We've pointed out many times in the past that trademark law really doesn't belong under the same heading as patents and copyrights, even though they're frequently lumped together as "intellectual property." Patents and copyright are from the same clause in the Constitution and, we're told, are supposed to be about "promot[ing] the progress of science and the useful arts." The origin of trademark law, however, comes out of the commerce clause, and was initially designed to be a consumer protection vehicle, to protect consumers from confusion: you wouldn't want to buy Bob's Crappy Cola thinking that it's really Coca Cola. Over the years, however, some lawyers have worked hard to turn trademark from a purely consumer protection play, into something more akin to copyright and patents, granting trademark holders greater and greater rights to limit what others can do. These are more recent variations on trademark law, and unfortunately some of them have snuck their way into the law. That's why you see things like discussion about "dilution" or "tarnishment."

The theories behind such efforts have always seemed quite questionable and, as with these kinds of laws, the effort to put them into the law (and to expand them) are almost always anecdotal, rather than empirical. So you hear plenty of talk about how even if there isn't any consumer confusion, a brand could be "harmed" by dilution or tarnishment. For example, just recently, we had a discussion about Ben & Jerry's ice cream suing a porn company, for creating porn movies that used covers that looked similar to Ben & Jerry's packaging. We noted a complete lack of likelihood of customer confusion, but, as many of our commenters pointed out, the theory in the lawsuit was more focused on tarnishment.

However, for the life of me, I can't see how a brand is "tarnished" if there's no consumer confusion. The two seem intimately linked. If someone knows that it's just some porn company -- and not Ben & Jerry's itself -- making those movies, how would it ever actually harm Ben & Jerry's? No one seems to be able to explain that part.

And, now there's some empirical evidence to suggest that the theory of tarnishment isn't particularly well supported in the real world. The study is one that we already wrote about, Do Bad Things Happen When Works Enter the Public Domain?: Empirical Tests of Copyright Term Extension by Christopher Buccafusco and Paul Heald -- though we focused on the main argument in that paper, that the public domain does not harm works. However, in proving that point, Buccafusco and Heald actually dabble a bit into the question of tarnishment as it pertains to trademarks. That's because they explore whether or not tarnishment is an issue with works in the public domain, and come up with a situation that has close parallels to the trademark realm. And, as I expected, the tarnishment argument has little support. As you may recall, the study looked at audiobooks for works both in the public domain and out of it. But they also compared professional recordings to amateur ones (from Librivox) and looked at how people judged the quality -- but also how that impacted the perceived value of the underlying works. The results are quite informative:

outside of the realm of copyright law, our study might provide support for those who applaud the judiciary’s continuing reluctance to vigorously implement the Federal Trademark Anti-Dilution Act. The tarnishment prong of dilution doctrine asserts that a trademark loses some of its intrinsic value when consumers encounter the mark used in an inappropriate context, such as when the mark is placed on goods of inferior quality. Our data show that listeners to Librivox recordings find the readers to be inferior but do not translate that sentiment to a significantly lower valuation of the associated work. Finally, the doctrine of post-sale confusion in trademark law rests on the assumption that a trademark owner is harmed when a bystander merely observes a trademark on an inferior product (imagine someone who sees a poor quality Chicago Bears sweat shirt without knowing that it’s a knock off). Our data may suggest that the assumption of such a harm is unrealistic.

This seems rather important, and raises significant questions about why we still allow dilution and tarnishment claims under trademark law, when the data continues to suggest little support for the anecdotal reasons behind them. Perhaps it's time to revisit these theories and bring trademark law back in line with its intended purpose: as a consumer protection statute, and not as a tool for brands to shut down things they don't like.

Online dating is by no means a new thing anymore, and by some counts, we're on the third iteration of improvement for internet dating. So that means we should be pretty close to perfecting these services, right? (Third time's the charm?) Matching algorithms will probably get better and better with time, but then so will expectations. Here are just a few interesting links for geeky singles out there.

