by Mike Masnick
Tue, May 22nd 2012 4:04pm
by Mike Masnick
Wed, May 16th 2012 7:35pm
from the why-we-can't-have-cool-things dept
by Mike Masnick
Thu, Jan 5th 2012 12:05pm
from the really,-mitch? dept
Specifically, he uses the example of the ongoing ITC case filed against Apple & RIM by Kodak to explain why OPEN is no good. His particular concern is the length of time it's taking the ITC to rule on the case:
The U.S. International Trade Commission (ITC) recently reported that it will delay ruling on an important patent infringement claim brought by well-known camera company Kodak against smartphone makers Apple and Research In Motion (RIM). The case, originally filed in January 2010, now anticipates a ruling in September 2012. The delay now means that the ITC will have taken 33 months to decide on a high-stakes and time-sensitive issue. So this is the “expedited” process SOPA opponents are embracing as an alternative in the proposed OPEN bill?This is both disingenuous and obnoxious at the same time. First of all, as Glazier must know, but apparently is too intellectually dishonest to admit, a patent case involves some very different issues, involving some pretty specific efforts around figuring out exactly what a patent really covers. You don't have to deal with "claim construction" in a copyright case. But in a patent dispute -- in a federal court or at the ITC -- there's a big, long, complicated claim construction process to determine the actual boundaries of what's covered in a patent. Then there's the process (somewhat complicated) of figuring out if the products in question actually do infringe on the patent.
Copyright is different than patents. And while there does need to be a careful analysis of whether or not a copyright is infringed, the process is very different than with patents, and can absolutely be expedited, if need be.
Why in the world would we shift enforcement against these sites from the Department of Justice and others who are well-versed in these issues to the ITC, which focuses on patents and clearly does not operate on the short time frame necessary to be effective? In addition, the remedy traditionally offered by the ITC – an exclusion order to prevent foreign criminals from accessing the US market – is precluded under the OPEN Act.Oh really? This would be the same "well-versed" experts at the DOJ who have been censoring multiple websites on no legal basis for over a year? The same "well-versed" experts at the DOJ who finally had to give back Dajaz1.com after an entire year in which it refused any and all due process?
I'm sorry, but I think there's more than enough evidence that the DOJ isn't that "well-versed" in these issues, and that when it acts in a "short time frame" it makes significant and serious mistakes. Similarly, where was that vaunted "short time frame" when it came time to admit that it totally screwed up and seized and censored a blog without legal basis? It took Dajaz1 over a year to get its domain name back, despite no legal action being taken against it. Multiple other sites are still being held. So, forgive me for questioning (1) if the DOJ is really that well-versed, (2) really should be operating on such a "short time frame" or (3) really does operate on such a "short time frame" when it comes to admitting it screwed up. And, the story of Dajaz1 seems like a pretty damn perfect example of why "an exclusion order" is a dangerous remedy. When you screw it up, you make a serious mess of things.
Realistically, what Glazier is making clear here, is that the RIAA wants a "censor first, ask questions later" approach to any site it doesn't like, no matter how legal it might actually be. That's scary. As the Dajaz1 case pretty clearly demonstrated, the damage such an approach creates is something we should all be against. Look, censoring a website is not something that should be done lightly. If we're going to have such a remedy in the law, it should be a slow process that takes time to review to make sure mistakes aren't made. Unfortunately, the current law and the laws that the RIAA wants appear to take the opposite approach: censor first, then take your damn sweet time in ever reviewing those censor orders.
by Mike Masnick
Wed, Dec 21st 2011 10:36pm
from the how-does-this-promote-the-progress dept
In the meantime, Apple's statements about the ruling are equally ridiculous, given Apple's history of copying others (including Android):
"We think competition is healthy, but competitors should create their own original technology, not steal ours."Copying an idea and building on it is not "stealing." And if Apple had to build its devices without building on the ideas of others, it wouldn't have very much today. This whole thing is a joke, and it's rulings like this that make engineers have even less respect for the patent system.
by Eric Goldman
Fri, Dec 9th 2011 7:39pm
from the some-good,-some-bad dept
Sen. Wyden and Rep. Issa have released a draft of OPEN: Online Protection & ENforcement of Digital Trade Act, intended as an alternative to SOPA/PROTECT-IP. See my prior posts opposing SOPA and linkwrapping the discussion. Unlike SOPA's disgustingly blatant rent-seeking, which was such an over-the-top abuse of the legislative process that it did not (and could not) support a principled or even intelligent conversations about it, OPEN provides a useful starting point for a sensible conversation that could actually lead to acceptable compromises. For that reason alone, I think Congress should immediately stop all work on SOPA/PROTECT-IP and redirect that energy towards vetting this proposal. Having said that, for reasons I'll explain in a moment, I continue to believe the assumptions underlying SOPA/PROTECT-IP and OPEN are misguided, meaning that forging a compromise from OPEN's more sensible proposal may be tricky.
