Back when I moved to Silicon Valley, Silicon Graphics Inc., (SGI) was still a hot place to work. They were still pumping out cool machines and had a reputation for a fun corporate culture. Of course, that collapsed pretty quickly over the next few years, as SGI totally misjudged the market trends and fell victim to the innovator's dilemma. Basically, SGI never could come to terms with the fact that its premium products were going to be increasingly undercut as cheaper commodity technology improved. Back in 2006, we noted that what remained of SGI had indicated that it planned to resurrect the company by going patent troll. However, we thought we'd avoided that ignoble result when SGI sold most of its assets to Rackable for a mere $25 million three years ago. Silly us for assuming those patents would just go away.

While Rackable changed its name to Silicon Graphics International... the original company actually retained the patents, and renamed itself Graphics Properties Holdings... and over the last few years has been suing lots of companies for patent infringement. In the last year alone it has sued Apple, HTC, LG, RIM, Samsung, Sony, Acer, ASUS, Panasonic, Sharp, Toshiba, Vizio and Motorola Mobility.

As the link above notes, while some of GPH's patents are relatively early, it appears that lots of similar inventions predated key patents. However, the early date may make those patents look stronger, and give GPH much more leverage in getting companies to pay up -- or risk losing the ability to produce devices with nice graphics capabilities.

I'd been meaning to write about this lawsuit ever since it was filed, but other stuff got in the way, so this is a bit of a catch-up post, to go along with Honeywell's response to Nest's counterclaims (which we'll get to in a bit). But the key to this highly questionable lawsuit is that electronics giant Honeywell wants to use the patent system to effectively kill off the well-hyped Nest thermostat. Nest, a company that launched just last fall, got some well-deserved attention for applying an Apple-like design sense to everyday gadgets -- starting with the lowly thermostat, a device that really hasn't seen that much innovation in quite some time. The product was, indeed, a pretty big leap forward, and I know a bunch of people who have Nest devices and love them.

But, of course, under a crony capitalist system, the incumbents can't have any of this nasty "disruption." Honeywell was not pleased. Bizarrely, just days before Honeywell filed the lawsuit, it had told GigaOm that it had built something similar to Nest but killed it off because consumers weren't interested. Yeah, this certainly sounds like a company jealous that Nest actually figured out how to truly innovate (bring something to market in a way consumers want) rather than just invent (create something new).

The simple fact here is that consumers really seem to like the Nest, and apparently Honeywell is ill-equipped to compete in the marketplace. So it's response is to sue and try to kill off the competition. It's a sickening display of a legacy company resting on its laurels afraid to actually compete in the market against a disruptive player that's younger and nimbler and actually in touch with what consumers want. Out of this, we get some absolutely ridiculous claims, such as the suggestion that Honeywell has patented the idea of a thermostat asking you what temperature you like, and only Honeywell could do such a thing:
Honeywell also seems to suggest that merely connecting a thermostat to the internet infringes on its patents, because, of course, no one else could have possibly thought of connecting home devices to the internet before Honeywell came along. While the filing also does highlight some evidence that Nest looked at Honeywell thermostats, isn't that how competition works? You look at what others are doing, and figure out how you can do it better? Basically, what Honeywell seems to be admitting is that it can't do it better, so instead it will sue.

Nest's counterclaim hit back pretty hard on a bunch of these points, stating upfront:

This lawsuit is a bald effort by Honeywell to inhibit competition from a promising new company and product in a field that Honeywell has dominated for decades. Nest Labs, with its Nest Learning Thermostat, has generated consumer and critical enthusiasm around the home thermostat -- a device that most people had long since written off as a bland, dumb appliance.... That "blah-looking controller" on the market today is very often from Honeywell, which has long dominated the thermostat market, but has yet to generate a device that offers ordinary consumers as much as the Nest Learning Thermostat. Instead of countering product innovation with its own new products, Honeywell has a track record of responding to innovation with lawsuits and overextended claims of intellectual property violations.

Nest also points out that Honeywell has lost previous lawsuits that similarly appeared to be bullying competitors. The Nest response doesn't just call out the company for what it's obviously trying to do, but further claims that all of the patents are "hopelessly invalid" and points to prior art that raises significant questions about the validity of the patents in play.

Nest also files some counterclaims for declaratory judgment -- which basically start out as a long commercial about Nest and how awesome everyone thinks it is. While this may seem out of place, there's a reason for this. The company is trying to demonstrate that it's not just a clone of Honeywell, but that it (not Honeywell) is the true innovator here. It not only pumps itself up, but provides plenty of evidence of Honeywell's own failures to innovate.

The latest news is that Honeywell has now filed its own response to Nest's counterclaims and (not surprisingly), Honeywell is not at all happy. It says that Nest's counterclaims are "self-serving characterizations based on Nest Labs' unfounded opinions and speculations that are irrelevant to Honeywell's valid claims..." These are legal filings, so I'm pretty sure that all of them are "self-serving." As for whether or not they're "unfounded opinions and speculations," that seems like a pretty big stretch from Honeywell, in an attempt to smear any competition making valid legal arguments against them.

