There's been a really interesting trend going on recently. For all the talk about how the entertainment industry must be dying (it isn't), a whole bunch of internet-aware celebrities are wholeheartedly embracing the internet as a new video platform -- and this includes a bunch of folks we've written about before. The first to make a big splash was Felicia Day, who already has been hugely successful in building a massively popular online-only video program, while also being thoughtful about new business models. On April 2nd, she and some friends -- including folks like Wil Wheaton, Veronica Belmont and Paul & Storm, -- launched the awesomely named Geek & Sundry, which includes both her existing show, The Guild, and a variety of others (including Wheaton's Tabletop, which looks awesome).

That same day, Chris Hardwick, of the Nerdist (or, I guess we should now call it "Nerdist Industries") launched his special YouTube channel with a variety of shows of its own:

While some of the programming is based on already-existing Nerdist properties, most of it has been specifically conceived for the Nerdist YouTube channel. For instance, "Face to Face with 'Weird Al' Yankovic" brings in the beloved song parodist (and frequent Nerdist guest and contributor) to interview celebrities, and "Ain't it Cool News with Harry Knowles" will adapt the infamous film gossip site to a filmed talk show. Hardwick will also host "Chris Hardwick’s All Star Bowling," a bowling competition/comedy show with a nod to Hardwick's father, champion bowler Billy Hardwick. Nerdist will also stream episodes of the legendary sketch show "Kids in the Hall," with new interviews and segments hosted by Hardwick.

The Nerdist YouTube channel will also incorporate adaptations of Nerdist podcasts, and plenty of wild cards, most notably: "Neil Patrick Harris’ Puppetopia," "Gif Gif City," "Cute Things Exploding," "Weird Shit From Japan," "Untitled Rob Zombie Project" and "Star Talk with Neil deGrasse Tyson," a video version of the podcast hosted by the famed astrophysicist.

While I note that there's a lot of overlap between these two worlds (Wheaton and Hardwick are good friends and used to be roommates, and I'm pretty sure Hardwick is friends with Paul & Storm too), it seems pretty cool that they're both starting to flood YouTube with cool content.

Amusingly, when I first started writing up this post, I was going to mention all of the cool things that Kevin Smith has done with his Smodcast network, but I was realizing that was just audio. Well, no matter. Just as I was reading up on the details of the other two networks, I saw the news that Smith was launching Smodcast Internet TV -- his own online video network too! Perfect timing, Kev.

Like both of the other networks, the plan here is to take some existing shows (in this case, from the Smodcast network), and then add some new ones as well.

Who knows if all of these (or any of these) will survive, or even thrive. But, the awesome thing is that they can do these things and just see what happens. They don't need to go through gatekeepers. There are no gatekeepers anymore. They can blaze their own path and find out for themselves what works and what doesn't work -- and we're talking about a bunch of folks who all have pretty long histories of really embracing what the internet allows, so I'm excited to see where these experiments go, and I'd imagine we're going to see plenty more like this. Some will succeed, some will fail. But you have to be blind to think that creativity or the industry is struggling. People who can't help but create cool and amazing things suddenly have many more tools at their disposal for creating, distributing, promoting (and, yes, monetizing) content than ever before, and tons of new opportunities are opening up.

Anyone who thinks that the entertainment industry is in trouble isn't paying attention. The rest of us are over here checking out all sorts of cool new content, which didn't require a big studio exec deciding whether or not it deserved to be on TV.

There's been plenty of research over the years (much of which we've pointed to here) showing that the sharing of information and knowledge -- including information and knowledge that leads to innovation breakthroughs -- can actually help companies thrive. Studies on the early success of Silicon Valley by Annalee Saxenian focus heavily on how information sharing among companies -- even those in competition with each other -- helped make Silicon Valley so successful. That's because the breakthroughs opened up new markets and expanded them in ways that allowed multiple players to thrive. To put it another way: if, by sharing information, companies were able to reach major market-changing breakthroughs faster, there would be more than enough benefit to go around as the new markets expanded. Thus, the "cost" of having competitors with the same knowledge was dwarfed by the "benefit" of having the innovation and the resulting market expansion.

Gene Cavanaugh points us to a new study that appears to reiterate this basic point, but focusing directly on situations with patents. The research, by economist Gilad Sorek, found that the free-licensing of patents to competitors actually increases the likelihood that a company's profits will grow as the result of a particular innovation. In other words, contrary to what many believe (that the best thing to do with a patent is to restrict others from using it), this research suggests that openly sharing that information for free actually tends to help the patent holder in the long run by opening up new opportunities that increase their profit.

The study, to be published in a forthcoming issue of Economics Letters, shows that the benefits of giving up patent protection outweigh the risks of surrendering a share of the market. By inviting further research, Sorek says, the original innovator is able to stimulate demand for its product. The company may lose a share of the market, but its product ultimately becomes more valuable as a result of the extended innovation effort.

The research points out that such open and free licensing acts as a way to get free research and development from other companies that help expand the original innovator's market. This paper certainly seems to match what we've seen in other research in the past and, yet again, raises significant questions about the way many companies today manage their patent portfolios, as well as how they view the process of innovation itself.

The BBC has a great short video feature looking at Odd Future, the massively popular (and equally controversial) rap collective, and their merchandise-focused approach to the music business. Odd Future has always been an interesting case study in music: their graphic content prevents them from getting much radio play, their career was started and built online, and they give away all their music (20 albums worth, at this point) for free. But they have been making money since the beginning by selling homemade merchandise directly to fans, offering lots of limited edition shirts and one-off products. Now they've combined that approach with their highly successful tours, by launching pop-up merch shops in every city before the show. They do meet-and-greets at the shop where they take photos and sign autographs. The fans love it—they were in Toronto recently, and the line for the pop-up shop stretched several blocks, and according to the BBC they are moving unique hand-made t-shirts at £100 each.

Tour merchandise has always been popular, but Odd Future takes it to the next level (though they're not the only artists to experiment with this kind of thing). Rather than just selling cheap t-shirts at a massive markup from a table in the venue, they turn it into a whole companion experience to the show, and offer merch that's actually one-of-a-kind. The Odd Future kids are naturals at connecting with fans, and this shows how they also combine that with a bundle of different reasons to buy. Well-known for shirking the establishment in every way imaginable, Odd Future doesn't seem to care too much about record sales, and they definitely don't care about piracy or competing with free—they've found a new way of doing things, and it's working.

