I was a bit confused to see California Attorney General Kamala Harris announce that she, with the help of the MPAA, had broken up an "online piracy ring" that was streaming movies online. That's because Harris has no authority when it comes to copyright issues. Copyright is a federal, not state law, and copyright cases need to be in federal court. But that's not what happened here. Instead, she rounded up a trio of brothers, Hop, Tony and Huynh Hoang... and charged them with grand theft, conspiracy and receiving stolen property. I was wondering if there was any actual "theft" going on here, or if Harris is simply redefining theft to get around federal preemption rules for copyright infringement. From her statements, it sounds like a blatant attempt to get around federal preemption as a favor to the MPAA.

“Digital piracy is theft. It is a serious crime that harms one of California’s most important economic engines – our entertainment industry,” said Attorney General Harris. “This case sends a clear message that the California Department of Justice will investigate digital piracy and prosecute violators to the fullest extent of the law.”

Except that infringement and theft are two very different issues, which are taken care of under two very different laws. I know that the MPAA loves to call infringement "theft" but it does not make it legally "theft."

Separately, it's worth pointing out that the details of this case, once again show that the claims of people that various "pirate" sites are making tons of money doesn't have much support:

Over the 18 months of the website’s operation, the brothers earned approximately $150,000 in advertising revenue.

So, 18 months, 3 brothers, $150,000. That's $50,000 per brother. Or, about $33,000 per year, per person, not counting expenses. If the sites were even remotely popular, most of that money went towards hosting. So, not exactly a huge moneymaker.

Either way, the bigger issue here appears to be the attempt by the MPAA and AG Harris to redefine copyright law as "theft" to avoid a federal case concerning copyright. That's an incredible attempt to change the meaning of the law, which one hopes a judge will toss out on preemption grounds. If these brothers actually did what they're accused of, why not go after them on copyright infringement grounds? It seems likely that the MPAA has been just waiting for a case like this to try to circumvent the basic tenets of copyright law, to pretend that laws on theft apply.

Thieves are getting more clever about stealing money from ATMs. It used to be that people mostly just had to worry about getting robbed while getting cash at an ATM. In 1998, Joseph Zingher, a Chicago businessman, even patented a "reverse PIN system" called SafetyPIN that would alert police when a cardholder at an ATM entered their PIN in reverse. The idea was that if someone was being forced to withdraw money at an ATM, they could silently alert the police with this "panic code." Unfortunately for Zingher, he was never able to convince the banking industry to adopt his SafetyPIN system. Now, people have to worry about ATM card skimming and other high-tech theft methods. Here are a few examples of some recent ATM theft methods.

• Like something out of the movie Ocean's Eleven, cybercriminals working with "cashing crews" in more than two dozen countries managed to steal $45 million from thousands of ATMs in just a few hours. First, the hackers raised the withdrawal limits on several prepaid debit card accounts, then the account information was distributed and encoded onto magnetic-stripe cards. In NYC alone, a team of 8 people withdrew $2.4 million from a few thousand ATMs. [url]
• Thieves glued the cancel button on several ATMs in Spokane, WA. Their hope was that a customer would make a mistake or try to cancel a transaction, and then realize they can't because the cancel button is stuck. If the customer left in frustration, the thieves could unglue the button and then steal the bank card or continue the transaction. [url]
• A hacker serving a five-year sentence in Romania has invented a device that prevents ATM skimming thefts. The add-on device rotates ATM cards so that skimming devices (as they're currently designed) can't read them. [url]

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

Economists have a hard enough time trying to figure out economic statistics from legitimate businesses and activities that are honestly reported to the government. But every so often, someone points out that the official numbers for unemployment or GDP are more than just slightly off. Here are just a few interesting stories related to some fairly sizable underground economies.

• An underground economy of off-the-book businesses could account for trillions in commerce and employ nearly half of all workers. This gray market called "System D" could be worth $10 trillion per year, making it the biggest economy after the US (which itself has an underground economy estimated to be about 10-20% of its GDP). [url]
• A real-life heist involving about 8 men posing as police officers made off with about $50 million in diamonds from a plane headed for Zurich, Switzerland. It might be difficult for these robbers to sell these diamonds through legitimate routes, so the jewels will probably become part of an underground currency. [url]
• Surprisingly, Tide detergent isn't just soap; it's also used as a currency for buying drugs. Procter & Gamble hasn't seen much of a negative effect on its brand, so bottles of liquid Tide will likely continue to be part of the black market. [url]

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

Who hasn't sampled some grapes at the grocery store before buying a bunch? That's a pretty minor theft, and presumably one that stores take into account when they're pricing grapes. The really big problems are when huge amounts of food go missing. Recently, there have been a few bizarre food-related heists, and in case you missed them, here they are.