Either way, it does not seem like either side is likely to back down any time soon. So, what remains is a classic case of a legacy industry player who failed to adapt reacting to the young upstart everyone likes by going legal, rather than actually competing. This is pretty short-sighted. If it actually competed in the market it might learn why people like the Nest device and why they're buying them instead of Honeywell thermostats. All I know is that my house has a Honeywell thermostat currently, and this lawsuit makes me much more interested in buying a Nest device to replace it.

If there's a way to make a weapon more mobile, the military has probably tried it. Bat bombs were created during World War II, but after spending a couple million dollars on development, the project was cancelled. Here are just a few more modern examples of flying weapons that are currently under development.

• Mav6 is building deadly blimps -- attaching guided missile systems to a huge, optionally-manned airship. This blimp can hover for a week a time, and it's surveillance capabilities could be coming back to the homeland... [url]
• The Airborne Laser was a proof-of-concept weapon that could take out missiles (in flight!) by shooting a laser from a modified Boeing 747. It's not really a practical way to shoot down missiles, but the idea seems to pop up about as often as putting lasers on sharks. [url]
• The US Navy is planning to convert some of its unmanned Fire Scout helicopters into autonomous pirate hunters. These ship-launched helicopters would be able to keep an eye out for small boats and possibly deter Somali pirates on the open seas. [url]
• To discover more interesting tech-related content, check out what's currently floating around the StumbleUpon universe. [url]  

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

A leaked internal report by Homeland Security has revealed what most people already knew: that its new (expensive) nudie scanners have vulnerabilities that could let things through. This is hardly a surprise. We've written about previous claims including a pretty detailed research report highlighting the vulnerabilities. In fact, it seems pretty crazy that the TSA is finally starting to take notice now. What's really the most galling, of course, is that plenty of people have been pointing out these kinds of vulnerabilities for a while and the TSA did nothing. It's just that now, as the vulnerabilities are finally getting press attention, that the TSA starts to pretend to take these things seriously, rather than admitting the truth: they're there for show more than anything else.

The Metalluminati blog has a great interview with Mark Hunter, frontman of the metal band Chimaira. Hunter is apparently a known critic of record labels, but he has a thoughtful and measured view, and in this interview he discusses the pros and cons of the DIY approach for bands:

Example: For us, leaving Roadrunner in 2006 was necessary for the band to continue. We didn’t feel part of a team, so I simply asked our A&R Monte Conner to let us go. The pro was we got our freedom; the con was our career in the UK suffered drastically. While we paired up with good company after, Nuclear Blast had less of a presence in the country and our sales (both, album sales and live tickets) dwindled in the UK while they went up in the rest of the world.

I can’t recommend what’s right or wrong, I can only guarantee there will be unforeseen consequences to any path you take. Some labels might have a market cornered — like heavy metal in the UK — so you actually might be better suited to stay in that “hell.”

He also addresses the question of piracy and free distribution in general, and the beginning of his comment is very reminiscent of rapper/producer El-P's comments in his recent guest post, which is interesting since the specific question he was answering was about how hip-hop has been faster to embrace these things than metal:

Personally speaking, spending energy yelling at fans of music for their method of intake would be trite, not to mention hypocritical.  Chimaira got popular thanks to Napster, Limewire, and various other file-sharing platforms.  We embraced YouTube in the beginning, and were one of the first metal bands to make webisodes.

The full interview is a good read and includes links to some other great comments from Mark Hunter, who is clearly a guy with a lot of smart stuff to say about the music industry.

We've seen that Twitter has taken a legal stance in the past to try to protect the rights of its users against the government, and it appears to be doing so again. The State of New York has filed a lawsuit against Malcolm Harris, an Occupy Wall St. protestor who was charged with disorderly conduct. Harris has a Twitter account at @destructuremal, and the government issued an infamous 2703(d) order to compel Twitter to hand over information about Harris' Twitter account. Twitter, as it should, informed Harris of the request, and Harris sought to quash the order. Amazingly, the court refused, not because it disagreed with the stance, but because it claimed that Harris had no standing to challenge the disclosure of his own information, by literally claiming that Harris had no interest in his own tweets.

This was based on a total misreading of Twitter's terms of service, which have been clear from very early on that poster's retain control over the content in their tweets. All they do is grant Twitter a license to display them. The NY court, bizarrely, interpreted this to mean the user gave up control over the tweets, even though Twitter's own terms of service say exactly the opposite.

In response, Twitter has now stood up for its user and filed its own motion in support of Harris, that the April 20th order stating that Harris had no standing should be rejected. It points to the above, as well as to US law that says users can challenge 2703(d) orders. On top of that, it points out that complying clearly seems to violate the 4th Amendment. In an interesting argument, it relies on the recently decided Jones case that said that even if certain information is "public" (e.g., location or tweets), it may still require a warrant to collect.

