development. Dropped randomly into (traditional) subdivisions, the houses look eccentric and experimental.

The reason it works in Ocean Springs is that it’s around similar houses and it’s within walking or biking distance of places to eat and drink, a grocery store, a YMCA, hair salons, barbershop and retail. I rode a bike everywhere and didn’t need a car. If you have easy, walkable access, you don’t need all kinds of stuff in your house.

You see, in a conventional suburban development, they’ve taken an entire town and compressed it into a McMansion — you have the bar somewhere, you have the basement rec room, there’s the TV room, the coffee shop in an espresso machine. There’s a room with workout equipment. In a conventional subdivision, you have to (put all those features into the house) because you don’t have access to anything you can walk to.

There are a few developments based on the idea — there’s Cottage Square, where I stayed. Ross Chapin, a developer in Langley, Wash., builds so-called “pocket neighborhoods” — he’s got people buying 400-square-foot homes for $600,000. And Lowe’s created and still sells plans and kits for (individuals) who want these houses.

Several things are interesting in this response:

1. Conflating all suburban homes with McMansions is a common mistake.

2. The idea that suburban developments don’t want anything too different in terms of design or architecture is accurate. Homes that look too different might just negatively affect property values. On top of this, the idea that many places would find these homes to be illegal seems silly but is likely true.

3. I would be very interested to know what would lead people to pay $600,000 for a 400-square foot home. Check out Ross Chapin’s designs here.

4. You can read more about Ben Bowen’s thoughts here. It sounds like his argument for these small houses includes a certain kind of neighborhood where amenities and daily needs are within an easy walk. These ideas seem quite similar to those of New Urbanism.

How Wal-Mart plans to regain its edge

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Here is an interesting summary of Wal-Mart’s corporate plans for the near future. The headline of the article says it all: “Wal-Mart, humbled king of retail, plots comeback.”

Three years ago, Wal-Mart ruled for convenience, selection and price. But today it is losing customers and revenue, and smarting from decisions that backfired.

Wal-Mart is not in danger of ceding its place atop the retail world. But competitors have begun to chip away at its dominance.

Over the last year, revenue at Wal-Mart stores open at least a year has fallen by an average 0.75 percent each quarter, according to the International Council of Shopping Centers. Revenue rose by an average of nearly 1.7 percent at Target, 8 percent at Costco and 5.9 percent at Family Dollar.

To fight back, Wal-Mart is again emphasizing low prices and adding back thousands of products it had culled in an overzealous bid to clean up stores. It’s also plotting an expansion into cities, even neighborhoods where others dare not go.

Even as the article talks about stagnant or slightly declining sales at existing stores plus some questionable decisions (like reducing the number of products on the shelves), the main issue seems to be perceptions. On the business side, Wal-Mart has been challenged, particularly on the lower end by dollar stores. But business has not tanked and Wal-Mart still thinks it has new markets to tap in the United States, particularly in urban areas. What do investors and shareholders think – is it just about stronger growth right now? On the public image side, stores like Target have offered an enticing alternative. And yet Wal-Mart has changed the layout and design of its stores to look more like Target and this seems to have helped. Ultimately, the article says Target’s revenues are still one-sixth of that of Wal-Mart.

It sounds like Wal-Mart thinks they need to make some changes. There is no guarantee that any business, even a behemoth like Wal-Mart, will continue to expand or even be profitable. And just by virtue of its size, Wal-Mart’s actions will continue to be scrutinized.

Why you should have had a Super Bowl party: to reinforce deep human bonds

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A communication professor suggests that going to a Super Bowl party with friends is more than just eating food and hanging out: it is about building human bonds, particularly after tough times.

Sparks said there’s a wealth of medical evidence that human contact — particularly in social situations — can be therapeutic, reducing stress and giving people a comforting sense of belonging.

“It sounds silly in a way when we’re talking about Super Bowl parties, but I don’t think events like this should be underestimated,” Sparks said. “These are important social occasions that really have the potential to reinforce our deep human bonds. And the timing of this year’s Super Bowl is really quite nice. People are going to be wanting to come out and share stories about their experiences.”

From blizzards in the Midwest to Super Bowl parties. If people needed more reasons to have a party, this seems like a good justification.