Before I get further into substance, two process notes:
First, SOPA was the product of rent-seekers who were talking only amongst themselves and legislators tethered to their campaign contributions. The drafting process was disturbingly closed-door and exclusionary, exactly the kind we wish didn't take place in our representative democracy. In contrast, the OPEN sponsors want to have a dialogue about their ideas. In support of that, they have posted the draft to a website that allows comments and discussion. This is the way our democracy SHOULD work. Why is such an open process the exception instead of the rule?
Second, OPEN is a comparatively svelte 18 pages focused mostly on one core concept, compared to SOPA's 78 page monstrosity that advanced about a dozen different substantive proposals. I can't tell you the number of times I've seen very smart people stymied to keep all of SOPA's moving parts separate, and the failure to do so meant that they were conflating different parts of the statute in ways that prevented productive discussion. (Just two examples: the Colbert Report, where Zittrain mostly focused on SOPA's felony streaming provision while his counterpart was mostly talking about the cutoff provisions; and Business Insider's infographic where the felony streaming sanction was presented as a remedy to the cutoff provisions.) By reducing the number of topics at issue, OPEN substantially reduces the chance that policy discussants will simply talk past each other.
The law contemplates that rightsowners can file a petition against rogue websites at the ITC, an independent federal agency best known for its adjudication of certain patent disputes. In response to the rightsowner's petition, the ITC will conduct an administrative adjudication. If the ITC determines that the website is a rogue website, then (1) the website is required to cease its conduct (not sure how enforceable that is), (2) the site also will be subject to any other unspecified consequences following from its determination as a rogue actor, and (3) most importantly, the rightsowner can take the ITC determination to payment service providers (PSPs) and ad networks and have them cut off the flow of money to the rogue website. The PSPs and ad networks would be protected by several immunities for trying to comply with the orders or their other efforts to protect the public.
This makes OPEN similar to SOPA in that it seeks to cut off funds flowing to rogue actors. However, among other key differences, PSPs and ad networks have no legal obligations until the ITC makes a ruling. In contrast, SOPA imposed cutoff obligations on PSPs and ad networks based merely on rightsowners' unsubstantiated assertions.
Substantively, some of the things I liked about OPEN:
* it situates the discussion about "rogue websites" in foreign trade policy. This fixes SOPA's overinclusive application to both domestic and foreign actors. However, if we really think rogue websites are a transborder enforcement problem, there are many other trade policy solutions that might be better options to consider—the most obvious being transborder enforcement coordination like the FTC does with its foreign counterparts.
* OPEN doesn't touch the domain name system or search engines. SOPA had the potential to destroy the DNS and to jeopardize search engine functioning. OPEN sidesteps both pitfalls.
* OPEN builds in some due process before any formal legal obligations attach. As we've recently seen, due process is actually quite important, and we suffer from its absence. I say "some" due process because I'm not sure how much due process will attach in practice. For example, I have some concerns about the notice provision--not every targeted website will receive notice of the ITC investigation. However, I did like that any website the ITC labels as rogue can correct any identified problems, reapproach the ITC and ask it to remove the "rogue" determination.
* the definition of rogue website is tightened up substantially. It requires three elements:
a) a "non-domestic domain name," which requires that the registry, registrar and registrant all have to be located outside the US (I'm not sure what "located" means in this context). Venkat asked me what happens to a .com registered with a foreign registrar; I believe OPEN does not apply to this domain name.
b) conducting business in the US; and
c) "has only limited purpose or use other than engaging in infringing activity and whose owner or operator primarily uses the site to willfully engage in infringing activity."