As Twitter notes, saying that its users can't move to quash such requests sets a problematic precedent:

If the Order stands, Twitter will be put in the untenable position of either providing user communications and account information in response to all subpoenas or attempting to vindicate its users’ rights by moving to quash these subpoenas itself--even though Twitter will often know little or nothing about the underlying facts necessary to support their users’ argument that the subpoenas may be improper.

It's nice to see a company like Twitter standing up for its users. It's unfortunately rare these days, when many companies simply roll over the second the government comes calling.

Remember the NDAA? Yeah, for a variety of reasons that bill got a lot of attention last year -- mostly focused on the question of detainment of terrorists. But there are some other nuggets in the bill, including one tidbit about "military activities in cyberspace." The existing version of the NDAA does grant the Defense Department the ability to conduct such military activities, but only "upon direction by the President" and if the purpose is to "defend our Nation, Allies and interests," subject to existing laws.

Here's the existing text:

SEC. 954. MILITARY ACTIVITIES IN CYBERSPACE.

Congress affirms that the Department of Defense has the capability, and upon direction by the President may conduct offensive operations in cyberspace to defend our Nation, Allies and interests, subject to—

(1) the policy principles and legal regimes that the Department follows for kinetic capabilities, including the law of armed conflict; and

(2) the War Powers Resolution (50 U.S.C. 1541 et seq.).

However, the House Armed Services Committee is getting ready to do a markup on the NDAA that includes a change to that section (section 954), which expands the powers of the Defense Department, and basically gives it broad powers to conduct any military actions online -- with it specifically calling out clandestine operations online. Here's the text they want to substitute:

SEC. 954. MILITARY ACTIVITIES IN CYBERSPACE.

‘‘(a) AFFIRMATION.—Congress affirms that the Secretary of Defense is authorized to conduct military activities in cyberspace.

‘‘(b) AUTHORITY DESCRIBED.—The authority referred to in subsection (a) includes the authority to carry out a clandestine operation in cyberspace—

‘‘(1) in support of a military operation pursuant to the Authorization for Use of Military Force (50 U.S.C. 1541 note; Public Law 107-40) against a target located outside of the United States; or

‘‘(2) to defend against a cyber attack against an asset of the Department of Defense.

‘‘(c) RULE OF CONSTRUCTION.—Nothing in this section shall be construed to limit the authority of the Secretary of Defense to conduct military activities in cyberspace.’"

Note a bunch of slightly sneaky things going on here. First, it gives blanket powers to the DoD, rather than saying it can only take actions on the President's direction. While we may not have much faith that the President wouldn't let the DoD do such things, giving such blanket approval upfront, rather than requiring specific direction is a pretty big change.

Second, and perhaps more important, the new language specifically grants the DOD (and the NSA, which is a part of DOD) the power to conduct "clandestine operations." This is (on purpose) left basically undefined. Combine this with the fact that the "Authorization of Use of Military Force" is so broadly defined in the current government, this then grants the DOD/NSA extremely broad powers to conduct "clandestine" operations with little oversight. Related to this is that it removes the restriction that the DOD must take actions that are "subject to the policy principles and legal regimes that the Department follows for kinetic capabilities, including the law of armed conflicts." Instead it lets them use such powers, without these restrictions, against anyone declared an enemy under the AUMF (lots and lots of people) or in any effort to stop a cyberattack against the DOD -- which again you can bet would be defined broadly. This is a pretty big expansion of online "war" powers for the Defense Department, with what appears to be less oversight. And all done while people are looking the other way...

In all the talk about how CISPA represents a threat to privacy and civil liberties, it's easy to get lost in the legislative semantics and to lose track of the very real dangers the bill presents. It's not as though CISPA is going to be signed and the next day everyone's going to wake up having always been at war with Eastasia, but the bill is a significant step in the erosion of key privacy rights that stem from the 4th Amendment—the sort of rights citizens are supposed to be vigilant about giving up to the government, even if it doesn't mean their lives are going to change overnight. At the same time, it's not a purely philosophical issue: CISPA or a similarly problematic bill can and will be abused if it becomes law.

Over at Lifehacker, Adam Dachis spoke to law professer Derek Bambauer and used their conversation as the basis for a piece of speculative fiction from the point of view of someone who falls victim to CISPA abuse. It's a well-executed concept that steers clear of sensationalism and presents a realistic example of how CISPA would grant the government new powers in areas far beyond cybersecurity, and how innocents might get swept up by those powers. The fictional narrator, who struggles through an ethically challenging college assignment on child pornography laws, has his name dragged through the mud after the school turned its computer logs over to the feds as part of a hacking investigation and his search history landed him under scrutiny. This nicely demonstrates one of the big problems with CISPA: the affirmative search permissions it would grant, which allow the government to dig through cybersecurity data for evidence of other crimes.

