You know how content and product producers hate when the public recreates what they do on their own? Like when somebody with the copyright on a David Bowie song went all nutso over a fan film? Or when the music industry took a position so ridiculous that it could be compared to the slogan "Home Cooking Is Killing The Restaurant Industry"?

Well, shockingly, it turns out not everyone that produces a product has that mentality. Take, for instance, Matthew Pisarcik & Sebastian Sandersius, the founders of Bison Made, makers of some seriously well-made wallets (story sent in by Markiyan).

However, nothing is more frustrating than purchasing something expensive with your hard-earned dollars and having it fail on you. In this article, we want to address a common problem for men: their wallets don't hold up. It's a source of pride to build something that you can call your own.

Too true, but one wouldn't expect that to result in a blog post by makers of quality wallets to teach everyone how to make their own quality wallets. The rest of the post is a rather detailed, informative set of instructions on how to make a wallet in the same manner that Bison Made makes them. It's essentially an informative version of a patent, minus all the supposedly progress-promoting restrictions. Perhaps you're asking why they would do such a thing. They do not answer that question explicitly, but I would suggest it's a simple matter of confidence. Take the way the post ends.

Bison Made uses these same basic principles when producing quality leather carry goods. Instead of paper patterns and hand cutting, we use high precision cutting dies to create consistent leather components that are hand finished and stitched. We have taken a position that by starting with high-quality raw materials and detailed precision, beautiful and functional works that are designed for life will follow.

In other words: here's how to make what we make, and it's real, but we are really, really good at it. Also we have the materials, machinery, and know-how. So here's our designs. Here's what we do. Feel free to make it if you like. But if this explanation of what we do helps you appreciate all the work that has gone into our business, you could always spend a little money with us to get the real thing.

It looks like the long-running dispute between GEMA, Germany's brutish performance rights organization, and YouTube isn't ending anytime soon. This licensing battle goes back to 2009, when Google's contract with GEMA ended and the German PRO asked for $0.17 per view, a rate Google claimed was "without comparison in the history of online music." (By comparison. YouTube was paying PRS, the UK performance rights group, $0.0034 per view in 2009.) GEMA countered that it had offered to take $0.01 per stream, but wanted YouTube to cough up more usage data in exchange for the cut rate.

Once this initial negotiation broke down, things went from frosty to litigious.

GEMA went on to sue YouTube in a 2010 test case for distributing copyrighted material without permission — holding it responsible for copyrighted material uploaded by its users. Then in April last year a German court ruled that YouTube must install software filters to prevent users uploading content whose rights GEMA holds.

After a couple of lawsuits, GEMA returned to the "negotiating" table, this time with an offer a bit more in line with reality.

Die Welt reports that GEMA wants the German Patent and Trademark Office to arbitrate on whether its proposed rate of 0.375 cents per stream is appropriate — but YouTube is arguing for a lower rate.

This doesn't really resemble a negotiation at this point. GEMA offers, Google counteroffers and all of a sudden, the home team's PTO is going to decide whether GEMA's preferred rate is "appropriate." But that's not all: GEMA is also suing YouTube to the tune (pun really not intended) of €1.6 million for the alleged unlicensed use of 1,000 songs from its catalog.

Not only that, but another German court is in the process of defining YouTube's role on the web, something that could potentially see YouTube remove itself entirely from Germany.

A Hamburg court is already arbitrating another row between GEMA and YouTube over how the platform should be defined. GEMA claims that YouTube is a content provider whose business model is built on content that is subject to royalties. YouTube, on the other hand, says it is a hosting service which simply makes space available to its users.

The push here is to remove any sort of "safe harbor" (such as it exists in German law) and hold YouTube entirely responsible for anything uploaded by its users. Framing YouTube as a content provider puts it right in the legal crosshairs, which is where GEMA wants it. Despite the efforts made by YouTube to curtail infringement, GEMA still wants to see it pay more.

Of course, GEMA's doing this "for the artists." And those artists must be thrilled, what with the world's most popular video streaming site serving up this message, rather than actual videos, all too frequently.


And wouldn't you know it, GEMA also has a problem with the message posted by YouTube, which has become visual shorthand for the German YouTube Experience.

GEMA is demanding that YouTube take down the on-screen notice blocking music videos in Germany that blames GEMA for the impasse. In November last year, GEMA head Harald Heker accused YouTube of deliberately misleading German users with the notice.

"The notice about GEMA is being posted wilfully, purely to stir opinion," he told WirtschaftsWoche magazine at the time. "YouTube is trying to awaken the false impression that the failure to license is GEMA's responsibility. That is simply wrong."

This sounds familiar. Those blocking or taking down videos for various violations seem to think that YouTube should keep them free from criticism, too. Considering YouTube has already negotiated licenses with various other PROs, including ASCAP and the infamous PRS, it certainly seems likely that GEMA's contentious relationship with, well, just about everyone, might have something to do with the "failure to license." GEMA can complain about the "impression" this message makes, but if it were solely up to Google, German citizens wouldn't be seeing this message at all. Here's Google's statement:

YouTube believes that rights holders and artists should benefit from their work. We have dozens of collection society deals in place across more than 45 countries because we provide an important source of income for musicians and a platform where new artists can be discovered and promoted. Music labels are generating hundreds of millions of dollars on YouTube every year. Artists, composers, authors, publishers, and record labels in Germany are missing this opportunity as a result of GEMA’s decisions. We remain committed to finding a solution with GEMA compatible with YouTube’s business model so that we can again provide a source of revenue for musicians and a vibrant platform for music lovers in Germany.

That's the crux of the situation. The artists, composers, etc. aren't just missing these opportunities -- they're not even being allowed to have these opportunities, thanks to GEMA's insistence on combative, hardline tactics. GEMA hasn't done much for the artists it "represents," but it's doing a great job turning Germany into a cultural island.

Evidence of life hasn't been found outside of our planet (yet?), but life seems to be getting into nearly every nook and cranny of our dear Earth. Places that seem too cold or hot or dark have been shown to harbor life forms that survive in unusual ways, eating substances that aren't normally considered food. Here are just a few examples of these extremophiles that suggest life might exist on other worlds, even if the conditions don't seem ideal.

