Some of the folks filing mass copyright infringement lawsuits have tried to claim that merely having an open WiFi connection on which someone else infringes on copyright-covered works is a form of negligence. Basically, they're suing based solely on limited information -- an IP address -- and when those pursued point out that they have an open WiFi, the lawyers insist that this, alone, is a form of negligence. However, the courts aren't buying it. In July, we wrote about a district court in New York rejecting this argument quickly, noting that the position was "untenable."

And now a California district court has ruled similarly, completely rejecting the negligence theory on three different points. First up, there is no negligence because negligence requires a relationship and a duty to protect, but no such relationship exists between the copyright holder, AF Holdings, and the defendant in the case:

AF Holdings has not articulated any basis for imposing on Hatfield a legal duty to prevent the infringement of AF Holdings’ copyrighted works, and the court is aware of none. Hatfield is not alleged to have any special relationship with AF Holdings that would give rise to a duty to protect AF Holdings’ copyrights, and is also not alleged to have engaged in any misfeasance by which he created a risk of peril.

The allegations in the complaint are general assertions that in failing to take action to “secure” access to his Internet connection, Hatfield failed to protect AF Holdings from harm. Thus, the complaint plainly alleges that Hatfield’s supposed liability is based on his failure to take particular actions, and not on the taking of any affirmative actions. This allegation of non-feasance cannot support a claim of negligence in the absence of facts showing the existence of a special relationship.

Even ignoring that, the court is skeptical. Noting that even if there was a negligence claim it would be unavailable in this case, because of copyright "pre-emption" (basically, federal copyright law wipes out any state statutes that seek to do the same work).

AF Holdings is seeking to protect its “exclusive rights” from “copying and sharing.” Simply recharacterizing the claim as one of “negligence” does not add a legally cognizable additional element.... Thus, because AF Holdings alleges that Hatfield’s action or inaction constituted interference with its “exclusive rights in the copyrighted work,” the negligence claim is preempted by § 301 of the Copyright Act.

And then the court goes even further, and says that even if the first two theories don't kill the negligence claim, there's also Section 230 of the CDA, which we've discussed for years. While the Section 230 safe harbors (protecting a service provider from liability concerning the actions of their users) technically does not apply to intellectual property issues, the negligence claim is not an IP law issue, and thus gets wiped out thanks to Section 230 immunity.

Basically, the idea that you're negligent if you leave your WiFi open and someone else uses it to infringe seems dead in the water.

There's been a lot of discussion over the past few years concerning whether or not intercepting data on an open WiFi network is a form of "wiretapping." This has been a central issue in one of the legal challenges to Google's Street View cars collecting data from open WiFi networks. I've long argued that on such an open network, it shouldn't be wiretapping because it's wide open and available for anyone to see. Yes, that may be a security concern, but it's one that an individual user can deal with. It certainly shouldn't be illegal for someone to sniff that data. If you're broadcasting something free and clear and I then read it... how is that wiretapping? Unfortunately, last year a judge in a case related to Google's Street View capturing came to the opposite conclusion, but in a convoluted way where the court declared that WiFi is not a radio communication (even though it is).

However, in a totally unrelated case, a judge has now come to the exact opposite conclusion again, and noted that sniffing open WiFi is legal. The case is one that we've already talked about, though in a very different context. A patent troll called Innovatio IP has sued a bunch of businesses (hotels, coffee shops, restaurants) that offer WiFi to users, claiming that anyone using WiFi infringes, though it says "at this stage" it won't go after individual users, only businesses. In trying to win its patent lawsuit, it wanted to use evidence from packet sniffing on some open networks, and asked the court to say that this is legal. And the judge has now said it is. First, unlike in the Google case, the judge has no problem recognizing that WiFi is electronic communication using radio waves. Then it points out that open WiFi quite clearly fits under the stated exception to the wiretapping laws, which is that they do not apply to "a system that is configured so that such electronic communication is readily accessible to the general public." The judge then pushes back on the ruling in the Google case, noting that the judge there claimed that the data on an open WiFi network was only available via "sophisticated technology." This judge isn't buying it:

