An increasingly problematic aspect of free trade agreements (FTAs) is the inclusion of investor-state provisions that essentially allow companies -- typically huge multinationals -- to challenge the policies of signatory governments directly. The initial impulse behind these was to offer some protection against the arbitrary expropriation of foreign investments by less-than-democratic governments. But now corporations have realised that they can use the investor-state dispute mechanism to challenge all kinds of legitimate but inconvenient decisions in any signatory nation. Here's a good example of how this provision is being invoked to contest a refusal by Canadian courts to grant a patent on a drug, as explained on the Public Citizen site:

Eli Lilly and Company has initiated formal proceedings under the North American Free Trade Agreement (NAFTA) to attack Canada's standards for granting drug patents, claiming that the denial of a medicine patent is an expropriation of its property rights granted by the agreement. The investor privileges provisions included in NAFTA and other U.S. "free trade" agreements (FTAs) empower private firms to directly challenge government policies before foreign tribunals comprised of three private-sector attorneys, claiming that the policies undermine their "expected future profits." Eli Lilly's move marks the first attempt by a patent-holding pharmaceutical corporation to use U.S. "trade" agreement investor privileges as a tool to push for greater monopoly patent protections, which increase the cost of medicines for consumers and governments.

The claim that denying a patent is somehow an "expropriation" of property is pretty extraordinary. Patents are intellectual monopolies that are granted by governments; Eli Lilly does not have such a monopoly in Canada unless the government there grants it, which it does by applying its well-established laws and rules. Here's the background to the current dispute:

Eli Lilly launched its NAFTA attack after Canadian courts invalidated Eli Lilly's monopoly patent rights for an attention deficit hyperactivity disorder (ADHD) drug, having determined that the drug had failed to deliver the benefits the firm promised when obtaining the patent. However, in its formal notice of intent to take Canada to a NAFTA investor tribunal, Eli Lilly makes clear that it is not only challenging the invalidation of its particular patent, but Canada's entire legal doctrine for determining a medicine's "utility" and, thus, a patent's validity. While pushing for a patent standard that would raise medicine prices, Eli Lilly, the fifth-largest U.S. pharmaceutical corporation, is demanding $100 million from Canadian taxpayers as compensation for Canada's enforcement of its existing medicine patent standards.

Basically Eli Lilly failed to deliver its side of the bargain, since the drug doesn't work very well, so Canada refused to allow the company to retain a patent that was contingent on it being effective. What's worrying is that the drug company's present action is not just challenging that decision, but the whole approach that requires drugs to work well enough to deserve a patent -- not unreasonably.

The case will not be heard before any ordinary national or even international court, with all that this implies in terms of transparency and fairness, but by a very special kind of tribunal:

The tribunals are comprised of three private sector attorneys, unaccountable to any electorate, who rotate between serving as "judges" and bringing cases for corporations against governments. The tribunals operate behind closed doors, and there are no conflict of interest rules. The tribunalists are paid by the hour and governments are often ordered to pay for a share of tribunal costs even when cases are dismissed. There is no limit to the amount of money tribunals can order governments to pay corporations. There are very limited appeal rights.

The entire approach is clearly biased towards companies and against the national governments, so the following facts will come as no surprise:

Under U.S. FTAs and related deals, private investors have already pocketed over $3 billion in taxpayer money via investor-state cases, while more than $15 billion remains in pending claims.

However, bad as things are currently, they promise to get even worse if the TPP agreement is finalized in line with leaked versions:

Ironically, while Canada faces an investor-state challenge from Eli Lilly, the country has joined negotiations to establish the TPP, which would expand the investor-state system further. To date, Canada has paid more than $140 million to foreign investors after NAFTA investor-state attacks on energy, timber and toxics policies. Part of Eli Lilly's claim against Canada is that the invalidation of its patent constituted an expropriation of its "investment." NAFTA does not list patents in its definition of a protected "investment," although some analysts have long worried that the broad, vague NAFTA definition could be used to attack medicine patent policies. But in the TPP, the proposed Investment Chapter explicitly names "intellectual property rights" as a protected "investment."

That is, TPP aims to formalize precisely the argument that Eli Lilly is trying to make using some rather far-fetched legal logic, discussed at length in the Public Citizen post quoted above. Moreover, it seems highly likely that a similarly far-reaching investor-state section will be included in the new Transatlantic FTA (TAFTA), now being discussed more widely.

The central problem with these investor-state provisions is that they elevate companies to the level of entire countries. Secret, unaccountable and biased tribunals with unlimited powers then enable them to overturn democratic decisions and legislation passed to preserve things like public health or the environment, simply because they would reduce corporate profits. And yet few people are even aware that such investor-state provisions exist, despite their massive impact on the lives of millions. That's a hugely troubling combination for the future.

Follow me @glynmoody on Twitter or identi.ca, and on Google+

For those of you who claim that copyright inspires no creativity whatsoever, perhaps you have not seen the following video, PandoHouse Rock: Copyright, explained, a collaboration between PandoDaily and Explainer Music's David Holmes: I usually find these sorts of things to be pretty bad. Copyright isn't something that you can usually simplify down to a song, but this one actually does a pretty good job of making the key point: which is that copyright is a crazy mess and widely abusable and abused. There are a few minor points I might quibble with (it's not clear that "It's A Wonderful Life" is really in the public domain for example), but on the whole it's one of the better such videos we've seen. Oh yeah, also, Holmes has put the video itself into the public domain, which is something we do with Techdirt content as well, but which very few other people do. Nicely done.

So, yes, copyright may have inspired this song... to be put into the public domain.

We've written a few times about the band Uniform Motion out of France, which got some fame last year for being incredibly open about how much money they make from various streaming platforms. Since then we've gotten to know Andy from Uniform Motion and posted a few other stories concerning cool things that he and the band have done. They're really open to doing cool experiments and being really transparent about how well they work. In fact, Andy has pointed out that greater transparency has clearly resulted in a "reason to buy" for many of the band's fans.