Note: let's not turn this into a debate about the morality/merits of Odd Future's music. For that, head over to Tim Cushing's excellent post on Lost In The Sound.

The House Intelligence Committee has published a new draft of CISPA (pdf and embedded below), which includes the two amendments that were already approved, plus several other additions and changes. In some areas, there is genuine progress—in others, things actually seem to have gotten worse. Unfortunately, some of the biggest problems with the bill remain, and some of the new language seems to have little effect at all. Some changes I will discuss in future posts, but there are two that I wanted to look at right away:

A Narrower Definition Of Cybersecurity
This is the one clearly positive change in the bill. Previously, the definition of cybersecurity and cyber threat information was:

(A) efforts to degrade, disrupt, or destroy such system or network; or

(B) theft or misappropriation of private or government information, intellectual property, or personally identifiable information.

While the first part remains unchanged, the second part is now much narrower:

(B) efforts to gain unauthorized access to a system or network, including efforts to gain such unauthorized access to steal or misappropriate private or government information

Where the original language could be construed to include all sorts of activity that goes beyond what most people could consider "cybersecurity", the new definition makes it clear that we are talking about unauthorized network access. Most notably, it removes the reference to "intellectual property", which makes sense: the authors have always insisted that they were talking about the misappropriation of secret R&D by foreign entities, which is sufficiently covered by language referring to privacy and unauthorized access. Including "intellectual property" opened it up to all sorts of additional interpretations that went beyond this stated intent.

Now, there's still reason to be a little concerned here, because the attempts to charge people for "unauthorized access" under the CFAA have been ridiculous in the past. If this language in CISPA were construed to include things like violating terms of service (as some have claimed of the CFAA language) then it would be very dangerous. However, with last week's Ninth Circuit ruling which narrowly construed unauthorized access, legal thinking on this matter seems to be heading in the right direction. There's still some gray area, and I think there's still room for a much better definition of cybersecurity in CISPA (I know they want to future-proof it, but it doesn't have to be that short and vague) but this is still a significant improvement over the previous draft.

Extremely Limited Liability For Companies
The new draft of CISPA includes a whole new section carving out the requirements for a company to be held liable if they share information improperly. Basically, a company that shares data with the government receives immunity from all existing privacy laws unless you can show that their actions caused you injury and constituted "willful misconduct"—which is very specifically defined in CISPA as an action taken:

(I) intentionally to achieve a wrongful purpose;
(II) knowingly without legal or factual justification; and
(III) in disregard of a known or obvious risk that is so great as to make it highly probably that the harm of the act or omission will outweigh the benefit.

Yes: and. A company's actions need to satisfy all three of those conditions. I'm not even sure how that's possible. They have to be trying to harm you, knowingly breaking the law and, in a bizarre third clause, they also have to know there is a risk that the harm to you will outweigh the benefits to them. How you are supposed to weigh the harm to individuals whose private data is handed to the government, versus the benefits to cybersecurity services who improve their networks with data, is beyond me. But no matter how you slice it, this is an insanely onerous definition of willful misconduct that makes it essentially impossible to ever sue a company for wrongly sharing data under CISPA.

Overall, despite the progress made on the definition of cybersecurity, CISPA is still a highly problematic bill which still doesn't properly safeguard people's privacy. One of the biggest problems—the fact that the government can use, retain and affirmatively search the information they gather for vaguely defined "national security" purposes—is untouched in the new draft. There are some attempts to alter the rules on how federal agencies can share information between themselves, but many of those changes seem essentially meaningless. It's good to see some reaction from Congress, but if CISPA is to be fixed (a prospect I'm still dubious about) there is still a long way to go.

This year, April 15th isn't the deadline for filing your taxes, you can wait until Tuesday, April 17th -- thanks to Emancipation Day. Enjoy those extra couple days and a few of these tax-related links.

• Death and taxes are unavoidable, but it's a strange coincidence that there's a statistically significant increase in car accident fatalities on Tax Day. Unfortunately, it seems that electronic filing hasn't had much of an impact on Tax Day car accidents. [url]
• Sherman Friend, 69, evaded income taxes on his lottery winning to the tune of $132,000 -- in a scheme involving getting his friends to cash in his winnings for him. The tax evasion plot has been reported clearly, but the winnings were collected on a large number of 50-cent tickets in Pennsylvania's daily Big 4 game. [url]
• The IRS needs some help for keeping track of organizations that provide free tax preparation services to low-income and elderly taxpayers. Over 88,000 volunteers prepared about 3.1 million Federal tax returns in 2011, and the IRS could improve on how it manages its Volunteer Income Tax Assistance program. [url]
• Not sure if you can deduct your haircuts as a business expense? Um, you can't. A list of other non-deductible expenses include: vet bills, pets as dependents, gym memberships, cosmetic surgeries... [url]
• To discover more interesting business-related content, check out what the deal is on StumbleUpon. [url]  

By the way, StumbleUpon can recommend some good Techdirt articles, too.

The US government seems to be bending over backwards to make sure that Megaupload cannot get a fair trial. Perhaps they're finally realizing that their own indictment had serious problems and figure the best way to get past that is to make it that much harder for Megaupload to defend itself. We've already covered the desire of the feds to have significant evidence destroyed in the case, but now they're trying to block Megaupload from hiring a top law firm. It had recently been noted that top litigator Andrew Schapiro from Quinn Emanuel, was joining the defense team.

But the US is objecting to Quinn Emanuel taking part in the case, claiming that Schapiro's previous work with YouTube and Google represent a conflict of interest -- since the government intends to try to show that YouTube was a "victim" of Megaupload, and use Google as a witness since it pulled AdSense over infringement concerns. Furthermore, the government uses the fact that Quinn Emanuel -- a pretty large law firm -- has also represented some Hollywood interests to say that it shouldn't be able to take part. The thing is, law firms like Quinn Emanuel have a pretty detailed conflict of interest process, in which they check a bunch of things before they take on a case. If they satisfied that process, then why should the government be involved at all, other than just as an attempt to deny Megaupload the skills of the lawyer it wants to hire?