• Over 80,000 pounds of walnuts were stolen in California -- possibly by a delivery driver with a distinct Russian accent. Rocky and Bullwinkle think they know who to investigate.... [url]
• A stolen food truck in Florida was recovered -- in a crazy guy's backyard as part of some kind of doomsday-type bunker. The police commented that it's okay to build doomsday bunkers in your backyard, but just don't make them out of stolen vehicles and equipment. [url]
• This summer, Canada's strategic maple syrup reserves were raided by thieves, making off with about $30 million worth of the sugary condiment. Thankfully, they recovered 600-800 barrels of it in New Brunswick and have it under police protection. An investigation is still on-going to find out who could be behind such a sickly sweet score. [url]

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

A few different folks have submitted variations on this story of singer Taylor Swift copying a single lyric from a singer for whom she'd long expressed admiration. That singer, Matt Nathanson, responded the way any normal person would: by being happy about the homage and recognizing how it might draw more attention... I'm sorry, what was I saying? I meant that he called one of his biggest fans, who just happens to be a hugely popular singer with a ridiculously loyal following, a thief. In case you were wondering:

Here’s the Taylor Swift line:

“And I forget about you long enough to forget why I needed to”

Here’s Matt Nathanson’s:

“And I’ll forget about you long enough to forget why I need to”

Considering that Swift has admitted that Nathanson is a personal favorite, and that she sometimes scribbles his lyrics on her arm before performing (?!?!?), it's unlikely to be a case that both of them came up with the lyric independently, though it's not exactly the most original lyric.

Either way, welcome to the latest edition of "ownership society" in which even an homage is attacked as "theft."

A few weeks back, we wrote about the rather crazy exaggeration and attack from the UK Publisher's Association on groups -- including the British Library -- who were seeking common sense changes to copyright law. After that post went up, I was asked to participate in a podcast debate with Mollett, chief executive of the UK Publisher's Assocation, along with the head of the UK Pirate Party, Loz Kaye (also a composer/musician) for The Naked Book. You can now listen to the episode here:

Via Radio Litopia

It goes on for about an hour. The debate got a bit heated at times, but honestly I thought it was something of a joke. First, you have one of the biggest abusers of hyperbole and exaggeration -- Richard Mollet -- and any time Loz or I made any points against him, his response was to just accuse us of hyperbole. For example, he keeps setting up a ridiculous strawman, claiming that people like myself have claimed that everyone should just get everything for free and no one will ever pay for anything. Of course, nothing could be further from the truth.

For a good summary of the conversation, you could read this blogpost from Cheapass Fiction which covers the high (and low) points:

Throughout the hour-long show, he repeatedly attacked pirates as though they were some monolithic mob, rather than readers, librarians, professors, students, and even creators. (Maybe someone should have told him that Loz was a composer & musician.)

Richard Mollet bypassed the victims copyright. He went for the jugular, ignoring his opponents’ points – libraries being crippled, and culture stagnating without copyright reform. Every time – every time! – one of these points was brought up he got defensive, shifting the focus away from the issue, saying things like “this is classic Pirate Party tactics!” as in the quote above. The irony was palpable, for as a great defender of victim-authors, one would expect him to at least show compassion to the victims he himself has helped to create. But there was not even a charade of sympathy.

One final point: towards the end, we got into a bit of a debate about differences between the basics of UK copyright law and the US (since everyone else on the episode were UK-based). I pointed out the value of fair use, which Richard seems to think would be too difficult to implement in the UK now because it would create massive uncertainty. I don't see why that should be, since a UK implementation could easily learn from what's happened in the US and establish the rules accordingly.

However, I also brought up the importance of separating out the "moral rights" argument from the "economics rights" argument, and Richard seemed to react as if this was an impossibility. It is not. In the US, we've survived (and thrived) without a standard "moral right" as a part of copyright law (except for a very, very small category of visual artists, which is a relatively recent change anyway). If you are going to look at the actual economic harms done by copyright law, it's a cheap and weak response to revert over to moral arguments the second anyone calls you on it. If we want to have an honest debate about preventing the economic harms, we have to separate out the moral rights. And as the US has shown, there is absolutely nothing crazy at all about that, contrary to Richard's mocking claims or his insistence that I live on a "different planet" than he does. The planet he and I both live on confirms that what I said was true.