The last element, in particular, is quite restrictive by requiring willful infringement. The meaning of the word "willful" is notoriously murky (see, e.g., the multitudinous Supreme Court cases over the word), so the statute would be improved by using a more detailed synonym. No matter what, though, willful is a high scienter level that should easily exclude most legitimate players. The statute further expressly excludes any sites that:
- follow good notice-and-takedown procedures
- qualify for 17 USC 512 (the DMCA online safe harbors) [this means that the statute sits next to 512 instead of rendering 512 moot like SOPA threatened to do], or
- distribute "copies that were made without infringing a copyright or trademark." I'm not 100% sure what this means. It apparently excludes websites reselling goods covered by the First Sale doctrine. I presume that the exclusion includes sites that sell legitimate knock-off goods, such as replicas of goods that aren't protected by copyrights or trademarks.
* if a PSP or ad network fails to comply with an ITC order, the only consequence is that the DOJ can seek injunctive relief. Rightsowners do not have a private cause of action in those cases. As discussed below, this doesn't eliminate all PSP/ad network exposure to rightsowners, but rightsowners can't introduce evidence of ITC orders in any civil suits they bring against PSPs or ad networks.
* on the trademark side, it expressly limits its applicability to counterfeiting (although there is an erroneous cross-reference in the draft). Presumably, dilution or garden-variety trademark infringement disputes don't qualify under the statute.
What's Not Good
Substantively, some of the things I don't like about OPEN:
* OPEN still contemplates reestablishing a Fortress USA. Fortress USA marginally makes sense regarding the shipment of physical goods across geographic borders. It makes zero sense for digital bits zinging around the borderless network.
* in particular, because OPEN would burden only US-governed PSPs and ad networks, it may drive websites—including legitimate websites who want to reduce their risk of being mistargeted—to shift their business to foreign-based PSPs and ad networks. If lots of businesses make a switch based on these concerns, OPEN could counterproductively result in net financial losses for the US economy.
* similarly, foreign websites can opt-out entirely of the ITC process by consenting to US judicial jurisdiction. I like the idea of an opt-out, but imagine if other countries offered the same quid-pro-quo of allowing US websites to opt-out of some nasty foreign process so long as the websites consent to jurisdiction in their countries. I think we'd be outraged and insulted; which is how I would expect foreign countries to view this quid-pro-quo. Cf. Venkat's recent post on Facebook v. Faceporn. Then again, other countries might think it's a pretty good idea, leading to a proliferation of transborder quid-pro-quo jurisdictional offers.
* designating the ITC to conduct the investigations is a little odd. First, the ITC is an administrative agency, not a federal court. I don't fully understand all of the implications of administrative vs. judicial review, but I believe there are substantial procedural differences that could lead to important substantive differences. Second, the ITC has been gamed in the patent world (see, e.g., my colleague Colleen Chien's research on the ITC explaining how the ITC hears many US company vs. US company disputes), so I fear similar gaming will emerge. For example, a rightsowner chasing a rogue website could simultaneously pursue a domestic court action, a foreign court action and an ITC proceeding. How would these types of parallel proceedings play out in practice? We're still trying to resolve the parallel proceeding problems in patents.
* like SOPA, the bill covers copyright infringement, trademark infringement *and* 1201 circumvention. I don't understand why the circumvention issue is getting equal billing or how often transborder circumventions are a real problem. Seeing how 1201 circumvention lawsuits have devolved into anti-competitive enforcements, picking up the circumvention piece could increase the risk of competitive misuse of the statute.
* like SOPA, the definitions are vague. Consider, for example, the definition of Internet advertising service:
The term Internet advertising service means a service that serves an online advertisement in viewable form for any period of time on an Internet site.
Hmm...what does that mean? Notice that the definition doesn't directly distinguish between third-party ad networks and sites that sell their own ads. I think in practice sites that sell their own ads drop out of the statute, so one possible implication is that more sites will ramp up their own ad sales. (This is doubtful, but just throwing the possibility out there.) I think the focus on "viewable" is interesting; are audio-only ads excluded? And what does it mean to "serve" content? This contemplates a specific technological interaction that I don't fully understand today and will almost certainly evolve over time.
Why I'm Not Enthusiastic About OPEN
Even though OPEN is worth discussing intelligently, unlike SOPA, I believe it's based on two underlying assumptions that aren't fixable.
First, like SOPA, OPEN assumes there is a problem with foreign rogue websites that needs to be solved. I'm not saying there isn't, but the policy discussions have been startlingly devoid of reliable and credible facts demonstrating the nature and scope of the problem.