The story's message can't really be conveyed in snippets, but here's a brief excerpt:

As I continued my research I found more and more instances of laws with vaguely-defined terms that were designed to be tough on crime. No one bothered to oppose them in fear of being painted weak, or as a lover of terrorism and sexual deviancy. As a result, innocent people ended up in jail as collateral damage. The law had chosen to try and assuage our fears by sacrificing our freedoms as payment. But even worse, it didn't seem to be working. When you cast a wide net, you not only catch too many fish but so many that you can't find the fish you're actually looking for. People who broke the law weren't getting caught because the resources previously utilized to catch them were diverted to finding offenders before they actually offended. It's a nice thought to think we can preemptively prevent a crime, but it just doesn't work.

Whether it's Chinese hackers or child pornography, it's vital that hot-button panics don't override evidence and common sense in crafting legislation. Even more importantly, people should only allow the government to bypass their rights under extremely limited circumstances, if at all. There's a famous quote about liberty and security, but I don't want to Google it lest I end up on a watch-list somewhere...

And here we go again. Perfect 10 likes to describe itself as a porn publisher, but it's become clear that it's real business seems to be about suing internet companies by claiming copyright infringement. It's sued all sorts of companies, using all kinds of bizarre legal arguments, many of which have resulted in losses (and useful precedents), but sometimes sites seem to settle and Perfect 10 just keeps suing. It's latest target is Tumblr, which it has sued for copyright infringement using many of the same old theories it's used before. You would think that Perfect 10's Norman Zada would have at least waited until Tumblr was actually making some revenue before suing, but apparently he couldn't wait.

So how is Perfect 10 trying to get around the DMCA claims? First, by claiming that Tumblr ignored its DMCA notices. If this is true, that certainly would damage Tumblr's DMCA safe harbor claims. Though, it would surprise me if it was true. In many of its other cases, it's later come out that what Perfect 10 claims are legitimate DMCA takedown notices are anything but. In fact, it often appears like Perfect 10 tries to make its DMCA notices almost impossible to comply with -- which, if true, would be one way to make it easier for the company to then sue over failed compliance...

Second, it claims that Tumblr's own employees uploaded Perfect 10 images to "jumpstart" Tumblr's success. Again, if true, those actions would not be covered by the DMCA's safe harbors, but the filing provides little to no support for the claim that this happened. Perhaps it's true, but given Perfect 10's past, it would nice to see some actual evidence there in order to believe the claim, and not think that this might just be a fishing expedition.

Finally, Perfect 10 claims that the fact that Tumblr has a search engine lets people find the infringing pictures. They seem to be arguing that this is part of the contributory infringement claim. I'd imagine that this is based on the fact that part of the reason Rapidshare beat Perfect 10 was the lack of a search engine (and, yes, here is where we note the irony that the US gov't is using the lack of a search engine as proof that Megaupload was clearly illegal -- when that same fact actually helped get Rapidshare deemed legal). Still, Perfect 10 hasn't had much luck getting any actual search engine found liable, so it's unclear why it will suddenly start with Tumblr.

We'll see what other evidence comes out, but, assuming Tumblr's employees did not directly infringe Perfect 10's work and that there is an explanation for the "DMCA notices," one would hope that Tumblr will join many other top internet companies in fighting back against Perfect 10 and (hopefully) create a few more good precedents along the way.

Recently, the Association of National Advertisers (ANA) and the American Association of Advertising Agencies (4A's) put together a statement of best practices as part of an "International Anti-Counterfeiting Conference." The best practices say that advertisers and marketers should be explicit that they don't want their ads on "rogue" sites. This leads to a bunch of thoughts.

First up, as Dan Mitchell at Fortune points out, the companies that already advertise on "rogue" sites aren't the major advertisers. For all the talk by copyright maximalists of how big companies are getting rich off of rogue sites, that shows they don't know much about how advertising works. The ads that show up on most of those sites is the crappiest of the crappiest of advertising -- the pure bottom-filler type crap that doesn't pay very much at all. While Mitchell uses this to suggest that such a best practices won't "staunch the flow of revenues" to these sites, he totally ignores the more important point: that it shows that these sites aren't making very much money in the first place because all the advertisers who actually pay decent ad rates have already made sure their ads don't show up on these sites.

Second, this raises questions about why the MPAA was so insistent on the need for SOPA. It sure looks like the major players in the industry are already doing things like blocking ads from "rogue" sites voluntarily. It's amazing how the entertainment industry likes to pretend that companies would never do such things without a law, when they do it all the time anyway.

Finally, the Adweek article (first link above) notes that ad giant GroupM already had put in place a blacklist. But what the Adweek article unfortunately left out was that the "list" GroupM came up with was a complete joke -- listing all sorts of perfectly legitimate sites, like the Internet Archive, Vimeo and Soundcloud. Oh yeah, and a bunch of hip hop blogs... and 50Cent's personal website. It's great to declare that they won't let ads show up on "rogue" sites, but it gets worrisome when they define "rogue" sites so broadly.