• Psychologists have pointed out that matching algorithms for long-term relationships are not significantly better than random. Dating algorithms aren't actually so bad at excluding potentially "bad dates" -- but that's not what most online dating services offer. [url]
• The Secret Diamond Club takes advantage of some economic tricks to try to match up rich men with attractive women. The real secret, though, is that it probably doesn't work at all -- and it preys on lonely people with money. [url]
• Recently, the Nobel prize for economics was awarded for work on matching markets. The Gale-Shapely algorithm has been used for matching organ donors and doctors with hospitals, but maybe someday it'll be used for finding romantic partners, too. [url]

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

Just a quick reminder that tomorrow at 11am PT / 2pm ET, we'll be doing a live stream Google Hangout in which I talk to Kal Raustiala and Chris Sprigman, authors of The Knockoff Economy: How Imitation Sparks Innovation. It should run for about half an hour. If you haven't yet read the book, you should. Either way, we've run excerpts on the importance of those who "tweak" the work of others, and on what the music industry can do, based on lessons from other industries or professions that don't have monopoly restrictions on competition. I imagine that tomorrow will be a very interesting conversation all around. If you have specific questions, please feel free to submit them below, and we'll see what we can get to. Also, don't forget this month's book club book, Hacking the Future. We'll be running another excerpt next week...

Way back in 2002, Gary McKinnon made his Techdirt debut when he was caught hacking into NASA and Pentagon computers from the UK in an apparent attempt to find evidence that America was covering up evidence of UFOs. Since that story, subsequent stories were done on how he basically went on an appeal-losing-tour to avoid being extradited to the United States. But now, despite all those losses, it appears the United Kingdom's version of Fox Mulder will indeed be staying in the UK and not be trotted off to the States.

UK Home Secretary Theresa May has announced that McKinnon will not be extradited due to mental illness and a fear for his safety. McKinnon reportedly suffers from both depression and Asperger's Syndrome, and experts consulting with May believe that he is a significant suicide risk if extradited.

Mrs May said: "After careful consideration of all of the relevant material I have concluded that Mr McKinnon's extradition would give rise to such a high risk of him ending his life that a decision to extradite would be incompatible with Mr McKinnon's human rights. I have therefore withdrawn the extradition order against Mr McKinnon."

Mrs May also said measures would be taken to enable a UK court to decide whether a person should stand trial in the UK or abroad - a so-called forum bar.

This move is immensely significant, as it represents the first time an extradition was blocked by a Home Secretary under the Extradition Act of 2003. As extraditions over alleged computer and IP crimes have come into vogue, with the United States leading the charge, it's a welcome sign that the UK wants to be able to review cases in which their citizens would potentially be carted across the world to face massive prison sentences (or worse). One would hope similar scrutiny would be applied in the case of Richard O'Dwyer, though Theresa May has thus far failed to do so. Instead, she has so far bowed to the will of the United States and MPAA sock puppetry in extraditing him.

To be clear, none of this suggests that McKinnon will not face a trial at home. In fact, according to May, the UK will now decide whether to bring a case against him at home.

She said it was now for the Director of Public Prosecutions, Keir Starmer QC, to decide whether he should face trial in the UK.

Where he can be tried without the added threat to his well-being. A foreign national, accused of computer crimes against the United States facing trial in his home country. How refreshing.

 

Lawyers for big companies tend to be notoriously careful to make sure the companies license images they use for marketing purposes, for obvious reasons. And yet... Apple seems to keep using unlicensed images. It's really quite surprising. A couple of years ago, we wrote about how the default wallpaper for the iPad was used without licensing it. In that case, the photographer, Richard Misrach, was thrilled, saying that he was sure that a contract was on the way, and whatever was in it would be fine: "I'm sure they'll send me [a contract] quickly now. But I'm very happy, I'm sure it's fine, and the terms are good." I don't know if that experience made Apple confident it could do the same sort of thing again, but Misrach's response is not quite the norm. And Apple is now discovering that as it will have to deal with a lawsuit from photographer Sabine Liewald.

As detailed at the Patently Apple site, Liewald has sued Apple, claiming that it used her photograph as part of the marketing around the MacBook Pro's promotion for its Retina Display. The first link above, to the MacObserver story, notes that Apple is now using a different (though similar) image of an eye. However, Liewald claims that Apple had requested Liewald's image from her Factory Downtown page, but for layout purposes only. It sounds like someone then got confused over whether or not they had actually licensed the image. Again, it's really surprising that Apple isn't a lot more careful about this kind of stuff. Liewald is apparently claiming that she's entitled to both "actual damages including defendant's profits" and statutory damages. That sounds like a lawyer just trying to push the company to settle faster -- and I wouldn't be surprised if Apple cuts Liewald a decent check pretty quickly to make this go away. I can't imagine that it pays to fight this lawsuit.