• Astronauts have actually discovered a new species of life... while training in an underground cave. The astronauts were taking a week-long ESA CAVES underground training course to prepare for duties on the international space station and to acclimate to working under extreme conditions, and they found a new kind of crustacean. [url]
• An ecosystem exists in the deepest layer of the Earth's ocean crust, in the gabbroic layer, living off hydrocarbons such as methane and benzene. This discovery could mean there may be life even deeper, possibly in the Earth's mantle. [url]
• Microbes isolated beneath 65 feet of Antarctic ice might define a new limit for life to survive. These little organisms live in Lake Vida without much sunlight, without oxygen, at -13°C, in acidic salt water. [url]

If you'd like to read more awesome and interesting stuff, check out this unrelated (but not entirely random!) Techdirt post.

Raise your hand if you love bundled toolbars and other assorted suspiciously-acting software installing itself on your computer when all you thought you were installing was a Java update or some other unrelated program. No, go ahead. Yeah... that's none of us.

Bundled toolbars and the like are considered "necessary evils" by those hoping to monetize something they're otherwise offering for free. But to the average computer user, they're annoying, devious bits of software that do fun things like hijack your default search or plant a row of links you'll never use in your Favorites bar. And that's when they're not doing more nefarious things, like delivering all sorts of browsing data to who knows where or, worse yet, running an unasked for "virus scan" and holding your computer hostage until you purchase the software from some shady third party.

Knowing the preceding to be an actual, provable fact, why on earth would respected entities in the tech community like Y Combinator and Andreessen Horowitz get in bed with a startup whose sole purpose is to "monetize" installs by bundling unwanted adware, toolbars or worse with its clients' programs?

That's the question Long Zheng at I Started Something is asking.

Many people in the technology startup community have very high regards for Paul Graham and Y Combinator, the exclusive seed accelerator program in Silicon Valley which has under its belt acclaimed successes like reddit, Airbnb and Dropbox. There’s equal standing for Andreessen Horowitz, a private equity investment company with notable alumni such as Groupon, Instagram and Skype.

Now those people and companies have put their most valuable support – money, experience and brand – behind “InstallMonetizer“, a company that describes itself as a “windows based software monetization platform”. Very carefully selected words.

Now, there's nothing wrong with being a "software monetizer" who bundles products for clients with the software of others, other than the fact that your business method is highly unpopular with most computer users and that your financial success is usually dependent on the ignorance of those on the receiving end of opt-in/opt-out dialog boxes. In and of itself, not illegal or evil... just unwelcome.

No, the problems begin when your privacy policy can't even agree with itself as to whether InstallMonetizer is providing personal information to its clients, something Rafael Rivera discovered when reading through the company's typo-laden fine print:

Consumers Receiving Product Recommendations- We review the consumer’s pc for existing software. This is done to provide the consumer an advertiser software which they currently do not have installed on their computer. This information is not stored in order to maintain consumer’s privacy. We gather personally identifiable and may include information regarding your geo-location, ip address, operating system, language setting and information regarding whether recommended advertiser software has been accepted, downloaded, installed and any reason for failure installing. None of his information is personally identifiable.

But that statement seems to be false, on top of being nearly unintelligible. As Long Zheng points out, its own website clearly states (with pictures!) that it gathers IP and MAC addresses and makes them available to its clients.


So, all this information is/isn't gathered and is/isn't turned over to InstallMonetizer's clients, so there's nothing to worry about because the company takes rigorous security precautions...

We endeavor to take security measures to guard against unauthorized access to the systems where we store your data. This includes internal reviews of our data collection, storage, and processing practices and security measures and physical security measures.

and sends your unencrypted login data to you via a third party mailer...



Long doesn't question the fact that some software developers will find services like this a useful way to generate some additional income. What he does want to know is why respected entities like Y Combinator would back a startup that actively makes computing worse.

I’m not going to delve into the technical aspects of crapware – its effects on system performance, reliability and satisfaction are pretty well documented. The fact that there is a thriving ecosystem of “crapware, adware, spyware” removers is enough evidence it’s a significant issue.

Perhaps more importantly, I strongly believe crapware installers among other foul practices have eroded the trust of the Windows app ecosystem as a whole.

What used to be a fairly standard flow of app discovery has turned into a minefield of misleading download links on websites, defaulted checkboxes or sneaky install crapware buttons in position of “next” in wizards and browser homepage overrides. And it just takes one wrong click to have irreversible consequences.

Last but not least, disregarding the moral factor of this investment, I’m puzzled why such visionary investors would invest in a process that is slowly being phased out by changing industry practices...

I admit every person and company has the right to set their own moral compass, but it’s genuinely disappointing to see such respected and influential people and companies put their weight behind a practice that has undermined and continues to undermine the credibility of the Windows app ecosystem.

It's a good question. While no one expects VCs and accelerators to solely back conscionable startups, no one really expects those with stellar reputations to back a startup whose product is indistinguishable from hundreds of other shady installer packages standing between the end user and the product he or she actually wants.

InstallMonetizer claims it turns down 95% of applicants in order to keep it free of adware, spyware and malware, but just because the Yahoo! toolbar (to use one example) is none of the above doesn't make its uninvited presence in a string of opt-in/opt-out dialog boxes any more welcome. There are many ways to earn income while still providing a free product and there will be even more ways in the future. What's going on here isn't innovative. It's just another, slightly shinier version of something people are already sick of, and its questionable privacy policy quite possibly makes it no better (or different) than the others that have preceded it. 

Well, we've seen the always-impending cyberdoom compared to all sorts of horrendous events by legislators and security agencies. The perpetually-just-over-the-horizon cyberattacks have been given catchy names like "cyber-Pearl Harbor" and "cyber-9/11" in an attempt to scare up some support for terrible legislation and expansions of power.

The UK's former head of cyber security has taken a slightly different tack, avoiding the terrorist imagery in favor of something even more dubious.

