When you receive an official law enforcement document/request, like a subpoena, it can actually be pretty scary. An official-looking document from a court in association with law enforcement may leave many people with the impression that they absolutely have to comply. While there are circumstances in which you do need to comply, you can often fight back. Tragically, many companies don't. They just roll over and hand over the info, even if it violates their own policies (and sense of right and wrong). There are (unfortunately few and far between) cases like Twitter, who has shown a willingness to fight for user privacy, but it's still a tough issue for many companies.

Shawn Sims points us to the interesting story of how the popular electronics company Sparkfun publicly explained how it dealt with a very broad subpoena demanding all sales information on sales made to addresses in Georgia over a six month period. The reasoning was that a Sparkfun device was found as a part of a credit card skimmer device.
Sparkfun CEO Nate Seidle explains that the subpoena came after an initial call requesting the same info, where the company politely refused to provide the info, noting its support of the privacy rights of its consumers. As Seidle noted, no one supports card skimming, but there are issues of principle here:

I want to be very clear: creating devices that steal credit card numbers are illegal and cause pain for a lot of people. We know our parts can be used for good or for evil. We have zero tolerance for those who use them for evil. I will offer our technical services to any law enforcement that may need help reverse engineering a device. It is obvious the law enforcement agency is requesting this information to put a stop to this activity. However, I also believe strongly in the right to privacy and the protection of personal data.

After talking to their lawyers, and realizing that you don't have to fully comply with a subpoena -- but also that a subpoena can turn into a warrant which you do have to comply with -- the company worked with the law enforcement to try to limit the type of information requested, and eventually came to a compromise:

Please read the subpoena carefully. The request for 'all orders' seemed like they were casting a very wide net without cause. Discussing this issue with our counsel and working with the law enforcement agency, we agreed to obtain the orders that had the product on it, not all orders as required by the subpoena. This ended up being about 20 orders. In my opinion, one order is too much information. While I believe this legal process protects us all from wrong doing, turning over any piece of data goes against every fiber in my being. But without any further legal options, I made the decision to turn over the sub set of data.

I want everyone to know that we take your data and privacy extremely seriously. We guard it with the highest levels of security and confidentiality. If we are legally forced to turn over data, we promise you we will work with the law enforcement agency to do everything in our power to limit the amount of information released.

This is a tough position to be in -- and you can certainly argue that the company could have (or perhaps should have) continued to fight the subpoena. But in the end, it's likely that it would have to turn over the info eventually no matter what. At the very least, you have to respect the company for being totally transparent and open about what happened and why (and how Seidle personally felt). Plenty of other companies would hand over the data and then never discuss the issue publicly ever.

In one of many Apple patent fights concerning smartphones, it went after Taiwanese smartphone maker HTC in both the courts and using the infamous ITC loophole that gives the company two separate cracks and blocking competition using the same patents. The ITC ruled in Apple's favor late last year, issuing its customary injunction (the ITC can only issue injunctions blocking import, rather than any monetary award). HTC was given time to create a fix, but the injunction has apparently gone into effect, and it means that the newest HTC phones -- eagerly awaited by some -- are being held at the border by customs to make sure that allowing them into the country won't violate the ITC injunction. It's pretty sad that Apple doesn't appear to think that it can actually compete on the merits in the marketplace, but rather has to resort to this sort of protectionism. Similar to Apple's complaints against Samsung, I have to admit that all this has really done is increase my interest in both the HTC One X and the HTC Evo LTE. If a smartphone is so good that even Apple is scared to compete against it, well, that seems like a phone that might be worth having...

No one likes feeling drowsy when they want to be awake and alert. For centuries, folks have been self-medicating by drinking various beverages with caffeine (and Coca-cola originally had a more potent drug in it). We've come a long way from just boiling tea leaves in water, and here are just a few more ways caffeine is spreading into our lives.

• Inhalable caffeine isn't really meant to be absorbed by the lungs, despite its name. Caffeine doesn't really seem like a dietary supplement, either. [url]
• The Caffeine Zone app is supposed to help optimize when a person should ingest caffeine for maximal effects. But this simple app doesn't take into account personal metabolisms -- it just predicts how much caffeine will be left in your bloodstream after you enter in how much you drank, when and how fast. [url]
• The CDC and FDA have several warnings against caffeinated alcoholic beverages. But where are the warnings for a rum and Coke? [url]
• To discover more food-related links, check out what's floating around in StumbleUpon. [url]  

By the way, StumbleUpon can also recommend some good Techdirt articles, too.

There is a major problem with the Anti-Counterfeiting Trade Agreement (ACTA) that has little to do with IP or the internet: how does international law get made—by the President alone, or with Congress's involvement? ACTA's key problem in the United States is a Constitutional question that turns on the separation of powers. The President, or an office of the executive branch like USTR, can negotiate treaties that fall within presidential powers. But for topics that fall within Congressional powers, like IP law, the Constitution requires that Congress be involved in the process.