... upon examination, the proposition that Wi-Fi communications are accessible only with sophisticated technology breaks down. As mentioned above, Innovatio is intercepting Wi-Fi communications with a Riverbed AirPcap Nx packet capture adapter, which is available to the public for purchase for $698.00. See Riverbed Technology Product Catalog, http://www.cacetech.com/products/catalog/ (last visited Aug. 21, 2012). A more basic packet capture adapter is available for only $198.00. Id. The software necessary to analyze the data that the packet capture adapters collect is available for down load for free. See Wireshark Frequently Asked Questions, http://www.wireshark.org/faq.html#sec1 (last visited Aug. 21, 2012) ("Wireshark is a network protocol analyzer. . . . It is freely available as open source. . . ."). With a packet capture adapter and the software, along with a basic laptop computer, any member of the general public within range of an unencrypted Wi-Fi network can begin intercepting communications sent on that network. Many Wi-Fi networks provided by commercial establishments (such as coffee shops and restaurants) are unencrypted, and open to such interference from anyone with the right equipment. In light of the ease of "sniffing" Wi-Fi networks, the court concludes that the communications sent on an unencrypted Wi-Fi network are readily available to the general public.

While the court admits that many users probably don't know their unencrypted data is subject to sniffing, that does not play into the analysis. The law doesn't say whether or not the user's perception matters. It only matters if the communications are "readily available to the general public," which they are. Legal expert (especially on privacy issues) Orin Kerr disagrees with this ruling, claiming that the intent of whoever configures the network is what matters, but I'm not sure I buy that claim either. He compares it to early cordless phones that easily "leaked" data, noting that no one designed those systems to do that, and the same is likely true in most cases with open WiFi. But that's pretty different. The case of unencrypted data on an open wireless network isn't some sort of accidental leakage, it's the basic nature of any open network.

Either way, I get the feeling this is not the last we'll be hearing of these kinds of cases. Though, if you're really worried about your data on open WiFi networks, there's an easy way to deal with it: encrypt your data.

Amazon announced a ton of new ereader/tablet devices this morning, which is being covered to death on the various gadget blogs out there. While some of the devices look interesting (and could put some pricing pressure on other tablets), what caught my eye was the addition of a 4G LTE mobile data plan on the Kindle Fire HD. It's $49.99 for the year, though it's limited to just 250MB per month -- which is tiny. Amazon has included mobile data before in its Kindles, but those were strictly for books (which don't take up that much data). As they go further into the fully functional tablet world, this starts to become more interesting. That's because mobile data continues to be something of a racket, with just a few national providers: Verizon, AT&T, T-Mobile and Sprint (and there are limitations there). The pricing offered by those guys always seems to border on collusion (amazing how closely they track each other's pricing changes) and is always focused on keeping the prices very high.

Amazon's offer here is a way to tiptoe into that pool with something of an alternative. Yes, they're just piggybacking on someone else's network via some sort of MVNO (mobile virtual network operator) agreement, so you're still really using one of the national carriers' networks. But from a consumer standpoint, it is offering something of an alternative for mobile data, at much more reasonable prices (though, obviously, the super low caps match that super low pricing). That, alone, doesn't revolutionize mobile data pricing, but it does seem like a way for Amazon to get its foot in the door and expand over time. Amazon has a long history of figuring out ways to do things in a consumer-friendly manner, even if it means undercutting others to do so (which has made it a few enemies). In the presentation itself, Jeff Bezos noted that they're focused on making money elsewhere -- basically as people buy things via the device -- and thus the company has tremendous incentive to keep the prices of the devices and the service quite low. And that has the potential to be quite disruptive.

In some ways, I look at it as similar (in a very different context) to Google's fiber effort in Kansas City. In both cases, you have companies sort of dipping their toes in the water of ancillary markets that make their primary markets more valuable. They're very limited at this time, and many people may brush them off as being useless. But that's what always happens with The Innovator's Dilemma. Offer something simple and small, and the legacy players brush it off as too small or too limited to matter. But keep improving on that, and you undercut legacy providers without them fully realizing what's happening -- often because you're using your tiny and "weak" efforts there to actually enhance your primary market, where the traditional players have no presence.

Lots of people are reasonably mocking the 250MB limit. It is kinda useless. But, look at it as a wedge, and the beginning of the climb up the innovation slope, making Amazon's core business more valuable... and things could actually get quite interesting.

It seems that today you can't spit in the wind without hitting a story about some US drone killing a bunch of people in a country somewhere overseas. Every known drone strike is accompanied by news reports of the location and the number of people killed. Yet, even with all these stories about drone strikes, it can a daunting task for those interested in following them to keep up with them all. So what is a drone enthusiast, or someone just appalled by the frequency of the strikes, to do?

One creative iPhone developer, Josh Begley, took the time to create an app that sought out news articles about drone strikes. When it would find one, it would send a push notification to the owner of the iPhone and then display a Google map of the area with a push pin of the location of the strike. He had hoped to have it released in the wild by now, but Apple keeps rejecting his application.