Well, this is just sad. When we reported the unfortunate news of Adam "MCA" Yauch's death, we pointed to the EFF's call for an appropriate tribute to the beloved artist: an end to the legal war on sampling. The Beastie Boys produced some of the earliest sample-based music—including their seminal Paul's Boutique, widely seen as one of the best and most influential albums ever—just before the courts started coming down hard on sampling, more or less entirely tossing out the concepts of fair use, transformative work and de minimis copying that should protect samplers in many cases. Most experts agree that, today, an album like Paul's Boutique could never be officially released, since licensing the hundreds of samples used would cost exorbitant amounts—but that hasn't diminished the album's importance, nor has it stopped countless producers from continuing to work with unlicensed samples and release their work as bootlegs. In other words, the law does not match reality: sampling is a valid and vital form of creativity that can and will continue, even though nowadays it's either impossibly pricey or just illegal. What better tribute could there be to one of the fathers of sample-based music than to finally officially legitimize it as the important (and amazing) art form that it is?

Instead, we get the opposite. AllHipHop reports that, in a bout of incredibly unlucky timing, music label Tuf America filed a copyright lawsuit against the Beastie Boys the day before Yauch's passing. At issue are samples from Licensed to Ill and Paul's Boutique, which Tuf America claims were taken from a handful of their songs.

Tuf America said they did a thorough sound analysis of the tracks in question and concluded that the Beastie Boys illegally incorporated elements of the songs without permission.

To complicate the matter, Tuf America claims The Beasties and Capitol Records continue to profit off the album, by way of anniversary and commemorative releases of Licensed To Ill and Paul’s Boutique, which was released in 1989.

Tuf America is seeking a trial to determine the amount of punitive and exemplary damages, if any.

One would think that the simple fact that a "thorough sound analysis" was necessary means this is clearly a case of transformative work, but unfortunately, as mentioned, the courts have pretty much completely eliminated that defense when it comes to sampling. Moreover, where has Tuf America been this whole time? The Beastie Boys albums came out in 1986 and 1989, and now, a quarter-century later, Tuf America is claiming they deserve a payout? Their legal argument will, by necessity, rely on significant rulings that came out after the albums, which were released under the common sense assumption of the time: that sampling was creative and transformative art that didn't require a license.

The timing here is almost certainly just bad luck, and Tuf America must be rather worried about the PR nightmare this will surely incite. However I can't say I feel that bad for them: even setting aside Yauch's death, I find their actions despicable. They are attacking a piece of classic art just to cash in on someone else's success. If the Tuf samples were really so integral to the success of the Beastie Boys albums, then they would have had plenty of opportunities to capitalize on that over the last two decades. Instead they chose a legalistic get-rich-quick scheme. Shameful.

Last month, when 50 Cent was sued over a sample on a free mixtape he released, I asked when hip-hop's biggest stars will start speaking up about copyright and educating their fans about the fact that the music they love and respect is, in the eyes of the courts, illegal. This new incident might just kick off that process—nobody is going to be happy about what Tuf America is doing, and a lot of people who had no idea that sampling is illegal are going to see the coverage of this lawsuit (which is sure to be far greater than for your average sampling lawsuit) and discover just how broken the law is.

I truly hope this confluence of events can kick-start the necessary momentum to start fixing copyright law and getting the courts to recognize the validity (and fair use/transformative aspects) of sampling. This is not about capitalizing on Yauch's death—he and the Beastie Boys helped open the world's eyes to a rich and unique new approach to music that informed everything that came after, with samples finding their way into countless genres beyond hip-hop and becoming, essentially, an exciting new instrument that musicians everywhere started teaching themselves to play. The introduction of sampling was as important as that of distorted guitars or electric keyboards, and changed music just as much—but since day one, legal respect for sampling has been in steady decline and is now virtually zilch. It would be a wonderful thing if, amidst the tragedy of Yauch's death, we were able to help him give the world one more gift: a new attitude about sampling that will allow the next generation's Beastie Boys to pursue their artistic ideas without fear of being randomly sued 20 years later.

Last week, we had the story about the unsealing of the court records in the Dajaz1.com case. That revealed that the main reason why the feds (almost certainly illegally) held onto the domain name for over a year was that ICE had asked the RIAA for the evidence it needed (i.e., that Dajaz1 actually infringed -- criminally -- on its members' copyrights), and the RIAA had taken its sweet time responding.

Ben Sisario, over at the NY Times, has an article noting the official RIAA statement on the matter. Both Ben and the RIAA itself were kind enough to send me the full RIAA statement:

"We referred this particular site to ICE for investigation because of its long history engaging in the unauthorized distribution of copyright content prior to its commercial release. ICE conducted its own independent investigation of the site and ICE along with the Justice Department concluded that there was a basis for seizing the domain name. Rights holders and the RIAA were requested to assist law enforcement and made every attempt to do so in a complete and prompt manner. As we stated previously, we were disappointed with the decision to not seek forfeiture but we respect that this is a judgment that properly lies with the government."