It's really quite astounding how terribly obnoxious supporters of the ridiculous TPP agreement have become. This Trans Pacific Partnership agreement is being negotiated entirely in secret -- even as the USTR lies and claims the process is transparent at an "unprecedented" level. Of course, it seems that transparency only extends to big industry lobbyists who support the agreement's concepts already. For everyone else, we're told it's a matter of national security. Furthermore, rather than be transparent, it appears that the TPP negotiators are bending over backwards to (a) not allow those representing the public to even speak, while (b) spending as much time as possible with Hollywood lobbyists. It's as if the USTR and other TPP negotiators are so sure they've completely rigged the process that they're showing off just how little they care about the public.

Honestly, the whole thing is a scandal in the making.

In February, a bunch of groups representing public interests scheduled a public hearing about concerns with TPP in the same hotel where the TPP negotiations were going on... and the USTR apparently contacted the hotel and had them kicked out. The night before all of this? The negotiators went and partied at a Hollywood studio with the key lobbyists. Yeah, the USTR can't even stand to be in the same building as those concerned about the public, but will party with the lobbyists. A few weeks later, some big corporate interests hosted a dinner for ACTA negotiators. Public interest groups found out about it at the last minute and were told they were not welcome. When questioned about this in a Senate hearing, the USTR Ron Kirk took a totally condescending attitude, still insisting unprecedented transparency, even as Senator Wyden pointed out that wasn't even close to true.

And, of course, it gets even worse. One of the things that the USTR had talked about in the past was about how "transparent" they were when holding various "stakeholder" sessions that let people express their concerns. Of course, most of these are free-for-all's and they're positioned to limit the exposure of the concerns -- but at least there was some attempt in the past to offer people a voice. Not any more. As we noted recently, the US has done away with the stakeholder meeting. So the public interest groups are, once again, left out.

Now, the very latest is that during meetings in Chile, public interest groups once again sought to host a stakeholders meeting, and got an agreement to host it at the University of Chile School of Law. The whole thing was organized, and they even had a big name local politician signed up as the keynote speaker. The dean of the school was all for it... and then, two days before the meeting, the University canceled the meeting. Once again, the public interest groups were shut out. It's not entirely clear why, but there is tremendous speculation that the cancellation was due to a faculty member who consults heavily with the pharmaceutical industry.

Either way, it seems clear that there is influence peddling going on here, and it's astounding that the USTR seems to think that these moves won't backfire and just make it look worse. In talking to someone who was in Chile working with the public interest groups, it's been claimed that many of the delegates had no idea this would happen -- and were quite upset that the USTR had basically hijacked the process. The organizers of the event were actually able to find an alternative, but it is too bad that they had to spend days scrambling to figure this out.

There's been some buzz in music circles about the news that the RIAA, the NMPA (music publishers) and the DMA (digital music companies) have reached an "historic" agreement on mechanical royalty rates, potentially avoiding what often is a contentious rate setting process at the Copyright Royalty Board (CRB). The CRB still needs to approve the deal, but the fact that an agreement was reached outside of having to go through such a contentious process, where the results often seem arbitrary and disconnected from reality, is mostly a good thing.

That said, I do have some concerns. Because beyond setting the rates for existing mechanical licenses, the groups also sought to create new rates for new types of service. THR has the details:

• Mixed service bundles (for example, a locker service, limited interactive service, downloads or ringtones combined with a nonmusic product such as a mobile phone, consumer electronics device or Internet service)
• Paid locker services (subscription-based locker providing on-demand streaming and downloads)
• Purchased content lockers (a free locker functionally provided to a purchaser of a permanent digital download, ringtone or CD where the music provider and locker have an agreement)
• “Limited offerings” (subscription-based service offering limited genres of music or specialized playlists)
• Music bundles (bundling music products such as CDs, ringtones and permanent digital downloads)

Now, to some extent it's nice to see them coming to agreements with the idea of allowing certain new types of sites to easily make it clear that they are licensed under a clear rate, and move forward with that. But some of this is concerning in that it partly seems like a way to overclaim rights that copyright doesn't, in fact, cover: for example, the license rates for locker services. As has been discussed, it's not clear that locker services need to pay any copyright under existing law. If it's just about enabling users to store and listen to their own music, what copyright issue is there? Yet it appears that at least some such services may be expected to pay these mechanical rates.

One of the more concerning aspects of CISPA that sets it apart from SOPA/PIPA is the number of technology companies that support it. Of chief concern is Facebook, which handles a lot of sensitive private data, but is standing behind the bill. Joel Kaplan, Facebook's VP of U.S. Public Policy, has now released a statement explaining their support, which basically amounts to "we promise not to abuse the gray areas in the bill".

A number of bills being considered by Congress, including the Cyber Intelligence Sharing and Protection Act (HR 3523), would make it easier for Facebook and other companies to receive critical threat data from the U.S. government. Importantly, HR 3523 would impose no new obligations on us to share data with anyone –- and ensure that if we do share data about specific cyber threats, we are able to continue to safeguard our users’ private information, just as we do today.

That said, we recognize that a number of privacy and civil liberties groups have raised concerns about the bill – in particular about provisions that enable private companies to voluntarily share cyber threat data with the government. The concern is that companies will share sensitive personal information with the government in the name of protecting cybersecurity. Facebook has no intention of doing this and it is unrelated to the things we liked about HR 3523 in the first place -- the additional information it would provide us about specific cyber threats to our systems and users.

Kaplan then goes on to say that Facebook is engaging lawmakers to see about amending the bill to address people's concerns. But that creates a pretty big question: why are they still supporting the bill if they recognize its problems? Based on this statement, Facebook wants to use cybersecurity laws the right way—to give and receive anonymized and minimized data about specific threats, to be used solely in relation to those and similar threats. But CISPA does not require any of that. It's nice that Facebook is "able to" protect private information, but why aren't they and all other companies forced to? If the authors of the bill want to tout its "strong privacy protections", then a requirement to eliminate personal user information from shared data seems like a necessity.

Moreover, while Facebook may only be worried about specific cyber-threats, they can't control what the government does with the information. As currently written, CISPA basically allows the feds to keep whatever data Facebook shares on file, and search it whenever they want, for anything they want, as long as there is a "cybersecurity" or "national security" purpose. And "cybersecurity" is very broadly described, and includes things like intellectual property. If this bill is supposed to be about protecting networks from disruptive attacks, why aren't the terms and limitations narrowly defined to ensure that's the only thing it can be used for?

