The latest in a long line of patent lawsuits in every patent hoarders favorite district of East Texas involves the game controllers used by Nintendo. A company holds a patent on and sued Nintendo (and Microsoft) for supposedly violating the patent. Not surprisingly, the jury . Juries quite often side with the patent holder, no matter how questionable the patent may be. In this case, there would seem to be a ton of prior art raising validity questions. The patent itself was filed in November of 2000, at which point there were already numerous game controllers that seem to meet most of the criteria outlined in the claims. Whatever minor differences there may have been between what was on the market and what's in the claims should be seen as an obvious iteration of game controllers. As for Microsoft's involvement, it paid up to settle last month, once again showing how it's often cheaper to just pay up rather than to fight questionable patents. And, that, of course, is why we will keep seeing more and more questionable patents being filed. It's just so lucrative.

Permalink | Comments | Email This Story

Last month, we pointed out that the market for stolen credit card data was so saturated that prices were falling. Of course, that just inspired scammers to go looking for other types of data that was a bit harder to find: VoIP accounts. According to the BBC, scammers selling VoIP account info are now able to get higher prices than those selling credit card data. Of course, it's not at all clear how widespread this really is. The info seems to be coming from a company trying to sell a solution to deal with this -- which already makes it somewhat suspect. Also, you have to wonder how valuable VoIP account data really can be compared to credit card numbers which have much wider applicability. Either way, it will be interesting to see how the market deals with the "glut" of credit card data out there, and where else data scammers turn.

Permalink | Comments | Email This Story

I'm currently attending a workshop on "The Future of News" at Princeton's Center for IT Policy. One of the most interesting things about the conference is that it has proven to be a kind of "meeting of the minds" between the "old media" (the Wall Street Journal and the San Diego Union-Tribune are represented) and practitioners of Internet journalism. One of the frequent complaints we've heard from some of the newspaper folks is that they're losing business to aggregators like Google News. On the surface, this doesn't seem to make sense, because as we've pointed out before, aggregators drive traffic to news sites, and it's silly for an ad-driven website to complain about another site sending them traffic.

Yet complain they do. And indeed, the complaint seems so common that there has to be something behind it. It has become clear that incumbent media outlets hate aggregators because aggregators increase competition. Incumbent media outlets -- especially local newspapers -- grew accustomed to a cozy relationship with their readers in which their readers had few alternatives for their daily news. That meant they could maintain high circulation (and advertising rates) without worrying too much about the quality of their product. When newspapers migrated to the web, they expected to maintain this captive audience.

What aggregators do is make it a lot easier for readers to find new news sources. That's good for an up-and-coming site with a lot of great content, because aggregators enlarge the potential audience for the content. But it's not good for a mediocre site with a large readership based largely on inertia. The easier it is for readers to find news sources of news, the faster mediocre news sites will bleed readers. We tend to think of competition in terms of price, but competition is important even when a business is already giving its product away for free. More competition forces sites to create more and better content, have fewer and less intrusive ads, and offer content in formats that are convenient and appealing. The increased competition enabled by aggregators may be bad for some websites, but it's unambiguously good for consumers. Google News isn't a competitor to newspapers. Rather, Google News forces newspapers to compete with each other. And when newspapers compete, readers win.

Timothy Lee is an expert at the Techdirt Insight Community. To get insight and analysis from Timothy Lee and other experts on challenges your company faces, click here.

Permalink | Comments | Email This Story

Three years ago, reporter Tom Foremski tossed out his idea for how Microsoft could kill Google in an underhanded way: offer $100 million to whoever clicked on a random Google ad. The trick would be that no one (other than the person administering the prize at Microsoft) would know what the ad is. Foremski's theory was that this would lead to massive clickfraud and anger from Google advertisers. Of course, there are a lot of assumptions in there that likely wouldn't hold up in a real world test (with the biggest being that the whole deal would stop working the second someone "won"). However, now we've got Mark Cuban tossing out a suggestion for how to take down Google that seems to come from the same "wishful thinking" playbook. Cuban's idea is that Microsoft (with Yahoo) should offer to pay the top 100,000 sites in Google to get them to remove themselves from Google, and agree to be "exclusively" in the Yahoo/Microsoft listing. The idea is that the money would serve to pay for the lost traffic from Google -- but that's highly speculative.

