We often hear from people that without "legal protections" what could they possibly do to stop others from copying them? Of course, "copying" can be loosely defined, and there are times when it's just multiple people coming up with the same basic idea at the same time, and in those cases it seems only fair to just let people compete. But what about a situation of incredibly obvious, blatant copying? Do you need laws? Or can social norms cover the situation? It seems that one small company facing that situation has decided to take the high road and not resort to legal tactics, but instead use social shaming in just such a situation where the copying isn't only obvious, but egregious.

For reasons that I don't fully understand, one of the most popular categories of products that have been successful on Kickstarter is high quality metallic pens. There are tons. But one of the first really, really successful ones was Pen Type-A, a minimal stainless steel case for the popular Hi-Tec-C pens, created by CW&T. Among the distinct features of the pen was the rectangular stainless steel case with a ruler on the side that it came in. The Kickstarter project raised $281,990 -- a bit more than the $2,500 they shot for. What happened next is covered in a detailed and well-documented-with-images explanation from Notcot. Needing a good manufacturing partner to handle the much larger than expected orders, CW&T partnered with a guy named Allen Arseneau, a Stanford MBA, who was representing JOIGA, a company that claimed to provide manufacturing capabilities in China. Allen and his partner, Diana Hudak, started helping CW&T, and CW&T even mentioned Allen and Diana in some of their updates to Kickstarter backers -- and showed the two of them in some of the photos they posted. Many of those updates highlighted that CW&T were working hard to fulfill all their orders, but that they weren't coming quite fast enough.

And then... earlier this week, popular site Fab.com announced a sale on something called the Torr Classic... a pen that looks remarkably like the Pen Type-A. Remarkably. Lots of people started wondering if it was the same pen, and even asked CW&T, who were taken by surprise by the whole thing. When they looked at Torr Pens' website... they noticed that it wasn't just the pens that looked familiar. The "CEO & COO" of the company... were the very same Allen and Diana who had recently been working right besides CW&T folks to get the pens ready. Back to Notcot for the illustrated version: Yup, the same folks who had supposedly been in charge of helping them get their own pens, and who had been working with them to ship the pens: Over at the Notcot link there are a lot more photos of Allen helping out with the pens. And it's clearly the same guy whose face is plastered all over the Torr pens site, including in a horrifically done James Bond parody video "commercial" for the pens.

Now, for CW&T, this is clearly a pretty horrible situation. The "partner" that they were working with to help them manufacture the pens that everyone had bought had apparently started his own company to make nearly identical pens... and did this while still waiting for the full order of original pens to come in. CW&T responded by just telling the world what had happened: In response, many Pen Type-A supporters quickly came out in support of CW&T and against Torr Pens. Fab.com pulled down their sale, and other sites started to pick up on the story. I don't know if CW&T have any legal recourse, or if they should even bother, but they realized that just by talking about the situation with the large group of fans they had connected with, they could have an effective response.

Oh, and they've also found a new manufacturing partner, here in the US: Stories like this are certainly not a fun situation for CW&T, but it seems like their time going forward will probably be well spent continuing to make awesome products and connecting with fans who want them. Who knows what happens to Torr Pens and its "execs" but the story behind them is now out and I can't imagine they'll be able to create the same sort of love and appreciation for their products from fans as CW&T has done.

Back when Facebook first rolled out its IPO in the same smooth and easy fashion as an Olympic hurdler racing with his testicles twisted like a Navy Pier pretzel, Eduardo Saverin, Facebook co-founder, entered the crosshairs of some United States congressmen looking to make some noise. See, Eduardo decided that taxes suck and he wanted to incur as little of said suckiness as possible, so he renounced his American citizenship and declared his love for Singapore. This, according to Chuck Schumer and Bob Casey, made him evil personified.

Exhibit 1: Artist's rendering based upon Chuck Schumer's description

The argument was that Saverin had allowed this country to help make him rich and now, in an evil move that was completely legal, he was going to evade paying the full taxes of an American citizen by no longer being one. To combat this unholy act, Schumer and Casey unveiled the oh-so-cleverly named EX-PATRIOT Act, which would levy heavy taxes on Saverin and anyone else who thought they could escape the virtous clutches of the American tax system.

"This is a great American success story gone horribly wrong," Schumer told reporters Thursday. "Eduardo Saverin wants to defriend the United States of America just to avoid paying taxes. We aren't going to let him get away with it."

But, as fate would have it, Facebook's stock price dropped faster than a Righthaven lawsuit. And the result, according to Forbes, may be that Saverin paid more in taxation than he would have had he stayed in The States.

A couple of things got missed in the furore. The first was that he had to pay tax on his Facebook stock as if he sold it on the day of his citizenship renunciation. The value then was some $2.4 billion, leading to a $365 million tax bill. That tax bill is fixed of course: now that he’s no longer a citizen he doesn’t get any tax breaks or credits on losses he might make. Which of course he has done. Since he crystallised that tax bill his stock (assuming he’s still holding it and he would have been until just now because of the lock in around the IPO) has halved in value to about $1.2 billion. But he still owes that $365 million.

So, at least so far, the net effect of his renunciation has been to double his tax bill, not reduce it. Oh, and if he hasn’t paid the tax as yet then he has to pay interest to the IRS on it.

And there we have it. Schumer and Casey drafted legislation, which didn't pass, to combat a guy who did something legal because they insisted it was unfair that he escape full taxation by renouncing his citizenship. It turns out that Saverin's renunciation caused him to be overtaxed by a rather substantial rate. Any takers on whether Schumer and Casey would be open to Saverin claiming relief from this overtaxation?

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Alcoholic beverages have been part of human culture for thousands of years. But what do we really know about these drinks? Red wine goes with red meats, and white wine goes with fish... Liquor before beer, you're in the clear... Here are just a few more interesting tidbits of information regarding ethyl alcohol.