The most obvious and difficult way to involve Congress is through Article II of the Constitution. Under Article II, a treaty negotiated by the executive branch is presented to the Senate for ratification. The process is notoriously difficult, because it requires two-thirds of the Senate to approve. So USTR, almost understandably, wants to avoid the Article II process if at all possible.

A number of years ago, this wouldn't have been a problem, or at least not a Constitutional one. Congress gave USTR "fast track" authority to negotiate trade agreements, subject to an up-or-down vote at the end of the negotiating process. This authority, however, expired in July 2007. ACTA wasn't announced until October of that same year. Fast track wasn't great, because it didn't allow for amendments, but at least it allowed final oversight over the executive branch by Congress. It also allowed international law to be made, because the hurdle of Senate ratification for Article II treaties can make that process come to a standstill.

USTR knew, then, when it began negotiating ACTA, that it no longer had Congress's authorization to negotiate these kinds of trade agreements. This doesn't mean that USTR had to drop its activities, but at the end of the negotiating process, it would have to seek Congress's approval anew. If Congress decided not to do an up-or-down vote or amend the agreement, the agreement would need to go to the Senate for ratification, or it would fail.

So USTR tried to avoid the process, and Congress, entirely. USTR initially explained that it planned to negotiate ACTA under the President's powers, alone. This made no sense, as prominent legal scholars noted. The President's inherent powers do not involve IP. That’s Congress's purview.

In March 2012, USTR switched gears. After Senator Ron Wyden publicly questioned the way in which ACTA had been negotiated, the Legal Advisor to the Department of State, Harold Hongju Koh (disclosure: also formerly the dean of my law school and my professor of transnational law), explained that ACTA wasn't being negotiated just by the President. Koh explained that--surprise!--Congress actually had been involved in ACTA, authorizing the negotiation of ACTA beforehand in the 2008 PRO-IP Act.

There's a major problem with this argument. First, the part of the PRO-IP Act Koh cited describes the creation of a plan for US agencies to generally coordinate on IP enforcement, under the IP Czarina Espinel. It isn't addressed to USTR, and it doesn't authorize USTR to negotiate an agreement.

Second, there's an element of madness in claiming that the 2008 PRO-IP Act authorizes ACTA. ACTA was announced in 2007. How can Congress pre-authorize the negotiation of a treaty that was announced in 2007 through a law enacted in 2008?

Thus, while the EU focuses on ACTA's impact on fundamental rights and liberties, in the United States the procedural problem blows those questions out of the water.

This is about situating ACTA against a bigger picture of the excessive power of the President, and the ability of Congress to put limits on the executive branch. In the context of treaty-making, it's about all of our international lawmaking, and an executive branch that has grown used to making international commitments without involving democratic process. It's important to understand that ACTA is just the tip of the iceberg, where the public has finally encountered the craziness with which international law now gets made in the United States. Frequently, now, international law gets made by the President under purported prior authorization by Congress, without a democratic vote at the end of the process.

There are enormously important values at stake. When the executive negotiates without Congress's participation, citizens don't get a say in the process. We don't get to review the agreement, or pressure our representatives into changing or rejecting it. However, special industry groups do, including the RIAA, as advisors to USTR.

It's not that all the problems with IP and trade law would disappear if we involved Congress. But the struggles of advocates and academics with USTR's lack of responsiveness and the secrecy around ACTA and TPP show that we require at least a sense of being able to effect change through democratic process.

Congress needs to get involved here. It needs to make clear to the administration that it must send ACTA to Congress to seek approval, or to the Senate for ratification as an Article II treaty. With this in mind, I am part of a group of legal academics that is writing to the Senate Finance Committee asking them to make these requirements clear with respect to ACTA. The PRO-IP Act doesn't authorize ACTA, and IP is not part of the President's inherent powers, so Congress must get involved.

And the problem continues. Last week, the USTR and other countries met to continue negotiating the Trans-Pacific Partnership Agreement (TPP) in Dallas. The TPP also contains an unreleased IP chapter of dubious substance. As of now, USTR still doesn't have fast-track authority from Congress to negotiate agreements like the TPP. USTR also can't claim that the PRO-IP Act authorizes negotiations this time, because unlike ACTA, TPP is broader than just IP. So once again, USTR is negotiating an international agreement without a clear plan of how Congress or the Senate will be involved. If USTR does not get the desired fast-track authority for TPP, it will have to try to get after-the-fact approval from Congress or ratify TPP as an Article II treaty. So where ACTA is facing a Constitutional crisis where the executive branch is claiming it can go it alone, TPP is an example of an overactive agency not thinking through how it will Constitutionally accomplish its goals.

What we have right now is an overactive executive branch accustomed to a lack of supervision, and a Congress that has failed to assert its Constitutional responsibility in this sphere. If we want public input on international law-making at any point in the future, this is a dynamic that we're really going to have to work hard to change.