The UK Publisher's Association seems to be making sure it appears as out of touch and obsolete as possible these days. This is the same group that, a few months ago, announced that fair use would put a "chokehold on innovation" despite the fact that we've got plenty of experience with fair use in the US, and see no such chokehold due to it. The latest is that the Publisher's Association has apparently decided to go on the offensive (and I mean that in multiple ways), attacking all who call for more reasonable copyright laws -- including the British Library -- as defending "tawdry theft":

[PA chief executive Richard Mollet] attacked organisations such as the Open Rights Group, research councils and the British Library, who he said all to varying degrees wish to erode copyright, and the tactics of lobby groups, who have "the temerity to appropriate the language of freedom of expression as a cloak for their tawdry theft". He said it was "a grotesque attempt to draw moral equivalence between stealing someone's work and the struggle for political representation".

That's pretty funny, since it appears that he (and many others on his side) are the ones who are actually "appropriating" language in a ridiculous way -- such as referring to things like the public domain, open access and fair use as "stealing" or "tawdry theft." The thing is, Mollet is coming down on the wrong side of history. People are growing up today with the internet understand the importance of unfettered communication and openness, and they don't buy the mythical story that locking up works is good for anyone. All the Publishers' Association is doing here is guaranteeing that they're seen as obsolete and out of touch for the entire next generation.

But, really, when you stoop so low as to accuse the British Library of supporting theft, you would think that someone, somewhere, would point out to Mollet how ridiculous he looks. However, it does reveal the publisher's true belief: things like libraries are apparently evil copyright abusers. Incredible.

Over at the Cannes Film Festival, MPAA boss Chris Dodd apparently told Variety that the MPAA is "on the wrong track" when it calls infringement "theft."

"We're in a transformative period with an explosion of technology that's going to need content... We're going to have to be more subtle and consumer-oriented.... We're on the wrong track if we describe this as thievery."

Now, I thought that was kind of interesting, because it appears that the folks who work for Dodd haven't received the memo. The MPAA website is chock full of his minions calling it "theft" every chance they get. There's an entire page supposedly dedicated to "types of content theft." There's a page on "rogue websites," that calls them "havens for theft." There's a link in the footer to a website called FightFilmTheft.org. There's also a link in the footer to the ICE website (you know, the government agency illegally seizing and censoring websites based on no evidence) saying to click the logo "to report IP theft." Then there's the MPAA's "blog," which as of this writing has the word "theft" on the front page a mere fifteen times (and "steal" or "stealing" another three times). So, er, Dodd might want to have a chat with his staffers.

Because, according to Chris Dodd, the MPAA is on the wrong track.

And, for once, I think we actually agree with Chris Dodd. Of course, some of us have been saying this since Dodd's first speech on the job -- which (of course) focused on saying how infringement was "no different" than theft.

There's also some history here. For a while, the industry focused on the word "piracy" to describe infringement. But about three years ago, a movie studio exec made the claim that the industry had "made a mistake" using the word "piracy," because it "glamorized" the practice (of course, Hollywood helped out with the glamorization thanks to some big blockbuster movies starring Johnny Depp...). Practically overnight, the use of "piracy" changed in the industry to "content theft." So, perhaps this is the start of a new phase...

Either way, it certainly doesn't seem like Dodd has really figured out just how disastrous things are going under his "leadership." Much of the story still has him blaming tech companies for stopping SOPA and PIPA. Until he realizes that it was the public the spoke up (and actually helped drag along those tech companies), he's never going to understand what happened, and never going to be able to lead appropriately. Hell, you can even see his dangerous framing in the short statement above. Notice he said they need to be more "subtle." He hasn't realized that their entire policy focus is wrong. He just thinks they're being too brazen about it.

We've asked Dodd (repeatedly, now) to actually come out and talk to the public. I'm sure the folks at Reddit would be happy to set up an AMA. We'd be happy to have him come and chat with our community as well. Yet, he refuses to do so. Instead, he continues to only lobby behind the scenes and blame the wrong parties in public. Things are never going to improve if he keeps on that path. He doesn't need to be "more subtle." He needs to actually understand what that public tried to tell him back in January. Instead, he seems to be sticking his fingers in his ears and taking random guesses.