• A group of Japanese physicists discovered that red wine could induce superconductivity in an iron telluride -- so they tried a bunch of other alcoholic beverages like sake, beer and white wine to try to figure out what was going on. The researchers found that more tartaric acid in red wine correlated well with the superconductive state, but the alcohol also played some role. With just a bit more study, red wine will solve all of our energy problems and allow us to live forever.... [url]
• University of Connecticut wine researcher Dr. Dipak K. Das published fake data on the benefits of resveratrol, so there's some doubt that this component of red wine has as many magical health benefits as some have reported. Still, the anecdotal evidence behind the "French Paradox" makes people think red wine has more than a correlation with a lower incidence of heart disease (even if there's no causal relationship). [url]
• The 'drunken monkey hypothesis' proposes that humans like alcohol because our primate ancestors were highly dependent on fruits in their diet... and ethanol can be found in overripe fruits. But did those drunken monkeys exhibit superior Kung Fu skills? [url]
• You might think that wine experts can tell the difference between an expensive French wine and a much cheaper wine from New Jersey, but you'd be mostly wrong. Wine tasting is hard. Sometimes experts can't even tell the difference between red and white wines -- and the perception of wine can be influenced significantly by the label on the bottle. [url]

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

The jury in the Samsung/Apple patent fight took nearly everyone by surprise by rushing through its job and finishing it way, way, way before anyone expected. They didn't even ask any questions and with about 700 questions to answer, they breezed through it in no time. It was not a total victory for Apple (apparently the design patent on rounded-edge rectangles wasn't infringed), but it was pretty close. In the end, Samsung was found to infringe an awful lot of things (and sometimes willfully) and the the final bill is a stunning $1.05 billion owed to Apple. There's still a lot to sort through in the details, but this is a massive victory for Apple. Of course, Samsung has probably already written up its appeal (or will ask the judge to set the jury verdict aside or something), so this case is likely to be around for many years, but yet again we see just how ridiculous patent law can be. What the hell is wrong with competing in the marketplace? If Apple thinks Samsungs' phones and tablets are too similar? Well, keep on innovating. It's called competition, and now we'll have less of it...

Minor update: After the rush, the judge came back to point out two problems with the verdict -- including the jury awarding damages in cases where it had not found infringement. While this will be corrected and won't change the results much, it certainly suggests that the jury rushed through this and may not have taken this particularly seriously. When you start talking about the numbers being thrown around in damages here, at some point, it must start to feel like play money. But it's a pretty big indictment of the jury itself that it would make a mistake like this. It raises significant questions about how careful they were in getting to a verdict vs. how quickly they wanted to be done in time for the weekend.

We've been waiting patiently for quite some time now to see the SEC's "rules" for equity crowdfunding. As you hopefully recall, earlier this year, the JOBS Act became law, and one part of that was the legalization of certain forms of crowdfunding for equity (i.e., ownership of a company). You're probably already familiar with crowdfunding for things like pre-sales. And you may be familiar with things like crowdfunding loans, via services like Prosper and LendingClub. The JOBS Act is supposed to enable a different form of crowdfunding: for equity investments. Thus, in theory, a startup could not just let people pre-pay for a product they're developing, but could also actually purchase a tiny bit of stock in a company. Other countries already have this, but in the US it went against SEC regulations concerning the hoops you have to jump through to offer any of your equity to the public, rather than just a smaller group of accredited investors.

There's been a fair amount of talk about this effort, and a bunch of companies chomping at the bit to get into the market once crowdfunding for equity is officially in place. The main holdup? The SEC. As part of the law, the SEC is supposed to put forth rules for how such crowdfunding can work. But the SEC made it quite clear before the law passed that it didn't like this idea -- not one bit. So I've been quite curious to see what rules it would eventually put out... and so far all it's done is keep stalling. The rules were supposed to come out yesterday (which was already postponed from the original date), but instead, the SEC pushed things back another week.

While everyone waits for the SEC rules, various state securities regulators, in the form of the North American Securities Administrators Association (NASAA), are ramping up the FUD about such equity crowfunding. They released a report on the top investment scams... and crowdfunding in general is near the top of the list. They seem especially worried that the space is quickly going to be overcome by fraud:

"The number of entities out there already pitching themselves as crowdfunding entities online has risen in a significant fashion," said Matt Kitzi, NASAA Enforcement Section Chair and Missouri Securities Commissioner. "Just look at web domain names: it has gone from a couple hundred to well over 1,600 in the past year. They are staking up a position to enter crowdfunding market. There will be a lot more to come on this."

In early in August, the Massachusetts Securities Division charged a Lowell, Massachusetts man for a crowdfunding scam, bilking 20 investors who thought they were investing money in a gaming site of $153,396.

Secretary of the Commonwealth William Galvin, who brought the case, wrote to the SEC urging regulators not to let the JOBS Act changes become a tool for financial fraud and abuse. "Longstanding problems in the markets for small and speculative stocks show the pitfalls of relying on the wisdom of crowds."

Here's the thing: there are always scammers out there. And that's going to be a big part of the challenge for any of the platforms that are jumping into the equity crowdfunding space to deal with. They're going to have to distinguish themselves by how they enable trust between buyers and sellers and how they prevent fraud. But, some fraud is going to happen -- just as some fraud is always going to happen in just about any market. That doesn't mean we don't let the market itself develop.

In the end, I'm guessing that the SEC rules will be fairly strict, and may limit this kind of market. Also, contrary to some expectations, I doubt that many will see this as a true replacement for angel or VC financing. It seems like the sort of thing that will likely be more useful for small businesses (such as local businesses) rather than traditional high growth enterprises which are the kinds of "startups" that usually attract angel and venture money. Surely, some people will set up scams and get tricked. But there have been scams in the startup world for ages, and there are likely already some scams that have made it through existing crowdfunding platforms. But that's the nature of risk. Sometimes you lose.

While most people focus on how this will compete with angels and VCs, I'd think that it's much more a form of competition for the crowdlending platforms, since those are more about investment as well, just with debt financing, rather than equity financing. And while there certainly have been cases of fraud that came about because of those platforms, for the most part it hasn't sunk the top players in that space, because they've been able to try to minimize the likelihood of fraud while educating the market on investing wisely. There's nothing to suggest that the top players who emerge in the equity crowdfunding realm won't be able to do the same.