For the 9th year in a row, the Business Software Alliance (BSA), an organization that mainly represents Microsoft's interest, has put out its ridiculous "Global Software Piracy Study", which argues that tons and tons of software is being pirated, and if only people paid for it, there would be $63.4 billion more going to software companies. We've been criticizing the ridiculously laughable methodology of the report since it began, and even have seen the company that does the research, IDC, admit that the BSA exaggerates what the report actually says. We've done multiple detailed analyses of how the BSA's stats are misleading (or just flat out bogus). And yet, because there are magical numbers involved, the press just loves to parrot the claims without any skepticism.

This year's report is no different. It's more of the same ridiculousness, with a clueless press reporting (totally inaccurately) that the study says that software piracy "costs" the economy $63.4 billion. That's simply not true. What the report did find was not actually surprising or even very interesting. It's that people in developing countries tend to infringe more often. You probably knew that already, but if you wanted evidence for that, you shouldn't look to the BSA and its bogus stats, but a thorough, comprehensive and independent review of the market, such as the one done by Joe Karaganis and SSRC last year. That report found the reason that there was increased piracy in developing markets was because clueless companies don't realize that people aren't going to pay a month's salary for a single digital good.

Of course, rather than recognize it's their own business model failings at issue, the BSA is once again using this report to call for "tougher penalties" for infringement. This despite the fact that no study has ever shown that such penalties actually drive more people to buy.

Thankfully, at least some people are calling the BSA out on its bogus report, such as by noting that it's political propaganda designed to get legislation like SOPA and PIPA passed. The reality, of course, is that it shows how out of touch the BSA is with the innovation economy today, instead working to lock up and protect the interests of its major funders: Microsoft, Symantec and Intuit. Those companies are threatened by upstarts with better business models, and the best they can do is to support legislation that will lock down the internet, causing more harm than good for true innovation.

The "Bogus Stats Again" report from the BSA isn't about dealing with piracy. It's a way of white washing an agenda of protectionism for some large software companies who don't want to compete or to adapt.

Recently, Mike wrote about the importance of externalities and spillovers in economics, and the fact that it's often best to allow other people to capture pieces of the value you create and build on top of it. Not only does this benefit the economy as a whole, it benefits the originator, because some of the additional value that people create feeds back to them.

In the video game world, a great example of this is when companies open their games up to mods, so users can tweak them or build entirely new games on top of the same basic engine. Valve's Counter-Strike series grew from a fan-made mod for Half-Life, which was so popular it has been credited with keeping Half-Life on gamers' radars for years longer than it would have been otherwise, leading Valve to hire the creators and turn it into its own game, which remains one of the company's most successful titles. This week another example bubbled up on Reddit, in the form of a captioned screenshot of the Steam store titled "Dear developers, this is why you should make your games moddable":

The game ARMA II: Combined Operations was on track to be another mostly-forgotten game, still enjoyed by a small group of fans with few other prospects. Then, two years after its release, and without getting any kind of promotional sale price, it started selling like crazy and surged to the front page of the Steam leaderboards. Why? Another team of developers One of the company's developers released the alpha of a project he'd been working on independently: Day Z, a zombie-survival game built as an ARMA II mod. Fans have been clamoring for a particular type of zombie game for a while now (and Cracked's Robert Brockway pitched a similar idea recently) and the description of Day Z sounds like it fits the bill—so when the free alpha of the mod was released, lots of people bought a copy of ARMA II so they could give it a try. The developer was expecting it to be a hit within the existing fan community, but he had no idea that it would cross over into the mainstream.

In this situation, everybody wins. Gamers get a new game, ARMA II gets renewed sales, Day Z gets to exist (without the need to build a brand new engine). The sales boost to the original might be temporary, or it might spark new interest in the game and revive it entirely, or it might inspire newer and even more popular mods, or... well, there are a lot of possibilities, none of them bad. All because the ARMA II creators had the foresight to let people add value to what they created.

Update: A commenter pointed out that Day Z is the independent project of one of the developers working on ARMA 3. Post has been updated to reflect that fact.

Kevin H alerts us to the news that electronic music/DJ artist The Polish Ambassador recently began musing on Facebook about what it would mean to be an "open source" musician:

According to Wikipedia, "Open Source" is a philosophy that promotes free redistribution and access to a project's design and implementation details. The end user who edits the program is then allowed to send his/her input to the author for possible inclusion in the project.

If an artist like The Polish Ambassador were to become an open sourced project what might that look like? Is there room/possibility for art/music/brands to become open source? Is it already happening? Could this ideology serve some purpose? Maybe a way to get other people's ideas out there? A way to collaborate? A way to merge efforts of like minded folks? A way to create art from art? A way to generate $ for end users/charities? It seems to me the possibilities are endless. We all use open sourced software every day. Linux, Firefox, etc, but I haven't heard of many artists that when I think of their name, I also think, "O yea, she/he's that open source artist." Maybe there's a reason for this, maybe not. With Twitter/Facebook and the web in general, technologically speaking, we have never been more connected. Would love to hear your thoughts and ideas. Could "open source artists" be an evolutionary step for art?

