1/6/2009Apple's Philip Schiller announced at the Macworld Expo today that Apple will remove DRM from song downloads on iTunes and move toward a more flexible pricing model. Most songs now are priced at 99 cents, but under the new plan older songs could go for as little as 69 cents, while top hits would be priced at $1.29.
The New York Times has a story here. 1/2/2009
In a set of related cases, Warner Bros. Entertainment, Inc. has filed suit against the owners and operators of two websites that provide a one-stop-shop for infringing copies of plaintiffs’ copyrighted works via defendants efforts to “post, organize, search for, identify, collect and index links to infringing material that is available on third-party websites.” Defendants in both cases are alleged to profit from the display of advertising adjacent to the infringing content. The first case relates to material from either Warner Bros. or Paramount Pictures Corporation, 2:08-cv-08479; the second relates to material from either Warner Bros. or Disney Enterprises, Inc., 2:08-cv-08484. The links provided by the sites allegedly include links to movies that are currently showing in theaters.
Both cases allege Inducement of Copyright Infringement under the Copyright Act. The Disney case also alleges Contributory Copyright Infringement a la Napster.
Clearly Napster was only the beginning. Like Sisyphus rolling the rock up the hill, only to have it roll down again, the rightful owners of copyrighted material seem to meet with success in their battle to keep their property from being replicated on the Web only to have to start the fight afresh when the issue arises anew under a different name. Entertainment companies may, like Sisyphus, be doomed to push the same rock repeatedly for eternity.
The United States District Court for the District of Minnesota has ruled that a claim for misappropriation of employer data can not be brought under the Computer Fraud and Abuse Act, (“CFAA”), 18 U.S.C. § 1030, when the underlying data has not been damaged or compromised in any way. Condux International Inc. v. Haugum, D. Minn., No. 08-4824, 12/15/08 (“Decision”).
Condux International, Inc. (“Condux”) filed suit against former VP of Global Sales, John Haugum (“Haugum”), alleging that Haugum downloaded or otherwise obtained proprietary information stored on Condux’s computer systems, including customer lists, engineering drawings, and pricing and sales data, prior to his departure from the company in February 2008 in violation of the CFAA. The basis for the claim was Haugum’s apparent intention to use and subsequent use of the information to start a competing business. The suit also included an assortment of state law claims that piggybacked on the CFAA claim to make it into federal court.
The CFAA provides criminal liability for an assortment of activities that essentially amount to hacking. But it also provides a civil cause of action for “any person who suffers damage or loss by reason of violation of this section” of the CFAA. A previous line of cases, known as the Shurgard/Citrin cases, has held that an employee lost authorization to access a company’s proprietary information once he had begun to work against the company’s interest. International Airport Centers v. Citrin, 440 F.3d 418 (7th Cir. 2006). Shurgard Storage Centers Inc. v. Safeguard Self Storage Inc., 119 F. Supp. 2d 1121 (W.D. Wash. 2000). A conflicting line of cases, known as the Lockheed cases, has taken a more narrow approach, holding that the CFAA only comes into play when access or obtainment of information is unauthorized, not simply when the information is misused. Lockheed Martin v. Speed, 2006 WL 2683058 at *5 (M.D. Fla. Aug. 1, 2006).
Haugum argued that in his position as VP of Global Sates, he was “authorized” to access the information so no violation occurred, notwithstanding any subsequent misuse of the data. The court agreed, choosing to follow the Lockheed line of cases and stating: “The Court declines the invitation to open the doorway to federal court so expansively when this reach is not apparent from the plain reading of the CFAA.” Decision p. 11. The court also focused on the meaning of the term “damages” to find that damages only occur when the data that remains on the computer system has been impaired in some way, not simply when its confidentiality is lost. The data remaining on Condux’s system was still usable, therefore it was not damaged.
In dismissing Condux’s CFAA claim, the court also refused to exercise supplemental jurisdiction over the state law claims. But Condux lives to fight another day if it chooses to bring those claims in state court. More interesting will be the outcome of the growing split between the circuits regarding interpretation of the CFAA.
For further commentary and a link to the text of the decision, see: http://news.bna.com/ctln/CTLNWB/split_display.adp?fedfid=11175159&vname=ctlrnotallissues&fn=11175159&jd=A0B7R2E9X9&split=0 12/31/2008
A defendant in an RIAA copyright infringement case pending in the U.S. District Court for the District of Massachusetts has filed a Motion and Memorandum to Admit the Internet Into the Courtroom.
The RIAA sued the defendant, Joel Tenenbaum, for allegedly sharing music on the peer-to-peer network Kazaa. Tenenbaum is now moving to allow a firm named Courtroom View Network to place cameras in the courtroom and webcast motion and trial proceedings. Tenebaum cites the same rules that govern allowing television cameras in the courtroom in support of his motion.
Tenebaum is represented by Harvard Law School Professor Charles Nesson. 12/30/2008
Next year the Internet Corporation for Assigned Names and Numbers ("ICAAN") will begin accepting applications for significantly broader strings of letters for generic top-level domain names (gTLDs). In the past, ICAAN allowed only about 200 varieties, such as .com, .org, .uk, and the like. Now, applicants will be able to register, for example, .ipod, .cola, and .law.
