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Why The Tech Industry Should Be Furious About NSA's Over Surveillance

Mike Masnick — Fri, 14 Jun 2013 12:57:52 PDT

We've already pointed out how some tech companies, including Yahoo!, Google and Twitter have fought back against overly intrusive attempts at government surveillance (though, they often lose), and there's been some discussion about how these companies are fighting to protect their users' privacy. There's a further reason why all of the tech industry should be speaking out against NSA surveillance. Beyond just being the right thing to do to protect your users' privacy, it's likely that it also improves their bottom line. We're already starting to see the fallout from the revelations of the NSA being able to scoop up data from various tech companies, and it's going to be harmful to their revenue.

Right after the initial NSA leaks came out, David Kirkpatrick quickly wrote about how the Obama administration appeared to be sacrificing the US internet industry in a weak attempt at trying to increase security (despite no evidence that it's actually done that). The global implications of the NSA spying aren't hard to figure out -- especially when looking at how many people around the globe use these services:

It's quite possible that Obama has undermined the effectiveness and attractiveness for political speech and protest of what have been the most potent communications tools for activism in history. Political and commercial opponents of the U.S. in every country as well as governments themselves will likely alert citizens to the potential that U.S. companies could pass their info back to US authorities. This will seriously conflict with these companies' aim to maintain their platforms as neutral global environments. It could dramatically slow their global growth.

[....] Do we really want to impair such powerful tools for spreading dialogue, political discourse, and U.S. values? Is it worthwhile to impair the extraordinary financial and commercial success of these great flagships for the American economy? Does Obama want Facebook et al just to be seen as tools of American power? That is certainly not the way the average user in Bolivia sees it. They see it as a tool of their own personal power, and they don't want governments interfering with that.

Further, he points out, this will likely drive users to foreign corporations, rather than American ones, as they strive to protect their privacy:

Don't believe there are not alternatives to the U.S. Net collossi. Companies worldwide are already relentlessly working on alternatives. The second largest search service worldwide is China's Baidu, with more than 8% of searches globally at the end of last year according to ComScore. Russia's Yandex is at close to 3%, more than Microsoft's own search product. In social networking, China's Tencent has had a stunning recent success with its WeChat product, which by some counts has over 450 million users worldwide, including many tens of millions outside China. Most major Chinese Internet companies have global ambitions.

Kirkpatrick was focusing more on the consumer side, and the importance of using these tools for open and free communication. But the same issues clearly impact the business side as well. As CFO.com recently, noted, companies are gong to be a lot less trusting of US-based cloud computing companies because of these leaks. Exposing the key info to governments is a real risk:

At the end of the day, if you have mission critical data and information in the possession of a third party service provider - Cloud or otherwise – the assumption that your provider will be in full control over their environments may be drawn unto doubt. As a CFO, it is prudent to consider your next steps very carefully to ensure that your intellectual property and trade secrets do not become the assets of others.

Given the suggestions that the US government has used this surveillance as a form of economic espionage, these fears seem quite well grounded. Foreign companies are now going to be a lot less interested in using the services of American companies.

And this isn't a theoretical problem either. Sweden just issued a ruling that bars the public sector from using Google's cloud services. Meanwhile, India is already telling companies that they need to setup local servers rather than make use of US servers if they want to do business in India.

This issue is important on a number of levels, but technology companies, who rely on a global audience, should be standing up and loudly protesting the NSA's broad surveillance, because it's going to hit their bottom lines hard. The administration and the NSA are directly making it difficult for US internet companies to be global enterprises, at a time when that's exactly what we need. Is it really worth sacrificing one of the few growing and dynamic industries that the US has these days, based on some vague and unproven claims that the government "needs" all of this info? It seems like a massive cost for almost no benefit.

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Yahoo! Fought Back Against PRISM, Lost In Secret Ruling

Mike Masnick — Fri, 14 Jun 2013 11:17:00 PDT

As more and more details come out about PRISM, it appears that the attention and blame really belongs on the government, rather than the tech companies (for the most part). While it was known that an unnamed company had fought back against FISA Court orders back in 2008, the name of the company was not known. However, now the NY Times is reporting that Yahoo! fought back against being told to provide info on users, until the court ruled against them -- and the ruling (as an unnamed company and with details heavily redacted) was then released to put other companies on notice that they, too, had to comply. The rubber stamp FISA Court insisted that there was nothing wrong with the requests, saying that Yahoo's concerns were "overblown."