Patriotism at the Super Bowl

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If you want to see what Americans think about their country, sporting events are good places to find out, particularly the Super Bowl, the sporting event of the year.

This year, the pregame featured a reading of the Declaration of Independence. Football players, surrounded by military personnel, read the main parts though we didn’t hear all the grievances regarding the tyranny of the English king. Colin Powell and Roger Goodell finished off the reading.

The two patriotic songs, God Bless America and the Star-Spangled Banner, seemed overwrought. God Bless America had an interesting arrangement at the end while Christiana Aguilera tried her own take on the National Anthem.

Some of this is standard fare at American sporting events. But I’m still trying to figure out how the Declaration of Independence fits with football. It did offer an opportunity to support our military, a cause that often is invoked in big sporting events. But is the idea that because we have freedom and strive for equality as a nation that we therefore should sit together for the next four hours and watch football? Perhaps a little more text could have been added: “We are not red or blue states, Republicans or Democrats: we are united together on this day like no other in our desire to watch football and many commercials.”

This mix of patriotism plus the military plus explicit values plus football seems to have been done in a uniquely American way. The next step sociologically is to discuss this as American civil religion.

Getting not pwned by technology

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David Rowan over at the UK edition of Wired has an article about the advantages of renting out what you own:

There are assets all around us with high “idling capacity” that are essentially like an ATM machine. People use the extra cash for everything from offsetting car payments to taking the holiday they could not otherwise afford. Collaborative consumption is an easy way to become a micro-entrepreneur.

Rowan argues that the Internet is fundamentally changing the way that people think about ownership:

Now that collaborative spirit [of the sort that launched auction website eBay] is spreading to all sorts of other industries as ubiquitous internet connections bring us together in creative new ways. The peer-to-peer model has lately moved from auction houses and online classifieds to car-sharing, jewelery lending, even online banking — and each time it’s cutting out a traditional incumbent.

In an era when environmental concerns are making conspicuous consumption harder to justify, start-ups are targeting customers keener to pay for access to goods and services rather than actual physical ownership — and new web-based networks are letting all of us be both lenders and borrowers.

As the articles notes, however, such systems can only thrive within an environment of robust trust.  It’s one thing to sell a used laser pointer to a total stranger with the expectation of payment (like eBay’s first sale).  It’s quite another to open one’s dwelling to total strangers who find you through Couchsurfing.

One thing that the Wired article doesn’t address is the official legal barriers to much of these sorts of collaborative activities.  Hospitality, car rentals, banking:  these are highly regulated industries with a host of rules designed to protect incumbents by erecting barriers to entry.  While this may not be a large issue currently, it will be interesting to see how established industry players (or revenue-starved state and local governments) start responding if and when “collaborative consumption” becomes a truly major economic force.

Blizzards do not lead to baby booms in 9 months

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There is a story out there that suggests when a blizzard comes along, like the one that hit Chicago this past week, one can expect a rise in births in nine months. Experts say this story has little foundation in fact:

The commonly held assumption dates at least to the widespread blackout of 1965 that doused New York City in darkness. About nine months after residents spent hours together with the lights off, The New York Times reported an uptick in births. A sociologist quoted at the time offered this euphemistic explanation:

“The lights went out and people were left to interact with each other,” he said.

Over the years, blackouts, snowstorms, and even full moons have all been deemed natural aphrodisiacs. But for nearly as long, experts have sought to debunk the relationship between catastrophe and copulation, dubbing it mere myth.

“It is evidently pleasing to many people to fantasy that when people are trapped by some immobilizing event which deprives them of their usual activities, most will turn to copulation,” demographer J. Richard Udry wrote in a 1970 paper that showed there was no statistically significant increase in births that could be attributed to the 1965 blackout.

Tom Smith, director of the Center for the Study of Politics at the University of Chicago, agreed that most baby boom speculation following various disruptions has not proved true.

“First, these events are as likely to separate partners as they are to isolate them together with ‘nothing better to do.’ Second, most people are using contraceptives,” Smith said. “(And) third, these are hardly the type of events that make couples say, ‘Let’s start a family.'”

So why exactly does this myth still make the rounds? This one is fairly easy to disprove: just look at the records for birth nine months after any event.