Colorado's Jared Polis is likely a familiar Congressman to our readers. He was one of the key voices in Congress against SOPA. He's also been one of the few members of government willing to speak out against all of the problems in the domain seizures that have occurred. Now we learn that his pro-tech stance over government-meddling continues with a strongly worded letter to the Federal Trade Commission over its investigation of Google for antitrust violations.

At a time when the national economy continues to stagnate, it's not clear to me why the FTC should be focusing on a product that consumers seem very happy with, search engines. While Google is surely a big company and an important service in peoples' lives, my constituents also use a variety of competing services, including Amazon.com for shopping, iTunes for music and movies, Facebook for social networking and recommendations, and mobile apps like Yelp for finding local businesses. Competition is only a click away and there are no barriers to competition; if I create a better search algorithm I could set up a server in my garage and compete globally with Google. To even discuss applying anti-trust in this kind of hyper-competitive environment defies all logic and the very underpinnigns of anti-trust law itself.

His admission, that Google is indeed a massive entity, likely is designed to push back against the FTC for targeting Google specifically in the search space, despite the relatively high level of competitive search engines on the market. Antitrust violations are not designed to punish really successful companies, and they're not supposed to just go after companies for being "big." Rather, they're designed to prevent anti-competitive practices for the benefit of a healthy marketplace and, most importantly, for the benefit of consumers. While the country is still waiting for the official charges against Google by the FTC over any kind of anti-competitive behavior, there can be little doubt that there is indeed a swath of competition and that the public is pleased with Google's product. It's not like Bing and Yahoo (or Blekko or DuckDuckGo) don't exist, after all, it's just that more people trust Google for their search results. None of this seems worth pursuing an antitrust suit over. As Polis notes:

I have never heard one of my constituents say that they don't feel like they have enough choices online, or that they feel locked in to using any one of these services. Competition among these services is leading to lots of great services for consumers -- and consumers aren't asking Congress or the FTC to protect them.

Indeed, it only seems to be Google competitors who are asking for help here. And that's not the purpose of antitrust law.

Having said all that, Polis went further in his letter, issuing a warning to the FTC that if screws this up, it risks being downsized.

The FTC should tread carefully when reviewing Google, Facebook, Twitter or any other tech company, given the dynamism of our tech industry and the potential for making things worse through regulation. Today's giants can be tomorrow's failures without any government intervention; market forces drive obsolescence at a break neck pace which should only further abrogated the need for government intervention. I believe that application of anti-trust against Google would be a woefully misguided step that would threaten the integrity of our anti-trust system, and could ultimately lead to Congressional action resulting in a reduction in the ability of the FTC to enforce critical anti-trust protections in industries where markets are being distorted by monopolies and oligopolies.

Critics of Google will point to this as some kind of hinted blackmail by Polis, but that isn't at all what he's saying. All he's saying in this instance is that if the FTC brings a poor case against Google and loses face over it, the representatives of the people (whom government is supposed to serve) will take action. It's a warning that the FTC had better have its ducks in a row when considering such a move against a huge member of the national business community.

In the end, we'll have to see if any actual anti-competitive practices by Google are really brought forth. Barring that, Google simply being really successful is no reason to bring an antitrust suit against them.

One of the general rules for successful marketing is to under promise and over deliver, and the guys at Humble Bundle seem to keep doing that. While they've become famous for showing how cool bundles of digital products on a limited-time "pay what you want" basis can be a massive success, they keep doing really interesting things to tweak those experiments to show how you can "under promise and over deliver" in a way that encourages people to (happily) pay more and get more than they expect. From the beginning, they've used the charitable component (you can designate whatever portion of what you pay to go to charity) to get people to pay more -- something studies have shown works well to get people to pay higher amounts. They've also offered special products if you pay above the average price, which encourages people to both buy earlier, when the price may be lower, and to pay more, to get over the average to get the "special" extras. Finally, they consistently add awesome new products later on, while the Bundle is still going -- adding those extras automatically to everyone who already bought (encouraging people to buy early) or making them available to new buyers who pay above the average (again, pushing the amount people want to pay higher).

This round is no exception. After raising over $500,000 for the first round of (great) books, mostly from sci-fi authors, they've now added a pretty awesome "webcomic bundle" to the batch: For everyone who's already ordered, or anyone new who pays over the existing average price, they now also get:

• xkcd: volume 0 by Randall Munroe
• Penny Arcade Volume 1: Attack of the Bacon Robots by Jerry Holkins and Mike Krahulik
• Penny Arcade Volume 2: Epic Legends of the Magic Sword Kings by Jerry Holkins and Mike Krahulik
• Save Yourself, Mammal!: A Saturday Morning Breakfast Cereal Collection by Zach Weiner
• The Most Dangerous Game: A Saturday Morning Breakfast Cereal Collection by Zach Weiner

Of course, these are basically the three biggest names in webcomics, especially among the geekset who is probably already quite into Humble Bundle. It's yet another case of over delivering in a fun and exciting way.