Chris Dannen at Fast Company predicts that the plan will lead to a new wave of cybersquatting. It appears the U.S. government has similar concerns. Reuters reports the Commerce Department sent a letter to ICAAN this month urging it to exercise caution in rolling out the new plan. The Commerce Department stated that "it is unclear that the threshold question of whether the potential consumer benefits outweigh the potential costs has been adequately addressed."
The cybersquatting concern is valid. Businesses that have gotten cybersquatting of their trademarks under control could face a potentially infinite number of new cases. Victims of pure, bad-faith cybersquatting can easily force a domain name transfer by filing a UDRP action, but that alone is not cheap. The minimum filing fee for a WIPO-administered UDRP proceeding is $1,500. Multiply that by several cases, add in attorney's fees, and a victim is looking at significant costs. 12/28/2008
There is a fascinating article by Michael Isikoff in the December 22, 2008, edition of Newsweek. www.newsweek.com/id/174601/output/print The article reveals that former FBI agent Thomas Tamm was the government official who blew the whistle on the NSA's program of apparently eavesdropping on U.S. citizens. The article details the dramatic unraveling of the program, the threatened resignations of at least two high-ranking law enforcement officials, and the moral ambiguities associated with whistle blowing at this level.
The Newsweek article has been followed by an equally interesting blog posting by Matt Blaze. www.crypto.com/blog/metatapping/ Dr. Blaze is a computer science professor at the University of Pennsylvania. The thesis of his most recent blog entry is that the goal of the secret program, code named "Stellar Wind," was to collect metadata (call record information such as date, time, number, length of call) on millions of Americans suspected of nothing and aggregating this information into a central database for datamining about suspected criminal activity. Dr. Blaze also suggests that AT&T gave the Government access to AT&T's "Daytona" database of domestic and international calling records for datamining purposes.
The law in this area is extremely complicated, and it places many fewer restrictions on collecting metadata than it does on intercepting actual telephone communications or email transmissions. Nevertheless, the law still requires that even records requests be focused on specific targets and there is no argument that it permits the kind of wholesale data mining of domestic call records described in the pieces by Dr. Blaze and Mr. Isiskoff.
We recognize that the Constitution and the federal criminal code are not suicide pacts and we applaud the efforts of the Government to keep us safe from terrorism. Nevertheless, as in the case of torture, there are certain lines that should not be crossed, at least not without a national debate and a change in the law. If we ignore the rule of law in combatting terrorism or fighting crime, we are little better than terrorists or criminals ourselves. 12/24/2008
Gatehouse Media, which owns a chain of local Massachusetts newspapers, has sued the New York Times for copyright and trademark infringement in the United States District Court for the District of Massachusetts because a site owned by the NY Times, Boston.com, links to stories in Gatehouse papers. If successful, this suit would radically transform the reporting of news on the Internet for everyone from the lowly blogger to major media companies. The Web is all about linking. If you don't want people to link to your content, either password protect your site or get off the Web! This is a dogbite case and we hope the court gives it the mercy killing it deserves quickly. 12/23/2008A San Jose federal district judge has dismissed claims against Google that it should be liable for displaying allegedly fraudulent ringtone ads reports Mediapost.com.
The plaintiff alleged that an ad she found using Google's AdWords violated Google's stated policy of requiring the landing page to clearly display accurate pricing for services.
In dismissing the case without prejudice, the court stated that the Communications Decency Act immunized Google from liability. Noting that the provision of third party tools to create content falls within the protections of the CDA, "[e]ven if a service provider knows that thrid parties are using such tools to create illegal content . . ."
The U.S. Chamber of Commerce has released two papers (see here and here) advocating against Net Neutrality laws. From a glance at the papers, it appears the crux of the Chamber's argument is that regulation will discourage investment in the Internet, so much of which is responsible for making the Internet what it is today. The second paper focuses on the Internet's effect on senior citizens.
As we noted in a past post, it will be interesting to see whether a wave of anti-Net Neutrality hits Washington, since support from Google and others have apparently slackened. 12/22/2008Today, the Wall Street Journal reports that Warner Music Group Corp. and YouTube have not renegotiated their licensing deal. As a result, Warner will begin remooving music and video content from YouTube. The Wall Street Journal notes that, “the dispute reflects frustration within media companies over how little ad revenue is generated by their deals with YouTube.” Is the ad-based revenue model failing?
This morning's New York Times reports that Warner Music has begun removing music videos in which it owns rights from YouTube. Warner Music and YouTube previously had a licensing agreement that provided Warner Music royalties based on the number videos viewed and a share of YouTube's advertising revenue. That agreement recently expired, and negotiations over a new agreement have stalled.