For what it's worth, I also asked the RIAA if it could provide me the date on which it actually responded to ICE's questions, and I was told, politely, that the RIAA had "nothing further to add for now."

Beyond that, however, the RIAA's statement is ridiculous. First, it admits that it was the one who told ICE to seize this domain -- as had been suspected all along, but now has been admitted. At the very least, this raises significant questions about the all-too-close relationship between the federal government and the RIAA. The RIAA claims that "ICE conducted its own independent investigation," but that's clearly untrue. In both the original affidavit and the unsealed documents last week, ICE makes it clear that it relied heavily on the RIAA's statements. As we noted soon after the affidavit came out, ICE's "investigation" consisted of downloading four songs and asking Carlos Linares, the VP of Anti-Piracy Legal Affairs for the RIAA, if they were infringing. He said yes, and that was good enough for ICE to move forward with the seizure. Of course, as we pointed out, on one of the songs, Linares had no right to speak for the artist, since it wasn't even an RIAA artist. On the other songs, it appeared that the RIAA did not check with the labels' own promotions people who had sent the tracks.

That said, the really ridiculous claim here is that the RIAA helped in a "complete and prompt manner." If that were true, then 10 months after the domain was seized, ICE wouldn't be whining to a judge that it needed to censor the blog for another two months because the RIAA wasn't responding or providing the necessary evidence. It's hard to square the RIAA's statements with the government's.

Dajaz1's lawyer, Andrew P. Bridges, however, had a few things to add, and responded, in detail, about how ICE's original claim to being able to seize the domain in the first place was clearly against what the law allows:

The owner of Dajaz1.com appreciates the fact that the United States Government, on studying the matter further with all the information the RIAA could furnish, determined that there was in fact no probable cause to seek a forfeiture of the domain it had seized and held for a year.

That exoneration, however, did not remedy the harms caused by a full year of censorship and secret proceedings — a form of “digital Guantanamo” — that knocked out an important and popular blog devoted to hip hop music and has nearly killed it.

The original seizure was unjustified. The delay was unjustified. The secrecy in extensions of the forfeiture deadlines was unjustified.

Five details are notable here.

First, the seizure occurred pursuant to language the PRO-IP Act authorizing seizures of property used in connection with the making of, or trafficking in, “articles” in violation of copyright law. In that context, “articles” are physical items. The law does not authorize seizure of domains that link to other sites. So from the beginning this seizure was entirely legally unjustified, no matter what the allegations about infringement.

SEC. 2323. FORFEITURE, DESTRUCTION, AND RESTITUTION.
(a) CIVIL FORFEITURE.-
(1) PROPERTY SUBJECT TO FORFEITURE.-The following property is subject to forfeiture to the United States Government:
(A) Any article, the making or trafficking of which is, prohibited under section 506 of title 17, or section 2318, 2319, 2319A, 2319B, or 2320, or chapter 90, of this title.
(B) Any property used, or intended to be used, in any manner or part to commit or facilitate the commission of an offense referred to in subparagraph (A).
(C) Any property constituting or derived from any proceeds obtained directly or indirectly as a result of the commission of an offense referred to in subparagraph (A).

Second, seizing a blog for linking to four songs, even allegedly infringing ones, is equivalent to seizing the printing press of the New York Times because the newspaper, in its concert calendar, refers readers to four concerts where the promoters of those concerts have failed to pay ASCAP for the performance licenses.

Third, RIAA’s grand and sweeping attacks on dajaz1.com suggest that RIAA’s powers of demonization far exceed its ability to substantiate its malicious statements with specific and credible facts.

Fourth , when I explained that the blog publisher had received music from the industry itself, a government attorney replied that authorization was an “affirmative defense” that need not be taken into account by the government in carrying out the seizure. That was stunning.

Fifth, when discussing the secret extensions with the U.S. Attorney’s office in Los Angeles, I repeatedly asked the government attorney to inform the court that my client opposed any further extensions and asked for an opportunity to be heard. Not once did the government reveal those requests or positions to the court. The government should be embarrassed for keeping that information from the court.

This entire episode shows that neither the government nor the recording industry deserves any additional powers with new so-called “antipiracy” legislation, especially in the context where copyright law has been expanded and new anti-piracy remedies have been crafted ***16 times*** since 1982. This episode shows that the copyright establishment and the government are very much the “rogues” that deserve to be reined in.

That's a pretty meaty response, especially given the weak statement from the RIAA. All five of those points could be worthy of separate posts, delving into the details. For now, however, I'll just focus on two of the points. First, the fact that the government thinks that the use of authorized works is merely a defense to accusations of copyright infringement suggests a DOJ that is out of control with power, and completely out of touch with both the basics of the First Amendment and the Copyright clause, both of which would disagree with the government's statements here. There are already civil cases on the books, stating that claims need to take into account legitimate uses of the work before filing suit. However, in this case, it's even worse, because we're talking about a criminal issue, where (1) the presumption of innocence is supposed to be in effect and (2) for criminal infringement the behavior must be willful. As such, the fact that the tracks were authorized is not a defense, it's a key part of the question of willfulness. The government must consider that information prior to shutting down a site.