Yesterday, our most popular post involved a story of a questionable DMCA takedown notice leading to the shutdown of 1.5 million sites. This was not a first. We've written numerous times about bogus DMCA notices and the damage they can cause by censoring works without an adversarial hearing first. And one thing that always comes up is the question of whether or not there's punishment for bogus DMCA takedowns. In general, the answer has been no. There may be a few very specific circumstances under which whoever signed off on a bogus DMCA notice could be charged with perjury, but the specifics there are quite limited.

Now, one of the more famous cases concerning bogus DMCA takedowns -- which started all the way back in 2007 -- is heading back to court today, to see if Universal Music can be punished for issuing a bogus takedown on a woman, Stephanie Lenz, for posting a 30-second video of her toddler son dancing to Prince's "Let's Go Crazy." If you haven't seen the video, the song is barely audible, and the whole thing is a 29-second clip. There is a strong fair use argument. The case has been taking the slow route through the court system, with Lenz (and the EFF) suing Universal Music for taking down the video without considering the possibility of fair use. Universal claimed that fair use is merely a defense, and thus there is no obligation to consider fair use first. The court, thankfully, disagreed, and said that damages were available, but quite limited.

And now... the arguments are kicking off over whether or not Universal Music should get in trouble for its actions. UMG, for its part, argues that it shouldn't have to run everything through a fair use filter first, and that even if it was required to do so, it probably couldn't. EFF points out the ridiculousness of saying there are no consequences to bogus tweets.

"Parents are allowed to document and share moments of their children's lives on a forum like YouTube, and they shouldn't have to worry if those moments happen to include some background music," said [EFF IP Director Corynne] McSherry. "Content companies need to be held accountable when their heavy-handed tactics squash fair use rights. We hope the judge gives Ms. Lenz the closure she deserves, and shows content owners they can't trample over users' rights."

My guess is that the court won't punish UMG, arguing that it did all it needed to do. But it would be nice to actually put some teeth into rules that prevent abusing the DMCA to silence others' speech illegally.

People are notoriously bad at recognizing important trends in innovation. It's most commonly seen in people dismissing some new technology or service as being unimportant. Over and over again, people seem to think that the world is static and thus, people "won't need" certain technologies in the future. There are statements like Ken Olsen's from DEC claiming that "there is no reason anyone would want a computer in their home" (which he has since claimed was taken out of context) or Charlie Chaplin claiming: "The cinema is little more than a fad. It's canned drama. What audiences really want to see is flesh and blood on the stage." Those are both from this excellent list of failed technology predictions -- including a bank telling Henry Ford that "the horse is here to stay" and that the car is just "a novelty -- a fad," and multiple people arguing that there is no need for the telephone, including the head of the British Post Office, noting (helpfully) "we have plenty of messenger boys." Oh, and "Television won't be able to hold on to any market it captures after the first six months. People will soon get tired of staring at a plywood box every night." That's from someone who worked as a movie producer for Fox.

There are many more at that link, and I imagine in a few decades or so, the prediction from TechCrunch that "there is no reason for any individual to have a 3D printer in their home" would fit nicely among those other ones. There's just something about new and disruptive technologies that causes otherwise intelligent people to completely dismiss them. I still chuckle at people who thought that cameraphones were just a fad because their initial quality wasn't that good.

Technology advances and gets better and better. And a disruptive technology's best trick is that it does something completely new that you couldn't have done before. And that's the part that seems to trip people up. You don't need 3D printing in your home now, the thinking goes, so it'll never be worth having in your home. Entrepreneur Mark Birch has a really good response to the TechCrunch claim, noting that a lot of people completely miss disruptive trends when they start:

It is easy to miss the disruptive trend when it is first happening. Because it is often the nerds that are leading the charge, no one pays it any mind. There certainly is some initial hype, but it usually fades quickly because there is nothing for the mainstream to latch onto. They need to see and touch something and thus it is hard for non-geeks to make the mental leap in how the novel technology could be important for their everyday lives. People are looking for applicability when that does not exist in the early days.