Anyway, the band is coming out with a new album -- and they've been releasing streaming versions of songs over the past few days leading up to the official release of the album. As in the past, because the band makes it easy to do so, I suggest you listen to some of the songs from the new album, which they're releasing one by one. You can hear them via the widget below. Feel free to hit play before continuing. With the new album coming out, the band has been doing a series of interesting things to connect with its fans. First is that it set up its own crowdfunding site. In an age where everyone is using Kickstarter/IndieGoGo/PledgeMusic or other similar platforms, Uniform Motion decided to set up a similar offering, but directly off its own site. They note that the main goal is to be transparent in seeing if they can make back the €4,311 they spent making the album itself. So, that's the "goal" number that they're hoping to raise. The different tiered "offers" aren't anything out of the ordinary: t-shirts, CDs and vinyl, basically -- though the packaging looks fantastic. Where it gets more interesting, of course, is where they're going beyond what others have done to try to do much more to connect with fans. Last summer, we noted that the band was asking fans to submit sounds, which they promised to work into the album. Not only did the band do exactly that, but it has also created a truly awesome treasure hunt game, in which they've set up a "map" that has all of the songs embedded in the map, along with the various sounds that people submitted. The goal of the treasure hunt is to match the submitted sound with the song that it was in on the map. Here's a screen shot: Some may argue that this is nothing special or -- worse -- they'll pop up with the overused and silly insult that this is just a "gimmick." But it actually fits so well with the band if you're familiar with their style and aesthetic. As we've discussed multiple times in the past, part of what makes various efforts to "connect with fans" and giving them a "reason to buy" isn't to do what everyone else has done, but to figure out what is special or unique about your art and your connection to fans, and to build on that. And that can be different for everyone. When it comes to Uniform Motion, the band has always had a heavy graphics / animation element to it. After all, one member of the band doesn't play a musical instrument, but rather does live sketches with the music as the band performs. So having this kind of effort just totally fits with the band itself, and highlights again the importance of not copying what others are doing, but figuring out what makes the most sense for your art and your fans.

The Library of Congress names Louis' Lunch sandwich shop as the inventor of the hamburger, but there are various disputes over who exactly cooked the first hamburger (and named it after people from Germany). In any case, the hamburger has undergone quite a few changes since the early 1900s. Here are a couple unhealthy examples of extreme burgers, and a reminder that being overweight doesn't necessarily kill you (but it's not considered healthy).

• The 'Merica burger is made of ground bacon topped with more bacon and bacon cheddar cheese, along with a fried egg and bacon island dressing. Thankfully, this burger creation was available for only a limited time. [url]
• If customers were allowed to create their own burger combinations, would people really choose to put a greasy cheeseburger between two glazed donuts? The answer is apparently, yes, and they'd add bacon as well. [url]
• What are the ramifications of being overweight? According to a meta-study of 97 prior studies that categorized 2.9 million people by a Body Mass Index, people classified as overweight (BMI >30) had a 6% lower chance of dying than people of average BMI. The conclusion should be that BMI is not a perfect metric for health, but the alternative metrics may have a hard time becoming as widely adopted. [url]

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

Well, there they go again. We've talked a bunch about how the FBI has gotten really good at stopping its own terrorist plots and they've gone and done it again. Right here in the San Francisco Bay Area, the FBI has gleefully announced how they've stopped an attempt to bomb a Bank of America building in Oakland. The details are familiar: random guy with no actual connection to terrorists, and no actual way to build a connection with terrorists, is taken in by an FBI undercover agent who works with him to build a "bomb" that was never a bomb. In other words, there was no plot. There was no bomb. There was just a bunch of undercover agents playing dressup, and one Joe Schmo who thought it was all real. Maybe next time, the FBI can turn it into a reality TV show on Spike. Ralph Garmin as... a fake terrorist. I'd watch it.

This all comes just a week after On the Media profiled a new book called Terror Factory: Inside the FBI's Manufactured War On Terrorism. That book appears to collect a bunch of these stories, talking about how this is a major effort in the FBI these days: making up fake terrorist plots in order to stop people they themselves convinced to take part in the "plots" and then generate big headlines around them:

The Terror Factory: Inside the FBI's Manufactured War on Terror shows how the FBI has, under the guise of engaging in counterterrorism since 9/11, built a network of more than 15,000 informants whose primary purpose is to infiltrate Muslim communities to create and facilitate phony terrorist plots so that the bureau can then claim victory in the war on terror.

Think of just how many resources are wasted in entrapping random people, rather than stopping real crime. I don't see how this makes us any safer at all. Frankly, it makes me a lot more terrified.

It looks as if Judge Otis Wright is about done humoring Brett Gibbs and Prenda Law/AF Holdings/Ingenuity 13 LLC's continued legal asshattery. In a lengthy order that reads more like a smackdown, Wright attacks Gibb's abuse of the legal system and thoroughly dismantles his so-called "business model."

First, Wright takes on the evidence Prenda Law presents, consisting of a "snapshot" of possible infringement in progress. He points out that a time-coded screenshot hardly makes the case that actual infringement occurred.

This snapshot allegedly shows that the Defendants were downloading the copyrighted work—at least at that moment in time. But downloading a large file like a video takes time; and depending on a user’s Internet-connection speed, it may take a long time. In fact, it may take so long that the user may have terminated the download. The user may have also terminated the download for other reasons. To allege copyright infringement based on an IP snapshot is akin to alleging theft based on a single surveillance camera shot: a photo of a child reaching for candy from a display does not automatically mean he stole it. No Court would allow a lawsuit to be filed based on that amount of evidence...