Major General Jonathan Shaw, a former head of cyber security at the Ministry of Defence, said people must be told to improve their computer security because the UK is "extremely vulnerable" to attack by criminals and terrorists.

He said there is a "special responsibility" on all citizens to improve their "cyber hygiene" as private computers are the easiest to attack.

Speaking on BBC Radio Four's Today programme, Major General Shaw said the Government must "launch a cyber hygiene campaign like they did with the AIDS epidemic in the 1980s".

He said individuals are "on the front line" and must be warned their computers are at risk, as the Government is "not in charge of cyber space".

He's got that last part right. The government isn't in charge of cyber space, no matter how much it wishes to be. But owners of "private computers" have had "cyber hygiene" information available for years. If the UK government wishes to start a campaign to inform the public of the dangers prevalent on the web, I have no problem with that. The campaign will be mostly redundant and will have little impact on the number of infected private computers, but that's the way these things go. Actively keeping a computer free of malware, spyware and viruses takes a little effort and knowledge (and sometimes, a little money), but for many people, that "little" extra is too much.

Furthermore, it's tough to see how private individuals are "on the front line" of this so-called "cyber war." If there are key areas of infrastructure (say, the ever-popular power grid) that seem vulnerable to attacks by criminals and terrorists, how does erecting a firewall on a home computer prevent that? If these agencies feel they are threatened by cyberattacks, they need to do more policing on their end and make sure that critical systems are inaccessible from "personal" computers -- like preventing "cross-contamination" by keeping possibly infected "personal" media (thumbdrives, etc.) from connecting with critical systems or issuing "locked-down" computers for telecommuters. There are many more effective actions that could be taken by the "threatened" entities, but trying to keep the public's private computers from being conscripted into the latest botnet isn't one of them.

Lastly, conflating malicious activities with a communicable disease, even indirectly, is hardly a good idea, especially when the disease chosen is one with a loaded political and sociological background. It trivializes the impact of AIDS and generally makes the public feel the severity of the threat is overstated. Even if the aim is admirable (get more computer users to protect themselves from attacks), Shaw's unfortunate wording undermines his message.

One of the striking features of the drug world is how pharma companies become noticeably more inventive immediately before their patents are due to run out and their drugs are about to enter the public domain. That's because they need to find a way to differentiate themselves from the generic manufacturers that are then able to offer the same medicines for often vastly lower prices.

Usually this takes the form of modifying the formula of a drug slightly, patenting it, and then seeking to convince the medical profession that the new formulation is better in some way. But sometimes it involves more novel approaches, as here:

In coming months, generic drug producers are expected to introduce cheaper versions of OxyContin and Opana, two long-acting narcotic painkillers, or opioids, that are widely abused.

But in hopes of delaying the move to generics, the makers of the brand name drugs, Purdue Pharma and Endo Pharmaceuticals, have introduced versions that are more resistant to crushing or melting, techniques abusers use to release the pills' narcotic payloads.

As the New York Times article quoted above reports, having introduced these "tamper-resistant" designs, the pharma companies are now pushing to get a ban on generic versions that lack this feature. If you think of "tamper-resistant" techniques as a kind of DRM for drugs, the pharma companies are effectively asking for their own version of the DMCA, which forbids the circumvention of DRM.

The drug companies have dressed this up as a service to society, but some aren't buying it:

While companies like Purdue Pharma insist the public's health is their main concern, others note that producers introduced tamper-resistant versions of their products just as the drugs were about to lose patent protection. In court papers filed in response to Endo’s lawsuit, the F.D.A. described the company's action as a "thinly veiled attempt to maintain its market share and block generic competition."

There's no doubt that the abuse of painkillers is a significant problem, but according to another recent story, in The Washington Post, alarming levels of addiction to OxyContin and similar painkillers may be partly the drug companies' fault. For instead of warning doctors about this issue, the latter were assured that there were "minimal risks of addiction and dependence" if they prescribed these kinds of drugs for their patients:

according to a Washington Post examination of key scientific papers, a court document and FDA records, many of those claims [about minimal risks] were developed in studies supported by Purdue Pharma, the maker of OxyContin, or other drug manufacturers. In addition, the conclusions they reached were sometimes unsupported by the data, and when the FDA was struggling to come up with an opioid policy, it turned to a panel populated by doctors who had financial relationships with Purdue and other drugmakers.

So it would seem that rather than mandating the use of tamper-resistant packaging for these kinds of painkillers, a better long-term solution would be to avoid the use of these drugs altogether, where possible.

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Nearly three years ago, we wrote about one of the most bizarre lawsuits we'd ever seen. AFP (Agence France-Presse), a news organization with a history of copyright maximalism (it once sued Google for linking to its stories), had sued photographer David Morel after he accused AFP of using images he had posted to TwitPic in their own news reports. Yes, you read that correctly. AFP used Morel's photos without permission (and actually credited them to someone else), and then AFP sued Morel (rather than the other way around). There were all sorts of confusing factors in the lawsuit (and counterclaims from Morel) that suggested neither party had even the slightest clue what they were talking about.

First off, both AFP and Morel seemed to not realize that TwitPic and Twitter were two totally different services with two totally separate terms of service agreements. Second -- and this is the key whopper -- the AFP insisted that the Twitter and TwitPic terms of service (once they realized they were two different services) granted a universal license for AFP to use those photos. This was a blatant misreading of the terms. Both sites had standard boilerplate licenses that allowed just those services to display content. Those terms only applied between the user and the service. But AFP insisted that because the user granted a license to Twitter and TwitPic, that automatically meant that such a license was granted to third parties like the AFP as well. That, to put it mildly, takes a special level of misunderstanding -- and I'm amazed that AFP had a lawyer willing to stand behind it. In fact, a judge explained all this to the AFP back in 2010. At the time, we expected AFP would just quickly settle. After all, it had clearly copied the images and it had bizarrely sued first on a ridiculous legal theory that a judge explained made no sense.