The reality of 3D printing is that it is not for everyone right now. In fact, only the most hardcore techie could really get into it and fork over the $1000 for the setup. Very few people can fathom why one would want a 3D printing in his or her home. But people said the same thing when the first dot matrix printers came on the market. They were clunky and slow and expensive and broke down all the time. Plus, who would want to print stuff at home anyway other than computer nerds? Now practically every home has a color printer capable of producing high-quality photos, greeting cards, spreadsheets, novels, and the kid’s homework.

There are plenty of things to be skeptical about, but never underestimate what the geeks are working on. When you get past the hype cycles of “next big thing” and look deeper, you find that all that tinkering and experimenting is leading to something that is pretty remarkable and world changing. It might be hard to see at first, but with a little imagination and time, those early experiments generally lead to entire new industries and to the next generation of great companies.

I'd take it even further. I'd say that if people aren't missing the trend, then it's not disruptive. What makes disruptive innovation so disruptive is often the very fact that so many people dismiss it and insist that nothing will come of it. It's that dismissiveness that often helps the innovation become so powerful, because it gets better and better while people are so busy writing it off. And then, suddenly, it's ready and the world wants it. And the incumbent players, who dismissed it, all feel taken by surprise.

It's easy to miss disruptive trends when they arrive -- but the long term impact of doing so can be quite disastrous for those about to be disrupted.

I've heard enough stories about the legendary film producers Harvey and Bob Weinstein to recognize that they're known as being characters around Hollywood -- and sometimes are known to make some quirky decisions. In a recent edition of Kevin Smith's Smoviemakers podcast, they discuss how the Weinsteins knew they had a terrible movie in Dracula 2000 but released it anyway because "it's called Dracula 2000."

So, somehow it doesn't surprise me that Harvey Weinstein recently complained publicly about piracy -- but seemed confused and ignorant about who to blame. His main target: the tech industry providing him all the tools to get into the 21st century. But, he seems determined to stay in the past -- and live in a world of ignorance. It's as if he's heard a few of the MPAA talking points, as well as some of the more hysterically misguided anti-piracy rants online... and synthesized them into the ultimate in clueless rants:

Hollywood power player Harvey Weinstein has urged Big Content to take a “hang ‘em first and talk about it later” stance when it comes to piracy.

Right, because when you're ignorant and pointing the finger at innocent players, it's always better to kill first and realize you're wrong later.

Keynoting at the BFI London Film Festival, he railed against the online industries' approach to piracy, and slammed Apple and Google for “getting paid, not the actors.”

On what is he basing this? Both Apple and Google offer the ability to pay for movies, via deals negotiated with Hollywood. If the actors aren't getting paid -- then perhaps it's the studios' fault, with their fun tricks and Hollywood accounting, whereby they set up neat shell companies, who the studios charge huge fees to, so that their movies are never technically "profitable" and residuals never have to be paid. It couldn't be that, could it? Perhaps the reason actors aren't getting paid is because the studios are taking the money that Google and Apple are giving them... and playing accounting tricks.

"I think we are being done a massive disservice by these companies," he said.

Let's see, these are two companies who have built the key pieces of the modern distribution system that allows them to better deliver movies to consumers, including with unique and new monetization options? That's a disservice? Well, I'll grant you, perhaps Harvey's right that they've done a disservice to studio bosses in that they've disrupted them. The business of the studio used to be to act as the gatekeeper on promotion, distribution and monetization of movies. But Apple, Google and others are changing things so that the studio heads have less control over the market -- and the filmmakers can actually go direct. No wonder he hates them.

“I think after the [US Presidential] election we need to rally filmmakers, content providers and musicians around the world as long as these companies [continue to make content available] under the guise of free Internet.”

Good luck with that. Besides, he seems very confused in thinking that it's Apple and Google that are somehow broadcasting his content for free. That's not the case, and you'd think someone with more than two seconds of experience with the internet would recognize that.

“I love it when these Internet dudes say to me, hey man; we just want to be 'content neutral.' Next time, I'll say sure, I'll get my tie dye shirt and come and sit in your billion dollar mansion in San Francisco or Silicon Valley for a while, soak it up," he quipped.

Really no need to comment on that one. He then praised France's HADOPI three strikes law and pretended to prove a point.

"If an Internet company steals content, they shut it down. And let me tell you, Apple France, Yahoo France or Google France, none of them have gone out of business."