If Microsoft actually tried this, it would be quite difficult for the Justice Department not to call an antitrust foul, first of all. But, at a more practical level, it just wouldn't work. It's based on the false premise that those top 100k sites are really the only sites that matter. If they all disappeared from Google's index, another 100k would quickly fill in to replace them. In fact, it would get more and more difficult to convince sites to leave Google's index, since the competition for clicks would get easier and easier as others did leave. On top of that, if this actually did happen, my guess is Google would continue to index those sites anyway forcing some sort of court battle over whether or not a site can actually block a search engine from spidering it entirely. These sorts of ideas are fun to think about, but once you think past the basic idea, it's not hard to recognize why the scams would never work. Beating Google is never going to be about a scam.

Now, I should add that I started writing up this post last night. This morning, the news came out that Cuban is that Carl Icahn has put up to try to force Yahoo to sell to Microsoft. The timing, obviously, is no coincidence. Cuban's blog post went up just hours before he was revealed to be a potential board member. However, just because this could, conceivably, put Cuban in a position to actually push Microsoft/Yahoo to implement such a plan, it doesn't make it any more viable. In fact, it makes it that much more questionable.

Permalink | Comments | Email This Story

Well, well, well. The RIAA is not having a particularly good week. In the Tanya Andersen case (where the RIAA sued an innocent person), the court has awarded Andersen $108,000 in legal fees from the RIAA. You may recall that the RIAA had protested having to pay legal fees, which the judge smacked down. Note that this is entirely separate from Andersen's racketeering case against the RIAA.

However, the much bigger news concerns the infamous Jammie Thomas case. As you'll recall, the RIAA won that case, even though it now admits that it said false things under oath. Much of that decision hinged on the fact that the court said that "making available" was infringement, which is the opposite of what many other courts have been saying. In fact, it turns out that it went against the binding precedent in a different case within the same circuit. The judge has now admitted that he may have committed a "manifest error of law" in his jury instructions, and it sounds like he's going to order a new trial.

This is a big deal. The RIAA has been holding up the Thomas case over and over again as proof that (a) "making available" is infringement and (b) that courts will award huge fines for those caught file sharing. If that decision gets tossed out (not even by an appeals court, but by the judge who ruled in the first place), it will suddenly make the RIAA's claims relating to that case disappear completely.

Permalink | Comments | Email This Story

Last month we wrote about how New York was changing a law to try to force Amazon to collect and pay sales tax in New York by defining any affiliate in the state as being an Amazon point of presence. This is a clear perversion of the intention of the law that only requires collecting sales tax if the company has a physical presence in the state. While Amazon is now fighting this law in court, others are taking more drastic measures. E-commerce site Overstock.com has declared that in order to avoid having the state consider it to have a "physical presence" there. This would be an unintended consequence of such a law. In an effort to get e-commerce providers to cough up more in taxes, not only will Overstock not be paying those taxes, it just made life a lot more difficult for thousands of Overstock affiliates in New York.

Permalink | Comments | Email This Story

It's an ongoing theme around here, but ideas are everywhere. The real trick to making something great often has extremely little to do with the idea, and much more to do with the execution. That's where the real innovation occurs -- in taking an idea and trying to figure out how to make it useful. It's that process that's important, much more than the original idea. As nearly anyone who has brought a product from conception to market will tell you, what eventually succeeds in the market is almost always radically different than the original "idea." That's part of the reason why patents are so often harmful to innovation. The patent is for that core idea, which is rarely the key in making something successful. But by limiting who can innovate off of the idea (or just by making it much more expensive) you're limiting that process of innovation.

Some people disagree with this, but the failure of Cambrian House, once again seems to demonstrate the vast gap between ideas and execution. Cambrian House was a well-hyped company that tried to "crowdsource" new companies and products. I've paid attention to them for a while, since their business model had some similarities to what we do with the Techdirt Insight Community. However, as the founder of Cambrian House admitted in explaining the company's changing plans, it wasn't difficult to get people to come up with all sorts of interesting and exciting ideas -- but where the company failed was in getting anyone to actually execute on any of those ideas. Ideas are a starting point -- but it's high time that we stopped worshipping the idea, and started recognizing how much more important execution is in driving innovation.