“Notwithstanding the parade of horribles trotted out by the petitioner, it has presented no evidence of any actual harm, any egregious risk of error, or any broad potential for abuse,” the court said, adding that the government’s “efforts to protect national security should not be frustrated by the courts.”

As the article points out, Google and Twitter have also fought back against various attempts by the federal government to reach deep into their databases -- and, in both cases, have lost those lawsuits.

Of course, it appears that some companies, like Microsoft and the telcos are much more comfortable with providing info to the government.

It really seems like the focus of concern should very much be on the government's requests here, as well as the secret FISA court and its rubber stamp, given that companies that have tried to fight back against the government keep losing.

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More Details On PRISM Revealed; Twitter Deserves Kudos For Refusing To Give In

Mike Masnick — Sat, 8 Jun 2013 12:28:00 PDT

Late on Friday, the NY Times released the most detailed explanation to date of the PRISM system that was revealed on Thursday, claiming that nine of the biggest tech and internet companies were working with the NSA to give them "direct access" to servers. The explanation explains how both the original story was substantially true, as were the "denials," though the denials were (as predicted) a bit of doublespeak. Today, the Guardian revealed another slide from the presentation it has, which clarifies some more details.

Basically, it appears those companies all agreed to make it easier for the NSA to access data that was required to be handed over under an approved FISA Court warrant, and they appear to do this by setting up their own servers where they put that information (and just that information). From the NY Times report:

But instead of adding a back door to their servers, the companies were essentially asked to erect a locked mailbox and give the government the key, people briefed on the negotiations said. Facebook, for instance, built such a system for requesting and sharing the information, they said.

The data shared in these ways, the people said, is shared after company lawyers have reviewed the FISA request according to company practice. It is not sent automatically or in bulk, and the government does not have full access to company servers. Instead, they said, it is a more secure and efficient way to hand over the data.

This is significantly less worrisome than the original Washington Post report, which suggested full real-time access to all servers. That's not quite what has happened, according to this report. This involves cases where the companies really do need to hand over this information. We can disagree with whether or not the FISA Court should issue these warrants, but at some point there may be information that the companies do need to hand over to the government. As for the Guardian, they published the following slide: As you can see, it notes multiple programs where they can get data. The programs on top are the ones such as the NSA servers installed at telcos to collect all traffic running through them, which have been revealed before. The program on the bottom is PRISM, which clearly states: "collection directly from the servers of these U.S. Service Providers," followed by the already known list. That certainly confirms the "direct access" claim from the original WaPo report, but it could also be true in conjunction with the NY Times report, if you look at it as the companies setting up special servers where they place information they're ordered to hand over via FISA court orders. The "denials" from the companies are also substantially true, as they mean that the NSA isn't getting direct access to all their servers, but rather the ones set up for handing over this information.

The real question should be about what information the FISA Court is approving warrants over:

FISA orders can range from inquiries about specific people to a broad sweep for intelligence, like logs of certain search terms, lawyers who work with the orders said. There were 1,856 such requests last year, an increase of 6 percent from the year before.

In one recent instance, the National Security Agency sent an agent to a tech company’s headquarters to monitor a suspect in a cyberattack, a lawyer representing the company said. The agent installed government-developed software on the company’s server and remained at the site for several weeks to download data to an agency laptop.

In other instances, the lawyer said, the agency seeks real-time transmission of data, which companies send digitally.

Note just how broad some of those searches may be. Staying around for weeks to download logs? We're not talking about narrowly focused searches here.

Of course, what's now also come out is that, despite Google and Microsoft releasing transparency reports about government requests for data, they don't include FISA requests because of the gag orders on them. It's only recently that both Google and Microsoft were able to include "range" numbers for how many national security letter requests they get. One hopes they're pushing to be transparent on FISA requests as well.

The article makes it clear that Twitter was alone among the companies in refusing to join this program. That does not mean that Twitter does not hand over data to the government when receiving a legitimate FISA order. I'm sure it does. But it does mean that they have not set up a special system to make it easy for the government to just log in and get the data requested. Some people have suggested that the government has little need for Twitter to join the program since nearly all Twitter information is public, but that's not true. There is still plenty of important information that might be hidden, including IP addresses, email addresses, location information and direct messages that the NSA would likely want. Besides, YouTube is a part of the program, and most of its data is similarly "public."