If Facebook's cybersecurity motivations are good—and I'm willing to grant them the benefit of the doubt and assume that they are—then they should withdraw their support of CISPA until it is fixed to exclude the broad provisions that go well beyond what Facebook wants to use it for. If the company is so proud of its commitment to user privacy, then surely it has to acknowledge that there are other companies which are not so responsible, and which will abuse the same powers and immunities that Facebook promises to handle responsibly. Unless they can show us that they are making meaningful demands of Congress, this attempt to soften their support of CISPA is just hot air.

For a long time, the copyright industry has cried foul over technical progress, and demanded taxpayer compensation for how these new developments circumvent their existing privileges. It didn't start with the internet; they've done so for well over a century, starting with complaining about the gramophone and the self-playing piano. But as they are crying over lost sales, real or imagined, why is the rest of the world accepting that this field -- the copyright industry's profits -- is the place where the debate should be playing out?

You've all seen the stories. The sky is falling, the end is nigh, music will come to an end, people sharing their knowledge and culture and thus disrespecting the copyright monopoly rips the bread out of starving artists' children's kittens' mouths, yada yada yada.

What I can't understand for my life is why this industry's profits are even being debated. Who cares how much money a particular industry makes? That is not relevant at all for the form, size and shape of our most basic civil liberties as they apply online.

Let me try an analogy. When mankind communicated privately 30 years ago, our parents sent physical letters in the mail. They wrote a message by hand or with a typewriter on a piece of paper, put the paper in an envelope and sealed it, wrote the recipient's home address on the outside of the envelope, manually affixed a stamp to pay for delivery, and put it in a mailbox. The postal service would then physically carry the envelope with the letter inside to its recipient's home, where it could be read. This delivery took a day or a couple of days, just like when we order new shiny gadgets today and things need to be physically delivered.

So, let's take a look at what rights our parents had in this scenario. First, they and they alone determined whether to identify themselves as sender - on the outside of the envelope, for the delivery services to know; on inside of the envelope, for only the recipient to know; or frankly, not at all. That was their prerogative. Nobody had the right to open letters in transit just to see that they didn't contain any illegal material, and nobody was allowed to track who was communicating (sending letters) to whom.

It is perfectly reasonable that we demand these fundamental rights of our parents' private communications to carry over into the online world, to our children's equivalent environment of life.

Now, once you say that anybody should be able to send anything to anybody on the net without interference, because that's in the civil liberties that our ancestors fought, bled and died for, the copyright industry jumps in and complains. "We can't make any money if you allow this to happen", they would say.

My response is "So what?".

The role of any entrepreneur is to make money given the contemporary constraints of society and technology. They do not get to dismantle civil liberties, even if - and perhaps especially if - they are unable to make money in the face of sustained civil liberties.

If the copyright industry can't sell their products in the face of sustained civil liberties, they get to go out of business or sell something else instead. Mustard, perhaps.

The important trap to observe here is that it's not our problem if the copyright industry's sales are slumping - whether they are or not. It is irrelevant to the debate on civil liberties online. By starting to discuss the profits issue, the copyright industry wins the framing of the debate - that they should somehow have a right to such profit; that society must be shaped so they can continue to make a profit. No entrepreneur gets that luxury.

The copyright industry is not a stakeholder in copyright monopoly legislation. They are a beneficiary. There's a difference.

The only stakeholder in the copyright monopoly legislation is the public. The copyright monopoly is a balance between the public's interest of having access to culture and knowledge, and the same public's interest of having new culture and knowledge created. That's it. Those are the only two interests that go into the legal wording of the monopoly.

The copyright industry, meanwhile, profits from the current means of achieving this balance - just like Blackwater Security (or whatever their name is this week) profits off of United States foreign policy. (You remember Blackwater, the private security firm that was playing GTA IRL on the streets of Baghdad?) Actually, let's stick with Blackwater for a while. Can you imagine what would happen if Blackwater was considered a legitimate stakeholder in US foreign policy, and whose tantrums were taken seriously when they demanded more opportunities for profits in the foreign policy, violating people's civil liberties in the process?

Can you really imagine what would happen if the concern for Blackwater's continued profits would be allowed to take center stage, ahead of people's sustained civil liberties? I'm betting we would see about the same thing that's happening to the net right now with the copyright industry's equally asinine tantrums. This is the crucial difference between a beneficiary and a stakeholder.

Just because the copyright industry has benefited from this monopoly construct in the past, that doesn't mean that they have any right whatsoever to profit from it tomorrow. That's not a concern at all in reforming the copyright monopoly. In drafting such legislation, our only concern is maximizing the knowledge and culture available to the public.

Rick Falkvinge is the founder of the Swedish and first Pirate Party. Follow him as @Falkvinge on Twitter, read his private blog, or get him for a keynote.

We've been following the surprisingly weak case that the MPAA filed against Hotfile for some time -- and, in some ways it's become even more important lately as a sort of "civil analog" to the criminal case against Megaupload. Hotfile and Megaupload have many similarities, and the arguments against both seem to make the same highly questionable assumptions -- taking perfectly legitimate actions and insisting that they must have been done for nefarious purposes. For example, in both cases, the fact that the companies offered "affiliate programs" that allowed users to make some revenue on frequently downloaded works was used as evidence that they were inducing infringement. But what the facts are showing is that this was quite often used to create legitimate and lucrative new business models for creators themselves. When Megaupload was taken down, for example, hip hop superstar Busta Rhymes argued vociferously that it was a fantastic way to make money -- with much, much better terms than major labels. That's because he (and lots of other artists) could release their own content through these platforms, allow consumers to get them for free, and get a large cut of the ad and subscription revenue.

It appears that this was also a popular use on Hotfile. TorrentFreak obtained a filing from copyright expert and law professor James Boyle, in which he points out that open source developers were using Hotfile's affiliate program as a business model, and, in fact that open source downloads were incredibly popular on the platform, very likely representing one-third of the top 100 downloads, adding up to millions of downloads.

The standard for infringement under the Betamax ruling is supposed to be if there are substantial non-infringing uses of the technology, and that certainly appears to be the case here.