Permalink | Comments | Email This Story

While the Patent Troll Tracker remains darkened, the world at large is definitely missing out on some of the more useful information he provided on his blog, shedding all sorts of light on some of the sneakier practices of various patent hoarding companies, who were often shell companies to hide the real identity of who was behind the lawsuits. Without much information to fight back against these shell companies demanding millions and millions of dollars, various large tech companies seem to have seen an opportunity to team up to fight back. Joe Mullin points out a new organization called PatentFreedom that is basically an association of large tech companies to share information privately on some of the patent hoarding firms that pop up and sue all too often. Mullin has some fascinating background on the organization, which is actually spinning out of another firm that (of all things) was co-founded by Nathan Myhrvold (the guy some folks now accuse of creating a huge patent trolling organization on his own). That existing firm helps companies both big and small in their patent litigation strategies -- but this spinout organization will focus on larger companies facing shell companies that don't produce any products.

While I think it's a good thing that the companies who are often on the receiving end of questionable patent lawsuits are trying to combat the information asymmetry concerning these lawsuits, it's a bit worrisome that this perpetuates the stereotype that this is really a battle between "big companies" and "small inventors." That's a false dichotomy that opponents to patent reform like to set up, because no politician wants to be seen as going against the "small inventor." The truth is that there are all sorts of problems with the patent system, and big companies are some of the worst abusers of the system. Focusing merely on the non-practicing entities, rather than the overall problems with the patent system, may be a necessity these days, but it's merely dealing with a symptom, rather than treating the actual problem.

Permalink | Comments | Email This Story

Last week, in writing about the Italian government's defense of its decision to put everyone's tax returns online for everyone else to see, we noted the bizarre statement by the official who made the decision: "In the USA, tax filings are already public, check any American TV-movie and you'll see." This totally false statement didn't get much play in the American press (someone in the comments suggested that maybe it seemed so unbelievable that the press thought he was joking). However, as if to make it painfully clear how false this statement actually is, five IRS employees have been charged for snooping on tax returns they were not authorized to look at. While it is a little troublesome that IRS employees were able to do this in the first place, it's at least somewhat comforting that the IRS's auditing system seems to be able to catch people doing this, even when they're only looking at a very small number of unauthorized returns (each worker only looked at one to four unauthorized returns).

Permalink | Comments | Email This Story

I recently bought a copy of the new book by professor Neil Netanel called . From what I've heard and seen so far, it looks like a well-balanced book that explores what's good and what's bad about copyright. It's on the stack of books to read, so I haven't had a chance to dig into it yet (and might not for a few months at this rate). However, Netanel has been blogging a bit about the book over at The Volokh Conspiracy blog, and reader David Puglielli wrote in to ask if I had any thoughts on his latest post, where he discusses copyright as an "engine of free expression." This is half of the book's premise, and he promises to tackle the other half in a future post. Basically, the overall premise of the book (similar to what we've noted) is that any reasonable thinking person admits that intellectual property (in this case copyrights) has both benefits and costs at the societal level. The question is whether the downsides (the costs) outweigh the upsides (the benefits). In the post linked above, Netanel focuses on the benefit side of the equation -- which is the encouragement of free expression. Basically, expression is good and if there's monetary incentive then we should get more expression -- and that's a good thing.

However, as Netanel also notes, clearly copyright is not the sole driver of expression. He points to the internet as obvious proof that many people create content with no intention of ever enforcing a copyright -- and, in fact, noting that more content is being created than any person could reasonably consume. He then argues that copyright provides an additional value and benefit above and beyond what would be created without copyright, saying that he lays out the reasons why in the book. When I read the book I'll have to explore those in more detail, but there is one troubling point that I find in the blog post. In discussing that incentive to create, he notes: "Many works require a material commitment of time and money to create. Examples include numerous full-length motion pictures, documentaries, television programs, books, products of investigative journalism, paintings, musical compositions, and highly orchestrated sound recordings constitute such sustained works of authorship. It is generally far too expensive and time-consuming to create such works, let alone create with the considerable skill, care, and high quality that the best of such works evince, to rely on volunteer authors. Nor are alternative, noncopyright business models necessarily more desirable than copyright. For example, we might not want our cultural expression to be populated with product placement advertising or devalued by treating it as a mere give-away for selling other products." I'm hopeful that he at least challenges some of those assumptions more thoroughly in the book, because it seems to open on the assumption that content that is produced without copyright in mind doesn't necessarily require time and money to create. While I recognize that this is just a short blog post, it also simply brushes aside all alternative business models as not "necessarily more desirable than copyright." That's a big assertion that may not be true at all. It rests on the assumption that in the absence of gov't granted monopolies, the free market would be less efficient at figuring out how to allocate resources to create additional expression. You can make that case, but it should require some evidence, considering how rare it is for central planning to beat an open market in the long run (the short run is a different story).