Of course, that's not true at all. He's displaying his near total ignorance (yet again). All Hadopi does is send individuals (not companies) accused (not convicted) of uploading unauthorized content, letters warning them that their connections could be cut off (and after three of these, they can lose service). So, no, they don't "shut down" an internet company. It has nothing to do with that at all. Also, it's been a colossal failure. Even after Hadopi fudged the numbers to make their results look better there has been no increase in sales and the current government has declared Hadopi to be a failure and wants to cut its funding.

The fact that it has done nothing to increase sales is the key point. Since Harvey was talking about "getting actors paid" (a red herring, of course, but...), you'd think that he'd be a lot more concerned about whether or not the 3 strikes policy actually worked to get more people paid. It hasn't. So, if his concern is getting actors paid, Hadopi hasn't actually helped.

There are plenty of discussions to be had about how to deal with whatever challenges and opportunities the film business currently faces. But this wasn't one of them. Pointing the finger and blaming tech companies, even though they're not doing what he claims they're doing -- and then praising a failed law that hasn't done what he thought it had done -- is not productive at all. It just makes him look out of touch.

There have been a couple of stories covering the fact that the South Carolina Supreme Court has ruled that reading someone's Gmail does not violate the Stored Communications Act, a part of ECPA -- a law we've written about a number of times for being completely out-of-date. Orin Kerr has a good breakdown of the details, if you want to read them. What struck me most, however, is how this case is a near perfect example of the kind of mess we get into when politicians try to regulate technology. Technology changes much, much, much faster than the law, and because of that, you get very silly results. The key issue here is that the Stored Communications Act is now found in 18 U.S.C. 2701 -- and it defines the offense as occurring when someone "obtains, alters or prevents" access to communication "while it is in electronic storage." Now, for the purpose of the law, "electronic storage" is defined over in 18 U.S.C. 2510, with the relevant definition noting:

“electronic storage” means--
(A) any temporary, intermediate storage of a wire or electronic communication incidental to the electronic transmission thereof; and
(B) any storage of such communication by an electronic communication service for purposes of backup protection of such communication;

Got that? It must have seemed reasonable at the time it was written, but it makes little sense these days, and is apparently so misaligned with reality today that this one single case interprets that definition in three different ways, and exactly none of those ways agree with a 9th Circuit ruling in Theofel v. Farey-Jones. There's disagreement over the meaning of "backup" in part (B) in particular. Is that backup for the user? Or for the service provider? And then, how do you figure out what is or what is not backup? If a person reads his or her Gmail account, then the message was copied to his or her local machine inside the browser. Thus, it seems reasonable to argue that the copy that remains on the server is a backup copy. But two of the judges in this case argued that because the recipient had not "downloaded" any other copies of the message to store, then the ones on the server were not "backups." This makes little sense because copies were downloaded, but many non-technical people don't understand how browsers really work.

Other judges focus on whether or not your webmail account is really "backup" for the ISP. Either way, the end conclusions: webmail is not considered "electronic storage" under the law for the purpose of the Stored Communications Act. While accessing someone's email can (and likely does) still violate other laws, the very law that most people would probably think most directly applies, almost certainly does not.

The reality is that, when it was passed, back in 1986, it probably seemed to make sense that "stored communications" would only be done for backup. While there were networked client/server type setups at the time, it's doubtful that the folks who wrote the law could have fathomed something like webmail or other online forms of communication. If we're talking about "stored communications" today, it seems ridiculous to have it not cover web-based mail systems or social networks. But the law doesn't seem to support that view -- because the law is incredibly out-of-date. But, of course, the problem with fixing the law is that lawmakers will, again, have trouble figuring out where we'll be just a few years out, and the law may either fail to cover what it thinks it covers or (perhaps worse) cover stuff that should be perfectly legal.

And this, of course, is what we fear when it comes to politicians meddling in technology. Even when they have the best of intentions, technology changes rapidly -- and old and obsolete definitions get left in the law and can create problems or situations that make very little sense. If Congress were able to clean those up quickly, perhaps there wouldn't be a problem, but Congress isn't known for fixing real problems quickly. We've been hearing talk of fixing ECPA for years, and it seems unlikely to happen for a while.