Boyle also points out other ridiculous problems with Hollywood's "expert" report trying to claim that Hotfile was almost always used for infringement. For example, he notes that the report appears to have purposely excluded approximately 60% of the files on Hotfile. Hollywood's experts ignored files that were never downloaded or only downloaded once. Yet, as Boyle points out, the point of a cyberlocker is to store files -- and many people likely put files up so that they could be stored in case they were ever needed. Thus ignoring the 60% of files that were never downloaded or only downloaded once, excludes the fact that many of those may have been for perfectly reasonable and legitimate purposes of backup, storage or place/time-shifting. Basically, it looks like the MPAA's "experts" ignored anything that was inconvenient.

And it gets worse. The so-called "experts" that the MPAA found seemed to classify works as "highly likely infringing" despite there being significant evidence that they were perfectly legitimate works to be shared. Perhaps the most egregious example was a copy of a Russian book on embroidery published in 1871. No matter how you look at it, a book published in 1871 is in the public domain. But the MPAA's expert listed it as highly likely infringing. Then, when called out on that, the expert said that maybe there were new works in the book and would only downgrade his classification to "unknowable" rather than admitting it was public domain.

Mr. Zebrak’s classification here was inexplicable tome in my rebuttal report and remains so now. He argues that there could be copyrightable selection and arrangement in the illustrations of this work, even though both the original work and the illustrations are clearly in the public domain. I dealt with and dismissed this possibility in my rebuttal report – indeed the site to which he cites in his original argument for infringing status explicitly identifies this exact book, in unchanged order and arrangement, as being published in 1871 in St. Petersburg. This book is at the most conservative possible classification,“highly likely in the public domain.” Mr. Zebrak will not concede even this, though he does at least change his classification to “Unknowable.” Again, I think the refusal to admit evenoverwhelming evidence like this indicates a predisposition to find infringement that is worryingly strong – and that predisposition appears to be a general one, which therefore has significance far beyond the files I was able to examine in the time available to me.

Similarly troubling, the MPAA's experts took a freely distributable podcast, and insisted that, too, was "highly likely infringing." Podcasts are usually distributed for free, and since bandwidth costs are expensive, many podcast creators love using cyberlockers like Hotfile or Megaupload as a free storage and distribution platform. But the MPAA's "expert" insists that it's highly likely infringing. And it gets worse: even after the creator of the podcast said he was happy with its free redistribution, the MPAA's expert used iTunes terms of service to argue that it was still infringing. Except iTunes terms of service have nothing to do with the podcast:

Photography 101 Podcast: This podcast is an example, again, of the same theme .As I pointed out in my rebuttal report, the podcast is in fact offered for free download online and its author confirms that he does not object to its redistribution. Mr. Zebrak – somewhat puzzlingly – introduces the iTunes terms of service into the picture, apparently imagining that iTunes has the ability to affect the copyright status of a work in which it holds no copyright. It does not. Mr. Wittenburg holds the copyright in his podcasts. He allows people to download them freely and to repost them and says so explicitly in his affidavit. There is no evidence that the version of the podcast posted on Hotfile even came from iTunes. Mr. Wittenburg refers to the podcasts being available in multiple locations online. Even if it did, the iTunes terms of service are a red herring. I may give a lecture which I record and post online, posting it also on iTunes. I hold the copyright and I may choose to allow posting and reposting as I wish. Copyright law gives iTunes no rights over the program and no rights to circumscribe what I allow with my own podcast – they have no copyright to infringe – and thus the claim that the file is "highly likely infringing" cannot be supported on this basis.

Reports like this raise significant concerns about the claims against Hotfile (and similar sites).

Last fall, we wrote about how the Obama administration celebrated the signing of what they incorrectly called "free trade agreements" with Colombia, Panama and South Korea. These agreements had been the subject of significant controversy, but they did eventually get signed. Of course, the Obama administration -- via the USTR -- has long been a proponent of putting in ridiculous protectionism policies into free trade agreements. To this day, we still can't understand what copyright laws have to do with free trade. They're the opposite of free trade: they're government granted monopolies. We had warned about the excessive language in these agreements when it comes to copyright, and now we're starting to see the impact of that.

President Obama is heading to Colombia this weekend for a summit, and we'd been hearing stories that US officials had been putting tremendous pressure on Colombian officials to pass new, ridiculously draconian copyright laws ahead of that visit. So that's exactly what the Colombian government did -- using an "emergency procedure" to rush through a bad bill that is quite extreme.

Earlier this year, Colombia tried to pass basically the same bill, which was called LesLleras, after Interior Minister German Vargas Lleras (who proposed it). That bill was so extreme that it resulted in SOPA-like protests, following significant concerns raised by the public as well as copyright and free speech experts. So, this time around, the government just claimed it was an emergency and rushed the bill through, despite all of its problems. They seemed to think that the public wouldn't notice -- but they're wrong.

As is typical of idiotic trade agreements pushed via the USTR -- who only seems to listen to Hollywood on these issues -- the copyright bill includes all sorts of draconian enforcement techniques and expansions of existing copyright law, and removal of free speech rights. But what it does not include are any exceptions to copyright law -- the very important tools that even the US Supreme Court admits are the "safety valves" that stop copyright law from being abusive, oppressive and contrary to freedom of speech. Public interest groups in Colombia are planning a Constitutional challenge to this new law, but the process itself is sickening.

To use an "emergency procedure" to pass a highly questionable law that was put in place through equally questionable means and diplomatic pressure -- and to ignore the public at large -- is really astounding. I'm ashamed of my own government for its efforts to pressure Colombia into such undemocratic and anti-free speech actions.

The Department of Commerce just came out with a study on Intellectual Property and the US Economy, put together by the US Patent and Trademark Office and the Economics and Statistics Administration, seeking (supposedly) to "better understand" intellectual property and the "IP-intensive" companies. While the report insists that it is not taking a policy stance, its position is actually quite clear from the outset: to talk about how wonderful intellectual property laws are. The fact that the report was introduced by the government at a press conference with the US Chamber of Commerce & the AFL-CIO -- two of the biggest supporters of SOPA/PIPA -- shows you upfront that this report is not neutral on the policy position.