So, there's been this slightly weird tangent in the Oracle/Google patent & copyright dispute, in which Judge Alsup -- for reasons that are still not clear to anyone -- ordered both companies to disclose the names of any "authors, journalists, commentators or bloggers who have and/or may publish comments on the issues in [the] case." Both sides made filings last week, with Oracle disclosing -- as was already public -- that it had blogger Florian Mueller on staff as a consultant, and mentioning an Oracle employee who blogged about the case. Google, on the other hand, told the court that it hadn't paid anyone to comment on the case at all, but did mention that in the course of its regular activities, it does give money to various companies, some of whom may have had employees who commented on the story. Judge Alsup came back earlier this week and told Google it didn't try hard enough and to find some names to name.

Earlier today, Google did its filing and apparently found some names... including mine! Yes, I know that we've had some haters declaring for years that I'm a Google shill, so this must be the confirmation of all their conspiracy theories, rumors and attacks, right? Well, no. I'm named in the section about CCIA -- the Computer and Communications Industry Association. Why? Because CCIA sponsored some research that we did. Here's what the filing states:

The CCIA has commissioned studies by Mike Masnick, CEO of Floor64. See http://www.floor64.com/about.php. Mr. Masnick has commented on the case on the TechDirt website and on his personal friendfeed.com account. See Ex. X (available at http://www.techdirt.com/articles/20120523/11050519050/boom-jury-says-no-patentinfringement- google-oracle-case.shtml and at http://friendfeed.com/mmasnick/a3a94012/jurygoogle- did-not-infringe-on-oracle-patents).

And, yes, CCIA has commissioned a study by my company (Floor64) which I co-authored. And that's, uh, public knowledge. Here's my post back in January announcing the Sky is Rising report, in which it says, upfront, that it was sponsored by CCIA. And, of course, you can go check out the Sky is Rising report yourself directly, which has a nice big CCIA logo on the front. Hell, if you want, you can also donate some money for the ebook version -- and it, too, will come with the CCIA logo.

I'm not sure how that has anything to do with Google. Google is a CCIA member, as are a bunch of other companies. And, honestly, if you'd asked me yesterday, I would have said that I thought Oracle was a CCIA member too, because it's an organization that represents a bunch of top tech companies, including Microsoft, eBay, Sprint, Facebook, AMD, Fujitsu, Dish Networks and more. However, it appears that Oracle is not a CCIA member, though I only learned this today from the filing, which also notes that Oracle and Sun used to be CCIA members. So, I'm not sure what any of that says about anything.

And, of course, if the point of this exercise is to uncover "shills" who are really speaking on behalf of companies without disclosing it, once again this argument falls down. My position on issues related to copyright and patents has been pretty damn consistent since before Google existed. And that continues up until today. I will regularly call out Google for patent and copyright behavior that I believe is bad. And that's because I say what I think. The editorial content of this site has never been for sale, nor will it ever be. Because the only way I survive in this business is with my reputation.

Also, I'm not sure what's with the Friendfeed link in the filing. To be honest, I'd completely forgotten about Friendfeed, which I thought was shut down after Facebook bought the company. But I believe my Friendfeed just sucked in my Twitter account and Techdirt's Twitter account into a single feed. And apparently it lives on without my knowledge.

Separately, because all of this struck me as interesting, I remembered that we did some work with Oracle too! And, just as with what we did with CCIA, it was disclosed publicly at the time. Oracle (along with Intel) sponsored a section of our site, and a series of webinars that we did. And yet, Oracle did not disclose me in their original filing and I don't believe that they filed a new filing here either. Of course, as with CCIA, our relationship with Oracle did not include them having any say in editorial either. In fact, with the order as broad as it was from Judge Alsup, I'd argue that there's a much stronger argument that I should be in the Oracle filing than the Google one. But, of course, Oracle didn't include us because it was a random blog sponsorship thing they did a while back which had nothing to do with editorial (or even intellectual property issues).

In the end, this comes right back to some of the concerns that were raised about Judge Alsup's broad order in the first place. If you want to find tenuous connections, they exist. In fact, Google's filing lists out a bunch of other names (including many people who I know or consider friends), almost all of whom have a long, long history of holding the exact same positions, and where the connection to "Google money" is, at best, weak.

Like many folks, I was curious to see who would be named on both of these lists, but the order was so broad that it seems to have swept me up into it (on one side, though a broad reading says it would make more sense for me to be on the other one!), and that's silly. I'm a big boy and I can handle people not understanding the details here and attacking me, but the fact that we did unrelated research for a different organization that Google is a member of -- and that gets me named on a list of "shills" just doesn't seem right.

The rap game used to be about getting yours at all costs. It still is, in a way. The definition of "all costs," however, has changed from "dangling reluctant business partners out the window" and "late night drive-bys" to "retaining a lawyer." From legal bottle fights over a few seconds worth of melody to litigious shootouts over mixtapes, the road to riches tends to favor rappers who talk up their criminal exploits but maintain their IP status quo in various courtrooms.

Of course, not every attempt to monetize perceived slights works out. Rap artist Vince P. (Peters) was just handed the unwelcome news that, in a country of 300 million people, it's entirely possible to arrive at the same lyrical conclusion independently, especially if both parties are somewhat familiar with famous German philosophers.

In 2010, Vince P. filed a lawsuit accusing Kanye West of ripping off his track "Stronger." Vince claimed West had access to his 2006 track via business manager (and mutual acquaintance) John Monopoly. (He also claims West had access to this track through Myspace, to give you some idea how far back this complaint goes.) According to Peters, his CD was played at a meeting with Monopoly, who then promised he'd handle the executive producer gig if he could get Interscope to fund the album.

Needless to say, said album failed to be funded and to add perceived insult to non-injury, West's track, also titled "Stronger," was released in 2007 and went straight to the top of the charts.

P. cited many similarities between the two tracks, including the presence of the word "wronger" and a reference to Kate Moss, who is not normally a lyrical staple within the confines of the genre. Too many coincidences to be non-infringing? U.S. Judge Virginia Kendall disagreed:

In addition to their titles, U.S. District Judge Virginia Kendall found that the songs also have similar rhyme schemes and contain references to British model Kate Moss. They also hearken to Friedrich Nietzsche's maxim, "what does not kill me, makes me stronger."

But even assuming West had access to Peters' recording, the songs were too different to support a copyright-infringement claim, Kendall found.