Of course, many folks in the "free culture" world would point to Creative Commons as the artistic equivalent of an open source offering. However, two interesting things strike me. First, as of the time I'm writing this post, no one in the dozens of comments posted to that story mentions CC at all. Second, the request actually goes a bit further than CC. It's not just about making the works free to distribute or use... but the second part: sending it back to the original creator for possible inclusion in the project. Now, again, we have seen some examples of this with various remix projects. In particular, I'm reminded of the experiment by K-OS, where rather than having fans remix an album, he pre-released all the stems, and let fans create their own original mixes, and then took the best for each song and released a combo album: one of his own mixes, and a second of the best fan mixes. In the hip-hop world, releasing instrumentals or acapellas for fans and other artists to remix (and building contests or other promotions around that) is fairly common—but only a few artists have gone further and offered up the individual bits and pieces. Perhaps that's along the lines of what The Polish Ambassador is looking for.

Either way, this has me wondering if there isn't something Creative Commons could include in their offerings, or if if this goes beyond that. It is an interesting point however. One of the thrills people get in working on open source software isn't the fact that they can do what they want with it, but that they can collaborate to make the project better. Open source developers feel well-earned pride when a contribution gets included in a larger project. Imagine the same situation with musicians. What if your favorite band released your remix of their song? That is, what if they effectively worked with you and said your version was one they really liked -- such that you got the official stamp of approval that had the work more widely distributed? Again, it appears that some artists are doing this on the margins, but it seems like the kind of thing that could be more clearly formalized and promoted as a cool way for artists to connect with fans and for fans to gain some form of validation for their own help with certain projects.

Oh, and in the meantime, it appears that The Polish Ambassador is currently offering up its entire discography for free -- 7 hours worth of music, all in FLAC format.

For many years I've been pointing out the basics of economics concerning concepts like "free" and the importance of marginal cost to pricing in an efficient market. After one such recent post, I got an angry email from a college professor who has worked in the entertainment industry for many years, telling me that clearly I had never taken an economics class. That, of course, is not true. I took a great many economics classes, and learned the economics I talk about here on the site from some of the best economists around. Either way, I do wonder what this same individual would say upon reading well known (and greatly respected) economist Dean Baker's latest column about how The Pirate Party has got it right on copyright:

Near the top of the list of the Pirate Party's demons is copyright protection, and rightly so. Copyright protection is an antiquated relic of the late Middle Ages that has no place in the digital era. It is debatable whether such government-granted monopolies were ever the best way to finance the production of creative and artistic work, but now that the internet will allow this material to be instantly transferred at zero cost anywhere in the world, copyrights are clearly a counter-productive restraint on technology.

As every graduate of an introductory economics class knows, the market works best when items sell at their marginal cost. That means we maximize efficiency when recorded music, movies, video games and software are available to users at zero cost. The fees that the government allows copyright holders to impose create economic distortions in the same way that tariffs on imported cars or clothes lead to economic distortions.

The major difference is that the distortions from copyright protection are much larger. While tariffs on cars or clothes would rarely exceed 20-30 per cent, the additional cost imposed by copyright protection is the price of the product. Movies that would be free in a world without copyright protection can cost $20-$30. The same is true of video games, and the price of copyrighted software can run into the thousands of dollars.

Baker goes on to suggest some alternative means to fund such creative works in a world without copyright, including ideas like "artistic freedom vouchers" that would give people a refundable tax credit on supporting creativity, on the condition that any of the creativity funded by such money would not be able to protect it with copyright for a period of time. I find such program interesting, though I do wonder if they'd even be necessary. As we've been seeing over and over again, all sorts of interesting new business models are springing up that have nothing to do with copyright. As there is demand for creativity, I fully expect more and more such models to continue to show up as well. What I fear is that the focus by those who benefit excessively from the monopoly rents and protectionism of copyright, will lead to cutting off innovation or killing off interesting and more efficient business models, before they have a chance to evolve.

Contrary to what some like to say about me, I am not convinced that copyright should be done away with completely. I do think that it needs significant reform. I just want that reform to be based on actual evidence and understanding of basic economics rather than faith and the demands of those who have benefited excessively from it, over those who have been held back because of it.

If you don't recall, among the various domains that ICE and the DOJ seized last year were two domains -- rojadirecta.com and rojadirecta.org -- held by a Spanish company, Puerto 80. After extended negotiations to try to get the government to return the domain names, Puerto 80 finally sued the government to get them back. Almost immediately after, the government filed to forfeit the domains (seizing property is supposed to be a temporary thing -- if the owner wants it back, the government has to file for forfeiture to keep it permanently). Thus there are two semi-parallel issues going on here. Either way, the judge rejected the request to return the domains prior to the trial, and while the appeal on that process is ongoing, back in the district court, the fight over forfeiture has continued.