Also, in picking out one example to make his point, he uses a very negative connotation concerning content used as advertising and suggests that any kind of give-away of content "devalues" the content. This is incorrect on both accounts. While most people don't think of it that way, content has always been advertising for something. So complaining about cultural expression being negatively impacted by it being advertising is inaccurate. It's always been that way. The question is really just about what it's advertising (and how upfront it is about what's being advertised). As for the question of "free" content devaluing the content, again, that's incorrect. Value and price are two separate things. Something given away can be quite valuable (especially if it makes another product worth paying a higher price). So while I agree that copyright acts as an incentive for certain types of content to be created, I think it's worth exploring in more detail whether copyright really functions better than other business models in creating the best incentives. Hopefully the book delves deeper into this (or he'll do so in a future blog post).

Permalink | Comments | Email This Story

Back in March, Bell Canada started traffic shaping the internet traffic that passed over its network without telling its reseller partners. This was a pretty big deal, as many of the ISPs who resell Bell Canada DSL promise to their customers that they don't do any kind of traffic shaping. Those resellers complained to Bell Canada, who responded by saying too bad, recognizing that those resellers had nowhere else to go. Some of the reseller ISPs complained to Canadian regulators who have now sided with Bell Canada, allowing the company to keep on traffic shaping. The regulators basically said that the ISPs have been unable to show how they're being harmed by this move, which is required for them to step in. One would think that a boatload of customer complaints and threats to move to any other internet connectivity (not that there are many choices) would be enough to show harm to the ISPs. Once again, it's nice to have near total control over your market, isn't it? Update Some good details provided in the comments. The matter is still being investigated by regulators. This ruling was just about interim relief.

Permalink | Comments | Email This Story

If you haven't followed the "MP3 blogging" scene, it's grown quite big over the past few years, to the point that most folks (including the record labels) have effectively turned a blind eye to the copyright questions it raises (for once, this is a good thing). In many cases, record labels even treat some of the best music bloggers similar to the way they've always treated radio DJs -- sending them promo CDs and trying to get "air time." Most music bloggers don't ask for permission before blogging songs (some have policies saying they'll take down a song if any musician complains). However, over on an NPR blog, one of the bloggers has been putting together "mixes" of music on the blog, and being quite careful to ask for permission before any song is included. As BoingBoing points out, when the blogger, Carrie Brownstein, asked the Grateful Dead's label if she could use a Grateful Dead song, the response was a rather pompous demand that the band would require a piece done on the band on the radio show All Things Considered as well as a feature about the Grateful Dead on the NPR website. Just for using a song in a way that many would say was fair use (not to mention that it would be from a band that actively encouraged fans to tape and share its music broadly). If anything, it sounds like the record label overreaching in seeing an opportunity to get more press for a band that hardly needs any more. But, on the whole, it shows the sort of attitude that's becoming all too pervasive these days when people need to ask "permission" to help promote a song or a band.

Permalink | Comments | Email This Story

A new study points out the rather unsurprising fact that the . The definition of hyperconnected is anyone with seven or more connected devices and nine or more applications on those devices (though, it's not entirely clear how they define an "application" since it seems to include certain websites. Apparently 16% of people surveyed fell into that camp. Another 36% are in the "increasingly connected" group that counts those who connect via at least four devices and uses six or more applications. To be honest, this seems like an odd way of defining connectivity. If I had a really good "all-in-one" device meaning that I wouldn't need that many other devices but could use that one in more circumstances, why should that make me seem less connected? Of course, then there are the unconnected. A different study has found that approximately 18% of homes in the US .