Last week a jury in the federal district court in Marshall, Texas (patent trolls' favorite court) gave a ruling that was a clear miscarriage of justice -- and this is a case where I actually know quite a lot about the details and have firsthand knowledge that the patents are 100% bogus. The case involves a patent troll called DDR, which was built out of the ashes of a failed dotcom called Nexchange, which tried to build affiliate style stores that could be embedded in other websites, with their look and feel. DDR sued a few companies, including Expedia, Travelocity, Orbitz, Digital River and World Travel Holdings. Everyone but Digital River and World Travel Holdings settled. The main company here is Digital River -- and the key patent, 6,993,572 is ridiculous and never should have been granted. Even Nexchange admitted it wasn't doing anything new -- though it insists it was the first to do it "on the internet."

It wasn't.

Digital River pointed out that it had been doing the same thing since its founding more than two years before Nexchange filed for its patents. I can confirm this first hand. In June of 1998, I started working for a company called Release Software. Our main competitor? Digital River. We were always up against each other in trying to do deals to build exactly these kinds of stores. In fact, by the time I started (months before these patents were filed), Release was already supplying "store within a site" offerings to a number of sites, including Egghead (remember them?), Canadian electronics giant Futureshop, and had also done download "kiosk" sites for software companies like Adobe and Intuit -- all of which were designed to match the look and feel of the original site exactly.

DDR's response to the claims that Digital River was doing it first was that they did it badly, so it didn't count. Seriously. From the Joe Mullin article linked above:

When DDR lawyers got their chance to cross-examine Pichler, they flipped through many of the same webpages, then talked about differences between the host pages and the store pages that Digital River served up. For example, on the Digital Frontier website, the store page was missing the navigation bar present on the main Digital Frontier site.

Pichler admitted that some of the pages looked different. “Our goal was to replicate the look and feel of the website,” but each client had its own peculiarities, and some stores matched their hosts better than others.

To some extent, this is true. Digital River was bad at matching the look and feel of clients. But we weren't. In fact, I remember that was part of our sales pitch to beat Digital River on deals. When we built the stores, they really matched the look and feel. Shoppers on Egghead had no idea that they'd really left Egghead's main site to enter our site, for example. Even so, I'm not sure that any of this matters. Release clearly was doing what DDR now claims Nexchange "invented" (well after we had been doing it). And, even given all that, does anyone think it's reasonable to claim that the only reason Digital River couldn't "match the look and feel" was because of some great "invention" of "matching the look and feel" in the patent? That's insanity.

But, this is East Texas... where insanity rules. On Friday, the jury ruled in favor of DDR, saying that the patents were valid and infringed upon by Digital River (and WTH). It ordered both companies to pay $750,000 each, which is much less than what DDR was asking for but is still ridiculous. What the patent explains was not in any way "new" in September of 1998. I was already working on new deals to provide the same thing months prior, and the company I worked for already had numerous deals where we exactly matched look and feel.

Either way, just the idea that anyone could get a patent on the idea of integrating an e-commerce store into another site is pretty ridiculous. As far as I know, when we were at Release, we didn't even bother filing for such patents, because, seriously, who would patent something so damn obvious?

Finally, this once again highlights the difference between an idea and actually executing in the market. As Mullin highlights, even if it was true that Digital River didn't match the look and feel exactly, the company thrived and is still in business, making over $300 million last year. Nexchange completely flopped. So if matching look and feel exactly was so important... then shouldn't Nexchange have thrived? Hell, shouldn't the company I worked for have thrived as well? It didn't. It flopped, too. Digital River beat us silly, because while we were focused on silly things like matching the look and feel exactly, it was focused on what customers at the time actually wanted: more things to sell and better tools to manage the store. We couldn't keep up with their platform (or their ability to source products) and Release eventually shut down. As for Nexchange -- I never heard of them, and I was in charge of keeping our competitive matrix up to date with all of our competitors. If they were in the same market, they sure didn't make a splash.

Execution in the market is what matters. Digital River did it. Nexchange did not. The only thing this ruling has done is to punish the company that actually executed by making them give money to the guys who completely failed in the market. It goes against everything that we, as a society, should be encouraging. It's taking money from the successful companies to give it to the ones who failed.

I really have no idea why various furniture companies have taken to naming their furniture after famous Hollywood actors, but it apparently has become "a thing." In the past, we've written about lawsuits over Bogart couches and Brando couches. Back in April, Clint Eastwood jumped into the game with a lawsuit against Evofurniture for their line of ottomans and chairs named both "Clint" and "Eastwood." While there were legitimate defenses to this (as the estate of Humphrey Bogart learned) it appears that the Evofurniture folks weren't feeling particularly lucky... and agreed to settle.