Last December (actually the same day that the government was handing back the Dajaz1 domain in a similar dispute), the lower court dismissed the forfeiture claim -- saying that the government failed to plead willful copyright infringement, which is necessary to show criminal copyright infringement. However, it allowed the government to refile, which it did. The two sides have filed their latest motions in the case, and once again, it appears that they're talking about two totally different things. In fact, reading through the government's filing, it appears that they either have no understanding of the law itself, or have twisted themselves into such a tight knot, that they're not sure how to get out of it.

The details are a bit tedious, but let's see if we can break it out. First off, the seizure and forfeiture are "in rem" -- meaning that the case is against the domains themselves, and not the owners of the domains. That can be an awkward distinction, obviously, but the government makes it much, much more awkward in that it seems to shift its argument back and forth constantly. For example, it repeatedly (in a rather mocking tone) rejects the arguments of Puerto 80 by noting that no one is accusing Puerto 80 of anything. The case is merely about how the Rojadirecta domains "facilitate" criminal copyright infringement. So the government argues that the court should ignore the (rather compelling) defenses for why Puerto 80 did not violate criminal copyright law.

Now, that part is fine... but where it gets weird is that the government immediately then tries to use Puerto 80s actions as proof of facilitating infringement. If you're playing along with the home game, the government is arguing both that Puerto 80s actions are meaningless to the case and that Puerto 80's actions are the key to facilitating criminal copyright infringement. Basically, whenever Puerto 80 points out that its actions do not meet the standard of criminal copyright infringement, the government waves its hands and says "doesn't matter, we're not charging you, just the URL." But then to prove that the URL "facilitated" the actions, it cites Puerto 80's actions, rather than the URL's actions. That's because the URL doesn't act. It's just a URL. See the following as an example:

Additionally, there can be no serious argument that the Government has alleged that the Rojadirecta Domain Names' facilitation of the underlying copyright offense was anything but substantial. See Amended Complaint... ("At all relevant times, the links displayed on the main homepage of the Rojadirecta Website were purposefully aggregated and organized by the owner(s) and/or operator(s) of the Rojadirecta Website. Moreover, more than half of the material available on the Rojadirecta Website at any given time during law enforcement's investigation appeared to be dedicated to making infringing content available to users of the Rojadirecta Website.")....

Puerto 80's arguments about its own conduct are irrelevant and misapprehend the nature of the inquiry

See that? First it's "here's all the evidence of things done by Puerto 80"... and then immediately, "Puerto 80's actions are irrelevant".

At times this reaches absolutely absurd levels, such as the part of the government's filing in which they assert that the domain itself had knowledge of infringement. The feds can't say Puerto 80 had knowledge, since (again) they admit that Puerto 80 is not being charged. So they switch and anthropomorphize the domain itself:

Indeed, the Rojadirecta Domain Names were repeatedly noticed that they were linking to copyright infringing content.

You see? It's not Puerto 80 who was noticed, but the domain name itself. It must have "known." Or something.

The government's argument gets even worse from there, because nowhere does it show where the criminal copyright infringement happened. In order for the government to claim that the Rojadirecta domains facilitated criminal copyright infringement, you would think the first step would have to be to show where it actually happened. Here, the government basically waves its hand and says, "of course it happened." First, it highlights the fact that because of links on the Rojadirecta sites, content could be streamed from third party sites. In fact, it straight out admits that Rojadirecta hosted no infringing content, but rather it was all on these other sites. It then notes that such streams likely violated the performance and reproductions rights under the Copyright Act. That may be true, but that, alone, does not make it a criminal offense. That requires willfulness -- which was the problem in the original filing.

But, here again, the feds run into a serious problem: how can they show willfulness on the part of the infringer when they never identify an infringer? The entire filing insists that the domains should be forfeited because they were used to facilitate a crime, but they never show that any crime was actually committed, because they never even attempt to identify who committed the crime. They admit that it's not Puerto 80 (even as they try to use Puerto 80's actions). It likely isn't the users of Rojadirecta (and the government doesn't even try to make that claim). Instead, it seems to hint at an imaginary party who willfully infringed, but is never actually identified! It's really amazing.

The implications here are staggering. Basically, the feds are arguing that they can seize and then forfeit a domain without showing any crime actually happened. Instead, all they need to do is vaguely assert that someone, somewhere may have possibly violated a law somehow using the domain in the process -- but they never have to actually prove anyone violated the specific law. In other words, if the government wanted to, under this definition, it could easily seize and forfeit any search engine domain or any website that allows public comments, merely by asserting that a link in a search result or a link in a comment led to infringing material. That's an insane interpretation of the law -- yet it appears to be the one that the feds are asserting.