Instead, the AFP doubled down on that same argument, insisting that its reading of the terms of service was correct. We should be blunt here: there is simply no reasonable way to read the terms of service the way the AFP did. The terms are clear: users retain the rights to their content, and the license only applies to the specific services in question. There is no legitimate way to read the terms of service and believe it automatically grants a license to third parties.

So, once again, the court has needed to explain to the AFP that its legal theories are ridiculous.

The Court need not fix the precise scope of any license created by the Twitter TOS in order to resolve the dispute before it. Rather, it suffices to say that based on the evidence presented to the Court the Twitter TOS do not provide AFP with an excuse for its conduct in this case.... Put differently, the evidence does not reflect a clear intent to grant AFP a license to remove the Photos-at-Issue from Twitter and license them to third parties, nor does it “necessarily require” such a license.... Indeed, this is the fatal flaw in AFP’s argument: it fails to recognize that even if some re-uses of content posted on Twitter may be permissible, this does not necessarily require a general license to use this content as AFP has.

The court even points out that this very argument was rejected entirely in that earlier ruling we mentioned above, and appears perplexed that AFP would continue to advance an obviously faulty argument, which it had already been told was faulty.

Arguing for third party beneficiary status, AFP advances on this motion many of the same arguments that Judge Pauley has already considered and rejected with regard to the express language of the Twitter TOS. For example, the plain language of the Twitter TOS does not support finding a license covering AFP’s conduct, even as a third-party beneficiary. As Judge Pauley already explained, the Twitter TOS spell out expressly the entities to whom a license is granted, namely Twitter and its partners—and AFP does not contend that it is one of Twitter’s “partners.” Id. Construing the Twitter TOS to provide an unrestrained, third-party license to remove content from Twitter and commercially license that content would be a gross expansion of the terms of the Twitter TOS. Indeed, if Twitter intended to confer such a benefit, it easily could have manifested this intent. Instead, the Twitter TOS specify that the license was granted to Twitter and its partners, that the license “includes the right for Twitter to make . . . Content available,” and that additional uses of this content “by Twitter” or its partners may be made without compensation. In short, rather than showing that the benefit AFP claims was “necessarily required,” ... by the Twitter TOS, the terms of this contract cut against finding that Twitter intended to confer the benefit of a license on AFP to sell licenses to the pictures posted on Twitter or TwitPic.

In addition, in making its arguments on summary judgment AFP wholly ignores those portions of the Twitter TOS that are directly contrary to its position, particularly those portions stating that “[y]ou retain your rights to any Content you submit, post or display” and “what’s yours is yours – you own your content.” These statements would have no meaning if the Twitter TOS allowed third parties to remove the content from Twitter and license it to others without the consent of the copyright holder.

So it is unsurprising that AFP loses that point yet again.

What's a bit surprising is that the AFP didn't even try to raise any other defense, such as fair use. While fair use might be a long shot it seems like a much stronger argument than the ridiculous claims about the terms of service. Having, once again, dispensed with the AFP's license argument, the court notes that it can rule in favor of Morel's motion for summary judgment against the AFP.

Morel had also sued both Getty and the Washington Post in this fight. The AFP had turned around and "licensed" the photos it had copied to Getty and the Washington Post had used them via its contract with Getty. There was some additional confusion, because the AFP first credited the photos to someone else -- another person who had copied Morel's photos and posted them to Twitter, claiming the photos were his own (though there were some indications that the AFP knew that the photos they were using had been copied from Morel, as they'd already reached out to Morel about them).

Getty tried to defend itself by claiming safe harbors under the DMCA, basically saying that if there was infringement, it was AFP's fault, and AFP is just a user, so Getty is protected as a third party under the DMCA. The judge, however, rejected this claim. This part of the ruling is actually fairly troubling. The court seems to ignore how "service provider" under the DMCA has been widely accepted as a broad definition. Instead, the court decides that a very limited definition applies, and Getty is not a "service provider" because it sells stuff, rather than provides what the court considers a "service." That is, the court tries to distinguish between selling goods and offering a service, and says that since Getty sells stuff, it's not a service provider, and thus not protected by the DMCA. If that interpretation stands, watch as copyright holders start citing it in attempts to block safe harbor claims from others. At this point, however, the court just says it's an issue to be determined at trial, rather than at the summary judgment stage.

As for the Washington Post, that situation is confused by the fact that Morel's lawyers sent a bunch of communications to the Washington Post about its use of the images, but they mostly chose to send them to general emails or addresses (sometimes mislabeled) which people at the Post claim were never received. Making matters even more complicated, when someone from the Washington Post did seek to delete the images, confusion over the Post's system meant that the person believed the images had been deleted, when they really had not been. Once again, these are issues that will be explored at the trial, assuming there's no settlement.

Of course, as we've explained during all of this, Morel's case isn't the greatest either. Beyond making some bizarre initial claims (including admitting that he never bothered to read the terms of service in the first place), he's been demanding crazy sums of money -- way beyond anything that he could have possibly hoped to charge for a license. In fact, he was demanding high statutory rates for each copy of the image that was used, rather than recognizing that the reuse of his image was all part of a single infringing action. As part of this, he was arguing that AFP and Getty were secondarily liable for each and every later infringement, and that they should each have to pay for every such case. That would add up to a ridiculous sum of money -- potentially over $100 million.

Thankfully, the court quickly disabuses him of such a crazy claim, pointing out that the language of copyright law is pretty clear that the statutory rates cover "all infringements" associated with an infringing action. It even points out that Morel's interpretation would be "absurd."

The statutory text is not a model of clarity on this issue but—on the whole—it favors Counterclaim Defendants’ interpretation rather than Morel’s. For instance, § 504(c)(1) provides for “an award of statutory damages for all infringements involved in the action, with respect to any one work.”... The intent of this statute therefore appears to be to constrain the award of statutory damages to a single award per work, rather than allowing a multiplication of damages based on the number of infringements. Morel’s interpretation would effectively bypass the limit of a single statutory award for “all infringements” of a work because it would hold Getty or AFP liable for multiple infringements of a single work. This conclusion is further supported by § 504(c)(1)’s provision that a group of defendants who are all jointly and severally liable with each other are also to be liable for only a single statutory damages award, suggesting that a copyright holder should not be allowed to multiply damages against an infringer based on the infringing activity of jointly liable thirdparties. Relatedly, as pointed out in McClatchey v. AP, 2007 U.S. Dist. LEXIS 40416, at *10 (W.D. Pa. June 4, 2007), the interpretation Morel offers “would render the word ‘any’ [in ‘for which any two or more infringers and jointly and severally liable’] superfluous, or alternatively, would rewrite the statute to impose a single award only where ‘all infringers are liable jointly and severally.’”