Of course, Eastwood himself has been in the news of late for his interactions with a different sort of chair -- which in a bizarre way may have suddenly made his case slightly more compelling, as you could legitimately (though, ridiculously) make an argument that the public might really associate an "Eastwood chair" with the actor himself, whereas before that seemed like a longshot. I'm still not sure why so many furniture makers are naming their products after famous actors, but I wonder how effective it really is -- or if they're really just hoping for a lawsuit for advertising purposes...

Nearly four years ago, I gave a presentation at the Midem music industry conference, called How Trent Reznor & Nine Inch Nails Represent the Future of the Music Business Model, in which we first discussed the concept of CwF+RtB=$$$ -- or how Connecting with Fans plus giving them a Reason to Buy was the future model. While some are incorrectly suggesting that Reznor's recent decision to work with a major label somehow takes away from that point, I've yet to see any example of how he's no longer connecting with fans or giving them a reason to buy -- or how that's become any less important for musicians (or other creative artists) these days. Either way, I found it interesting to hear that Steven Brown, a student at Glasgow Caledonian University, has taken that presentation and published an academic article about it in the Empirical Musicology Review, entitled Artist autonomy in a digital era: The case of Nine Inch Nails. The paper goes through my presentation and looks at related academic research to see if there's support for the theories I discussed. I don't necessarily agree with everything stated, but it is interesting to try to put it all into the context of academia. Here's a snippet:

That these three factors may be partially responsible for the strong relationship between fan and artist in the case of Nine Inch Nails, is made all the more plausible in light of the findings of another qualitative study, by Saarikallio and Erkkila (2007), who explored the role of music in adolescents’ mood regulation. Seven unique regulatory strategies were identified, including solace, where particular attention is paid to lyrics - often in isolation. The authors noted that participants identified with the lyrics, and felt that the songwriter had faced up to feelings, worries and experiences similar to their own, helping them to connect with the artist. Given Reznor’s often dark lyrics and relatively narrow lyrical palette principally concerning themes of isolation, abandonment, loss and belongingness, it is likely the lyrics of Nine Inch Nails are a fundamental attraction to Reznor’s music. His naked lyrics help form a unique relationship with adolescents in particular, with consequent influence on consumer purchasing behaviours via age-based musical preferences. Furthermore, by engaging with Reznor, fans are ultimately drawn to him on a more personal level where reciprocity is more likely to be carried out. To this end, elusive superstars such as Madonna are perhaps more likely to suffer from piracy where blogging, fanclubs with exclusive interviews etc are likely means for musicians to help create a way of allowing their fans to engage with them on a more personal level, leading to reciprocal behaviour.

Reciprocity forms the basis of Shultz’s (2006) research into jambands; defined as bands whose live sets include much improvisation and variation and who allow their fans to record their live shows, copying and distributing them freely. The phrase is befitting for Grunge veterans Pearl Jam, who have been offering fans soundboard quality recordings of their live shows since 2000. These ‘unofficial bootlegs’ provide fans with documents of their live concert experiences, where as Masnick (2009) stated, live music is the ultimate form of connecting with fans and providing them with a reason to buy. Exploring the success of Tori Amos’ use of ‘official bootlegs’, Farrugia and Gobbato (2010) argue that Amos’ efforts at personalising each show increases the perceived value of each recording to those who were there. Amos and Powers (2005) note for example how throughout the 2005 Beekeeper tour Amos solicited fan requests for cover songs via her website, performing at least two of her fan requests. This level of interaction helps crystallise the importance of the relationship between fan and artist in creating a successful working relationship, adhering to supply and demand traditions, and subsequently increasing the likelihood to purchase hard copies of live music documents.

Such recordings can of course be easily obtained illegally for free and many fans are likely to do so, without affecting ticket sales. Those who do pay for them are the hardcore fans who enjoy bootlegs (Naghavi & Schulze, 2001) and circulation of their live recordings both legally and otherwise form part of the reciprocal relationship between artist and fan. In Shultz’s (2006, p. 657) words ‘the music industry thus needs to think in terms of building loyal communities that have reciprocal relationships with artists rather than simply moving physical products into the hands of consumers’.

Interestingly, the paper (obviously written prior to Reznor's recent announcement) notes that the research suggests different strategies at different times in a band's development -- and wonders what sort of distribution model Reznor would choose for his new projects. No matter what, it's great to discover a number of academic studies related to these topics that I had not yet seen. I'll have to spend some time digging through them.