The second point is Bridge's comment about the RIAA's "power of demonization" and failure to actually deliver. This is a really important point, because it demonstrates just how much ICE and parts of the DOJ appear to be captured by this private entity with a history of hysterical overreactions. If the feds were truly independent, none of this would have happened. Instead, the feds appear to have relied heavily on what quickly became clear were... well, let's just say "misguided" claims by the RIAA. We detailed how misguided the claims were just weeks after the seizure. From the evidence shown so far, it appears that rather than admit that it screwed up, ICE and the DOJ simply went running to the RIAA again, asking for more help in getting them out of the mess they had caused. And the RIAA couldn't deliver.

It's truly amazing that ICE and the RIAA still can't even admit how wrong they were here, let alone give an apology to Dajaz1.com. I guess that would be tantamount to admitting just how badly they violated the site's free expression and due process rights.

We've all seen the crazy high claims by the legacy entertainment industry about the "costs" of infringement. Most of these reports have absolutely no basis in reality and have been widely debunked -- even by the US government itself. But, even if we grant that there are some "costs" to infringement, why is it that we rarely -- if ever -- hear about the costs of enforcement? Julian Sanchez has a great post riffing off of the news that Hulu is thinking of requiring proof of pay TV subscriptions to get any free content, and does a neat little thought exercise on how distorting the "cost of piracy" discussions are if you don't also look at the cost of enforcement. He puts forth a hypothetical:

To illustrate, let’s imagine television show that initially streams online for free with advertising, garnering a million viewers per episode and earning $1 per viewer in ad revenues, for a total of $1 million. A small number who really dislike ads, or have connections too slow for streaming, let’s say 5,000, download pirate copies anyway—but the vast majority watch legally. After building an audience and generating some good word of mouth, the accountants suggest that it might be more profitable to stop the free streaming and instead sell ad-free episodes for $4, in hopes that enough dedicated fans will pony up to compensate for the predictable drop in viewership once the program is no longer free to watch. The paying audience does indeed drop to 255,000, which still leaves the company slightly better off for the switch, but 100,000 viewers decide to keep up with the show (at least initially) by downloading pirated copies. A subsequent price hike to $10, however, turns out to be a money loser. Now the show has only 80,000 paying viewers, while 150,000 are engaged in piracy.

Undoubtedly that piracy is costing the show’s producers something: If piracy were impossible, some unknown fraction of those who download illegally would be willing to pay the asking price. But just crudely using the actual market price at each stage—even if modified by some constant “displacement rate” to acknowledge that not every illicit download represents a lost sale at that price—yields some perverse results. As the pricing strategy for the show changes, the “cost” of piracy rises from $5,000 to $400,000 (even as revenue rises) to $1.5 million (while revenues drop by $20,000). Obviously, something is wrong here.

It’s no great mystery what: The problem is that the rate of piracy, the price of a digital good, and the “displacement rate” (the percentage of the pirates who’d buy at that price in a world of perfect copyright enforcement) are not independent variables. And, of course, the interdependency runs both ways: Pricing decisions are influenced by the knowledge that we don’t live in a world of perfect enforcement, and you can tell plausible stories according to which this might keep prices higher or lower than they’d be under perfect enforcement, depending on your assumptions about the conditions under which a particular audience will substitute the pirate for the legal good.

But it goes further than that, which is that when you factor in the cost of enforcement, the equation changes somewhat:

Returning to our imaginary program, suppose that under perfect enforcement—a zero piracy world—there would be 110,000 paying viewers at $10 per episode, netting the creators an additional $80,000 over what they’d make with their revenue maximizing strategy ($4 per episode) in the world of imperfect enforcement. That’s great for them, if not for consumers, but we haven’t factored in the costs of enforcement. Some of these are likely to be borne by the creators themselves—hiring lawyers to hunt down pirate copies circulating online and the like—but in practice they’re often shifted to taxpayers, in the form of direct enforcement expenditures, or to other parts of the economy, in the form of DMCA compliance costs or innovative services that are deterred entirely. It’s possible that, in this hypothetical scenario, the revenue maximizing strategy for the producers is to charge $10 while externalizing the costs of perfect enforcement, but the socially efficient outcome is to accept imperfect enforcement and let the producers revenue maximize against that background at a $4 price point.

As Sanchez admits, many of these numbers are theoretical, just for the sake of the thought exercise. But what we know in reality is that the cost of enforcement -- whether direct or through externalities -- almost never enters into the discussion in any meaningful way, even though it's absolutely there.

What's amazing is that even when the costs are explicit, they barely enter the conversation. Take, for example, the predecessor to SOPA/PIPA: the ProIP Act, which passed in 2008. A report by the Congressional Budget Office showed that the cost of this bill, which is almost entirely focused on increased enforcement was $435 million. Yes, you read that right. Taxpayers have been on the hook for nearly half a billion dollars for the increased enforcement initiatives -- like the spectacular flop known as Operation In Our Sites. Is this really a wise use of taxpayer resources?