And as part of its prima facie copyright claim, Plaintiff must show that Defendants copied the copyrighted work. Feist Publ’ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361 (1991). If a download was not completed, Plaintiff’s lawsuit may be deemed frivolous. In this case, Plaintiff’s reliance on snapshot evidence to establish its copyright infringement claims is misplaced. A reasonable investigation should include evidence showing that Defendants downloaded the entire copyrighted work—or at least a usable portion of a copyrighted work. Plaintiff has none of this—no evidence that Defendants completed their download, and no evidence that what they downloaded is a substantially similar copy of the copyrighted work. Thus, Plaintiff’s attorney violated Rule 11(b)(3) for filing a pleading that lacks factual foundation.

TorrentLawyer summarizes Wright's opening salvo as laying down two rules via case law, ones that will adversely affect copyright trolling in California, and which could affect proceedings elsewhere:

RULE 1. IN ORDER TO SUE A DEFENDANT FOR COPYRIGHT INFRINGEMENT, YOU MUST PROVE THAT THE DEFENDANT DOWNLOADED THE ENTIRE COPYRIGHTED VIDEO.

RULE 2. A “SNAPSHOT OBSERVATION” OF AN IP ADDRESS ENGAGED IN DOWNLOADING AT THAT MOMENT IS INSUFFICIENT PROOF OF COPYRIGHT INFRINGEMENT

This sort of lawsuit has almost always relied on little more than a snapshot and an IP address as "evidence," the latter of which has been shot down by multiple courts for its inability to correctly identify alleged infringers. Now, Wright is throwing out Gibb's precious bundle of snapshots as well.

Wright tackles the IP address issue next, under a heading titled "Lack of reasonable investigation of actual infringer's identity." He points to earlier explanations by the plaintiffs as to how they arrived at the identity of the alleged infringer and picks apart their "methodology." Here's Ingenuity 13 LLC's explanation of their deductive process.

Though the subscriber, David Wagar, remained silent, Plaintiff’s investigation of his household established that Benjamin Wagar was the likely infringer of Plaintiff’s copyright. As such, Plaintiff mailed its Amended Complaint to the Court naming Benjamin Wagar as the Defendant in this action. (ECF No. 14, at 2.)...

In cases where the subscriber remains silent, Plaintiff conducts investigations to determine the likelihood that the subscriber, or someone in his or her household, was the actual infringer. . . . For example, if the subscriber is 75 years old, or the subscriber is female, it is statistically quite unlikely that the subscriber was the infringer. In such cases, Plaintiff performs an investigation into the subscriber’s household to determine if there is a likely infringer of Plaintiff’s copyright. . . . Plaintiff bases its choices regarding whom to name as the infringer on factual analysis. (ECF No. 15, at 24.)

"Factual analysis?" Really? Wright calls it for what it is.

The Court interprets this to mean: if the subscriber is 75 years old or female, then Plaintiff looks to see if there is a pubescent male in the house; and if so, he is named as the defendant. Plaintiff’s “factual analysis” cannot be characterized as anything more than a hunch.

Wright gives Ingenuity 13 LLC several suggestions on how to narrow this list of suspects down, including "wardriving" to check whether the WiFi connection in question is open, whether several downloads have occurred at the same IP address, or just a good old-fashioned stakeout.

Such an investigation may not be perfect, but it narrows down the possible infringers and is better than the Plaintiff’s current investigation, which the Court finds involves nothing more than blindly picking a male resident from a subscriber’s home.

This sentence is damning enough, but the followup is the killer:

But this type of investigation requires time and effort, something that would destroy Plaintiff’s business model.

Wright notes the difference between criminal and civil suits that rely on IP addresses for identification. In criminal proceedings, the court usually can rely on the fact that an actual investigation has taken place prior to the charges being brought. In a civil case, the court has no such guarantee, but that doesn't mean the judicial system has to entertain these claims.

[W]hen viewed with a court’s duty to serve the public interest, a plaintiff cannot be given free rein to sue anyone they wish—the plaintiff has to actually show facts supporting its allegations.

Back to TorrentLawyer with another addition to California federal court case law and another blow to trolling-as-business-model.

RULE 3. BEFORE SUING A DEFENDANT FOR COPYRIGHT INFRINGEMENT, YOU MUST DO A “REASONABLE INVESTIGATION” TO DETERMINE THAT IT WAS THE NAMED DEFENDANT WHO DID THE DOWNLOAD, AND NOT SOMEONE ELSE WITH ACCESS TO HIS INTERNET CONNECTION.

All in all, this smackdown is going to make copyright trolling in California a rather unprofitable venture. Expect to see some venue-shifting in the future. Unfortunately for Ingenuity 13 LLC, it's already entrenched in a losing battle, and it's going to get even worse. Wright also had some choice words for Brett Gibbs' misconduct. Two allegations stem from his failure to comply with the Court's orders to cease discovery. Gibbs first told the court the plaintiffs had not obtained any information about the subscribers in question, before later regaling the court with tales of its efforts to obtain the forbidden information when responding to Orders to Show Cause.

The third allegation is more serious, alleging fraud on the court. This circles back to the mysterious "Alan Cooper."

Upon review of papers filed by attorney Morgan E. Pietz, the Court perceives that Plaintiff may have defrauded the Court. (ECF No. 23.) At the center of this issue is the identity of a person named Alan Cooper and the validity of the underlying copyright assignments. If it is true that Alan Cooper’s identity was misappropriated and the underlying copyright assignments were improperly executed using his identity, then Plaintiff faces a few problems.

First, with an invalid assignment, Plaintiff has no standing in these cases. Second, by bringing these cases, Plaintiff’s conduct can be considered vexatious, as these cases were filed for a facially improper purpose. And third, the Court will not idle while Plaintiff defrauds this institution.

Wright then orders Gibbs to show cause why he should not be sanctioned for this misconduct, while declining to extend the sanctions to AF Holding and Ingenuity LLC -- based on Gibbs' "fiduciary interest" in the plaintiffs and the likelihood that the plaintiffs are "devoid of assets."

Wright gets in a little dig at the still-nonexistent Alan Cooper:

If Mr. Gibbs or Mr. Pietz so desire, they each may file by February 19, 2013, a brief discussing this matter. The Court will also welcome the appearance of Alan Cooper—to either confirm or refute the fraud allegations.