One hopes that the judge actually understands the absolutely insanity of the feds' argument here. Puerto 80's lawyers lay it out nicely (pdf) in their response, but courts can be funny sometimes -- especially in copyright cases. Still, the argument made by Puerto 80's lawyers lay out just how ridiculous this interpretation would be:

Under the government’s construction of [the law], every domain name that pointed to a website containing links to infringing copies would “facilitate” and have a “substantial connection” to the offense of criminal copyright infringement, and would therefore be subject to forfeiture. The broad construction of the term “facilitation” the government seeks would give it the power to shut down google.com, yahoo.com, bing.com, or any of an array of other channels of communication that—like every site on the Internet—link to content provided by third parties that might or might not be infringing. The property in question is two domain names, which (in the government’s words) are merely “labels” that “resolve” to websites, and are distinct from the servers that host the website or any content of it....

The government’s theory would have allowed it to seize the New York Times issue that published the Pentagon Papers and destroy it, on the theory that the New York Times was facilitating Daniel Ellsberg’s violation of national security laws. And the Times would have had no opportunity to show that its speech was lawful. There is no reason to think Congress intended the forfeiture statute to extend so broadly. And even if it had, Congress lacks the power to confer such plenary control over speech on government agents acting without judicial sanction.

Of course, all of this doesn't even touch on two other important issues in the case. One is the First Amendment questions raised by seizing a domain and the second is the fact that US copyright law only matters in the US, not in Spain. In both cases, the government again comes back with wacky responses. On the First Amendment claim, it argues there's no First Amendment issue, relying incorrectly on the Arcara vs. Cloud Books case. But that ruling is clear that it only applies if the crime in question is not expressive. But copyright infringement is often absolutely expressive. It may not be protected expression but it is expression, and as such it requires First Amendment scrutiny to make that determination. The government flat out claims that copyright infringement (which it falsely calls "intellectual property theft") is "unrelated to speech." That's simply incorrect. Courts have long established that there is a balance between copyright and the First Amendment, and you can only establish infringement following a ruling by a court. Yet here the government wants to skip over that step entirely. As Puerto80 notes:

The government argues that the links on the Rojadirecta website are not protected speech because they constitute copyright infringement. But that argument exactly misses the point of the prior restraint doctrine. Unless and until there has been a final determination on the merits after an adversary hearing, there is no basis to find that criminal copyright infringement occurred on the third party sites to which the Rojadirecta website linked.

As for US law being applied outside the US, here the government just tries to wave this issue off again. It first admits that US law does not apply outside its borders, but then insists that it is "inconceivable" that some infringement didn't happen inside the US. But that's not how the law works. You have to actually show the infringement. You can't just insist that it happened somewhere in the US and move on...

The further this case goes, the worse and worse the government's arguments seem to get, and the less and less it seems to understand about the hole it has dug for itself.

Nastybutler77 was the first of a few people to send over this story of a church pastor, Charles O'Neal, of the Beaverton Grace Bible Church in Oregon, suing a former church member, Julie Anne Smith, and her family, for posting a negative review of the church online. O'Neal claims that the review was defamation, and apparently responded to Smith's review on Google with a post about how Smith was lying and how he was planning to sue.

Some of the specifics argued in the lawsuit do seem to quite critical of the church, but it's not clear they rise to the level of defamation:
The original report also claims that part of the lawsuit claims that using the word "creepy" is defamatory. While the factual statements might be defamatory, opinion statements such as calling a place creepy are clearly not.

For what it's worth, Oregon appears to have a reasonably strong anti-SLAPP law, and I wonder if Smith will make use of that. It will depend on the details of her statements to see if they were truly defamatory, but the general descriptions provided certainly make it appear like a vindictive lawsuit to silence a vocal critic.

A few years back, we wrote about how a sculptor who had been contracted by the US government to create the Korean War Memorial in Washington DC was suing the US Postal Service because it had released a stamp using a photograph of the Memorial. There were all sorts of issues with this, starting with the fact that the US government should never commission a monument in which it does not also get the copyright. Leaving it with the artist is ridiculous, because now we have a public memorial, which gets photographed a ton, and a single photographer artist has control over it? Why would the government allow this? The second problem was that this seemed like a classic case of fair use. The photo was clearly transformative from the original work, where most of the power of the photo is in other elements beyond the statue (the snow, the lighting, etc.). Unfortunately, however, the appeals court for the federal circuit (CAFC) made one of its all too typical bizarre rulings and decided that the photo was infringing. As we noted at the time, it rejected the transformative nature of the photo by claiming those were "nature's choices," which would effectively eliminate all nature photography from being covered by copyright.