This is not, by the way, the first time that we've seen Twitter stand up and fight for a user's rights against a government request for data. Over two years ago, we pointed out that Twitter, alone among tech companies, fought back when a court ordered it to hand over user info. Twitter sought, and eventually got, permission to tell the user, and allow that user to try to fight back. It later came out that, as part of that same investigation, the government also had requested information from Google and Sonic.net, with Sonic.net fighting back and losing. It never became clear whether Google fought back.

Separately, however, Chris Soghoian has noted that an "unnamed company" fought back and lost against a FISA court order... and that, according to the PowerPoint presentation, Google "joined" PRISM just a few months later. It is possible that Google fought joining the program, and then only did so after losing in court. That said, Google's most recent denial insists that "the government does not have access to Google servers—not directly, or via a back door, or a so-called drop box." Perhaps they don't consider a special server set up for lawfully required information a "drop box," but others certainly might.

In the end, it appears that the initial Washington Post report was overblown in that it suggested direct access to all servers, rather than specific servers, set up to provide information that was required. That said, it is still true that the FISA Court appears to issue a fair number of secret orders for information from a variety of technology companies, some of them quite broad, and that many of the biggest tech companies have set up systems to make it easier to give the NSA/FBI and others access to that info -- though, they are often required by law to provide that information. The real outrage remains that all of this is happening in complete secrecy, where there is little real oversight to stop this from being abused. As we noted just a few weeks ago, the FISA Court has become a rubber stamp, rejecting no requests at all in the past two years.

Given the revelations of the past week, the public (and our representatives) need to demand much more transparency and oversight concerning these surveillance programs.

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Tech Companies Deny Letting NSA Have Realtime Access To Their Servers, But Choose Their Words Carefully

Mike Masnick — Fri, 7 Jun 2013 08:35:00 PDT

We've already talked about James Clapper, the Director of National Intelligence choosing weasel words to pretend they're saying that they weren't spying on Americans when they really were, and now some are arguing that the tech companies are doing the same exact thing. All of the tech companies listed have been denying their involvement, but again, the words are being chosen carefully, and there's a reasonable argument that they're denying certain specific claims while really side-stepping the bigger issue.

Comparing denials from tech companies, a clear pattern emerges: Apple denied ever hearing of the program and notes they “do not provide any government agency with direct access to our servers and any agency requesting customer data must get a court order;” Facebook claimed they “do not provide any government organisation with direct access to Facebook servers;” Google said it “does not have a ‘back door’ for the government to access private user data”; And Yahoo said they “do not provide the government with direct access to our servers, systems, or network.” Most also note that they only release user information as the law compels them to.

But the PRISM program’s reported access to data and the now repeatedly confirmed widespread access to phone records and other types of digital data appears to be almost exactly what the 2008 Protect America Act (PAA) allows Foreign Intelligence Surveillance Act (FISA) courts to compel tech companies to do — as many warned around the time of its passage. If tech companies are not providing direct access to their servers but are cooperating with the PRISM program, that leaves at least one other option: Companies are providing intelligence agencies with copies of their data.

Note the fine distinction. Giving the NSA a clone of their data wouldn't be giving them "access to our servers." It would be giving copies to the NSA... and then the NSA could "access" its own servers. And you were wondering why the NSA needed so much space in Utah. If they're basically running a replica of every major big tech company datacenter, it suddenly makes a bit more sense. Of course, at this point there's no evidence that this is necessarily the case -- and some are insisting that the denials are legit, and that the Washington Post's story is not entirely accurate. But... the wording here is extra careful, and the government's report really does seem to indicate that these companies are deeply involved.

By the way, if you'd like to dig in on annotating the various tech companies' denials, someone put them all up at RapGenius, the site for annotating text (not just rap songs).

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Oh, And One More Thing: NSA Directly Accessing Information From Google, Facebook, Skype, Apple And More

Mike Masnick — Thu, 6 Jun 2013 15:35:00 PDT

Obviously, the Verizon/NSA situation was merely a small view into just how much spying the NSA is doing on everyone. And it seems to be spurring further leaks and disclosures. The latest, from the Washington Post, is that the NSA has direct data mining capabilities into the data held by nine of the biggest internet/tech companies:

The technology companies, which participate knowingly in PRISM operations, include most of the dominant global players of Silicon Valley. They are listed on a roster that bears their logos in order of entry into the program: “Microsoft, Yahoo, Google, Facebook, PalTalk, AOL, Skype, YouTube, Apple.” PalTalk, although much smaller, has hosted significant traffic during the Arab Spring and in the ongoing Syrian civil war.

Dropbox , the cloud storage and synchronization service, is described as “coming soon.”