The 7th Circuit Court backed up Kendall's decision:

"Vince P has adequately pleaded that West had an opportunity to copy his song, but that does not help him prove similarity," Judge Diane Wood wrote for a three-member panel. "Vince P must show that West actually copied his song by pointing to similarities between the two works. We are not persuaded that the similarities alleged by Vince P rise to the level of copyright infringement."

Wood noted that the mutual presence of a famous Nietzsche quote might seem to indicate infringement but, as West's team pointed out (paraphrased): "Who the hell hasn't used that quote?"

"Although the fact that both songs quote from a 19th century German philosopher might, at first blush, seem to be an unusual coincidence, West correctly notes that the aphorism has been repeatedly invoked in song lyrics over the past century," she added.

In fact, pop singer Kelly Clarkson also made the Billboard Hot 100 chart with her song, "Stronger (What Doesn't Kill You)," the decision states.

Yes. Kelly Clarkson. That's officially everybody.

The court also found the "unique" appearance of Kate Moss in both lyrics to be nothing more than "shorthand for beauty" and noted that copyright protects only the actual expression, not methods of expression. With most of the common aspects of the two songs being, well, common, the court found in favor of West, delivering this final coup de grace:

These songs are separated by much more than 'small cosmetic differences,' ... rather, they share only small cosmetic similarities," she added.

The music business is highly competitive, but trying to turn a "Hey, THAT was my idea!" moment into a potential payout via the legal system seems to be a bit like attempting to monetize failure. There are better ways to handle this. Competing artists have recognized that many ideas are not unique and that the expression of those ideas may inadvertently take on the appearance of infringement.

The legal system may not exactly welcome this sort of behavior, but those whose entire careers are the legal system have certainly made the most of these situations. In all fairness, Vince P.'s case is one of the more credible claims I've read, but the fact remains that if you use a variety of common symbols and phrasing in your work, the harder it's going to be prove infringement. Suing to "replace" income that was never yours to "lose" is no way to move artistic expression forward. It's a great way to stagnate, and given free reign, it's a great way to curb the expression of others. 

We recently wrote about David Pogue's article highlighting how the movie industry's failure to embrace what technology allows is a huge cause of infringement, and the industry still doesn't seem to get that. In response, in typically tone deaf fashion, MPAA spokesperson Howard Gantman has taken the usual tack of not actually addressing what Pogue wrote, but making an unrelated argument. He says that somehow, magically, because there are more crippled, annoying, expensive, incomplete movie services out there, no one should complain. You see, in the MPAA's world "offering something" is proof that they're innovating, even if it's not what people want.

But this shows a rather remarkable lack of awareness of what customers seem to be saying. They're saying they don't want services that only let you watch a movie for 24-hours. They're saying that they don't want movies that cost ridiculous prices. They want reasonable access at reasonable prices -- and the reasons some people aren't flocking to some of these services isn't that they're evil "thieves," but that they don't find those new offerings compelling. The proper response is to make them more compelling. But, apparently, in the world of the MPAA, the response is to berate and guilt people for not using their crappy offerings.

We've written about judge Beryl Howell a few times before. She's the recently-appointed judge whose immediate job prior to that was as a lobbyist for the RIAA. Before that, she worked for the Judiciary Committee and was apparently a key player in drafting the DMCA. It seems pretty damn clear that she holds a strong viewpoint on the nature of copyright law and copyright infringement -- but that hasn't stopped her from taking those cases, even when her rulings appear to be exactly the opposite of nearly every other court. For example, while most courts have been throwing out copyright trolling lawsuits for improper joinder, Judge Howell had no problem with the practice and ordered various ISPs to cough up names based solely on IP addresses.

The ISPs asked her to reconsider back in April, noting how pretty much every other court has ruled otherwise. The specific case involves well known trolling firm, Prenda Law, which is connected to one of the larger jokes in the copyright trolling business: John Steele. Steele's lawsuits have been laughed out of court and he's even been told to stop filing these bogus lawsuits, where the clear purpose is to use the judicial system as a weapon to force people (innocent or guilty) to pay up.

But apparently copyright trolls have found a friend in Judge Howell, who not only is welcoming them with open arms, but seems to be using these trolling cases to further the goals of her former employer. She's released her decision on the motion to quash the subpoenas, and it's basically a 42-page screed on the evils of infringement and how ISPs should be responsible for stopping piracy (much of which has absolutely nothing to do with the case at all). The only nod towards the other side seems to be a weak acknowledgement that "the Court recognizes that other Judges on this Court have reached different conclusions with respect to the legal questions posed by the ISPs" and thus she's agreed to stay her decision until the appeals court weighs in.

But she makes sure to get her arguments in for the appeals court to read, and it certainly feels like she reverted back to "lobbyist" mode, rather than "impartial judge."

She kicks off the polemic with a grand history of the DMCA, and how the task force that was created to write the DMCA originally wanted to pin liability on ISPs for actions done by their users. And while she admits that eventually the DMCA did include such liability protection, it seems clear she would have preferred it the other way. She then highlights the important court decisions from a decade ago, against the RIAA and in favor of Verizon and Charter, that ruled that the RIAA could not demand ISPs identify users without actually filing a lawsuit against them first. This, of course, was a basic recognition of basic privacy rights, and the fact that if you are going to expose someone's private info, you ought to at least file a lawsuit against them first. But, in the world of Judge Howell, apparently this was a bad decision. She approvingly cites the dissent in one of the key cases, claiming this somehow "unraveled" the balance struck in the DMCA. Nothing, of course, is further from the truth. That's a total rewrite of reality.

She also seems to suggest -- contrary to the very law she was just citing -- that ISPs have some sort of responsibility to "deter infringing activity."

Other than barebones references from two of the four movant ISPs that these subpoenas impose “a substantial administrative burden,” the ISPs fail to present any witness or other evidentiary detail to demonstrate a burden to the Court, let alone what steps the ISPs are or could be taking to deter infringing activity on their networks to reduce any burden subpoena compliance engenders.

This is a fascinating interpretation of the law. Basically, she says that if they're going to claim that copyright trolls are showing up with tens of thousands of IP addresses, demanding they all be identified, then that means they also have to show that they've taken "steps" to "deter infringing activity on their networks." In other words, if it's burdensome to the ISPs to identify users to copyright trolls, it's their own damn fault for failing to stop infringement. Seriously.