Further highlighting how bizarre this report is, the top industries it describes as "copyright-intensive" are actually tech companies -- the very ones who fought SOPA and PIPA. So this bizarrely disingenuous and misleading report really appears to be about SOPA/PIPA supporters co-opting the economic power of the tech industry that was against SOPA and PIPA, and obnoxiously trying to take their economic might and throwing its weight into an argument for IP expansionism -- even as the actual companies in the space continue to fight such laws.

The first paragraph of the executive summary alone represents the problem, in that they make statements that they pretend are connected to one another to prove a point, but which don't actually have any evidence of a direct connection.

The key problem is a simple one: those who wrote the report seem to have completely bought into the entirely faulty claim that because a company produces something that is covered by intellectual property laws, they needed those laws to produce that product. In other words, they are assuming -- entirely incorrectly -- that but for those laws, these products would not exist. This has been a key assumption in the bogus reports that the US Chamber of Commerce puts out every year, but it's scary that US government officials would fall for such a misleading assumption. Of course, when you base your entire report on such a completely false assumption, the rest of the report is going to look rather silly. And, indeed, this report looks incredibly silly. It is a true case of garbage in, garbage out. Let's look just at the opening paragraph alone:

Innovation--the process through which new ideas are generated and successfully introduced in the marketplace--is a primary driver of U.S. economic growth and national competitiveness.

Start with a factual statement that is difficult to dispute. This is absolutely true. Okay.

Likewise, U.S. companies' use of trademarks to distinguish their goods and services from those of competitors represents an additional support for innovation, enabling firms to capture market share, which contributes to growth in our economy

Wait, what? Already by the second sentence we've started to go off the rails with an unsupported and really tangential statement. Trademark doesn't "enable firms to capture market share." Trademark is a consumer protection law to keep people from being fooled into buying a product that is not what they think it is. That's got nothing to do with "support for innovation." When you're two sentences into a report, and you're already misrepresenting the nature of trademark law, you're not inspiring confidence.

The granting and protection of intellectual property rights is vital to promoting innovation and creativity and is an essential element of our free-enterprise, market-based system.

And here we take the entirely baseless assertion up a notch. They are honestly saying that a system of government granted monopolies issued from a centralized government organization are an essential element of a free-enterprise, market-based system? That's just wrong. Separately, there is little to no evidence that "the granting and protection of intellectual property rights is vital to promoting innovation and creativity." In fact study after study after study has shown much greater innovation and creativity in areas of the economy that do not have such protections. So, either the authors of the report are misinformed or they're lying. Neither makes them look good.

Patents, trademarks, and copyrights are the principal means used to establish ownership of inventions and creative ideas in their various forms, providing a legal foundation to generate tangible benefits from innovation for companies, workers, and consumers. Without this framework, the creators of intellectual property would tend to lose the economic fruits of their own work, thereby undermining the incentives to undertake the investments necessary to develop the IP in the first place

This is extremely disingenuous. Yes, granting companies monopolies on ideas and concepts may provide a legal framework for monetizing them by making them scarce rather than abundant (an economic loss in value), but to claim that without this framework creators "would tend to lose the economic fruits of their own work" is just not factually based. Once again, studies have shown repeatedly that in areas where there is no intellectual property protection, there are all sorts of creative, and oftentimes more lucrative, business models for people to monetize their work.

And, really, if all of this undermined the incentives to undertake the investments necessary to develop the IP in the first place, we'd see that as infringement increased, the product produced decreased correspondingly. Instead, we've seen the exact opposite. More and more things are being created, not because of IP laws, but for all sorts of other reasons. Yet this report more or less bases the entirety of its claims on the idea that because such things are covered by IP laws, it automatically means that it's because of those IP laws.

Moreover, without IP protection, the inventor who had invested time and money in developing the new product or service (sunk costs) would always be at a disadvantage to the new firm that could just copy and market the product without having to recoup any sunk costs or pay the higher salaries required by those with the creative talents and skills.

Again, while this may be the popular theory, it does not seem to be supported by the evidence. There's been research showing that the first mover advantage can often provide a much more important advantage than IP laws. And, as such, the fact that some companies can just "copy" does not actually put the originator at a disadvantage. As has been seen time and time again, being successful is not about copying. Companies copy each other all the time, but if all you're doing is copying, rather than the actual development, then you don't understand what really went into a product. You don't understand why the design choices were made. You don't know the research that was conducted to decide what the customer really wants. You don't know what changes were made, what mistakes were made, and what things really resonated. In other words, you only know how to copy the superficial parts -- and often those are the least important parts in building a successful business.

Tragically, it seems that this report is making assumptions that are common among those who have no experience in business -- that all you need to do to succeed in a market is copy someone else. The truth is quite different, but it's a shame that a government sponsored report would push this theory.

Again, that's just the opening paragraph of the executive summary, but it gives you a sense of the many problems with where the reports authors are starting from. The report has all sorts of other problems, many of which Tim Lee neatly outlined, so I don't need to repeat them all.

The biggest two things, however, are the bizarre definitions of what industries are covered by what areas. From Tim's writeup:

The report has an extraordinarily broad definition of an "IP-intensive industry." Thanks to the inclusion of industries that rely on trademark protection, the list includes the residential construction, "dairy product manufacturing," paper, and grocery industries. That's right—if you hang sheetrock, bag groceries, or answer phones at a paper mill for a living, you're probably in an "IP-intensive" industry as far as the Obama administration is concerned.

There are some other oddities, such as ranking industries based on IP registrations per employee -- a near totally meaningless ratio.

Of course, the authors of the report know these criticisms -- because they more or less acknowledge them in the report itself. At one point, they note the limitations of using these kinds of numbers and making these kinds of assumptions -- even highlighting the fact that many companies get patents with no intention of "using" them. But then, rather than using that to to question the data, they just move on and get back to talking about the importance of "IP intensive" industries.

There's also a separate issue raised by Tim, which is how the details of the report seem to nearly totally undermine the claims of those supporting the report. We've already seen a number of the copyright maximalist camp highlight the report as "proof" of the incredibly importance of stronger copyright laws. And yet, as one of the key charts in the report shows, the industries described as "copyright-intensive" seem to be thriving... and there is no noticeable "drop off" due to infringement. Over the time infringement grew, so did the success of these "copyright intensive" players. Furthermore, as you look at the chart, you see that the swings in employment pretty much match up with other industries. That is, the report seems to pretty clearly suggest that the lack of respect for copyright law has had little impact -- and instead, any issues the industry has are caused by general cyclical economic factors.