Add to that, of course, the negative externalities created by such enforcement -- such as the chilling effects of increased censorship, expensive court cases and other such efforts, and it's kind of amazing that these costs never seem to even enter the public debate, even though many of them are a lot more real than the "costs" presented by the industry for "piracy."

You may recall a few weeks back that a Delta 757 leaving JFK on its way to LAX hit some birds on takeoff, damaging an engine, and requiring a quick turnaround back to JFK. The story got more interesting when it was revealed that one of the passengers on board just happened to be recording video out the window as the birds hit:
Of course, then the story went from interesting to silly, when the FAA decided that this YouTube video was evidence of wrongdoing and that it needed to "do something." At least they decided that the extent of "doing something" would be to just send the passenger a warning letter, telling him that he was supposed to have all electronic devices turned off during takeoff, and that the letter would be the extent of their actions (though they mention that they could take legal action). The letter does say that it will remain on file for two years, after which it will be dumped.

The passenger, Grant Cardone, points out that this is all pretty ridiculous:

"To think that a device, a telephone or this iPad can take down a plane is ridiculous, because figure 90% of all people in America now have an iPhone on them," Cardone said. "Nineteen percent of all people have a tablet of some sort. If only 10% of passengers on that plane had their device in the on position, thousands of planes would fall out of the sky every day."

As some people know (my colleagues at work are sick of me talking about it), I recently became slightly... er... obsessed with the wonders of shaving with an old fashioned double edge safety razor. I won't go into the details, but in reading about shaving with such a device, I couldn't get it out of my mind and have been happily shaving with one for a few weeks now. To be honest, I never thought that I'd ever have reason to mention this in any way, shape or form on Techdirt, but just weeks after I started using one, I saw Stephan Kinsella point to a story by Callum Makkai entitled How Intellectual Property Destroyed Men's Shaving. Given my (entirely separate) interest in both subjects, I dug in. It kicks off with a reference to Andy Kessler's Eat People story about King Gillette's disruptive manufacturing of disposable blades that "challenged at least two professions: the barber with his straight razor and the blade sharpener with his strop."

From there, however, Makkai suggests patents have actually been making shaving worse. His argument is that as the makers of shaving equipment have been fearful of competing with commodity products, they keep "inventing" new ways to shave that they can lock up under patent -- and then try to convince you that it creates a better shave, even if none of the "improved" razors come close to one of those old safety razors:

The commodification of the razor blade was punishing to the profit margins of the razor companies. So the way ahead was clear: come up with new designs, patent them, and make a killing selling the disposable blades.

Thus the 1970s saw the emergence of the BIC disposable razor. Why replace just the blade when you can throw out and replace the whole razor?

Then in the 1980s, Gillette introduced the double-bladed Sensor cartridges. Now the question was: Why throw out the whole razor when you can just replace the cartridge?

Needless to say, these innovations were driven not so much by an improvement of the shaving experience but by the need to create a technology which could be patented.

Indeed, the injector razor did not improve the shaving experience compared to the classic double-edged safety razor, and the disposable razor was in no way superior to the injector razor. Likewise, the Sensor cartridges did not improve on the disposable razor. These developments only made shaving more expensive.

Admittedly, this is a bit of a cynical view on things. And one could make the argument that this isn't so much about patents as it is about marketing -- though it could be a combination of both. Frankly, the story reminds me of what we see all too often in the pharmaceutical world these days -- where when Claritin is about to go off patent, suddenly we get Clarinex, with an associated marketing campaign about how you have to use that rather than the original (much cheaper and equally effective) Claritin. Of course, if people didn't fall for the marketing campaigns, none of this would matter -- but they do. So combine that with the ability to charge monopoly rents due to patents, and voila, many of you are getting a crappy shave, despite the ten blades or whatever they're shoving on those darn cartridges these days. We should always be wary when life imitates The Onion, and wonder if, perhaps, the incentives are screwed up somewhere along the line.

Apparently there's been a years-long effort in Italy to give the Italian Communication Authority (AGCOM) some regulatory authority to enforce copyrights online. And apparently there has been some fighting over this (mostly over AGCOM's competence in this field). However, according to The 1709 Blog, it appears that AGCOM is now giving up its goal of regulating copyright online:

Although AGCOM has showed its ability to reconcile the various rights and interests involved in copyright, it will not go ahead with its copyright regulation. This is because Italian Government has not yet adopted the proviso needed to clarify the nature and extension of AGCOM's competence to this end. Therefore, until this happens, AGCOM will not feel obliged to adopt its "well-balanced" regulation.

This, of course, does not mean that there is no online copyright in Italy. Just that it's not being regulated by AGCOM for the time being. Considering just how badly pretty much every attempt to regulate copyright has gone recently, perhaps this is a good thing.