That said, the case has continued, as the follow up fight was about how much the sculptor, Frank Gaylord, should get. The district court looked at typical licensing deals from the US Postal Service and realized they usually pay a couple thousand dollars. The highest amount it could find was $5,000, so they awarded him that. Gaylord appealed, asking for 10% of all revenue from the stamp, which he estimated would be around $3 million on the $30.2 million in revenue made already. That's a pretty big difference. CAFC has once again sided with him saying that the lower court was wrong to just award him $5,000, without taking into consideration how much Gaylord might have wanted to license the work for in the first place. The lower court will now have to reconsider, and the US taxpayer may have to pay this guy a ton of money yet again.

So, can we convince the federal government of a rather simple idea going forward: if you have someone create a memorial or statue or piece of artwork for public display, part of the deal is they put the whole thing into the public domain. If they don't like it, find another artist. The fact that this work is not in the public domain is a travesty. The fact that the photo is not considered fair use on the sculpture in the first place is a travesty. The fact that he may end up getting another batch of money for this is a travesty. And all of it could have been avoided if someone (anyone) in the US government realized ahead of time that artwork created for public display should belong to the public.

While The Pirate Bay has lost all of its appeals in Sweden, one of the founders, Fredrik Neij, is apparently going to take his case to the European Courts, arguing that shutting down a site like The Pirate Bay is a violation of Article 10 of the European Convention on Human Rights. As Neij's lawyers point out, since TPB does not host or transmit any material covered by copyright, shutting it down (or fining and jailing Neij based on its usage) rejects his rights "to receive and impart information."

While I understand where he's coming from, I do worry that courts to date have been particularly bad at comprehending the fact that The Pirate Bay neither hosts nor transmits any unauthorized information. While they are seeking to make analogies, the courts seem to zero in on the way many people use the tool, rather than separating the tool from the usage.

The lawyer also notes that since the torrent file information itself wasn’t illegal, the function should be covered by Article 10. He adds that he will also ask for further scrutiny as to whether it was indeed correct to hold Fredrik Neij responsible for what other people did when they used The Pirate Bay.

“In our opinion, it is like being held guilty in court because someone delivered a letter with illegal content. Another, and perhaps even more relevant analogy, would be if the founders of a buying and selling site were found guilty after someone sold a stolen bicycle after it was advertised on the site,” Nilsson explains.

Basically, it sounds like they're going with a typical secondary liability protection argument, which makes sense in theory. Once again, however, the courts have been pretty resistant to recognizing such an argument, especially when so much of the usage is for infringing purposes and (especially) when the operators of the site were quick to mock those who challenged how much of the usage was infringing. The courts just don't have very much sympathy there. Thus, I'm not confident this will turn out all that well -- and I actually worry that the end result may be a precedent that cuts of secondary liability protections for other sites as well.

The conflation of tools and technologies with the ways people use them is a big problem in the copyright debate. One of the many, many examples is the way the anti-piracy crowd treats "torrent" as a dirty word. Google endorsed this last year when they started dropping it from their search autocomplete results, and as Mike pointed out at the time, just imagine they had done the same with "mp3" a few years ago when that was supposedly synonymous with piracy. Defenders of this kind of filtering don't take such a forward-thinking stance, and their typical response in the torrent debate is to assert that the majority of BitTorrent traffic is likely infringing. Of course, that's not really the point: you don't look at the ratio of infringing use to legal use, but rather at the legal use by itself—if it's substantial and meaningful, then you have to go after the infringing users, not the technology as a whole.

Torrents have many legitimate uses. BitTorrent is simply a good protocol for sharing large files with large groups—they are perfect for films, video games, music and of course software. Linux distros are a commonly cited example, since they are always available by (perfectly legal) torrent, but this is often brushed off as if it's an excuse and torrents are not really necessary for this. Geek icon Wil Wheaton puts a bullet in this notion with a recent post on his blog, clearly demonstrating why he turned to BitTorrent for a copy of Ubuntu:

One of the things that drives me crazy is the belief in Hollywood that bittorrent exists solely for stealing things. Efforts to explain that this is not necessarily true are often met with hands clamped tightly over ears, accompanied by "I CAN'T HEAR YOU LA LA LA."

As an example of the usefulness of bittorrent for entirely legal purposes, I present the following comparitive images:

In case you can't see, the torrent is going about six times faster than a direct download, needing less than 10 minutes as compared to nearly 45. It's a simple example, but an effective one: P2P sharing is simply better sometimes. Google prides itself of directing people to the best possible information, but when their users start searching for the latest version of Ubuntu or the new Counting Crows album, they won't see autocomplete suggestions for this perfectly legal (and potentially superior) means of obtaining what they want. Seems like that runs directly counter to Google's mission. It may only be a minor annoyance, but it's also pointless, and it will only get worse as more and more people embrace torrents for legitimate distribution.