It will be interesting to see which side can bring more leverage to bear in the negotiations. Warner Music and its artists surely cannot afford to keep their content off one of the most popular websites on the Internet. From YouTube's perspective, however, content is king, and the Times says that six of the top ten videos viewed of all time on YouTube are music videos. 12/19/2008
An article in the Wall Street Journal today indicates that the Recording Industry Association of America has decided to work with internet service providers to reduce piracy instead of filing mass copyright suits against individuals. Some might say, "it is about time!" 12/17/2008
The Sydney Daily Telegraph reports that The Canberra Supreme Court’s decision to allow service of a subpoena by “poking” the recipient on Facebook is a world-first. The decision, which allowed service of legally-binding papers on a couple who defaulted on a home loan came after 11 attempts to serve the couple had failed. Their Facebook profile was identified and once the judge was convinced that the profile actually belonged to the people sought, service was allowed.
Will service of process by “poking” come to the U.S.?
For further information, see: http://www.news.com.au/dailytelegraph/story/0,22049,24811525-5001021,00.html, http://www.news.com.au/couriermail/story/0,23739,24810905-5013016,00.html . 12/16/2008
The Virginia attorney general has petitioned the Supreme Court of the United States to review a case in which the Virginia Supreme Court held that Virginia's anti-spam law is unconstitutional. See our earlier post on the case here.
In September, the Virginia Supreme Court ruled in Jaynes v. Commonwealth that the anti-spam law is unconstitutional because it prohibits the sending of anonymous bulk e-mail messages, even if the messages contain political or religious speech. Virginia authorities prosecuted Jeremy Jaynes, one of the world's most prolific spammers, under the statute. Although Jaynes was North Carolina resident, Virginia asserted jurisdiction because his spam was routed through America Online servers in Virginia.
This appeal is going to be a tough one for the Commonwealth. The Supreme Court has long recognized a right to anonymous political speech, and the Virginia statute makes no exception for political or religious speech. This blogger is wagering the Court will deny cert. 12/15/2008
This morning's Wall Street Journal reports that Google has been quietly negotiating with cable and phone companies to create a "fast lane" for Google's content. This seems to indicate Google has jumped off the Net Neutrality bandwagon.
If the Journal article is correct, the concept of Net Neutrality may well have already met its death knell: Microsoft, Yahoo, and Professor Lawrence Lessig are said to have reconsidered their support as well.
We will be keeping a close eye on developments. 12/12/2008
Apparently, an unnamed parcel distribution company has recently announced that it has discovered a significant security breach. The company has discovered that millions of database records have been accessed, and in some cases deleted or changed. The records included personally identifiable information, such as consumer preferences and behavioral data, for millions of people. It is believed to be the most complete database of its kind in the world.
Class action suits on behalf of persons whose information may have been compromised are already being filed. According to one plaintiff’s lawyer, the database included data which could be very embarrassing, such as historic data regarding sleeping habits and personal behavioral traits. To complicate matters, much of the data related to minors and included precise GPS data of the location of their home. A press release from the company's North Pole headquarters noted that the extent of the security breach has yet to be determined.
Several states have initiated investigations into this matter. One can only speculate as to whether the records indicating who was naughty or nice have been compromised. We certainly hope not. Happy Holidays!
The U.S. District Court for the Middle District of Florida has issued a preliminary injunction against a producer of spyware under the Federal Trade Commission Act. Federal Trade Commission v. Cyberspy Software, LLC, et al., No. 6:08-cv-1872 (Preliminary Injunctive Order, Nov. 25, 2008).
The FTC sued the defendant company and its principal for unfair and/or deceptive trade practices under the FTC Act. According to the court's order, the defendants’ spyware is designed to be installed on a computer without the knowledge or consent of a computer’s user. The defendants provide instructions to customers which demonstrate how to disguise the spyware as an innocuous file. Once a user installs the spyware, the spyware tracks the user's keystrokes, passwords entered, and websites visited.
The court found the FTC was likely to succeed on the merits of the case, and that continued sale of the spyware was likely to cause substantial harm to consumers. Although the defendants argued that the spyware has some redeeming value, such as allowing a parent to track a child's Internet usage, the court noted that the defendants' marketing materials suggested that the spyware should be used for more harmful purposes.
Think Tanks from across the ideological spectrum are publishing reports recommending priorities for the Obama administration on intellecual property and cyberlaw issues. We wrote about the Electronic Frontier Foundation's "wish list" recently. Two more organizations have issued reports for the incoming administration to consider: the Center for Democracy & Technology and the U.S. Chamber of Commerce. Net neutrality and appointment of the newly created IP Enforcement Coordinator under the Pro IP Act look to be hot issues. 12/11/2008
The Supreme Court of the United States has denied a petition for writ of certiorari in the Greenberg v. National Geographic case. (See our earlier post here.) The denial of cert lets stand an Eleventh Circuit decision which allows National Geographic to sell its entire archive in digital format without paying additional royalties to photographers who shot for the magazine. Read the National Press Photographers Association take on the denial of cert here. 12/9/2008Another anonymous Internet speaker battle is pending in Madison County, Illinois. The St. Louis Post-Dispatch reports that prosecutors are seeking to enforce a subpoena they served on the Alton Telegraph. The subpoena would compel disclosure of five anonymous individuals who posted comments about a murder investigation on the Telegraph's website. According to the article, the Madison County court is the first in Illinois to address the issue. The Telegraph claims that the anonymous speakers are protected under the Illinois journalist shield law. |
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