Also counseling against Morel’s proposed interpretation is that it would lead to absurd results.... First, as Counterclaim Defendants point out, Morel’s interpretation of the statutory damages provision could lead to awards of statutory damages that are massively disproportionate when compared to the actual harm caused by the infringing defendants. Indeed, as discussed above, Morel’s position in this case is that—notwithstanding the extent of the actual harm that Counterclaim Defendants may have caused—he is entitled to tens or hundreds of millions of dollars of damages. The Court finds it unlikely that Congress intended the statutory damages provision of the Copyright Act to create such a result.

Of course, that wasn't Morel's only crazy damages argument. He further argued that the parties were liable for each distribution of the image (separate from the claims above) because (he claims) they "circumvented" protection measures by removing his copyright information -- and that they had to pay statutory damages for each image distributed there as well. His ridiculous interpretation claimed that with all of the images AFP and Getty distributed, they owed him another $44.5 million for removing his copyright information. Yes. Million. On top of the other statutory damages he asked for above. Again, the court was not buying it:

The omission of the references to damages “per act” differentiates the damages available for violations of § 1202 from those available for violations of § 1201, and demonstrates that damages should not be multiplied based on the number of recipients of the Photos-at-Issue. Rather, damages should be assessed per violation—i.e., based on AFP and Getty’s actions in uploading or distributing the Photos-at-Issue, regardless of the number of recipients of these images.

As we've been saying from the very beginning of this lawsuit, neither side looks very good. Both are making ridiculous arguments -- and that may be part of the reason the case was not settled earlier. Someone at the AFP must realize that their licensing claims make no sense. But if Morel is arguing for hundreds of millions of dollars, you could see how they've been unable to reach an agreeable settlement. Now that the court has clearly rejected the key arguments on both sides, perhaps it means that AFP will finally fork over some money to Morel to settle the case -- and that the amount forked over will be significantly lower than the millions he's demanding.

The backlash following Aaron Swartz's suicide has continued as Rep. Darrell Issa is now promising an investigation into the DOJ's handling of the case, according to statements he gave to the Huffington Post:

Praising Swartz’s work toward “open government and free access to the people,” Issa told HuffPost that the government's case against Swartz is problematic enough to warrant further investigation.

“I’m not condoning his hacking, but he’s certainly someone who worked very hard,” Issa said. “Had he been a journalist and taken that same material that he gained from MIT, he would have been praised for it. It would have been like the Pentagon Papers.”

Issa then specifically called out how prosecutors could go too far in pressuring innocent people to plead guilty:

“I’ll make a risky statement here: Overprosecution is a tool often used to get people to plead guilty rather than risk sentencing,” Issa said. “It is a tool of question. If someone is genuinely guilty of something and you bring them up on charges, that’s fine. But throw the book at them and find all kinds of charges and cobble them together so that they’ll plea to a 'lesser included' is a technique that I think can sometimes be inappropriately used.”

Issa, of course, has been a long time critic of the DOJ under President Obama, so it's likely that some will just brush this off as an opportunity to go on a partisan attack. However, it appears this attack may be growing bipartisan support. We've already mentioned Rep. Zoe Lofgren's plans to propose legislation to limit what the DOJ can do in these kinds of cases, and others on both sides of the aisle have started expressing concerns about prosecutorial overreach by Carmen Ortiz.

We've written a few times about Judge Paul Michel, the former Chief Judge for CAFC, the appeals court that handles all appeals in patent cases. He's an out and out maximalist, making claims that defy reality and suggesting a truly surprising ignorance of how innovation actually works today.

And yet, he refuses to give up his idealistic (and completely incorrect) notions of how patents work. The latest is a piece he's written for A Smarter Planet, a blog owned by IBM, in which he attempts to hit back at patent critics while arguing that what the US really needs is stronger patent protection, not weaker, including protection for things like software. The article is full of questionable assumptions combined with logical fallacies. I'm sure Judge Michel is intelligent and knowledgeable (you don't get as far as he did otherwise), but he does his own legacy a disservice by making arguments like the one he expresses here:

So in April, 1790, the first Congress enacted the first Patent Act. Over the next two centuries, the Act was amended and strengthened regularly, because successive Congresses observed industrialization and economic growth all around them, as under the Founders' system, the United States went from importing nearly all manufactured goods to itself manufacturing all the products it needed and prospering as a major net exporter.

Within just a little over one hundred years, America surpassed all other nations in wealth and technology, partly because of its strong patent system, aided by wide oceans, abundant natural resources, and universal public education. Throughout the 19th century American inventors outpaced their counterparts elsewhere. During the 20th century, the American patent system helped stimulate the computer revolution as well as astonishing advances in medicine, including creation of whole new fields, such as bio-technology. After a slump in the 1970s, when Japan replaced America as the leading maker of consumer electronics, in the last two decades of the century our nation regained its rapid growth and technological leadership.

This is a nice story -- and it's one that we've heard before. Unfortunately, it's not supported by the actual history. That history shows that the continued patent expansionism post-dated, not pre-dated significant expansions in innovation. That is, rather than encourage innovation, the increases in patenting almost always came after the innovation, when the early innovators then ran to the government to seek to block out follow-on innovations and competition from disruptive new upstarts. Furthermore, study after study has shown absolutely no evidence that strengthening a patent system leads to greater investment in innovation. Instead, it shows greater investment into patenting.