You may recall that, in the case of Joel Tenenbaum -- who is in a legal battle with some major lbels for file sharing -- a jury awarded the labels $675,000 for the sharing of just a few songs. The judge, Nancy Gertner, pointed out that this seemed unconstitutionally excessive and reduced the award to $67,500 -- knocking 90% off the jury's award. The appeals court in the case reinstated the original $675,000 on procedural grounds. It said that Judge Gertner jumped the gun in leaping to the constitutional question, rather than using remittitur, as had been done in the Jammie Thomas case. Remittitur would allow the RIAA to have the case happen all over again with a new jury. In the Jammie Thomas case there have already been three trials.

Tenenbaum, led by famed lawyer/law professor Charles Nesson, challenged the appeals court on all of this, but had that quickly rejected. As we noted at the time, Nesson seemed to (as he's done in the past) argue points unrelated to the specific legal questions at issue. This seemed like a bad way to go about things in a court of law, even if it may help in the court of public opinion.

The latest is that Tenenbaum/Nesson have filed to raise the issue with the Supreme Court. At least the argument here is a bit more focused on the requirement for remittitur, with Tenenbaum's team arguing that the statutory damages for non-commercial use is clearly a major Constitutional issue, and by forcing it through the remittitur process, all the courts are doing is pressuring people like Tenenbaum to settle, rather than ever allowing it to be judged on constitutionality. And that has consequences -- namely in enabling copyright trolls to shake people down, without ever allowing them to challenge the constitutionality of massive statutory damages.

I actually think this is a much more persuasive argument than I've seen from Team Tenenbaum in the past, but it seems unlikely that the Supreme Court will actually take the case on. I hope I'm wrong (and then, if I am wrong on that, I hope I'm wrong in my guess as to how it will come out, because this version of the Supreme Court doesn't appear to understand the issues around copyright law). Either way, we should find out soon enough.

I do think it's interesting that Nesson is using the copyright troll issue as part of the argument. Eventually, this or an issue like it will get to the Supreme Court, and hopefully the Justices realize just how damaging such practices can be:

They use the asymmetric cost of litigation to make defense by the individual economically irrational.

This Court should do everything it can to remedy this misuse of process. Its effects are not ended because the RIAA has ceased suing individuals. Others are using the legal structure and litigation tactics they have put in place.4 The weight of federal litigation is not a tool appropriately used to suppress legal challenge. The absence of cases pending in the federal courts highlights the problem: a deeply misshapen judicial architecture has been set in place. Without review, it is unfixable. The suppression of ability to challenge a process that is repeatedly producing appalling results, not circuit splits, is exactly why this case is worthy of this Court's present attention.

It's an interesting argument to get around the lack of a circuit split (conflicting rulings in different circuits, which is one of the key reasons why the Supreme Court agrees to hear certain cases). However, I just don't think the Court will think it's a big enough deal to jump on it, perhaps figuring that it can bounce back up eventually. Of course, that only underlines the point: for that to happen, it means years more of Tenenbaum's time wasted with this case. That seems unfortunate.

Even though just about every objective statistic suggests otherwise, the copyright industries still take turns bemoaning the terrible toll that piracy is supposedly taking on their markets. So it's good to come across some official figures that suggest the contrary, particularly because in this case they come from the European Audiovisual Observatory—not a market research company, but a public service body. Here are the latest numbers for the European film industry:

2011 was a year of stabilisation at the European box office as the marked upward trend of GBO [gross box office] of the past two years slowed down significantly, resulting nevertheless in an overall year-on-year increase. Based on provisional data the European Audiovisual Observatory estimates that EU gross box office returns increased marginally by 0.7% from EUR 6.37 billion [$8.14 billion] to EUR 6.4 billion [$8.18 billion], still the highest level on record. Cinema attendance remained stable with an estimated 962 million tickets sold.

Note that this is no mere one-off -- the report speaks of a "marked upward trend" of the previous two years that has slowed down significantly, but is still there, leading to what it terms "the highest level on record". That's about box office sales, but maybe the European film industry itself is suffering under the onslaught of popular US movies? It seems not:

2011 saw European films claiming back market share which they had lost to US 3D blockbusters in 2009 and 2010. Based on provisional figures, estimated market share for European films in the EU climbed from 25.2% to 28.5% in 2011, back to the ‘pre-3D’ levels of 2007 and 2008. Market share for US films on the other hand fell from 68.5% to an estimated 61.4%. This would be lowest level since 2001.

The best result for a decade, then. Now, that's all very well, but might still be the result of a few anomalous European blockbusters that have distorted the figures. According to the European Audiovisual Observatory, that's not the case:

EU production levels continued to grow to 1,285 feature films in 2011, 59 films more than in 2010 and a new record high.

In other words, in 2011, Europe note only saw record box office receipts at cinemas, but also record indigenous film production. It's a little hard to see how anyone could try to spin that as another "piracy is destroying the European film industry, we must bring in tougher copyright infringement laws" story, but I'm sure the usual suspects will try their darnedest.

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