Instead, the evidence in support of a rogue website "problem" typically consists of two main threads: (a) people are dying from counterfeit drugs, and (b) bad guys are "stealing" our stuff. With respect to the former, I've never seen anything more than ad hoc assertion; but if there's a real problem, counterfeit drugs can be fixed with a highly targeted solution. With respect to the latter, it's hard to give those arguments much credit. After all, all rightsowners' arguments are inherently self-interested: it's in their financial interest to say that they would like to make more money than they are making. It's also in their interest to bemoan broad sectoral changes in the economy as evidence that someone is capturing money they think they are entitled to (and to use rent-seeking to thwart those broad sectoral changes). More importantly, there is lots of evidence that a lot of rightsowners are making a lot of money today, both via the Internet and more generally. So it's hard to break out the quantity of actual economic losses that rightsowners are truly suffering when those claims are intermingled with rightsowners' general rent-seeking efforts.
Therefore, until the rightsowners offer us more than the trumped-up BS already-discredited statistics, I'm still not clear on the problem, how bad it is, how any legislative solution would remediate that problem, and if the collateral consequences of the effort to remediate the problem are greater or less than the problem itself. OPEN does nothing to fill the void of supporting foundational evidence of the problem, so it's hard for me to be enthusiastic about its solution.
Second, and more importantly, attacking the money supply to supposed bad actors remains too blunt an instrument. I may be truly on my own on this point, as many people I respect--including, notably, Rep. Lofgren--are prepared to embrace the policy solution of cutting off money flows. However, by embracing an attack on the movement of money, OPEN replicates one of SOPA's sins. If a player is engaged in legitimate and illegitimate activity and its money supply is cut off, both activities go down the tubes. In contrast, one of the positive aspects of 17 USC 512(c) and (d) is that they require the copyright owner to identify infringing items and target only those items. Giving rightsowners a remedy that would affect an entire site for only some items on the site goes too far.
The OPEN bill tries hard to minimize overbreadth by narrowly defining the targeted websites. Perhaps this definition is narrow enough that there won't be much collateral damage. However, in practice, regulating money flows nevertheless could have pernicious effects in the field. A PSP or ad network drawn into an ITC proceeding frequently will "voluntarily" choose to toss the targeted website before the ITC proceeding reaches its conclusion—even if the ITC proceeding would have rejected the challenge. Furthermore, rightsowners still will send cutoff notices to PSPs/ad networks without filing any ITC petition, and the PSPs/ad networks will often honor them as a way of preempting an ITC proceeding.
What this teaches me (in combination with the Elsevier v. Chitika case) is that PSPs and ad networks need robust statutory immunities which are not based on a notice-and-takedown scheme. On the trademark side, the need for an immunity became clear after the sloppy language in Gucci v. Frontline. On the copyright side, 512 doesn't cover PSPs and ad networks, probably because in a million years the safe harbor drafters never thought PSPs and ad networks would be liable for third party infringing activity in the first place. Now that we've seen copyright law and trademark law creep much further than we could have imagined in 1998, we should plug this liability hole completely. If OPEN proceeds, it should have a broad-based immunity for PSPs and ad networks with the idea that rightsowners are getting a specific remedy against them in the new law.
While OPEN can't really be fixed to resolve my two structural concerns, my hope is that the discussion about OPEN will force rightsowners to provide *credible* evidence of harms that they or consumers are suffering (no more self-serving hype, please), and that such evidence will force us to think carefully about how "rifle shot" solutions (as opposed to shotgun solutions) can ameliorate those harms. If we have a discourse that even slightly resembles this ideal, then OPEN will be successful no matter what final outcome we reach.
by Mike Masnick
Tue, Dec 6th 2011 12:38pm
from the of-course-they-do dept
Of course, this really proves the key point that many have been making. SOPA/PIPA have never been about taking down truly rogue sites. If so, supporters of those bills would embrace a proposal that really does focus on such sites. Instead, they're about very broad internet regulation that allows the entertainment industry to try to regain control over a market that they no longer control. The entertainment industry wants SOPA/PIPA because they don't know how -- or don't want to learn -- to innovate based on the internet today. So, instead, they're seeking regulations that basically let them attack anything they don't understand or don't control. When legislation comes along that narrowly focuses on the specific issue, it doesn't serve that purpose, so of course they hate it.