Ironically, criticism of patents and especially of the U. S. Patent and Trademark Office is peaking just as an array of reforms are taking hold. Over the past nearly four years the extraordinary leadership of former IBM executive David Kappos has greatly upgraded PTO operations. The courts, too, have instituted reforms in damages and other areas of controversy. Congress has responded by enacting the America Invents Act, which after a decade of neglect and fee diversion finally has provided the PTO with the resources it needs. The AIA also launched a Patent Pilot Program to have volunteer judges in over a dozen districts largely specialize in managing such cases. And, the private sector has stepped in to help train patent examiners in the newest technologies. In light of all this, now is the time to rely more, not less, on the American Patent System.

I'm not sure what's "ironic" here. The "reforms" that Michel mentions had nothing to do with the key complaints many made against patents: that they were being utilized by trolls to stifle real innovation, that patents themselves were overly broad and vague, that the damages awarded in patent infringement cases were excessive and had no basis in reality. Earlier versions of the AIA attempted to address some or all of those problems, but they were all left on the cutting room floor after patent supporters whined about them.

As for the "patent pilot program," it's difficult to see how that solves anything. In fact, it could actually make the problem worse, not better. As we've discussed, CAFC itself, which Michel used to lead, was the result of a similar "experiment," in which it was believed that centralizing all patent appeals cases to a single court, where a few judges would be "experts" would lead to better outcomes. But it did the opposite. That's because the judges had little contact with actual innovators, but plenty of contact with patent lawyers, who benefited from massive expansion of patent laws. And so they heard one side of the story over and over again, leading to massive expansion. Doing the same thing at the lower courts, and giving more power to a few judges who will be continually exposed to patent lawyers, is likely to create the same push towards expansionism in the district courts as well.

Nevertheless, some commentators suggest excluding whole business sectors, such as software, from patent eligibility and greatly shortening the patent term for other technologies. A few go so far as to say that only pharmaceutical firms really need patent protection. But the behavior of hundreds of companies in dozens of technologies suggests otherwise. Witness IBM: for the past 20 consecutive years it has received more U.S. patents than any other company in the world. Examples of other companies that rely on patents include Microsoft, General Electric, General Motors, Caterpillar, DuPont and Procter & Gamble. Ignoring such facts, certain commentators even argue that patents deter more innovation than they promote.

This assumes, entirely without proof, that companies that get patents do so because they promote innovation. This is laughable and simply untrue. Once again, studies have shown that patents and innovation are not linked but are entirely independent. Companies, however, see plenty of benefit in using patents in a protectionist manner to stamp out competition. Furthermore, the system is rigged these days such that companies that want to compete need a large patent portfolio not because it helps with innovation, but because it helps ward off some lawsuits from others to avoid a patent nuclear war with both sides suing each other.

Michel lovingly points to IBM's continual dominance in the patent numbers, but ignores the many stories of IBM's famed patent bullying, such as the bullying it did against Sun many years ago:

"OK, maybe you don't infringe these seven patents. But we have 10,000 U.S. patents. Do you really want us to go back to Armonk [IBM headquarters in New York] and find seven patents you do infringe? Or do you want to make this easy and just pay us $20 million?"

To argue that because large companies get patents, the patent system is working is just silly and unsupportable. Those companies don't "rely" on patents. They get them, because that's how the system works.

Yet, with many corporations and banks flush with cash reserves and pension and private equity funds seeking places to invest, now should be the era of increased investment in innovation, the country’s best hope for creating new wealth and new jobs. Instead, such investments lag. What, then, is needed to produce the needed private investment? Adequate incentives, for such investments are inherently risky. Slack consumer demand in a continuing recession is part of the problem, but so is the inadequate strength of patents. Obtaining and enforcing them remains far too slow, costly and cumbersome. Still worse, the uncertain scope of patents and the unpredictability of infringement and remedies outcomes inhibit business leaders who need certainty and predictability.

And this is the really nefarious part in Michel's argument. This isn't just an argument in favor of the patent system, it's an argument in favor of trolling operations. Trolls repeatedly try to defend their indefensible efforts by arguing that they're "investing" in innovation by paying for such "risk." Anyone who's experienced any run-in with patent trolls knows this argument is complete hogwash. Trolls do it because it's a system that allows them to legally shakedown real innovators for money, because it gives them a giant weapon where the cost to pay off the troll is almost always less than the cost to defend (and win) a case in court.

Most informed persons believe, correctly, that innovation holds the key to future prosperity. What we need is a stronger, faster, fairer patent system with quality patents and predictable protections. The issue is whether companies can look beyond short-term earnings and stock prices to also focus on the company’s long-term health and on the needs of the American economy, American communities and American workers.

Yes, we agree that innovation holds the key to future prosperity. The problem is that there is no evidence that the patent system actually increases that innovation, and a ridiculous amount of evidence that it does exactly the opposite. It retards innovation, diverting money from actual innovations that hit the market, to lawyers. The costs associated with the patent system far outweigh any benefits. Could you craft a functioning patent system? Perhaps, but today's system is not it, and if Judge Michel ever spent time with actual innovators who were the victims of patent trolling, he might learn something. But, you know, that would offend his patent lawyer and patent troll buddies.

Outgoing director of the US Patent and Trademark Office famously likes to claim that the US patent, trademark and copyright systems are the "envy of the world." Here's just one recent example:

The fact is, the explosion of innovation—and follow-on litigation—that we see across consumer electronics hardware and software is a direct reflection of how our patent system wires us for innovation. It's both natural and reasonable that in a fast-growing, competitive market, innovators would seek to protect their breakthroughs using our patent system. While our IP system is not perfect, it is the envy of the world. It’s the strongest in the world, by far. That strength encourages investment and provides assurances to entrepreneurs as they enter the U.S. and global markets. At the same time, our focus on quality in the patent examination process overall ensures that patents are granted for true innovation, and not otherwise.

There are all sorts of fallacies or outright questionable statements in that one paragraph, but the popular IP blog, IPKat, decided to put that "envy of the world" argument to the test... and found that its readers don't agree. At all.