Things were already looking pretty grim for Brett Gibbs, but the worst may still be on the very near horizon:

Based on the evidence presented at the March 11, 2013 hearing, the Court will consider whether sanctions are appropriate, and if so, determine the proper punishment. This may include a monetary fine, incarceration, or other sanctions sufficient to deter future misconduct. Failure by Mr. Gibbs to appear will result in the automatic imposition of sanctions along with the immediate issuance of a bench warrant for contempt.

What started out for Gibbs and co. as a route to easy money has morphed into possible jail time and a complete undermining of the "business model" Prenda Law, AF Holdings and Ingenuity 13 LLC hoped would make them, if not actual millionaires, at least slightly richer. And so another chapter of the Gibbs/AF Holdings/Prenda Law saga concludes, leaving us with the sort of cliffhanger that only those whose names haven't been listed above will enjoy seeing played to its conclusion.

Last year, we wrote about the next important lawsuit concerning software patents, the CLS Bank v. Alice case, which the full Federal Circuit appeals court (CAFC) heard today. Our last post on the case provided the background, but the short version was that it involves some software concerning doing a "shadow transaction" to see if there are really enough funds to complete a transaction, before completing the actual transaction. The district court found that this was just a representation of an abstract idea, and thus not patentable. CAFC, using a typical three judge panel, reversed that decision, saying that it was patentable subject matter. However, CAFC agreed to rehear "en banc" with the entire 10 judges, because there was some concern about the original ruling (which was split 2 against 1).

I've spoken to two people who were at the hearing this morning, and some other reports are trickling out as well. As always, what gets covered in the oral hearings is not always as indicative of how the court will rule as many people hope. Often times, what is discussed in the hearing may end up being a side item in the eventual decision, which considers a lot more information, usually from the various briefs filed by the key parties and amicis (friends of the court). And this case had a lot of "friends" on all sides. If you'd like to understand the full arguments, the Patent Progress blog has a good summary of the arguments.

Either way, lots of folks recognize that this is a key case for software patents and apparently there was a packed house, with lots of patent lawyers and Patent Office folks in attendance. There was plenty of discussion concerning what makes something an abstract idea vs. a specific implementation of an idea. Alice Corp. (the patent holder) argued that its patent was really on just a "specific way" of doing such net settlement transactions, but had trouble answering the question of whether or not it was possible to do a net settlement transaction without violating the patent.

One of the key questions that CAFC is supposed to answer in the case is:

What test should the court adopt to determine whether a computer implemented invention is a patent ineligible “abstract idea”; and when, if ever, does the presence of a computer in a claim lend patent eligibility to an otherwise patent-ineligible idea?

Here, apparently, the parties actually seemed to more or less agree that the "test" is a "significantly more" test -- and whether or not the computers are doing "significantly more" than just speeding up a process that could be done in one's head or with pencil and paper. A lot of this test is built on last year's ruling in the Prometheus Labs. v. Mayo Labs case concerning medical diagnostics patents, and that case was discussed a fair amount during the hearing (though that case involved doing "significantly more" than laws of nature, rather than general computing).

Lawyer Bob Sachs, a patent lawyer from Fenwick and West who was at the hearing today, told me that the "significantly more" test worries him, in that it's not an "objective test" and effectively leaves too much to chance. "It's a way of saying 'we can't figure this out.'" He also noted that the "significantly more" test may favor the idea that this particular patent is legitimate, since the patent in question was much more detailed and involved than your average software patent. That said, in his early handicapping of the field, he comes up with a 5 judge to 5 judge tie, based on their perceived opinions and the sorts of questions they were asking, so he's wondering if it'll end up that way or if any of the judges will swing to the other side.

While Sachs was disappointed that there wasn't a clear attempt to define what constitutes an "abstract idea," I'm not as sure that's an issue. In fact, it almost seems oxymoronic to say that you need a strict definition of an abstract idea. The reason an idea is abstract is just that: it's abstract. But, at the same time, I can understand why patent lawyers would generally prefer a brightline, objective rule that can demarcate what is and what is not patentable. Either way, lots of patent lawyers will be waiting eagerly for this ruling.

I don't particularly like the NCAA and I enjoy their legal difficulties as much as the next guy. As a devout college sports fan, the usually arbitrary and always backward business side of the NCAA (including the affiliated schools and "non-profit" bowl associations) causes me great consternation.

Apparently, the incomparable Charles P. Pierce shares my disdain for the lumbering excuse for a fair and credible sanctioning body that currently governs collegiate athletics.

In a sharp Grantland piece, Pierce revisits the Ed O'Bannon-led class-action case against the NCAA and video game manufacturer EA over their combined efforts to profit in perpetuity from the likenesses of unpaid "student ath-o-letes." (Take it away Eric Cartman!) But I think Pierce is overselling the extent to which a possible O'Bannon victory would really change the college sports landscape....

By way of background, Ed O'Bannon is a former UCLA and pre-Brooklyn Nets basketball player who had retired from the game. It came to his attention that the NCAA had licensed his likeness to EA to make approximately a gajillion dollars selling video games featuring "classic" teams like O'Bannon's 1996 UCLA Bruins. O'Bannon felt -- and he was later joined by basketball legends like Bill Russell and Oscar Robertson, who were stunned to learn a) that they were in a video game and b) what a video game was -- that this seemed a little far afield of putting his likeness on a calendar in 1995, which is what he reasonably assumed he was authorizing the NCAA to do when he signed away his rights to profit from the marketing of his collegiate career when he was all of 18 years old.

O'Bannon filed suit in 2009, alleging that the NCAA violated the Sherman Antitrust Act when they forced him to sign a waiver giving up his rights to profit from representations of his collegiate career. As Robert Wheel of SBNation explains:

O'Bannon is alleging that if the NCAA didn't force him to sign this contract, then he could have gotten money from someone else (say, an EA competitor) to use his likeness. Thus, it essentially fixed the price of using his image at zero. Even if you consider players' scholarships adequate payment for their services, this still artificially depresses how much they're paid. If a judge agrees, the waiver would be considered an illegal restraint of trade under the act.