To be honest, I'm a bit surprised at the details in this report. Government researchers are often more skeptical of some of the more bizarre claims from lobbyists, but here they not only accepted them, but then put out a big, misleading research report supporting them -- and then thought they showed something, when it appears they showed quite the opposite.

Still desperate to prove that they are in touch with the online community, the House Intelligence Committee has launched a new Twitter account apparently dedicated to talking about how totally awesome CISPA is. They haven't been at it for very long, but they've already blessed the hashtags #CISPA and #cyber (they really love that word, don't they?) with several disingenuous tweets full of misinformation and flat-out inaccuracies:

Firstly, how does a federal law that creates an internet security exemption to every other existing law represent keeping the "federal govt’s hands off the Internet"? The entire point of CISPA is to give every federal agency that already has its hands on the internet more information and power. Similarly, while the bill itself does not have any provisions relating to blocking website access, it creates clear provisions for companies to give data to Homeland Security—the people who already seize websites.

Strong privacy protections? CISPA includes virtually no privacy protections, beyond a call for annual recommendations from the Privacy and Civil Liberties Oversight Board. Meanwhile, it eliminates existing privacy protections, because as soon as a company deems its data "cyber threat information", it can turn it over to the government without worrying about any other laws. As for how CISPA "strictly limits" what the government can do with the data, that depends on your definition of "strictly"—and, of course, whether you're honest about what the bill says, which the House Intelligence Committee is not:

Maybe they'll blame Twitter's character limit, but they left out a very important part there. Information can only be shared with the government if it is related to cybersecurity, but it can be used by the government for the purposes of cybersecurity or national security. That's a much, much broader field, and the cybersecurity heading is already pretty wide open, when you remember how it's defined in CISPA—as anything relating to protecting a network from:

‘(A) efforts to degrade, disrupt, or destroy such system or network; or

‘(B) theft or misappropriation of private or government information, intellectual property, or personally identifiable information.

Moreover, there are no limitations on how long the government can keep the data, or on how often they can come back and search it for whatever they want—as long as they can justify the search as either cybersecurity or national security. That's not what most people call "strict".

Resistance to CISPA is growing, and more flimsy misinformation isn't going to change anything just because the committee puts it on Twitter. We already wrote about how astonishing it is that Congress expected no resistance to the bill, and now it seems like they're finally waking up to the fact that they were wrong—but, as usual, they have no idea how to respond.

Multiple people have passed along this fantastic manifesto of modern creativity that was put together by five curators of an exhibition for Les Rencontres Arles Photographie called "From Here On."

One friend noted just how inspiring that graphic alone was, but reading the more detailed manifesto is worthwhile as well. It talks about just how much the internet and digital technologies have changes our lives, and changed the way art and creativity works -- in undoubtedly positive ways. Here's just a snippet of the larger piece:

The growth of the Internet and the proliferation of sites for searching out and/or sharing images online—Flickr, Photobucket, Facebook, Google Images, eBay, to name only the best-known—now mean a plethora of visual resources that was inconceivable as little as ten years ago: a phenomenon comparable to the advent of running water and gas in big cities in the nineteenth century. We all know just how thoroughly those amenities altered people’s way of life in terms of everyday comfort and hygiene—and now, right in our own homes, we have an image-tap that’s refashioning our visual habits just as radically. In the course of art history, periods when image accessibility has been boosted by technological innovation have always been rich in major visual advances: improved photomechanical printing techniques and the subsequent press boom of the 1910s-1920s, for instance, paved the way for photomontage. Similar upheavals in the art field accompanied the rise of engraving as a popular medium in the nineteenth century, the arrival of TV in the 1950s—and the coming of the Internet today.

Digital appropriationism
Across-the-board appropriation on the one hand plus hyper-accessibility of images on the other: a pairing that would prove particularly fertile and stimulating for the art field. Beginning with the first years of the new millennium—Google Images launched in 2001, Google Maps in 2004 and Flickr the same year—artists jumped at the new technologies, and since then more and more of them have been taking advantage of the wealth of opportunities offered by the Internet. Gleefully appropriating their online finds, they edit, adapt, displace, add and subtract. What artists used to look for in nature, in urban flaneries, in leafing through magazines and rummaging in flea markets, they now find on the Internet, that new wellspring of the vernacular and inexhaustible fount of ideas and wonders.

What I love most about this is how inclusive it is, and how much of it is about recognizing and embracing what an amazingly creative time this is for artists. All too often, we hear of artists who decry such things, who complain about the fact that their club doesn't feel as exclusive any more. For artists and an art exhibit to not just embrace, but joyfully celebrate the way creativity works today, while recognizing how these tools mean that anyone and everyone are creating art all the time, is really wonderful to see.

We are all aware of the aggressive nature of Bethesda parent company Zenimax when it comes to trademarks. We now learn that it is not only aggressive in defense of its trademarks but is also an aggressive filer of trademarks for things surrounding its properties. Fusible is reporting that Zenimax has recently filed 6 different trademark applications covering a variety of uses of the phrase "Fus Ro Dah".

For those of you not in the know, "Fus Ro Dah" is a phrase spoken by characters in the Bethesda game Skyrim when casting a spell that sends a blast of energy knocking back anything in its path. For those Star Wars buffs out there, it is very similar to a Jedi Force Push. This spell has spawned its very own meme using both in game footage of the spell use and the use of the phrase just before real people fall on video, as can be seen here:


While we are not entirely sure of Zenimax's true intentions, we do know that due to the ownership culture we have in the US many companies want control over anything related or somewhat related to their properties. This protectionist attitude is probably the primary driver of this move. Zenimax most likely feels that since this meme is based on one of its properties, it should have sole control over its use.

Unfortunately, this move to trademark a meme can actually result in its premature death. Memes are born in the wild and are best able to grow and spread if left to the whims and wiles of those on the internet. Memes cannot be controlled or tamed. If Zenimax's trademark filing is approved, the moment it makes its first move toward control, such as sending a cease and desist or taking down a video, it will feel a backlash by fans of Skyrim. If Zenimax had anyone capable of rational thought running its operation, it would have left this meme be and sat back and enjoyed the free advertising it provides for one of its games.