Do you envy the US its patent system? (300 responses)

Yes, it's brilliant 19 (6%)
Maybe, if the America Invents Act works out 28 (9%)
No way! 253 (84%)

Do you envy the US its trade mark system? (170 responses)

Sure, it's great for owners, competitors and consumers 23 (13%)
I might if I could only understand the Lanham Act 41 (24%)
Never! It's convoluted, complex and contradictory 106 (62%)

Do you envy the US its copyright system? (162 responses)

You bet! Google could not have been created anywhere else 18 (11%)
I might if there was some consensus as to what it actually is 56 (34%)
Not in this life or for many years beyond it! 88 (54%)

Yes, this is an internet poll, so reasonably-sized grains of salt should be applied. However, it was taken on a popular IP focused blog, so you would think that if the US's system was really envied, the IP practitioners who read the blog would speak up positively.

It makes you wonder: are the US systems for copyright, patents and trademarks actually envied anywhere around the world, except, perhaps, by lawyers who might profit off them?

As we've stated over and over again, it's a bit simplistic to place the "blame" for Aaron Swartz's suicide on the federal prosecutors, led by US Attorney Carmen Ortiz and her assistant Stephen Heymann. It is still quite reasonable to question their activities, but suicide is a complex thing and going all the way there may be going too far. Still, you can understand why Swartz's family did, in fact, directly call out the US Attorneys given their hardline position on the case, and the stress that created for Swartz. Lots of reporters have been contacting Ortiz and Heymann and the US Attorneys' offices and have consistently been getting back a big fat "no comment." Some reporters are even upset that no one put President Obama on the spot concerning the Swartz suicide at Obama's recent press conference. But, the stance of the government has been to avoid all such questions.

However, some noticed that Ortiz's husband -- an IBM exec named Tom Dolan -- apparently felt no such restriction. He took to Twitter... to complain about the statement from the Swartz family and to further scold anyone who claimed that Swartz faced 35-years in prison. Amazingly, he chose to do this by taking on some "big names" in the tech and media world: Mitch Kapor, Dan Gillmor and the blog ThinkProgress:



Dolan has since deleted his entire account after he either came to his senses or someone suggested strongly that he think better of it. While you can understand his desire to defend his wife's efforts, the tweets aren't just somewhat offensive following Aaron's suicide, but misleading as well. To argue that the prosecution was fair because they offered him a 6 month plea deal is complete and utter hogwash. As many have pointed out, it doesn't appear that Aaron should have been facing any federal charges at all. The 35 years is completely relevant, because that's part of the hammer that his wife was using to pressure him into taking the 6 month plea deal so that she and her assistant could get a big headline about another "guilty" plea. To act like the 6 month offer is some sort of "leniency" is insane when you know the details of the case and everything else that came with it.

Dolan also -- conveniently -- ignores that the government supposedly told Aaron's lawyers that if he didn't take the deal, the next one they'd come back with would be worse, and that if the case actually got to court, they'd try to get the judge (notorious for strict sentences) to throw the book at Swartz.

The one thing that Dolan got right is that "35 years" probably wasn't accurate. But he had it in the wrong direction. The original four charges had a maximum possibility of 35 years. After Dolan's wife upped the charge count to 13, it was looking like the total could possibly be upwards of 50 years -- for a situation where Swartz didn't think he'd done anything wrong. In that scenario, the plea bargain is an insult, but the entire situation must be incredibly difficult. Dolan's response isn't just insensitive, but it's downright misleading.

As surely as iPods will continue to outsell wax cylinders, the film and television industries are moving online. Really, the whole distinction of media that "is" or "isn't" online will sound ridiculous within a generation, and today's awkwardness is just an unavoidable transitional phase. Reluctance and momentum are keeping legacy structures intact, but in an increasingly ersatz manner that guarantees lots of anxiety at the big TV networks and movie studios. AVClub editor Todd VanDerWerff saw the signs everywhere during the recent Television Critics Association winter press tour:

For years, people who write about TV have been wondering just what the tipping point would be, when DVR usage, online streaming, and pirated viewing of TV broadcasts would become so significant that networks would essentially have to invent a new business model. The networks aren't at that point yet, but they're so close that everybody's talking about it with great confidence, as if the Internet hasn't thrown a great fear of the unknown into their souls. There's still far more money to be made in the old model, the sort of money that can still afford to produce big, ambitious shows like Revolution, as opposed to smaller-scale things like reality series and multi-camera sitcoms, than there is to be made under any new model. But the tipping point is almost here.

Is it ever. The news of big things happening with online service providers, especially Netflix, never stops pouring in. Though traditional analysts might recommend Disney start a cold war with Netflix, the companies instead recently entered an exclusive partnership to stream lots of content from Disney, Pixar and Marvel. There's only one part of that sentence I wish I didn't have to type: exclusive. It's a word that pops up all too much in recent news about evolving TV and movie business models.

Netflix has been stockpiling exclusive original content, including a lot of potential hits like the revival of Arrested Development, a new drama starring Kevin Spacey, a murder mystery produced by Eli Roth, a new Ricky Gervais series and more — all on top of deals like the one with Disney. Then there's the infamously closed-off HBO and its hoard of ultra-popular shows that can't be accessed without a full cable package plus an HBO subscription (and which also happen to be among the most pirated shows). HBO recently reached its own exclusive agreement, this time with Universal — to air the studio's films and keep them off of Netflix, along with the rest of the HBO catalogue. For at least ten years.

Paul Tassi has a good grasp on what this move really represents:

I think people are missing the larger idea of what's happening here, and that's HBO becoming the closest thing Netflix has to a direct competitor. The groundwork is already in place with the aforementioned Go service. Add in exclusive access to movies from all those studios, and $15 a month for HBO Go starts looking nearly as appealing as $15 a month for Netflix.

Basically, HBO is betting against cord-cutting, but also trying to compete in the online space, assuming that most people will keep their cable and pay extra for exclusive content plus digital access to that content. I can see that being true for a while (lots of people have both cable and Netflix), but it makes no sense in the long run. Eventually, HBO will be forced to offer some sort of online-only subscription.