And now O'Bannon and his lawyers are seeking to certify a class of all former athletes used in this way for a trial next year (courts have held that maintaining the amateur status of current student athletes is a laudable enough goal to justify the NCAA robbing current athletes of the fruits of their potentially debilitating labor, so this case only deals with former athletes).

Which brings us to Charles Pierce's piece. You see, Judge Claudia Wilken of the Northern District of California just denied the defendants' motion to end the class certification process on the grounds that the plaintiffs have changed their legal strategy. Judge Wilken basically asked, "So?" and the defendants had no response. Pierce contends that this legal setback for the NCAA, along with recent NCAA retreats on the issue of stipends for players, portends an extinction-level event for college sports.

By and large, the people charged with running our various sports conglomerates have proven through history to be as incapable of taking the long view of their own survival as the average brachiosaurus was. They blunder around, eating whatever comes under their noses, trampling the scenery and hooting loudly into the wind. They never see the meteor coming. …

For the NCAA to survive in its current form, it has to win this lawsuit or get the lawsuit dismissed. There’s no third alternative. The NCAA can’t settle and then go back to the status quo ante. It can’t pay off O'Bannon and Russell and Robertson and all the rest of them, and then start business as usual again as regards Cody Zeller or Kenny Boynton. If it loses the lawsuit, the effect on the NCAA's financial structure would be profound. About which, at this point, the device has not yet been invented capable of measuring how little I care. Instead, I stand aside and listen to the stomping and the hooting from the thick Cretaceous rain forest, which is just loud enough to drown out the high whistling sound of something coming down from the sky.

I'm not sure comparing the NCAA to the dinosaurs makes much sense. The dinosaurs were wiped out entirely and a new world order replaced their presence. The elimination of the NCAA is more akin to the extinction of the Dodo bird: the weakest, most ineffectual player on the evolutionary stage will saunter off while the crazy dudes with guns and hunting dogs remain on top.

Or maybe Pierce is right about the extent of the mass extinction... but he forgets that the elite athletic departments and conferences aren't the dinosaurs, they’re the cockroaches. I just don't trust these folks to go quietly into the night. They'll let the NCAA take this hit regarding past licensing of "classic team" likenesses and then come up with some new regime where the individual schools capture all the revenue from licensing their own classic teams through bi-lateral agreements with manufacturers to create some semblance of a competitive market for these likenesses and go on exploiting the next generation of future former athletes.

Would that survive legal scrutiny? Maybe not, but the big power players in the sport will happily drag out the issue as long as possible to capture as much profit as possible, even at the expense of the weaker sports schools who would lose out without the NCAA dividing the licensing pot. But for a major athletic department, this is no time for communism! There's already a roadmap out there to ditch the NCAA and kill off the weaker sports schools leaching off the strong.

So the NCAA might die, but for the players themselves, the motto would be "meet the new boss, same as the old boss."

The O’Bannon Decision [Grantland]
Ed O’Bannon vs. the NCAA: The antitrust lawsuit explained [SBNation]
NCAA Student-Athlete Licensing Program — How Could It Happen and What Are the Elements? [Winthrop Intelligence]

More stories from Above The Law:

• When Luddites Handle Cyber Security, You End Up With American Law Firms
• The Practice: Blogging And Other Social Media, Like A Search Engine Whore
• Quote of the Day: Trump’s Lawyers May Be ‘FIRED!’ Over This

For years, we've talked about the idea of an independent inventor defense for those accused of patent infringement -- which, contrary to the claims of some patent attorneys, is totally feasible -- and that idea has received some traction. However, we've also argued that things should go even further, and that if there is evidence of multiple independent inventions of the same concepts that it is a sign of obviousness, and all such patents should be rejected -- since patents are not allowed on inventions that are considered "obvious" to those who are "skilled in the art." Unfortunately, we've seen less support for that specific idea -- but perhaps that's changing.

Mark Cuban recently gave an interview to TechCrunch in which he discusses his rationale for giving EFF $250,000 to create the "Mark Cuban Chair to Eliminate Stupid Patents." When asked about how he would fix the patent system, he names a few popular ideas, like getting rid of software patents, requiring that the invention be put into practice, but he also (repeatedly) talks up how independent invention should be a sign of obviousness. A few snippets:

I would also like to see a "cold room" exception. If you can show you invented the idea using completely independent thought, you don't violate the patent and the patent is invalidated.

Remember back in the 80s when AMD/Intel and others would clone each other and it was permissible because they came up with the features and functions completely independently? The same should apply to patents. If you didn't copy an idea, you came up with it on your own, then the idea should not have been patented in the first place. If multiple people come up with the same idea independently, that is the definition of obvious.

You should be given the right to your idea if you come up with it independently and any patents in place for that idea should be invalidated.

[...]

Independently derived ideas that are turned into products and can prove they are independently derived (Again, if multiple people come up with the same idea independent of each other, that should be as definite as it is obvious, and obvious cannot be patented), then it can not be patented, and all patents for those ideas are declared invalid.

It's great to see that this idea may finally be getting some traction, as it could have a big impact on fixing many of the most significant problems with today's patent system.

Way back in 2006, Jonathan Schwartz, then the CEO of Sun, caused a ruckus at the SEC for doing the amazing thing of trying to disclose material news about the company on his blog. The SEC was concerned about this, because it massively over-regulates communications from public companies, specifically under Regulation FD (for "fair disclosure"). The issue is that information needs to be available widely at the same time so that no one has a particular advantage (i.e., you can't just reveal info to some big bankers on Wall St. who trade on it, and then release your press release later). But, in our over-regulated world, the SEC had to go through a long process before deciding that, in this modern digital world, perhaps these crazy "blog" things are okay.

