Tag Archives: IP

Republicans propose copyright reform

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Techdirt links to a remarkable Republican policy brief on copyright reform:

The purpose of copyright is to compensate the creator of the content: It’s a common misperception that the Constitution enables our current legal regime of copyright protection – in fact, it does not…[L]egislative discussions on copyright/patent reform should be based upon what promotes the maximum “progress of sciences and useful arts” instead of “deserving” financial compensation….

Today’s legal regime of copyright law is seen by many as a form of corporate welfare that hurts innovation and hurts the consumer. It is a system that picks winners and losers, and the losers are new industries that could generate new wealth and added value.

This has the potential to mark the beginning of a huge political shift on intellectual property issues. Heretofore, most copyright reform advocates have pursued a judicial strategy, trying to persuade courts to narrowly read (or overturn) sweeping statutory language. By and large, courts have declined to limit copyright laws in this fashion. If those laws were actually changed, however, that would compel different outcomes.

A policy brief is not even a bill, let alone a law. But the conversation has started.

“Copyright math”

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Since this blog regularly covers issues ranging from intellectual property law to statistics, Rob Reid’s recent TED talk on “Copyright Math” seems particularly salient:

http://www.youtube-nocookie.com/embed/GZadCj8O1-0

Lessig keynote at ABA’s Techshow

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Yesterday, Larry Lessig gave the keynote at the American Bar Association’s Techshow 2011, available on YouTube here.  (ABA Journal write-up here.)

I’m watching it right now and will post additional thoughts when I’m done…

Update:  Much of Lessig’s presentation covers the same material he presented before WIPO last November.  However, the last part of his speech (direct link) talks a little bit about why Lessig thinks that IP policy in America is so wrong.  In brief, Lessig argues that special interest content providers have essentially “bought” Congress’ support of draconian enforcement.

Secondary liability, approaching the limit

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The Seattle Times reported a few weeks ago that Microsoft “is pushing Washington legislators to pass a law making it illegal for manufacturers that use pirated software to sell goods in the state”:

The proposed legislation would create a legal cause of action by making manufacturing companies liable for damages, and it would give the state attorney general and companies the right to pursue injunctions in civil court to stop the manufacturers’ goods from being sold.

For example, if a large Washington store sold T-shirts made from a company in China and the Chinese company uses pirated copies of Excel at an office in Shenzhen, Microsoft could seek an injunction to prevent the manufacturer from supplying T-shirts to be sold in Washington state.

This represents a sweeping change to current intellectual property law. It is one thing to grant monopolies via copyright for “limited Times” in order “To promote the Progress of Science and useful Arts”. It is another thing entirely to extend copyright’s monopoly over physical objects alleged to have been manufactured in another country with the help of pirated software and thus to hold the buyers of those physical objects legally responsible.

To put it concretely:  this isn’t holding the buyers of obviously stolen TV’s out of the back of a pickup truck legally responsible for their purchases.  This is holding GM, maker of that pickup truck, legally responsible because the Chinese manufacturer of one of the parts in the truck’s engine used a pirated copy of Microsoft Outlook to receive emailed purchase orders from GM.

Now that’s secondary liability.

Hat tip to Groklaw, where I ran across this story earlier today.  If you’d like to read more about this, Pamela Jones has written rather extensive commentary, including a hypothesis Microsoft is pushing for this and similar laws in other U.S. states in order to unleash a “litigation storm against Linux” — including derivatives like Android:

The law would make it possible for Microsoft to block Android sales in whatever state passed such laws if it could find some tie between the Android product and some manufacturer of a contracted part in China or wherever who happened to use a pirated version of Microsoft Word — not to make the part but to write up an ad for it. Ephemeral, much? But can you imagine how much litigation could spring from a law like this? How little it would take to keep litigation in the air forevermore? And you don’t have to even prove infringement in China, just allege it to initiate proceedings.

Of course, Jones is quick to note that the state of Washington’s “protections” do not extend to companies like Red Hat that profit from selling open source support and services.  Under the law, software companies with proprietary licenses like Microsoft

can sue in civil court and the Attorney General can go after the “wrongdoer” US company, if a notice is sent and no amelioration occurs. But if the violation is of an *open source license*, the victim can’t sue anyone under the bill, and the Attorney General does nothing for you. It’s an exception to the law.

IP enforcement, spying, and reasonableness

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Today’s posts have touched on who should enforce IP rights and what that that enforcement should look like.  Recent comments by Ed Black, President & CEO of the Computer & Communication Industry Association (CCIA — Wikipedia backgrounder), address both of these issues in the context of the White House’s Intellectual Property Enforcement Coordinator’s recent white paper:

The government has shown how its zeal leads to carelessness [previously covered here] in its unprecedented efforts to widely seize domain names for IP enforcement, which ICE undertook this year. Sites were wrongfully shut down based on allegations the user was engaged in criminal conduct deemed lawful by their courts. We are concerned the same low threshold will be used in making decisions to spy on U.S. citizens.

Some in Congress and the White House have apparently decided that no price is too high to pay to kowtow to Big Content’s every desire, including curtailing civil liberties by expanding wiretapping of electronic communications. Even the controversial USA PATRIOT Act exists because of extraordinary national security circumstances involving an attack on our country.  Does Hollywood deserve its own PATRIOT Act?

This new punitive IP agenda follows just weeks after dictators spying on citizens online was the lead story in every major newspaper.  Perhaps the obvious hypocrisy caused someone to decide to wait to announce the U.S. goal of expanding our government’s powers to spy online.   A screenwriter could almost market this plot as a comedy – if it weren’t so serious.