It’s the third time in a month that Apple has turned Drones+ away, says Josh Begley, the program’s New York-based developer. The company’s reasons for keeping the program out of the App Store keep shifting. First, Apple called the bare-bones application that aggregates news of U.S. drone strikes in Pakistan, Yemen and Somalia “not useful.” Then there was an issue with hiding a corporate logo. And now, there’s this crude content problem.

It's this last rejection that has Josh scratching his head. How can a news aggregating application be in any way crude or objectionable? Yes, I know that many people feel that news reports from the mainstream media could easily be classified as such, but that is beside the point. This app provides a useful service for those who want to keep abreast of the latest news regarding drone strikes. It doesn't show graphic images or other caricatures of the attacks, merely a push pin and a link to the story. If it is the content that is objectionable, he may just turn to a less strict operating system for the next version.

Begley is about at his wits end over the iOS version of Drones+. “I’m kind of back at the drawing board about what exactly I’m supposed to do,” Begley said. The basic idea was to see if he could get App Store denizens a bit more interested in the U.S.’ secretive, robotic wars, with information on those wars popping up on their phones the same way an Instagram comment or retweet might. Instead, Begley’s thinking about whether he’d have a better shot making the same point in the Android Market.

Its this kind of rejection of an interesting and thought provoking app that will turn people away from walled gardens. We talked recently about Microsoft's moves toward further locking down Windows resulting in developers seeking the more open alternative of Linux. The same will happen with the iPhone. As more developers continue to have their apps rejected with little to no context, those developers will become much more frustrated with the whole process and leave for Android. Is this really the lesson that Apple wants young developers taking from this and similar experiences?

Jon Brodkin, over at Ars Technica, has an interesting discussion about a paper from some researchers suggesting that we could augment first responder communications efforts by letting them make use of the public's WiFi routers. Basically, if I understand the proposal correctly, if turned on, it would make use of your router to try to form an ad hoc mesh network with other, similar routers in the area that, in theory would only be used by those public safety first responders. It's no secret that there are efforts underway to make sure that emergency personnel have better access to communications spectrum, and this is, at the very least, a creative way of attacking the problem.

The theory is that this doesn't impinge on anyone's security, because it would effectively carve out a separate service on the router, not unlike home WiFi routers that offer up different logins for residents and "guests." Of course, theory and reality aren't always one and the same, and Brodkin reached out to Bruce Schneier who raised his concerns:

“The problems are the same,” Schneier told Ars. “Once you build such a system, you have to build the security to ensure that only the good guys use it. And that's not an easy task. It is far more secure not to have the capabilities in the first place.”

That said, if such a system were purely voluntary, and individuals were able to offer up such connectivity for first responders (or even for anyone else), would that necessarily be so bad? I've been skeptical in the past of attempts to create truly comprehensive mesh networks building on people's home WiFi routers, and there hasn't been much success there. But, perhaps there's something interesting in special use cases, such as one involving first responders. I agree with Schneier that there could be some risks, but I'm not sure how they would be much different than running a basic guest access WiFi network that doesn't involve a password. As long as you're not using that network for sensitive and unencrypted info, it seems like a similar level of risk.

We have discussed the futility of banning cell phones while driving for some time at Techdirt. The evidence keeps pouring in and all of it seems to suggest that a driver capable of driving distracted while on his phone will dutifully seek out other ways to be distracted if the phone is no longer an option. However, it's worth pointing out this continuous deluge of evidence because, for whatever reason, both national and local politicians just seem to love flailing their arms about cell phones mixed with cars.

That's why we'll point out a new study done by MIT researchers which has found, yet again, that people who regularly use cell phones while driving also exhibit other risky driving behaviors, even when no phone is present. If nothing else, the method for this study is interesting:

The study involved 108 people, equally divided into three age groups: 20s, 40s, and 60s. For each person, the researchers correlated answers on a questionnaire with data collected from on-board sensors during a 40-minute test drive up Interstate 93 north of Boston. The drivers commanded a black Volvo SUV tricked out with an eye tracker, heart and skin monitors, video cameras facing out the front and back windows, on-board sensors, and other research gear.

No phones were allowed to be used during the study obviously, and yet researchers found some interesting correlations with the people who admitted regularly talking on their phones while driving: they were more likely to drive faster, to spend more time in the left hand lane, to brake harder, and to change lanes more often. None of these are as drastic as, say, upending the SUV and falling over the rail off a cliff and landing in fiery fashion on a school bus filled with nuns, but the changes do suggest an increased likelihood of danger.