We've been pointing out for a while that copyright is not property and that infringement is not theft. And yet... some people can't seem to let this go -- insisting that both claims are true. Of course, one retort from our side of the discussion is the simple fact that you don't see people who copy content being charged with "theft." However, in a case that received plenty of publicity involving a Goldman Sachs employee who had copied some code from the company, he was actually charged with theft. In response, however, a 2nd Circuit appeals court panel has said he was wrongfully charged, because code is not property. The court specifically cites the Dowling case, which we've discussed on many occasions, which makes clear that infringement is a different beast than theft.

The infringement of copyright in Dowling parallels Aleynikov’s theft of computer code. Although “[t]he infringer invades a statutorily defined province guaranteed to the copyright holder alone[,] . . . he does not assume physical control over the copyright; nor does he wholly deprive its owner of its use.” Id. at 217. Because Aleynikov did not “assume physical control” over anything when he took the source code, and because he did not thereby “deprive [Goldman] of its use,” Aleynikov did not violate the NSPA.

Of course, it's somewhat unfortunate that in a ruling in which the court finds that Aleynikov has been improperly charged with "theft" under the law... they still repeatedly refer to his actions as "theft." It's too bad they did not properly note that he copied the code, but still repeatedly claim he "stole" it, as they describe his actions in passing -- but when they discuss the actual legal aspect, they admit that there was no theft.

Separately, the court rejected the charges brought under the Economic Espionage Act, noting that the law he was charged under is limited to trade secrets concerning products used in commerce, and since the code in question was for internal use anyway, it did not qualify under the law.

To some extent (and then further in a concurring opinion written by one of the judges on the panel), the court seems to suggest that it doesn't necessarily like these results (this is less clear in the official opinion, but it appears to be what the panel is implying at times), but that the problem is how Congress wrote these particular statutes. It may be true that the laws are drafted poorly, but it's important that copying code is not seen as theft, because it is not theft. Still, the overall ruling here is good, though it could have been more complete.

We've argued for years that it's absolutely improper to call infringement "theft." Some, of course, have insisted that since copyright is so obviously "property", it's fine to call infringement theft. However, in a rather brilliant OpEd piece in the NY Times, law professor Stuart Green not only demolishes the "infringement = theft" argument, he also gives some of the history about how it came about:

When Industrial Age Bob and Joe started inventing less tangible things, like electricity, stocks, bonds and licenses, however, things got more complicated. What Bob took, Joe, in some sense, still had. So the law adjusted in ad hoc and at times inconsistent ways. Specialized doctrines were developed to cover the misappropriation of services (like a ride on a train), semi-tangibles (like the gas for streetlights) and true intangibles (like business goodwill).

In the middle of the 20th century, criminal law reformers were sufficiently annoyed by all of this specialization and ad hoc-ness that they decided to do something about it.

In 1962, the prestigious American Law Institute issued the Model Penal Code, resulting in the confused state of theft law we’re still dealing with today.

In a radical departure from prior law, the code defined “property” to refer to “anything of value.” Henceforth, it would no longer matter whether the property misappropriated was tangible or intangible, real or personal, a good or a service. All of these things were now to be treated uniformly.

Before long, the code would inform the criminal law that virtually every law student in the country was learning. And when these new lawyers went to work on Capitol Hill, at the Justice Department and elsewhere, they had that approach to theft in mind.

There's a lot more worth reading in the oped piece, including references to research that shows that, no matter how many times you compare infringement to stealing, people intrinsically just don't believe it. Professor Green and his collaborator Professor Matthew Kugler have done some of this research themselves, where they point out that these language choices really matter. As you can sense from what they wrote about above, when you call things "theft" that have very different characteristics than "theft," it actually influences how people think about these things.

Falsely lumping all of these specialized areas into the "theft" bucket leads law enforcement and politicians to take easy mental heuristics that have them assume that even if infringement is not exactly like theft it's "close enough" that you can treat it like theft and respond to it like theft. And that's exactly what we see happening. The legal proposals and constant changes to copyright law are all about treating infringement more like theft, and believing that greater enforcement leads to less infringement, and that greater "education" does the same. But that assumes that individuals intrinsically believe that making a copy of something is bad, even though in many, many cases they do not feel that way. Calling it theft when they know it's not theft doesn't convince people to stop file sharing. It just makes them respect copyright law even less, since it's clearly completely out of touch with the times and the technology.

The language choices used in this debate matter quite a bit, and it's great that the NY Times opened up its oped pages to someone who's done actual, detailed research on this specific issue.