Neil Young has been unhappy with the state of digital audio for a while, and he's made various overtures about fixing it. Now, some trademark applications found by Rolling Stone suggest his plans are in motion, though details on those plans are scarce. The only real clue comes from a tangential mention in an unrelated press release:

A press release issued last September by Penguin Group imprint Blue Rider Press, which is publishing Young's upcoming memoir, may have revealed the working title of Young's entire project. In addition to the memoir, says the release, "Young is also personally spearheading the development of Pono, a revolutionary new audio music system presenting the highest digital resolution possible, the studio quality sound that artists and producers heard when they created their original recordings. Young wants consumers to be able to take full advantage of Pono's cloud-based libraries of recordings by their favorite artists and, with Pono, enjoy a convenient music listening experience that is superior in sound quality to anything ever presented."

But does Young actually have a new idea? There are already lossless formats like FLAC that some audiophiles swear by, not to mention uncompressed formats like WAV and AIFF. But there is theoretically room for improvement: most uncompressed digital audio is sampled at a rate of 44,100 Hz, but some pro studio equipment can record at twice that, and technologies like DSD can go much, much further. Moreover most consumer audio consists of 16-bit samples, which could be bumped up to 24-bit. So on the technical side, there is the potential for new formats to popularize higher-quality digital audio. Who knows if that's what Young has in mind.

That, however, leads to the bigger question: is there really a market for such a format? The digital audio debate has been raging for years, and it has a lot of contours—not just the strengths and weaknesses of digital and analog formats, but also changing approaches to sound engineering and the debates over loudness, audio compression and overprocessing. While some audiophiles insist they can tell the difference, blind listening tests have proved they rarely can. For the average listener, convenience, selection and price surely trump such a negligible (and possibly undetectable) quality difference—and since it sounds like Young hopes to develop a proprietary, cloud-only format, I'm guessing those other factors aren't high priorities. Moreover, since most people are listening to their music on earbuds and other low-definition systems, the quality bottleneck exists much further down the line than the file format—and since an increasing amount of music is recorded with consumer tools like GarageBand that operate at the standard sampling rates for uncompressed AIFF/WAV files, there's another bottleneck above the file format too. Though, in theory, these factors are part of what Young wants to change with his push towards higher quality—and there may be some potential in that direction over time as bandwidth and storage space increases, and even some sort of immediate market among audiophiles. But it's hard to see what he could offer that existing formats don't already provide.

I know some people will insist that digital audio sucks, and that they can tell the difference—but frankly that's a meaningless assertion if they haven't done a controlled test. There are simply too many biases to account for. But even if it is a real problem for some people, it is likely to be a very small niche market, not a cultural sea-change like Young seems to envision. Some of his proclamations about the effect of music sound eerily close to Prince's insane ramblings about how audio interacts with the brain, which is hard to swallow. Music may create transcendent human experiences once it's inside your head, but your ears are still made of flesh and bone, not magic. And evidence suggests that most people's ears can't tell the difference.

You probably recall all the excitement that went around when a group finally won the big Netflix $1 million prize in 2009, improving Netflix's recommendation algorithm by 10%. But what you might not know, is that Netflix never implemented that solution itself. Netflix recently put up a blog post discussing some of the details of its recommendation system, which (as an aside) explains why the winning entry never was used. First, they note that they did make use of an earlier bit of code that came out of the contest:

A year into the competition, the Korbell team won the first Progress Prize with an 8.43% improvement. They reported more than 2000 hours of work in order to come up with the final combination of 107 algorithms that gave them this prize. And, they gave us the source code. We looked at the two underlying algorithms with the best performance in the ensemble: Matrix Factorization (which the community generally called SVD, Singular Value Decomposition) and Restricted Boltzmann Machines (RBM). SVD by itself provided a 0.8914 RMSE (root mean squared error), while RBM alone provided a competitive but slightly worse 0.8990 RMSE. A linear blend of these two reduced the error to 0.88. To put these algorithms to use, we had to work to overcome some limitations, for instance that they were built to handle 100 million ratings, instead of the more than 5 billion that we have, and that they were not built to adapt as members added more ratings. But once we overcame those challenges, we put the two algorithms into production, where they are still used as part of our recommendation engine.

Neat. But the winning prize? Eh... just not worth it:

We evaluated some of the new methods offline but the additional accuracy gains that we measured did not seem to justify the engineering effort needed to bring them into a production environment.

It wasn't just that the improvement was marginal, but that Netflix's business had shifted and the way customers used its product, and the kinds of recommendations the company had done, had shifted too. Suddenly, the prize winning solution just wasn't that useful -- in part because many people were streaming videos rather than renting DVDs -- and it turns out that the recommendation for streaming videos is different than for rental viewing a few days later.

One of the reasons our focus in the recommendation algorithms has changed is because Netflix as a whole has changed dramatically in the last few years. Netflix launched an instant streaming service in 2007, one year after the Netflix Prize began. Streaming has not only changed the way our members interact with the service, but also the type of data available to use in our algorithms. For DVDs our goal is to help people fill their queue with titles to receive in the mail over the coming days and weeks; selection is distant in time from viewing, people select carefully because exchanging a DVD for another takes more than a day, and we get no feedback during viewing. For streaming members are looking for something great to watch right now; they can sample a few videos before settling on one, they can consume several in one session, and we can observe viewing statistics such as whether a video was watched fully or only partially.

The viewing data obviously makes a huge difference, but I also find it interesting that there's a clear distinction in the kinds of recommendations people that work if people are going to "watch now" vs. "watch in the future." I think this is an issue that Netflix probably has faced on the DVD side for years: when people rent a movie that won't arrive for a few days, they're making a bet on what they want at some future point. And, people tend to have a more... optimistic viewpoint of their future selves. That is, they may be willing to rent, say, an "artsy" movie that won't show up for a few days, feeling that they'll be in the mood to watch it a few days (weeks?) in the future, knowing they're not in the mood immediately. But when the choice is immediate, they deal with their present selves, and that choice can be quite different. It would be great if Netflix revealed a bit more about those differences, but it is already interesting to see that the shift from delayed gratification to instant gratification clearly makes a difference in the kinds of recommendations that work for people.