Oh, and then she flat out misrepresents the GAO's findings from a few years ago that found that all of the entertainment industry's claims about the impact of "piracy" were complete bunk. Yet, in the world of former RIAA lobbyist Judge Howell, the GAO actually came to the opposite conclusion:

The plaintiff’s estimates regarding the amount of online infringing activity and the economic harm resulting from such activity is corroborated by a recent government report. See U.S. GOV’T ACCOUNTABILITY OFFICE, GAO-10- 423, INTELLECTUAL PROPERTY: OBSERVATIONS ON EFFORTS TO QUANTIFY THE ECONOMIC EFFECTS OF COUNTERFEIT AND PIRATED GOODS 23-24 (2010) (estimating that U.S. economy annually loses $58 billion, over 370,000 jobs, and $2.6 billion in tax revenue as a result of copyright infringement over the Internet) (citing Stephen E. Siwek, THE TRUE COST OF COPYRIGHT INDUSTRY PIRACY TO THE U.S. ECONOMY, Institute for Policy Innovation (IPI), IPI Center for Technology Freedom, Policy Report 189 (Oct. 2007)).

Uh, no. Go read what the GAO actually said. While the report does cite Siwek's widely discredited report of $58 billion in losses -- it does so only to say that Siwek did these studies and they claimed to show "ripple effects" beyond the immediate industry. However, most of the rest of the report highlights how those numbers, and others like them, cannot be substantiated and that most experts they spoke to found the methodology questionable. Furthermore, the report specifically calls out the reports that only try to calculate the negative impact, without even considering any possible positive impact, as being clearly misleading. That describe's Siwek's research exactly. Specifically, the GAO report noted:

Since there is an absence of data concerning these potential effects, the net effect cannot be determined with any certainty

In other words, sorry, but the Siwek claim of $58 billion is hogwash. And yet Judge Howell pretends that the GAO has blessed this number.

The ruling goes on to defend its position, but basically says that there is no burden on the ISPs and if there is one, it's their fault. It also says that there is no issue of improper joinder to consider until after everyone's identified (at which point it won't matter, since that's all the copyright trolls want, so they can then shift to demanding cash from them). The whole thing, once again, raises significant questions about why a judge who had such a vested stake in pushing for an extreme maximalist view of copyright now gets to judge cases where key decisions are made about the interpretation of copyright law.

Just a few weeks ago, Conan O'Brien did a satire video about the Samsung/Apple lawsuit, in which someone pretending to be a Samsung VP "defended" the company against charges of copying Apple, but everything he did, obviously, made it look like Samsung was copying Apple: In that, there's an amusing part, where the "VP" says "Don't believe me? Then come to our retail stores where you can talk more about our products with a 'Samsung Smart Guy.'" Truth, it seems, often matches fiction. Down in Australia, Samsung has now opened its own retail store that bears such an uncanny resemblance to the design of Apple's stores that the always-funny John Paczkowski brilliantly titled his article about it: Samsung Opens New Apple Store in Australia. Can you tell which picture was from the Conan O'Brien video and which actually came from this store?

Oh, did we mention that the Samsung store is... one block away from an Apple store? And, sounding almost exactly like the faux Apple VP in the O'Brien video, an actual Samsung VP told a reporter that Apple "didn't even come into the equation" when planning the store.

I'm firmly of the belief that the whole legal fight between the two companies is silly, and that they should just compete out in the market, but you have to admit that the resemblance here is a bit uncanny.

One would think that an article written by the CEO of something called the First Amendment Center in Tennessee would have, at the very least, something of a nuanced opinion when it comes to the intersection of copyright and the First Amendment in the digital era. We are constantly hearing about the new ways people are discovering art, and we are hearing about how more and more works are being created while more money is being made by artists. If you're a supporter of "free expression," you'd think this would be something to celebrate. Similarly, when you hear of stories of how over-aggressive copyright enforcement is being used to censor speech or shut down criticism, you would think that the head of the "First Amendment Center" would express concern about the attacks on free speech and the First Amendment.

Well, apparently that's not the case. Meet Ken Paulson, aforementioned CEO of the FAC, who last made an appearance on Techdirt way back in 2009 exhorting the virtues of newspapers over internet news organizations. This time, he's back at USA Today to explain to us all what the real cost of pirating media is, and he does so with the kind of revisionist history and myopic thinking world dictators have long dreamed of harnessing. Take, for instance, the outstanding un-logic of his opening in the article.

Nashville's Craig Carothers is a singer-songwriter whose livelihood depends on concerts and CD sales. Yet sometimes, his biggest fans make that job tougher.

"I've had the experience more than once of having someone come up to me and — completely pure of heart — excitedly tell me they bought copies of my CDs when I was last in town and they enjoyed them so much they made copies for 15 or so of their friends," said Carothers.

There goes the revenue stream.

Let me see if I've got this right. Paying customers express to the artist that they enjoyed his music so much that they chose to introduce 15 of their friends to it, thereby widening the fan-base that can then go on to, oh, I don't know, buy more music, go to concerts, and all the rest...and this is a bad thing? This is the myopia of the hardline anti-sharing crowd: all they can see is that someone listened to some music without paying for it. But so what? Before the sharing occurred, these potential fans/customers ostensibly didn't know who Craig Carothers was! This isn't some devil you have to legislate against; it's your market growing. Even as a song writer, who may not get much of a cut of concert or merchandise sales, this is a can't hurt situation. New people are being introduced to the music and those new customers can then be sold to. You simply don't have to make money on every listen for you to reap the benefits of sharing.

But we aren't done.

Virtually every entertainment and media company has been buffeted by the digital revolution, but the music industry was the first to see major economic consequences and a dramatic shift in the buying habits of a new generation. Despite growth in iTunes and other digital sales, many young people continue to see "free" as the appropriate price tag on music.