Permalink | Comments | Email This Story

You just knew that the whole Yahoo/Microsoft deal wasn't really over and done with, right? Rumors started spreading yesterday that billionaire investor and professional "shake things up" guy Carl Icahn was going to put forth his own slate for the Yahoo board (after buying up a bunch of shares in the company) which would allow him to create a board that would sell the company off to Microsoft. Those kinds of rumors don't just magically come out of nowhere, so it should come as no surprise that it looks like, indeed, Icahn will be putting forth his own list of potential board members. As plenty of people have noted, this ought to be fun to watch. Dealing with Steve Ballmer is one thing, but taking on Icahn isn't something that many do successfully. Of course, the real question is what does Icahn do with Yahoo should he gain control over the board. Many are assuming that he'll sell it off to Microsoft, which assumes that Microsoft is willing to come back to the table. Either way, it seems like what we witnessed over the last few months was merely Act One. Act Two may be a lot more exciting.

Permalink | Comments | Email This Story

Every year around this time, the Business Software Alliance (BSA) comes out with a report, put together for the BSA by IDC, about software "piracy" statistics. Every year, since 2004 I call them out on how misleading many of the stats are (or, more specifically, I jokingly refer to the BSA as Bogus Stats as Always). At times, even IDC, who puts the report together for the BSA, has admitted that the BSA has tended to misrepresent the results -- and yet IDC keeps putting together the report every year. The good news, honestly, is that over the past few years, we've seen a changing trend in the coverage of the reports on these numbers, in that more people are calling the BSA out for using the numbers in a misleading way. The BSA, to its credit, has at least tried to be more conscious of how it presents and explains its numbers... sometimes.

Perhaps because of this, in advance of the release of the latest report today, the BSA reached out to me (and I'm sure plenty of others as well) to talk about the report and address any concerns. I spent half an hour on the phone this afternoon with Neil MacBride, the BSA's VP of Anti-Piracy and General Counsel. With him was Marcel Warmerdam an associate VP from IDC. I really appreciate the two spending the time to discuss the latest study with me -- as (this should come as no surprise) we didn't agree on very much.

The report itself seems pretty similar to what's come out in previous years. IDC does a rather credible job in determining the rate of unauthorized use throughout the world. The report this year highlights the fact that the rate of unauthorized use appears to be falling in many countries while rising in a few rapidly developing ones (Brazil, Russia, India and China). This is no surprise, as it's pretty much what anyone watching this market knows happens. I have no problem with the reporting on the rate of unauthorized usage.

Where things get problematic, however, is when the report starts to look at the impact of such things. The report itself shifts back and forth between "retail value of the software" and "losses" as if they are one and the same. By now, it should be quite clear that they are not the same. My second problem is that the report also ties these faux "losses" to a separate IDC report claiming that a drop in unauthorized usage of software would increase jobs, increase revenue in the IT sector and increase taxes. That's inaccurate for a variety of reasons, specifically in that it double-counts the impact of certain things and also only counts the "ripple effects" in one direction.

I raised these questions to both Neil and Marcel, and the summary of the call as Marcel noted at the end is that we'll have to agree to disagree. We didn't discuss the ripple effects issue, because that's actually from a different study than the one released today (though, the one today does reference that report to back up its claims -- which is why I brought it up). However, Neil and Marcel defended the "losses" claim by pointing out that plenty of companies out there (they kept pointing to large companies) would go out and buy the software if they had no other option. Indeed. And, I would probably go out and buy lunch at Pizza Hut if I had no other options, but we don't count it as a "loss" for Pizza Hut when I go eat at McDonalds instead. The fact is that there are other options -- even if some of them break the license agreements. My point is that this is a business model issue that the industry needs to deal with by giving businesses positive reasons to pay, rather than threatening to whack them with a legal stick.

However, what became clear in talking to Neil was that the BSA really does seem to believe that the majority of these unlicensed uses really would be paid for -- which seems like a highly questionable claim. We also very much disagreed over calling unauthorized use of software "theft" (he says it is, and tossed out the old favorite about how it's no different than taking a CD or a pack of chewing gum out of a store). He specifically said "software is a tangible good." The problem is that this is simply not true. I'm sure plenty of software companies and the BSA itself would like it to be a tangible good -- but it is not, and no amount of pretending makes it so.