We're seeing something of a repeat of the episode a little more than six years later, Netflix CEO Reed Hastings wrote on his Facebook account the news that Netflix users were watching "nearly a billion hours per month." The SEC decided that this might be material information that Hastings had dangerously shared in a new-fangled manner and this might violate RegFD. Amusingly, Hastings told the world about this... via Facebook.

SEC staff informed us yesterday that they are recommending that the SEC bring a civil action against us for my July 1 billion hour public post, asserting we violated “Reg FD”. This rule is designed to ensure that individual investors have equal access to information as large institutional investors, by prohibiting selective disclosure of material information. The SEC staff believes that I gave you all “material” investor information in my post and that we needed to instead release the June viewing fact “publicly” with an 8-K filing or press release.

Hastings points out that the whole thing is stupid. The Facebook postings are public and viewable by anyone with a Facebook account, and he already has 200,000 subscribers to his updates. Furthermore, he pointed out that the announcement itself had nothing to do with "material" information for investors, it was just cool news -- which had been blogged about a few weeks earlier anyway.

Hastings finds the whole thing so ridiculous (and it is) that he's promised to keep posting news to Facebook even as the SEC continues its "investigation." As he points out, the whole thing is more about SEC red tape than any reasonable regulation:

“Reg FD was about protecting me from telling Carl Icahn something special, the big investor, that not everyone else got,” Hastings said. “This was me talking to 200,000 Facebook followers; it is letting the small guy in on the information.”

It would be nice if our various regulatory institutions didn't react to any new technology by automatically dumping it into the "must be evil / most be stifled" category.

Glenn Fleishman has a typically fantastic post over at BoingBoing in which he discusses how the famed Amoeba Records chain has launched Vinyl Vaults, an online store for digitized music from vinyl records, available exclusively via the store. Amoeba, for those who don't know, is something of a mecca for music fans. I used to spend hours there buying CDs... until Amazon, CDBaby and the like just made it much easier for me to buy CDs (and eventually MP3s) online. I had no idea, but apparently Amoeba spent six years and $11 million building this online store. That seems like an awful lot. But here's the thing: it appears that the store is basically one giant case of copyright infringement, as Fleishman describes in detail.

Basically, Amoeba decided that if it couldn't find the copyright holder, it would just hold money for them in escrow, and be willing to hand it over should they ever come calling. And, while this might seem like a viable plan in a world that made some sense, it's not what the law allows. At all. Fleishman explores all of the legal nuances (including the fun stuff about how pre-1972 sound recordings are under wacky state copyright laws that have different rules, and won't go into the public domain for much longer than other works). Here's a snippet of the piece:

Where does this leave Amoeba? It seems to be standing on the notion that orphaned works are up for grabs so long as you pay out the owners' cut later when it's claimed. Orphaned works are creations for which no clear knowledge of ownership exists. But there's no provision in U.S. law for how to deal with orphaned works of any kind, music or otherwise. A proposal from 2006 was languishing at the Copyright Office, as it requires Congress to take it up (ha) to establish a clear procedure in law.

Go read the whole thing. It's yet another example of how copyright law makes no sense to most people.

As you're probably aware, Monster Cable is somewhat famous as a trademark bully -- at times going after completely unrelated businesses that use the word "monster" (such as a mini-golf course, an automotive parts shop and the manufacturer of deer salt blocks) despite there being no chance for confusion. So it's interesting to see what happens when it's actually being accused of trademark infringement itself. Unlike Monster's lawsuits, this one is from a company that's actually in the same space. Dolby is suing Monster for trademark infringement and last week Monster failed in its attempt to win the case via summary judgment, while Dolby partially won its summary judgment arguments. (Updated to show the logos): Incredibly, Monster, which continually attacks totally unrelated businesses where no moron in a hurry would ever consider there to be any confusion, is now forced to argue here that its own use wouldn't cause any confusion at all. However, the court isn't convinced, noting that the marks do, in fact, appear similar (and even Monster's own "expert" witness said as much):

Here, both marks consist of an icon of a pair of over-the-ear headphones surrounding an abstract geometrical shape. The proportionate size of the headphone icon compared to the center geometric shape is approximately the same for both marks. Both of the center geometric shapes have a similar dark, right-angle side nearest the headphones icon, with mirror-image, inward-facing, semi-circular arcs opposite the right-angle side. Indeed, Monster's own witnesses concede that the marks have similar elements. The evidence indicates that Monster's mark sometimes appears in a certain configuration with the Monster name or in certain color combinations, but sometimes does not. In short, a reasonable jury could find, on the record before the Court, that this element favors likelihood of confusion.

And, while Dolby itself doesn't directly compete, it licenses its mark to those who do:

Headphones bearing the Dolby mark sell in the same price range and to the same market segments. Moreover, the Dolby mark may appear on a variety of different headphone styles, including styles similar to Monster's, since Dolby licenses its mark to different headphone manufacturers. This adds to the potential for source confusion, whatever the sophistication level of the buyers.

Oh, and there's even some evidence to suggest that, unlike those Monster accuses of trademark infringement, Monster itself may have purposely copied Dolby's mark:

Based upon the record before the Court here, a reasonable jury could find that Monster intentionally adopted a mark similar to the Dolby Headphone Mark, thus creating a triable issue. Monster was aware of the Dolby Headphone Mark at the time that it adopted its Monster Headphone Mark. It had, in fact, licensed and used the Dolby Headphone Mark on its own products. The record contains conflicting accounts about the creation of the Monster Headphone Mark. Dolby also offers evidence that Monster previously admitted using a different Dolby mark without permission, as well as evidence that Monster acknowledged the value of including the Dolby Headphone Mark and Dolby technology in marketing headphones to consumers. This and other circumstantial evidence would allow a reasonable jury to find in favor of Dolby on the intent to confuse factor

You would think that, for a company so incredibly (and ridiculously) aggressive in enforcing its own trademark, it would be a bit more careful in designing its own damn logos. Monster may eventually win the case, but initially it doesn't look to be going that well.