Let's point out a few things here. First, the "music industry," and the entertainment industry as a whole, are doing wonderfully, particularly in a down global economy. Some specific big record labels may be floundering due to the fact that it isn't 1990 anymore, but that isn't the entire music industry. Secondly, it's an interesting method of logic to acknowledge that the most popular platform on which to purchase digital music is growing in sales and then conclude that people just want free music. I may as well use that logic to my own end, so here we go: as I've gotten older, despite the fact that I've gained some weight and worked out less, I'm even more of a man-hunk than before. Doesn't make sense, right? God I wish it did, though.

In any case, the article then wastes some more words-without-logic before admonishing the general public with these little nuggets of shame.

Noah Webster would not have been amused. Primarily known for his early and influential dictionary, Webster campaigned in the 1780s for copyright laws to protect American authors from theft of their content by printers. The printers of the 1780s were not large corporations. They were small shops that made their living largely by stealing the content of books published in Europe. Webster wanted to make sure his work would not be published without compensation.

Sept. 5 marks the 225th anniversary of the drafting of the Constitution's copyright clause. Advocates argued that ensuring authors were paid would encourage literary arts, lead to a body of truly American literature, unify the nation and demonstrate that the U.S. could be a leader in creativity. This notion of building a haven for creative people was so important that it was ratified as part of the Constitution in 1789, two years before ratification of the First Amendment, which gave us freedom of expression.

I love these two paragraphs so, so much, because of how awesomely pitiful they are. First, chiding the general public by holding up Noah Webster, (that's right, history buffs, his first name wasn't Merriam), is pointless because he lived in a time when rifles were less deadly than mosquitoes. Things may just have changed a bit since the 17-freaking-hundreds. Add to that the fact that the purpose of copyright had nothing to do with making the U.S. a leader in "creativity." This is pure revisionism. The purpose was to encourage learning. The "science" in the "promoting the progress" clause was a synonym for learning, not creativity. That's why the original Copyright Act of 1790 in the US only covered "maps, charts and books." Notice something missing? Oh, right: music. So, if we're going to go all the way back to the original intent and all, shouldn't that mean music doesn't get copyright?

Oh, and that talk about printers "stealing content of books published in Europe," and the claims that Webster wanted to make sure "that his work would not be published without compensation," it's got nothing to do with anything. As we were just discussing, American printers still figured out ways to pay foreign authors, even without copyright. Furthermore, studies have shown that it was the cheap books that American printers were able to make that helped to spread culture and literacy around the US -- which is what we were supposed to be "encouraging" with copyright law anyway.

Finally, I note that last little bit about how the Constitution's copyright clause was written two years prior to the First Amendment. Maybe someone can help me here, but I cannot fathom any reason for making this point beyond associating some kind of dominant weight to the former because it came before the latter. This is an interesting way to view Constitutional amendments, in that it's completely wrong. By this logic, I mean, yeah we repealed prohibition, but prohibition came first, so we should still have it...or something. Along those same lines, some have argued it's quite reasonable to assume that the later clause, the one promoting free expression, supersedes the earlier clause. Though, the real story is that since copyright was really designed to be narrowly focused on promoting one aspect of learning, it had little conflict with free speech. It's only since (due to exaggerated claims like the ones found in this article) copyright expanded massively, as did the tools of production, that we've created a monster in which nearly every written or recorded thing is covered by copyright that the two have obviously come into conflict.

Obvious, that is, unless you're the apparently oblivious head of the clearly misnamed "First Amendment Center."

Let's be clear on one thing: Joel Tenenbaum should never have allowed the record label lawsuit against him to go forward. As with Jammie Thomas before him, he was not a good defendant, and had too many factors that clouded the key questions concerning the statutory damages rates in copyright law. Even worse, he lied to the court and his lawyers seemed more focused on making a point than mounting a defense. As we said all along, he needed to find better lawyers (and he probably shouldn't have fought this in the first place). Even the judge, who clearly was sympathetic to Tenenbaum's side of the story, rejected his basic argument, on which his legal team seemed to bet their whole strategy -- and then berated his legal team for their dreadful handling of the case.

Given all of that, it's easy to conflate all of those other issues with the important one: are the statutory rates for copyright infringement, especially in cases of non-commercial, personal use, Constitutional? The original judge, Nancy Gertner, argued that they were unconstitutionally excessive, which became the focus of the appeals process. The appeals court rejected the process Gertner used to come to that conclusion, saying that she should have used "remittitur" to reduce the award and offer the RIAA a chance for a new trial (as happened in the Jammie Thomas case). Instead, Gertner effectively tried to jump the line, by going straight to a Constitutional argument. The appeals court noted that it was too early in the process for that, and she should have used remittitur first. As such, it reinstated the original jury award of $675,000 for sharing 30 songs. The Supreme Court then refused to hear the case, which wasn't a huge surprise either.

So... back down at the district court, with a different judge, who doesn't seem nearly as sympathetic. Given that the judge is 80-years-old, it's perhaps not a surprise that she seemed to spend more time talking about what a naughty kid Tenenbaum was, rather than the actual reasonableness of the rates. The court has now said, not only does it not find $675,000 constitutionally excessive for sharing 30 songs, but that it doesn't even qualify for remittitur, because $675,000 is not "grossly excessive, inordinate, shocking to the conscience of the court." In other words, a $675,000 judgment is perfectly reasonable for sharing 30 songs. The judge, not surprisingly, focuses on many of the elements that we discuss above in arguing why it's not excessive, with Tenenbaum's continued use of file sharing and his lies, to support the supposed reasonableness of the ruling. She never actually looks at whether the numbers make sense, but merely suggests that because he didn't revere copyright law, that such an award is perfectly reasonable.

Unfortunately, it seems that Tenenbaum's behavior -- which we agree was not good at all -- clouds the larger issue of just how insane the statutory damages are. Some, of course, will point out that he's been accused of sharing a lot more than 30 songs, but that doesn't matter. The trial was about 30 songs. We don't punish people in a court for stuff they're not charged with and which they can't defend against. If you want to say that $675k is reasonable for thousands of songs, then he should have been charged with infringing on that many songs.