But will even that be enough? Here's where we get back to the exclusivity problem. All these exclusive deals are serving to fragment a market that doesn't yet have clearly defined rules for delivery. Exclusivity is a great thing for creators to sell, and a great thing for businesses to leverage, but in this transitional phase for distribution models, it's harming everyone involved by making sure piracy retains its biggest advantage: comprehensive access. Networks have always had exclusive shows, but they all ended up in the same place — your television, delivered through a single antenna. Then later you needed not just an antenna, but a cable, to get everything. Then later you needed to pay more for specific cable channels to get certain shows — and lo and behold, those shows were among the first and most widely pirated.

The knee jerk reaction to piracy's unflagging popularity is to assume that, as the mantra goes, "people just want everything for free." But as the evidence that pirates buy more media has continued to pile up, that idea has been stripped of its credibility.

As some people have been pointing out for years, piracy's real advantage lies elsewhere: convenience, selection and availability. Piracy is currently the fullest realization of the internet's potential as a culture-machine: virtually any movie, any TV series, any song, any obscure documentary or bootlegged live performance, all accessible to anyone. No need to subscribe to multiple different providers; no release windows or geographical barriers. The fact is that no other means of obtaining media has matched piracy in terms of sheer selection and accessibility, so naturally it has never gone away, even though it has many significant flaws like spammy sites and spotty quality control.

I'm not saying everyone should hand everything to Netflix — only that service providers, studios, networks and everyone else involved need to employ a little game theory and figure out how to move the business forward to everyone's benefit. This means partnerships that allow more sharing of content, new infrastructures that make delivery and payment more seamless, and the undeniably challenging elimination of geographical restrictions and other obsolete licensing concerns. As the world moves away from the captive audience and towards a culture of infinite choice, expecting people who want comprehensive access to buy multiple different subscriptions from multiple different companies is tragically foolish. The culture machine has been built; pirates shouldn't be the only ones using it properly.

There's been talk for years about fixing the Computer Fraud and Abuse Act (CFAA), which has been widely abused by law enforcement/prosecutors to claim that basically any use of a computer that did not fall under the explicitly allowed uses was a form of "computer hacking" -- and potentially a felony. This allowed for law enforcement to go after all sorts of people -- including anyone who did anything on a computer that their employer didn't like. Or anyone whosent spam. Or anyone who reported on a data vulnerability. Or anyone who just senta too many emails. These and many more cases mostly revolved around a stretched interpretation of the (outdated) CFAA, which suggested that simply violating a terms of service was the equivalent of "unauthorized access," and thus a "hacking" violation. Courts have so far been somewhat split on this interpretation, with some buying it and others not buying it at all.

The abuse of the CFAA has been seen in some high profile cases, including the one against Lori Drew, after a young girl, who was a friend of Drew's daughter, killed herself following a "dispute" with a fake profile of a boy that was really set up by Drew and some others. The court eventually tossed that out (though a jury convicted her). But it seems tragically ironic that a law that prosecutors once used (they claimed) to go after someone for bullying someone to commit suicide, is now itself being blamed for prosecutors' own bullying tactics, which many (including his parents) now insist led to the suicide of Aaron Swartz.

Congress has approved fixes for the CFAA in the past, but they've never made it all the way into law. The unfortunate, untimely and tragic death of Aaron Swartz may have brought back politicians' interest in making such a fix. Rep. Zoe Lofgren announced on Reddit her plans to introduce "Aaron's Law" to fix one glaring weakness in the CFAA: the idea that any terms of service violation is akin to hacking and fraud under the law. The draft bill rejects such an interpretation explicitly:

Section 1343 of title 18, United States Code, is amended by inserting after the first sentence the following: ‘‘A violation of an agreement or contractual obligation regarding Internet or computer use, such as an acceptable use policy or terms of service agreement, with an Internet service provider, Internet website, or employer is not in itself a violation of this section.’’

Hopefully, this new Congress can look at the unfortunate situation with Aaron (and many others) and how prosecutors are using the CFAA as a weapon to browbeat people they don't like into guilty pleas on garbage charges, and finally pass this much needed fix to the CFAA.

Back in February last year, Techdirt wrote about the rather pathetic attempts of the Portuguese Society of Authors (SPA) to drum up some support among its members for a new copyright levy on storage devices in the face of a public outcry at the extra costs this would impose on consumer and professional products. This was a dismal failure, and so it's probably no surprise that the Portuguese government didn't move forward with the original plans.

Via Nelson Cruz, we learn that there have been some further developments in this area recently. On January 4, SPA suddenly announced that it was taking the Portuguese government to court for failing to bring in the new copyright levy (original in Portuguese.) And then, just as unexpectedly, the next day it said that it was suspending the legal action. The reason for this change of heart was the intervention of Portugal's Secretary of State for Culture, who got in touch with the president of SPA, and promised to place the copyright levy law before parliament by the end of the month.

It's hard to see why the Portuguese government is capitulating like this when there is so little support for the new law, both among the Portuguese electorate and even among artists, as our previous story reported. That lack of spine is particularly regrettable given the following statement from SPA (original in Portuguese):

the issue of private copying is resolved in all EU countries, except in Portugal, a situation that causes losses of millions of euros to the authors.

This gives the impression that "all" EU countries have copyright levies, but that's certainly not the case. As detailed research carried out in 2011 reported, five out of the 27 EU members states do not have copyright levies -- UK, Ireland, Malta, Cyprus and Luxembourg. Moreover, when the Hargreaves Review recommended that the UK government bring in a limited private copying exception without compensation, it explained its reasoning as follows:

As right holders are well aware of consumers' behaviour in this respect [of making private copies], our view is that the benefit of being able to do this is already factored into the price that right holders are charging. A limited private copying exception which corresponds to the expectations of buyers and sellers of copyright content, and is therefore already priced into the purchase, will by definition not entail a loss for right holders.

So not only are copyright levies not universal in Europe, but they are unnecessary, since they can be replaced by ordinary pricing mechanisms that are fairer to users and artists. It's a pity the Portuguese government doesn't seem to realize that rather than meekly acquiescing to the demands of SPA, a far better option would be to abolish copyright levies altogether.

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