ACTA and SOPA may have flopped, but minor setbacks like that won't stop the onslaught of abuses from the entertainment and pharmaceutical industries looking to use the international treaty process to try to pressure everyone to keep ratcheting up protectionist laws concerning copyright, patents and trademarks. Obviously, we've been talking about the still worrisome TPP agreement involving a bunch of Pacific Rim countries, but it's not stopping there. Back in October, we warned that the US and EU were preparing a new trade agreement as well, and the preliminary plans noted that it would include a "high level of intellectual property protection, including enforcement."

More details are starting to come out as the main EU negotiator for ACTA, Karel de Gucht, came to DC to see about getting things kicked off, on an agreement that's being called TAFTA -- the Trans Atlantic "Free Trade" Agreement. Of course, instead of recognizing the lessons from previous failed efforts to push for broken maximalist policies, it appears that the plan is to try, try again. Some are already saying that this is "the opportunity to try to set the gold standard" in copyright, patent and trademark protection. The goal, as with ACTA and TPP is to ratchet up the laws, and then put tons of pressure on China and India to "respect" those laws. To put it mildly: this is stupid. Both of those countries recognize how protectionism works. We've already seen that China is becoming exceptionally good at using patent laws to basically punish foreign companies, while helping domestic Chinese companies. It seems downright idiotic to provide them with even more tools to do so.

Of course, the real questions are why do we keep letting our governments negotiate these kinds of deals, and why do we let them do so in secret?

We recently picked up on a suggestion by Farhad Manjoo over at Slate that MIT should make all of its research open access as an apology for assisting in the prosecution of Aaron Swartz. Some people in our comments, reacting angrily against this idea, noted that faculty could not be forced to make their works open access by an administration. Well, it turns out that it's already happening. Daniel Hawkins pointed out that MIT faculty unanimously agreed that all its faculty members would release their works under an open access policy... back in 2009.

The Faculty of the Massachusetts Institute of Technology is committed to disseminating the fruits of its research and scholarship as widely as possible. In keeping with that commitment, the Faculty adopts the following policy: Each Faculty member grants to the Massachusetts Institute of Technology nonexclusive permission to make available his or her scholarly articles and to exercise the copyright in those articles for the purpose of open dissemination. In legal terms, each Faculty member grants to MIT a nonexclusive, irrevocable, paid-up, worldwide license to exercise any and all rights under copyright relating to each of his or her scholarly articles, in any medium, provided that the articles are not sold for a profit, and to authorize others to do the same. The policy will apply to all scholarly articles written while the person is a member of the Faculty except for any articles completed before the adoption of this policy and any articles for which the Faculty member entered into an incompatible licensing or assignment agreement before the adoption of this policy.

This is a good policy, and one you would hope that other universities would adopt as well.

But, in light of the situation with Aaron Swartz, it just makes it that much more baffling why MIT helped push the case forward and, despite repeated requests to do so, failed to join JSTOR in asking the feds to drop the case. Here is MIT, a school that has widely embraced both the hacker culture and the widespread and free dissemination of academic research, and it helped push forward and supported a massively over-aggressive campaign by the Justice Department against Aaron for embracing the same principles the school itself publicly supports. It's incredible, baffling... and disappointing.

Silly reactions to violent video games are coming so fast these days it makes one's head spin. Redundant labeling of games, doubling down on unconstitutional laws, and even special 1% taxes for games with a rating of "Teen" and above... It's quite difficult to parse out the well-intentioned silliness from the grandstanding silliness. What's clear, however, is that there are a great many people who don't recognize games as the speech that they are.

One state representative from Connecticut, home of the Sandy Hook tragedy, is now upping the ante on that last idea and proposing a 10% tax on games that are rated "mature". Here's Rep. Debralee Hovey's idea:

“That the general statutes be amended to establish a sales tax on the sale of video games rated “mature” at a rate of ten per cent on the entire sales price and to require the moneys derived from such sales tax be used by the Department of Mental Health and Addiction Services for the purpose of developing informational materials to educate families on the warning signs of video game addiction and antisocial behavior".

There is more than one problem with this type of legislation, but let's get the most obvious out of the way: it's likely unconstitutional. Courts have held in the past that both limiting violent games, as well as taxing specific types of speech differently than others, fails on constitutional grounds. Hovey's proposal would appear to violate both precedents. But even if that weren't the case, Forbes goes further in explaining how dangerously dumb this is.

This is of course punishing an industry based on conjecture, as no concrete evidence has yet been put forth linking video games and violent actions. The Obama administration’s new gun plans do involve the NHS studying this link, but as nothing is proven (and likely won’t be), video games should not be treated in the same way as a product proven to cause cancer.

I've said this before, but I will say it again: emotion is not a reliable basis for legislature. Ever. Data is what should drive laws and, in this case, the data is at best inconclusive and at worst non-existent. Proposing laws without data to perform the function that is supposed to be performed by parents is the height of a nanny state.

Sometimes the press screws up. Anyone can screw up. The best thing to do is to admit that you screwed up, apologize, and make it right. At times, we've had to do that, sometimes even admitting we were just plain wrong. It happens. You apologize, you make things right, and you move on. However, for some people, that's hard, and apparently the Washington Post is included in that bunch. Earlier this week, we did a big debunking on the WaPo's incredibly misleading story about the FCC and "super WiFi." The story was on the front page of the Washington Post, suggesting (incorrectly) that there was a "new" proposal from the FCC to blanket the US in free WiFi.

The truth was that there was nothing of the sort. There was a minor step in a decade-long fight over putting some old TV spectrum to better use. It wasn't new. It wasn't anything important. And it had little to nothing to do with blanketing the US in free WiFi -- especially free WiFi supplied by the FCC (as the Post article implied, and which many people took to be true). A few others got on the debunking train as well, and one of the earlier thorough debunkings came from Ars Technica's Jon Brodkin, who pointed out that it was just bad journalism at work.