In the end, Neil suggested that maybe this is a "generational" thing (I guess I'm the young whippersnapper), which I don't think is accurate either. I think it's really more of a business model thing. The companies that make up the BSA have relied on a particular business model for many, many years. That business model depends on government-granted monopolies that allow them to create artificial scarcity. They like that business model and don't want it to go away. However, the market is shifting, and it's shifting due to companies recognizing the fundamental characteristics of software being infinite, which allows them to implement other business models that don't rely on artificial scarcity. We're seeing it all the time, even among some companies who are members of the BSA. IBM, for example, has learned that its real money-maker is in services, and free software helps build that market. Red Hat has shown a similar business model on a smaller scale. And Google, which is a software company (even if people don't realize it), has shown an entirely different model to make its software extremely profitable in a way that "piracy" is of no concern.

The more the BSA talks up fundamentally flawed "losses" the more difficult it makes it for many of its members to recognize that the market is changing, and they need to change their business models with it. The less these companies focused on made up "losses" and the more they focused on creating business models where there are good reasons for companies to pay money, the more they'd realize that unauthorized use isn't the problem at all. With the BSA reports on losses, though, too many of these companies are taught to think that the problem is elsewhere (those darn pirates), rather than in how they view the market themselves. And, that, fundamentally, is dangerous for the BSA's own members. So, I very much appreciate both Neil and Marcel for reaching out and taking the time to talk with me, and responding to my criticisms -- and I hope to continue the conversation with them. But, they did little to change my feelings about the BSA report and its misleading nature.

Permalink | Comments | Email This Story

William Patry points us to a court ruling in Australia that says, in effect, that television program guides are copyrighted material and anyone producing their own program guide needs to license that information from the TV networks. On this, it would appear that Australian law differs from US law, which doesn't consider factual information by itself to be copyrightable. However, the Australian ruling basically found that program guide information isn't quite "factual" information, but "created." Thus the copyright is on the creative decisions the TV network execs made in choosing when to show each show (yes, they're apparently serious about this). If that sounds a bit extreme (and a bit ridiculous), you're not the only one who thinks so. While the court didn't directly address the question, from this ruling it certainly sounds like you could be found to have violated copyright if you just sat in front of your TV and wrote down what played when -- and then predicted a similar schedule going forward.

Permalink | Comments | Email This Story

And here we go again with rumors about questionable DRM tactics involving Microsoft and NBC Universal. Just days after a (later denied, after first being confirmed) report that Microsoft was going to put a "copyright cop" into Zune devices, users of Microsoft's Vista Media Center were upset to find that they were earlier this week. Instead, they received error messages reading: "Restrictions set by the broadcaster and/or originator prohibit recording of this program." That would suggest, at the very least, that Microsoft's Media Center does allow content broadcasters to block shows from being recorded -- even if it turns out that they didn't block these particular shows on purpose. My guess is that this was an accident in this case, because it would be quite surprising to find out that NBC Universal and Microsoft would do this officially without any kind of announcement. However, given that other DVR systems out there do not have any such restrictions, this should serve as yet another reason not to trust Microsoft and its DRM efforts. Update: Some folks in the comments reminded us that TiVo had a similar problem a year and a half ago, which was equally problematic. There are still other DVR offerings out there that do not include these "features."

Permalink | Comments | Email This Story

A couple months ago, in discussing The Streisand Effect with a reporter, the reporter asked if I thought lawyers would one day be accused of malpractice for not informing their clients of the potential implications of demanding some content be pulled off the internet. While I doubt it will reach the point of malpractice, it certainly does make you wonder what some lawyers are thinking when there are such clear examples of what happens when you try to suppress material online. Earlier this year, the lawsuit that brought plenty of new attention to the concept of The Streisand Effect was when a Swiss bank, Julius Baer, convinced a judge to shut down the site Wikileaks for hosting some documents related to a lawsuit Julius Baer was involved in. Of course, not surprisingly, the attempt to shut down Wikileaks got those documents much more attention (and did the same for Wikileaks as well). Eventually, the judge reversed the order and Julius Baer dropped the lawsuit. But the end result showed how badly the strategy backfired on Julius Baer. Before it demanded the documents be taken down, almost no one saw the documents or even knew that the bank was involved in a case that accused of it laundering money. Afterwards, a lot more people knew about the lawsuit and had seen the documents -- and they were still online.