"These are not 'oh-my-god' differences," says study leader Bryan Reimer, a human factors engineer at the Massachusetts Institute of Technology (MIT) in Cambridge. "They are subtle clues indicative of more aggressive driving." What's more, he says, other studies have linked these behaviors to an increased rate of crashes. "It's clear [from the scientific literature] that cell phones in and of themselves impair the ability to manage the demands of driving," Reimer says. But "the fundamental problem may be the behavior of the individuals willing to pick up the technology."

In other words, crappy drivers are crappy drivers. If they aren't chattering away on their phones, they'll be singing Carly Rae Jepson with their eyes closed, or putting on their deodorant, or reaching into the backseat for that bag of Cheetohs they left there last weekend. But do we ban cheese snacks in cars? Do we outlaw Old Spice-ing while driving? Should pop music be banned in the car (resist...temptation...to say...yes...)? Of course not, particularly when these studies continue to show that distractable drivers will find another way to run us all over.

At least if they have their cell phone out, it'll be that much easier to dial 911 when they make us roadkill.

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.

I'm still not convinced the FCC really has the mandate to put in place net neutrality rules, but even so, it's quite amazing to watch AT&T try to tap dance around them, while clearly violating both the spirit and the letter of the policies. The latest issue has to do with Apple's Facetime video chat. While earlier rumors that AT&T would charge for using the app proved untrue, it did announce that the app would only be available for those paying for a higher level of service (which may effectively be the same thing). The usual parties quickly raised a stink, highlighting how AT&T appears to be violating the rules: AT&T has now hit back, claiming that the complaints are "knee jerk" and they're not doing anything wrong.

As far as I can tell, AT&T's defense is two-fold:

1. It believes that there is a loophole in the net neutrality rules in that it does not apply to preloaded apps, and they can set whatever access rules for such apps that they want:

   The FCC’s net neutrality rules do not regulate the availability to customers of applications that are preloaded on phones. Indeed, the rules do not require that providers make available any preloaded apps. Rather, they address whether customers are able to download apps that compete with our voice or video telephony services.



2. It believes that as long as some other competing apps are available, they can restrict the apps they want to restrict.

   AT&T does not restrict customers from downloading any such lawful applications, and there are several video chat apps available in the various app stores serving particular operating systems. (I won’t name any of them for fear that I will be accused by these same groups of discriminating in favor of those apps. But just go to your app store on your device and type “video chat.”) Therefore, there is no net neutrality violation.

That's a very interesting interpretation of these things, but doesn't just create a loophole, it creates a giant vortex through which AT&T could restrict a huge number of apps just by pointing out that other such apps exist -- even if they're awful and no one uses them.

Of course, all of this is why we've argued for nearly a decade that the whole "net neutrality" fight is a red herring, anyway. The telcos are always going to find their own loopholes and ways around the rules (which they helped create anyway). The whole fight over net neutrality is not the problem. It's a symptom of the real problem: a lack of serious competition in the marketplace. Get more competitors out there, and increase the fight over customers, and AT&T can't get away with such moves.

While we've written plenty about the US Justice Department and US Homeland Security (via ICE) seizing various websites on questionable legal authority by claiming they were tools used for criminal copyright infringement, a series of pretty massive screwups seemed to have them, at least temporarily, shying away from such seizures around copyright claims. Huge errors like seizing Dajaz1 for over a year and then having to admit they had no evidence and give it back seemed to at least make them a little less cowboyish about the websites they chose to shut down and censor.

But, of course, this is the federal government we're talking about, and they sure loved the ability to shut down speech without any sort of adversarial hearing or, you know, due process. So you just knew it wouldn't last. The latest is that the feds have seized three more domains (applanet.net, appbucket.net and snappzmarket.com), claiming that they were "engaged in the illegal distribution of copies of copyrighted Android cell phone apps." Indeed, a quick look at the internet archive certainly suggests that these sites advertised that you could get "paid" apps for free if you joined. But does that warrant a criminal investigation and seizure? Perhaps there are more details, but given the sketchy details of earlier seizures, I'd wonder.

But, more to the point, if these sites were really engaged in such things, why wouldn't a civil copyright infringement lawsuit suffice? Why should the government get involved, when it involves completely pulling down a website with no warning, no adversarial hearing and no due process for those accused?

The Justice Department seems to indicate that this sort of thing is now a "top priority," because (apparently) they have way too much free time on their hands:

“Cracking down on piracy of copyrighted works – including popular apps – is a top priority of the Criminal Division,” said Assistant Attorney General Breuer. “Software apps have become an increasingly essential part of our nation’s economy and creative culture, and the Criminal Division is committed to working with our law enforcement partners to protect the creators of these apps and other forms of intellectual property from those who seek to steal it.”