The judge argues that one of the factors that makes this "reasonable" is that if Tenenbaum had wanted to license the songs for distribution himself, the cost would have been "enormous," according to the labels. But that's a silly comparison, because this wasn't a commercial venture and he wasn't looking to set up a service -- he was just doing what millions of people around the world do -- whether you think it's right or wrong. As such, any thinking person should recognize that a $675k fine for the personal sharing of 30 songs seems offensive to the senses, even if you agree that Tenenbaum is not particularly apologetic for what he did. It really is a situation where tons of people were doing it, and right or wrong, it had become the norm. Something is wrong with a legal system that burdens people with such out of proportion awards for doing what everyone's doing.

And despite the RIAA cheering on this decision, claiming that it's "pleased" with the decision, it actually hurts them too. When ordinary people see $675,000 judgments for sharing 30 songs, they respect copyright less, because it seems so out of proportion with reality.

This case probably isn't over yet, and there will likely still be an appeal to get at the Constitutional questions. But, I'm worried that Tenenbaum's own bad actions, separate from what he's accused of, are clouding the water here, and actually make this a bad and potentially dangerous case. That the court has upheld the $675,000 isn't a surprise, but it should still be worrisome to people in terms of the precedent it will set for the next group of people accused in this manner, who didn't act the same way Tenenbaum did.

Hologram* Tupac's appearance at Coachella has brought more attention to the inexact science of publicity rights than anyone could have imagined. While not necessarily a "one-off," the whole experience had the gimmicky feel of a small triumph of technology over death.

*Not actually a hologram.

Several months down the road and dead celebrities (or rather, their representatives) are fighting back, sending cease-and-desist letters and asserting their publicity rights as a defense against marauding technologists and their holographic emissaries.

The estate of Marilyn Monroe is currently engaged in a legal battle with Digicon Media over possible future digital representations of the dead actress. Digicon cites its 1996 digital representation, "VM2 - The Virtual Marilyn" as proof that it holds the copyright and trademark on digital representations of Marilyn Monroe. It also points out that since the Monroe estate raised no legal challenge during the previous 15 years of development, the statute of limitations has expired and it can proceed unchallenged.

Things are never that simple when IP meets dead celebrities and their "handlers." Monroe's estate argued that Digicon had similarly done nothing over the last 15 years, hence the lack of legal noise. Digicon pushed back, pointing out that New York doesn't recognize publicity rights, a fact that Monroe's estate should have considered when they relocated her "domicile" in order to dodge California's estate taxes.

AV Concepts, the company behind the Tupac Non-Hologram has plans to craft digital versions of Michael Jackson, Elvis Presley and Jimi Hendrix. (Oh, and their own Marilyn Monroe.) It's tough to imagine many of these being granted permission from the various estates, as the company is either working from a list titled "Most Recalcitrant Estates" or figures rejection is the best teaching tool.

Maybe all AV Concepts will need is a change of venue. As Slate points out, many states do not recognize post-mortem "publicity rights." In fact, most don't. Only 18 states are willing to grant the dead control over their images. Those that do seem to have followed Sonny Bono's example: dead celebrities (and their estates) are covered for at least 70 years after death. (Tennessee takes this to the illogical conclusion: postmortem publicity rights in that state run death+forever.)

The fact that a famous person could just lapse into the public domain (for lack of a better term) is apparently unacceptable to some existing celebrities. Comedian Bill Cosby is one of them. His concern that "opportunists would one day use his name and image to promote stuff he'd never want to be associated with" was the impetus behind a piece of legislation recently passed by the Massachusetts' senate.

To date, 13 states have passed laws that take this notion a step further, and explicitly make the rights to a person’s identity a piece of property transferable after death, not unlike a car, a house, or a gold watch. They are even transferable in advance, while the person is alive.

While it may seem perfectly normal that a celebrity wouldn't want his or her likeness resurrected to pitch dubious products and services, the unintended consequence is another chilling effect, one that can be leveraged to shut down any posthumous project that doesn't toe the estate line. In addition to IP-as-enforcement, there's the effect it has on the rest of the living. When other IP-protection beneficiaries are claiming a piece of IP-protecting legislation goes too far, this usually indicates a serious problem.

Critics imagine a world in which costume shops can’t dress kids up as Humphrey Bogart for Halloween, pop stars can’t borrow dance moves from Michael Jackson, and college political clubs can’t sell T-shirts emblazoned with John F. Kennedy’s face without paying a licensing fee for the privilege.

Other pushback has come from movie studios, book publishers, and newspapers, concerned that overly strict protections will limit free speech and artistic creation.

Of course, exemptions are granted.

In response to concerns voiced by media organizations like the Motion Picture Association of America, most such laws—including the Massachusetts bill—are written with specific exemptions for creative endeavors, including books, movies, music, and commentary.

This usually means "industries" and not "individuals." This certainly doesn't mean John Q. Nobody can dash off a line of fiction involving dead celebrities unhassled. It simply gives the writer a bit of legal standing should the inevitable lawsuit be raised.

But say you wanted to write a play about a chance meeting between these two historic figures. Could you? While the play itself may be protected by the First Amendment, that doesn’t mean that the companies that manage Parks and Einstein might not attempt to assert control. Hebrew University has aggressively defended Einstein’s image, even blocking its use on a book called “Everything’s Relative.” And don’t expect to sell programs, posters, T-shirts or the other paraphernalia that might support your play without getting approval and paying whatever fee the owners of Parks’s and Einstein’s rights of publicity demand.

Every push for additional post-death IP protection adds to the potential bottom line of companies like Core Media Group (formerly CKX), which has amassed an entire graveyard's worth of clients at this point. 

“We get countless calls about people who are famous and passed away to ask us if we can magically turn them into a brand and so forth—and that’s very seldom possible,” says Mark Roesler, the intellectual property lawyer who has become perhaps the most prominent avatar of the dead celebrities industry. Roesler, the head of CMG Worldwide, was hired by the James Dean estate in the 1980s to handle licensing, and his company has since added hundreds of deceased stars to its roster.

Occasionally, CMG has even acquired the rights to deceased celebrities’ images outright, including that of model Bettie Page—Playboy’s Miss January in 1955—who died in 2008. (A Bettie Page-branded store is scheduled to open on Newbury Street in Boston this fall.) “She didn’t have any children, and she wanted to be remembered as the pinup queen that she was, and the legend that she was, and she asked us if she left her intellectual property rights to us, if we’d continue to protect them,” Roesler said.