That situation got so much publicity, you would think that anyone would think twice about going down the same path. No such luck. Last month, Scientology threatened Wikileaks for hosting Scientology documents, and this morning (as a whole bunch of folks have sent in) news is coming out that the Mormon Church is threatening Wikileaks as well, for hosting church documents. In this case, the Mormon Church isn't just going after Wikileaks, but also threatened the WikiMedia foundation and document hosting site Scribd. It went after WikiMedia because WikiNews ran an article about the document and linked to them (which is hardly copyright infringement). Scribd was apparently hosting a copy of the documents as well (since taken down). Wikileaks, however, true to its charter, is refusing to take down the documents.

While you can understand why the Church might not like it's documents being made public, it does seem ridiculous that whoever decided to start threatening everyone didn't do the most basic research to recognize what would happen as soon as they threatened sites. Given what happened with Julius Baer, it should have been abundantly clear that threatening Wikileaks would almost guarantee that the documents were both more widely seen than before and copied widely across the internet.

Permalink | Comments | Email This Story

There was a story last week that got a lot of press about how the FBI discovered that the military was using a ton of , including thousands of fake Cisco routers. Dan Wallach has an excellent writeup looking at the security implications of what happened. From the description, it certainly doesn't sound like any of the equipment was found to include any kind of questionable technology for spying, but the point is that it would have been easy enough if someone had wanted to do so. Basically, the background is that while the government only buys equipment from approved vendors, those vendors can subcontract out the actual tech purchases to anyone. That leads to situations where (no joke) one subcontractor purchased a bunch of fake routers off of eBay and then resold them to the government via an authorized vendor. Or, try to follow the details of the case of the US Navy contracting with Lockheed Martin for equipment. Lockheed outsourced the deal to an unauthorized Cisco reseller as a subcontractor. That subcontractor turned to its own subcontractor who (yup, you guessed it) hired another subcontractor who shipped the equipment straight to the Navy. If you lost count, that's five layers deep, with most of those layers having no real oversight on what they did. You would think the government (and especially the military) would be a bit more careful in where it sourced its products from, but it certainly doesn't seem as though that's the case at all. Given all that, it's almost difficult to believe that compromised equipment hasn't been sold to the government at some point.

Permalink | Comments | Email This Story

You may recall Bridgeport Music as a company that claims to own the rights to various musical compositions and has a long history of suing anyone who samples even the tiniest bits of that music. The worst part is that there are very serious questions concerning whether or not it really has the rights to much of the music it claims to control. George Clinton, for example, claims that Bridgeport used forged signatures to get control over his catalog. A recent Bridgeport case may be interesting for a different reason, though -- one that shows how the record labels have no problem contradicting themselves when on the receiving end of a copyright infringement lawsuit.

The lawsuit involved Univeral Music, who lost the original decision and was hit with a rather large fine. Universal Music appealed that decision on a variety of points -- and appears to have convinced the judge that the punitive damages tacked onto the copyright infringement claims were unconstitutional. This is quite interesting because, as Ray Beckerman notes in that link, Universal Music is involved in a bunch of lawsuits where it's pushing for extremely high fines for individuals found guilty of infringement. In fact, Universal Music is actually on the receiving end of a lawsuit that accuses the company of requesting unconstitutionally high fines. In that case, Universal Music is asking for fines that are more than 1,000x the actual damages. Pretty high, right? So what were the damages that Universal Music (and the court) found so unconstitutionally high in this case from Bridgeport? Turns out they were about 10x the actual damages. Funny how that works.

It seems like Universal Music may come to regret pointing out the variety of reasons (pdf) why punitive damages can be seen as unconstitutional, as one would imagine that UMG's own filing will be raised against it in its own copyright infringement suits: "While the Supreme Court has declined to adopt concrete or bright-line constitutional limits for the ratio between actual or potential harm and a punitive-damage award, the Court nonetheless observed that, "in practice, few awards exceeding a singled-digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due process."... The court cited a 4-to-1 ratio as being close to the line of unconstitutional impropriety." Universal Music would likely claim in its own defense that it was complaining about punitive damages, and in the other lawsuits it's fighting for statutory damages, but there are already plenty of folks pointing out that there really isn't much of a difference in many cases.

Permalink | Comments | Email This Story