While some of the others who picked up on the original story have since admitted they were mistaken, Brodkin has a new article pointing out that the original story won't die. He was contacted to go on Current TV about it until he explained that there was no story. But the really awful part is that the Washington Post itself and reporter Cecilia Kang (who normally does good work, so this still has me baffled) still have not corrected their original piece. Instead, Kang put up a weak follow up piece that added five "things to know" about the plan. The "five things" are all accurate, but they were sort of core to the original story and weren't in there. The whole point is that the original story is incredibly misleading, and the proper thing to do was to put a giant correction notice on it, pointing out that they screwed up the original story. It was misleading to the extreme, and at points, implied things that were simply incorrect.

Yes, it's embarrassing to admit you were wrong, but it's more embarrassing to let a wrong story live on. As Brodkin notes, because the original story is still out there and uncorrected, the false story lives on in many places. He also notes that the Washington Post is standing by the story, which makes no sense:

I ended up talking to the Post reporter on the phone and e-mailing with the Post's ombudsman. The ombudsman told me that the FCC confirmed to the Post that the "free Wi-Fi" story was correct, which is odd, because I also talked to people at the FCC who said the exact opposite. Similarly, a TechCrunch reporter wrote that "my contact at the FCC told me that there was no such plan" as the one reported by the Post.

The Post reporter was genuinely nice and seemed eager to correct the record, but the execution was lacking. She followed up with a more realistic piece titled "Five things to know about 'free' public Wi-Fi." It explains some of the realities of the situation, such as the fact that the FCC won't be building any networks itself and that whatever networks are built won't necessarily be used to provide free Internet access.

The Post's follow-up story was all well and good, but the original story was never corrected or retracted. In addition to getting the front-page treatment, the initial Post story was coupled with a cringe-inducing video titled "FCC offers path to free Internet access." A host begins the spot by asking, "What if Wi-Fi didn't come from a router in your living room but instead from powerful TV antennas? And better yet, what if you didn't have to pay for it? That possibility could become a reality across the US thanks to a new proposal by the Federal Communications Commission." (Have I made it clear that the proposal is not new and never required "free access," either?)

And people wonder why folks have trouble "trusting" the press these days?

If there's one thing our judicial system has taught the layman, it's this: when faced with public criticism, your first reaction should be to craft angry letters/emails full of baseless legal threats. (Of course, the internet teaches exactly the opposite lesson, one that many have failed to learn...) Today's angry email writer (and phone caller) is the president (and treasurer) [and legal agent] of the Stonecreek Arbor Homeowner's Association, located in Indiana's Vandenburgh County.

The Evansville Courier & Press recently wrote a lengthy piece about HOAs and how they can range wildly in quality, from being so laissez-faire that you wonder where your money is going to providing the services your area needs to micro-dictatorships that leave residents unhappy.

The HOA at the center of this story is called Stonecreek Arbors, in Indiana’s Vandenburgh County. According to the paper, the Stonecreek HOA was responsible for more than half of all the liens filed in the county last year. Many of these liens were for unpaid HOA dues worth a little more than $200.

The 49 liens filed by the HOA translates to slightly less than 1/6 of all the homes in the subdivision.

Anyone who's even slightly familiar with HOAs knows it's going to be nearly impossible to find a flattering article written about these overweening middlemen/micromanagers who have inserted themselves between homeowners and their own property. (At least one that's not written by association board members...) Why so many of these associations exist is a mystery, given that most people resent having arbitrary rules and limitations placed on something they purchased. It's like DRM for houses.

That being said, Stonecreek Arbor was like any other homeowners association that makes the news. Excessive fees. Sudden bans on a previously parkable driveway, which instead became a HOA board member's private road to and from the lake. Demanding pets be microchipped, even when the existing "rules" carried no language to that effect. And so on.

The Evansville Courier article detailed these offenses, leading off with a photo of the subdivision's entrance which handily sported the Stonecreek name, lest anyone be confused about which HOA was currently abusing its members. Shortly after publication (and following a brief interview with the HOA president Stephen Hess -- captured "on tape" over at the Consumerist), the Evansville Courier & Press received this email from Hess.

“[T]his notice also requires you not to at any measure mention anything regarding my name, any resident of Stonecreek, NOR will we ALLOW any of your printing in any article regarding Stonecreek at any time in any publication… You will be held liable for any violations of this letter and notice/request in this email. If we find/discover you have mentioned Stonecreek in any legal matter their (sic) will be action toward yourself as well as any print paper you represent in the media article.

“You may contact any HOA in the County of Vanderburgh, the State of Indiana, but Stonecreek will not PERMIT OR ALLOW YOU our legal name in any future article.”

There are a lot of claims being made here that the HOA president can't hope to back up. Exactly how he was hoping to prevent mention "in any publication," much less the one with which he's currently tangling, is unclear. Maybe he was hoping a few CAPITALIZED WORDS would strike fear in their tiny journalistic souls. The double threat of "being held liable" and having "action toward" the paper doesn't seem to have prevented publication of this article on the internet, or in "any print paper."

The HOA president didn't even throw out handy, but un-actionable, terms like "libel" or "defamation," but he did follow up with one more vocal threat:

That obviously didn’t work, nor did the phone call to the Courier & Press, which demanded the paper “stop this article immediately, because I will sue you just like I sue the people who don’t pay their dues.” he said.

While Hess certainly seems to know his way around legal matters like lien filing (he filed more than 47 liens against his neighbors in one day), he seems to have a little trouble parsing the grayer area of public criticism. His response has just dropped Stonecreek's reputation from "bad" to "worse," and he will probably find himself on the outside staring in come the next board election. Now, he's also "internet (in)famous" as well, having successfully portrayed himself as the sort of person who comes out suing at the drop of a hat. Not much fun to deal with at a phone line's length, much less as a neighbor.