The supporters of publicity rights legislation make a seemingly good point: let's protect the dead from being abused without hope of recourse. It seems like the "right" thing to do, but the reality of the situation is that these laws encourage abuse from estate holders, most of whom look to set up toll booths everywhere and shut down any use they don't agree with.

But some critics see the problem in more philosophical terms, arguing that no matter how many exemptions are made, such laws still privatize something that ought to be considered part of the public’s cultural heritage. One illustration of this involved Martin Luther King, whose family was paid an $800,000 licensing fee when a foundation building a memorial in King’s honor in Washington, D.C., wanted to use the civil rights leader’s face on fund-raising materials.

It's not as if a majority of the world is simply scanning the obituaries and firing up the screen printer. The effects of locking down every single aspect of a human being and their creative endeavors for a minimum of a lifetime plus 70 years is more subtle and far-reaching than simple hearse-chaser profiteering.

“My concern is over the continued development of popular culture,” said David Wall, a professor at Durham University in England who studies the sociology of law, in an e-mail. Popular culture, he points out, is essentially a huge blender of borrowed influences. “The big [question] is whether Elvis could become Elvis in this modern world. His hair colour and flick were copied off his child idol, Captain America; his clothes style and dance were drawn from contemporary black fashion, but especially Jackie Wilson....No celebrity image comes out of the blue.”

Culture builds on culture. Locking away more and more of it for longer and longer periods of time has a deleterious effect on future creative endeavors. To build on previous culture to sustain your own career and then spin around and lock down everything you can for several decades is disingenuous to say the least. Culture isn't just about taking. It's also about giving. Leaving a legacy behind for your fellow artists to appreciate, share and build on is supposed to be the rule, not the inadvertent result of dying in the wrong state.

Kickstarter has become a powerful tool for artists and creators to take their future in their own hands and succeed or fail by their own merits. While a Kickstarter based business is not a guaranteed success, it is one of the many powerful tools for that purpose we highlight here on Techdirt. Much like any other business model, running a successful Kickstarter campaign takes a lot of work and a lot of speculation about what your potential fans and backers expect. With all this in mind, it is great when people, who attempt a Kickstarter, share their experiences, whether good or bad.

Over at Gamasutra, one such creator, Ryan Payton, shares his experience running the recently successful Kickstarter campaign for Republique. As Ryan explains this Kickstarter was not an easy success.

I was driving across Seattle's 520 bridge on a beautiful, sunny afternoon on the third day of our Kickstarter campaign, dazed and confused, and momentarily considered hitting the red "abort mission" button on our whole Kickstarter. Fifty-five hours into our campaign and we had only gathered 11 percent of our funding goal.

It was this moment that he realized that he needed to figure out why it was not going as smoothly as he expected. While he lists a number of reasons for why the campaign was struggling and what he did to turn it around and eventually succeed, it was his first discussion point that took me by surprise. One of the reasons he felt his campaign was not succeeding was that many people thought the campaign was "too polished."

A week into our campaign, we were surprised to see dozens of comments online from people saying: "Look at that game, look at how expensive their video looks... They don't need our money." Meanwhile, our company bank account was getting dangerously low.

As I sought out reasons as to why our campaign wasn't resonating, I realized that people were put off by how polished everything looked. This was disappointing because, yes, in fact, we worked extremely hard to make everything as professional as possible.

This has been one critique of Kickstarter we have seen come up from time to time. If potential backers feel that the person asking for money doesn't really need it, they will complain and withhold their money. This is an unfortunate attitude for people to take because it really doesn't matter who you are and if you "need the money." What matters is that you are using the campaign to connect with fans and get the money needed to succeed where you need to.

Initially, I was frustrated at the "too polished" complaints, especially when I remembered the late nights and weekends Craig Cerhit put into our video content. I often thought about the rich guys on Kickstarter intentionally making rough-looking webcam videos to appeal to peoples' charitable instincts and subsequently pull in six or seven figures in pledges.

Based on what I have read about running a successful campaign, having a quality campaign video is one of the primary ways to reach your goal. Even Kickstarter tells people that having a good video is helpful in making a project successful. If your video is utter crap, people will lose interest. But is there really such a thing as having a too polished video turn off fans? Honestly, there is no reason why it should be an issue. Having a high quality video shows off the love you have for your project. That is the important thing to convey to the public and especially to build a report with them. Something that Ryan learned as the clock was running down on the campaign as his team prepared both a new video and a Livestream event on the last day.

Instead of focusing the team on Kickstarter success or failure, we decided to host a Livestream party for the final three hours of the campaign and just have fun regardless if we hit our funding goal. Too distracted to work on the game, the team started prepping food and activities for a big online thank you party for the community. At the time, over 7,000 people had pledged a total of $355,000 towards our game. We wanted to thank them, even if we failed and didn't receive the money.

What transpired what something I was dreading the entire month: dozens of articles with headlines like "République May Miss Kickstarter Goal." While I was anxious about that negative press, it was calling renewed attention to our campaign, which we smartly prepared for: we uploaded an entirely new debut pitch video that reviewed all of the news from the past 30 days (PC & Mac announce, David Hayter & Jennifer Hale), showed new gameplay footage, and addressed all the feedback we got from the community. We slapped a "New Video!" sticker on the top of our page, welcomed all the new and returning visitors, and crossed our fingers that this time they would pledge.

What happened in that last day was an amazing turn around for Ryan and his team. They managed to complete the goal of $500,000 and then some. An excellent ending for what looks to be a great game.

So what exactly turned this campaign around? Ryan and his team did a whole lot of prep work prior to launching but all that prep work did little toward the final goal. What Ryan learned and highlighted in his other points was the importance of engagement with the community in order to connect.

The final three-hour Livestream was the best idea we ever had. We don't know if the 4,500 views sparked increased pledges, and we didn't care -- it was all about connecting and celebrating with the thousands of dedicated backers and enjoying the victory together. By the time the clock struck zero, we were at $555,512 and hugging each other.

I don't really know how many different ways we can say it. "If people like you and your work, they'll pay." CwF+RtB. Being Open, Human and Awesome. And many more iterations on the same theme. The fact remains, this concept is integral to success.