“Criminal copyright laws apply to apps for cell phones and tablets, just as they do to other software, music and writings. These laws protect and encourage the hard work and ingenuity of software developers entering this growing and important part of our economy. We will continue to seize and shut down websites that market pirated apps, and to pursue those responsible for criminal charges if appropriate,” said U.S. Attorney Yates.

“The theft of intellectual property, particularly within the cyber arena, is a growing problem and one that cannot be ignored by the U.S government’s law enforcement community. These thefts cost companies millions of dollars and can even inhibit the development and implementation of new ideas and applications. The FBI, in working with its various corporate and government partners, is not only committed to combating such thefts but is well poised to coordinate with the many jurisdictions that are impacted by such activities,” said FBI Special Agent in Charge Lamkin.

One other tidbit of interest. Unlike the previous seizure disasters, this one appears not to have been led by ICE, but directly by the Justice Department (via the FBI). The announcement doesn't name this as a part of "Operation in our Sites" which seems to be a term specific to ICE's controversial program. Either way, they're still certainly using the eagle-heavy "seized" graphic they love to throw around, so, of course, we'd be remiss if we did not remind folks that they can purchase their very own "seized tee," to show what you think of the government's efforts.

With the Apple/Samsung case finishing up, James Allworth, over at HBR, has an excellent post wondering why it matters if one company copies from another? A few years ago, we wrote about a book that pointed out that copying and then innovating on the copies is a perfectly reasonable and important business strategy. Allworth points to a new book (one I've been looking forward to for a while) by Chris Sprigman and Kal Raustiala (who we've quoted numerous times) called The Knockoff Economy: How Imitation Sparks Innovation.

He then takes the lessons of that book and applies it to the Apple/Samsung fight, noting that even if we assume they were imitating each other, that seems to have only encouraged further innovation, not less:

If you go back to the mid-1990s, there was their famous "look and feel" lawsuit against Microsoft. Apple's case there was eerily similar to the one they're running today: "we innovated in creating the graphical user interface; Microsoft copied us; if our competitors simply copy us, it's impossible for us to keep innovating." Apple ended up losing the case.

But it's what happened next that's really fascinating.

Apple didn't stop innovating at all. Instead: they came out with the iMac. Then OS X ("Redmond, start your photocopiers"). Then the iPod. Then the iPhone. And now, most recently, the iPad. Given the underlying reason that Apple has been bringing these cases to court was to enable them to continue to innovate, it's hard not to ask: if copying stops innovation, why didn't Apple stop innovating last time they were copied? Being copied didn't stop or slow their ability to innovate at all. If anything, it only seemed to accelerate it. Apple wasn't able to rest on its laurels; to return to profitability, and to take the mantle they hold today of one of the technology industry's largest companies, they had to innovate as fast as they could.

It's the same story we've been explaining for years. History and tons of studies have shown over and over and over again that competition drives innovation, because innovation is an ongoing process. Thus, when others can copy you, that actually accelerates innovation by giving the original incentives to stay ahead in the marketplace, and develop the next great thing. Research has also shown that it's not as easy as you think to "just copy" because you only see the superficial aspects to copy, rather than having the deeper understanding of what works and what doesn't that a market leader often gains.

In fact, when you understand that, you realize that patents can actually slow down innovation by letting a company rest on its laurels, and not have to continue to rapidly innovate. Other companies can't build on what they did first, and so they don't have the same incentives to continue to advance the market forward. And the Apple/Samsung fight in the market appears to support that.

If Apple ends up winning this case against Samsung — and either stops Samsung from releasing their phones and tablets to the market, or charges them a hefty license fee to do so — does anyone really believe that the market will suddenly become more innovative, or that devices will suddenly become more affordable? Similarly, if Samsung wins, do you really believe that Apple will suddenly slow its aggressive development of the iPhone and iPad? It's certainly not what happened last time they lost one of these cases.

Now, if you're with me so far, then I don't think it's a leap to suggest that having these companies duke it out in court over "who might have copied who" is counterproductive. All these lawsuits flying around suggest that everyone is already copying each other, anyway. A better solution? Let's have these companies solely focused on duking it out in the marketplace — where consumers, not courtrooms, make the decisions about innovation. In such a world, the best defense against copying isn't lawsuits, but rather, to innovate at such a rate that your competition can't copy you fast enough. That, to me, sounds like an ideal situation not just for consumers — but for the real innovators, too.

Exactly.