Still, it pretty much reveals their true views, to react so negatively to a plan that does what they claimed they wanted. It proves that's not what they wanted at all.
by Mike Masnick
Thu, Dec 1st 2011 3:30pm
from the it-is-a-trade-issue,-isn't-it dept
This new effort has bipartisan support in both the House and the Senate, and unlike SOPA and PIPA, seeks to try to focus in on situations that are actually problematic. In the Senate, it has the backing of Senators Cantwell, Moran, Paul, Warner and Wyden. All of whom had come out against PIPA, except for Warner. Adding him to this issue is big, given his experience in the business world. On the House side, it's Reps. Chaffetz, Campbell, Doggett, Eshoo, Issa and Lofgren. The focus would be putting the issue into the International Trade Commission, where there are experts focused on trade issues.
I think this is an approach that absolutely makes sense for counterfeit physical goods and the websites that sell them. Frankly, it's bizarre that it ever went beyond a discussion of international trade. It becomes somewhat trickier with copyright issues, and that's because you now have questions about how physical borders apply to digital networks. And I'm not sure I know how to best deal with that. Separately, having seen the ITC process on patents go off the rails at times, and become more of a way for patent holders to issue a "double whack" against a company they accuse of infringement, I'd be concerned about making sure that this process doesn't allow for two bites at the same apple. If it's properly focused on just foreign sites, that might not be as big an issue.
Either way, the devil will be in the details, but the details are still being written. Seeing as this is a discussion draft, I'm hearing that the folks involved really do want a discussion (unlike what we got with SOPA/PIPA), and that includes folks here. Take a look at the draft, and weigh in, knowing that some of the folks involved really will be reading what you have to say.
Fri, Nov 4th 2011 1:40pm
from the one-down-many-more-to-go dept
This case has a couple of similarities to the two recent patent suits brought against Nintendo. Much like those patent suits, Motiva's involved a patent that was filed for the same year Nintendo introduced the Wii and the Wii Remote to the world. As with the UltimatePointer suit, Motiva does not have a product on the market, as can be seen by the lack of any product details on Motiva's website -- which, again, was fatal for the case, since the ITC cases (unlike federal court cases) do require some actual products. It's good to see the ITC recognize this case made little sense, and hopefully it bodes well for Nintendo's other cases brought by patent holders. However, just the fact that it keeps getting hit with questionable patent suits again should raise questions about the state of the patent system today.
by Mike Masnick
Thu, May 19th 2011 10:15am
from the mythical-losses dept
In this case, the ITC is claiming losses of a rather astounding $48 billion. Having seen similar studies over the years, both good and bad, my first reaction was that this didn't pass the laugh test (at all) and sounded like the typical exaggerations from industry. So, I looked at the actual ITC report (pdf and embedded below) and it turns out it's even worse than I expected. Rather than taking any sort of actual objective study, the ITC simply asked 5,000 companies for what they thought their "losses" to Chinese infringement were. Not only that, but the ITC tried to choose the firms who were most likely impacted by this -- which means those who have the highest incentives to lie or exaggerate, because they want to have greater protectionism against Chinese competition.
Seriously, this methodology is just dopey. It's like asking horse and buggy makers how much in "losses" they would suffer if the automobile market were allowed to move forward -- and then basing regulatory policy on what they had to say. What's most frustrating about this is that folks at the ITC know this. Just last year, it held hearings on this topic for this very report in which it was told, repeatedly, by experts that such methodologies were woefully inaccurate. Given that, it's somewhat incomprehensible that the ITC would still use such an obviously wrong and biased methodology to support its claims.
It's both disappointing and troubling that the ITC would use such a methodology (and that the press would parrot the numbers back as fact, without bothering to look at or even mention the methodology). The real problem is that this clearly bogus study will now likely have a tremendous impact on US policy towards China.
by Mike Masnick
Wed, Apr 20th 2011 9:01pm
from the patent-protectionism dept
With the massive patent thicket on smartphones, leading to a bunch of lawsuits, many are using both the court system and the ITC to try to force the other side to give in and just pay up. However, so far, it appears that the ITC is not playing along. We recently noted that the ITC indicated it was rejecting Nokia's claims that Apple's iPhone violated some of its patents, and now the ITC has indicated that it won't side with Apple in its claims against HTC and Nokia.
In other words: keep your silly patent pissing fight out of the ITC.
If the ITC keeps rejecting these attempts to stifle competition via the patent system, then hopefully companies will stop using this little loophole to get to extra bites of the (proverbial) apple.