Maybe we should be grateful our government only wants to make streaming a song or movie a felony with potential prison time as punishment.  What’s next corporal punishment?

This is the latest indication of the extent to which the content industry has infiltrated this administration and managed to turn the Administration’s IP agenda into a policy which protects old business models at the expense of consumers, citizens’ rights and our most innovative job creating industries.

To be sure, Mr. Black speaks as the head of a trade group, advocating for his clients’ interests.  Nonetheless, we’ve covered advocates for the content industry and the broadband industry before.  I think it is important to remember (1) that both sides of the IP debate can make sweeping — sometime unprovable — assertions and (2) there are usually two sides to every story.

Broadly speaking, I have to agree with Mr. Black’s concern with the disconnect between official condemnations of “dictators spying on citizens online” and “the U.S. goal of expanding our government’s powers to spy online.”  As illustrated only a few months ago, the line between vigorous copyright enforcement and totalitarianism can be a thin one indeed.  As Harold Feld of Public Knowledge put it recently over on the LA Times:

In the virtual world, the real but mundane problem of shoplifting undergoes a Hollywood-esque transformation into “piracy,” causing the entertainment industry and folks in Washington to lose all perspective. Consider that Rep. Howard Berman (D-Valley Village) proposed a bill in 2002 to allow record companies to hack into your computer to search for illegal downloads. And how did Berman justify the equivalent of an electronic strip search? “There is no difference between pocketing a CD in a Tower Records and downloading copyrighted songs from Morpheus,” Berman told the crowd of aghast tech executives. “Theft is theft.” True, theft is theft. But I suspect Berman would have objected to an amendment allowing Tower Records to break into your home to recover a stolen CD.

Whatever you think of Mr. Black’s rhetoric — even hyperbole — I think most people would agree that truly draconian IP enforcement is not worth the terrible price it exacts.  Now we just need to reach a consensus on exactly how much is too much…

The 84,000 question

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I hadn’t had a chance yet to comment on the 84,000 websites the U.S. government seized about a month ago because they were supposedly associated with child pornography.  Turns out the government was wrong about that, but the damage was done since a lot of visitors to the websites of innocent small business owners were directed to a page displaying an imposing government seal and the statement:

Advertisement, distribution, transportation, receipt, and possession of child pornography constitute federal crimes that carry penalties for first time offenders of up to 30 years in federal prison, a $250,000 fine, forfeiture and restitution.

Whoops.

Recently, the White House’s IP Czar Victoria Espinel testified before the House Judiciary Committee, and Rep. Zoe Lofgren (D-CA) had a lot of pointed questions (YouTube video of the exchange here).  Now Ars Technica has posted an interview Rep. Lofgren in which talks about the due process problems with seizing domain names without giving people a chance to defend themselves before the seizure takes place:

You’ve got the prosecutors coming in, they have a judge sign something, and the people whose property is being seized are never heard from. It doesn’t appear, honestly—though it would not solve the due process problems—that there’s much inquiry on the part of the prosecution, either. Is there a fair use right? Is there an authorized use? Is there legitimate business going on? There’s no opportunity for that to be raised, and once the damage is done, it’s done.I’ve not yet talked to some of the individuals, but we’ve had second-hand reports of people in the child pornography takedown [i.e., who owned one of those 84,000 websites] whose businesses were essentially destroyed. There’s hardly anything you can say. It’s worse than accusing somebody of being a pedophile.

These are troubling developments indeed.  The whole point of giving the innocent-until-proven-guilty the chance to defend themselves before seizure is to help prevent these sorts of devastating mistakes from happening.

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.

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:

Found hypocrisy; still searching for clarity

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In case you haven’t heard, a few days ago Google started publicly accusing Microsoft’s Bing of stealing its search results.  Juan Carlos Perez over at PCWorld has published an interesting roundup of reactions to Google’s new “strategy” of public accusations:

While the merits of Google’s accusation are up for debate — Microsoft denies the charge — the fact that Google chose to complain in such a loud and agitated manner has become fertile ground for analysis and comment by industry observers.

Opinions range from those who view Google’s actions as hypocritical to others who say the company did the right thing by airing its grievance.

PCWorld’s link to Daniel Eran Dilger reaction over at Roughly Drafted is especially worth checking out.  Personally, I come down on the “Google is being hypocritical” side of things.  It’s hard to have the expansive view of copyright law and fair use that Google embraces for its own activities and then to complain with any legitimacy about Microsoft’s alleged behavior.

Unfortunately, copyright law in general (and fair use in particular) is notoriously unclear, malleable, and subject to judicial whims.  It’s doubtful that Google will actually sue Microsoft over this, so we may never know what the “answer” is.

However, even if a U.S. court upheld Microsoft’s right to copy Google’s search results (assuming that’s what happened here), that would only give us an answer (1) on these specific facts (2) as between parties willing to litigate (and maybe even (3) before that particular judge).  Given the high costs of litigation, most non-Fortune-500 copyright users claiming fair use rights usually find it is in their best interest to settle for a few thousand dollars when saddled with a copyright infringement lawsuit.  Indeed, there are companies based on this very business model that are out there suing people; the number of copyright infringement suits is rising.

This latest spat between Google and Microsoft is, to some extent, a sideshow, but it does highlight some of the problems that uncertainty breeds within copyright law.  I’m not worried about Microsoft’s ability to defend itself:  it’s a multi-billion dollar company with lawyers and PR specialists both in-house and on speed dial.  I am worried about the start ups that are seeking to be the next Google or Microsoft:  they generally can’t afford to get anywhere close to the line because they know that an infringement lawsuit may mean millions in legal fees and damages, so they back off and play it safe.

That’s the real cost of un-clarity in copyright law.