This program, like the constant surveillance of phone records, began in 2007, though other programs predated it. They claim that they're not collecting all data, but it's not clear that makes a real difference:

The PRISM program is not a dragnet, exactly. From inside a company’s data stream the NSA is capable of pulling out anything it likes, but under current rules the agency does not try to collect it all.

Analysts who use the system from a Web portal at Fort Meade key in “selectors,” or search terms, that are designed to produce at least 51 percent confidence in a target’s “foreignness.” That is not a very stringent test. Training materials obtained by the Post instruct new analysts to submit accidentally collected U.S. content for a quarterly report, “but it’s nothing to worry about.”

Even when the system works just as advertised, with no American singled out for targeting, the NSA routinely collects a great deal of American content.

I expect we'll be seeing more such revelations before long.

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Facebook, Google, Microsoft, Twitter And Yahoo Refuse To Cooperate With UK's 'Snooper's Charter'

Glyn Moody — Fri, 31 May 2013 18:35:00 PDT

A month ago, we wrote about how the UK's infamous "Snooper's Charter" had been scuppered by Nick Clegg, the UK's Deputy Prime Minister. The Guardian now reveals that top Internet companies may have played a key role in this decision:

The five biggest internet companies in the world, including Google and Facebook, have privately delivered a thinly veiled warning to the home secretary, Theresa May, that they will not voluntarily co-operate with the "snooper's charter".

In a leaked letter to the home secretary that is also signed by Twitter, Microsoft and Yahoo!, the web's "big five" say that May's rewritten proposals to track everybody's email, internet and social media use remain "expensive to implement and highly contentious".

In the letter, originally posted online by the Guardian, but now taken down for some reason, the Internet companies write: Although it seems that the revised Bill will address some of the concerns we and others raised in evidence to that [Parliamentary] Committee, we expect that the core premise of the Bill -- to create a new form of retention order for the data of UK-based users of communications services -- will remain highly contentious.

…

However, we also do not want there to be any doubt about the strength of our concerns in respect of the idea the UK government would seek to impose an order on a company in respect of services which are offered by service providers outside the UK.
The letter rather pointedly invokes efforts to promote online freedom around the world: The UK Foreign and Commonwealth Office in particular has played a leading role in promoting the value of freedom of expression on the Internet on the global stage. This freedom of expression is intimately linked to the fact that the Internet services are offered globally unlike traditional media channels, which may be under different degrees of state control in many parts of the world. Key to being able to offer a global Internet service is the understanding that the service provider can work primarily within the legal framework of its home jurisdiction.
It then paints a picture of what might happen if other countries brought in their own Snooper's Charter: Service providers like ours can and do make reasonable accommodations to reflect local concerns and legal requirements including in the UK. But this is very different from a chaotic world within which every country seeks to impose potentially conflicting requirements on a global service provider in sensitive areas like the retention of personal data.
As the Guardian article explains: The companies also detail an alternative approach to extend existing arrangements for them to meet the requests for personal data from the police and security services, including a new UK-US bilateral initiative to make the process faster and more efficient.
The letter concludes: The Internet is still a relatively young technology. It brings enormous benefits to citizens everywhere and is a great force for economic and social development. The UK has rightly positioned itself as a leading digital nation. There are risks in legislating too early in this fast-moving area that can be as significant as the risks of legislating too late. We would urge you to follow the approach we have outlined above and see how far the needs of UK law enforcement can be met by improving existing legal instruments and treaties before making significant legislative changes.
This is a pretty significant move, underlined by the fact that traditional rivals have come together to form a common front against the UK government. If companies like Facebook, Google, Microsoft, Yahoo and Twitter refuse to cooperate with the UK's surveillance plans, it will make the scheme much more difficult to operate, particularly when it comes to spying on encrypted data streams.

Unfortunately, whereas the Snooper's Charter looked pretty moribund a month ago, matters have been changed by the recent brutal murder of a soldier on London's streets. This has led to a knee-jerk reaction from some, who have called for the Snooper's Charter to be revived. But it turns out that the alleged attackers were already known to the UK's secret services, which suggests that the extreme surveillance powers contained in the Snooper's Charter are simply not necessary. Let's hope that the main Internet companies stick to their line of non-cooperation, and that the UK government realizes that the Snooper's Charter is not just pernicious, but unworkable.

Follow me @glynmoody on Twitter or identi.ca, and on Google+

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Bev Stayart Loses Yet Another Battle Against Levitra, Cialis And Search Engine Results

Tim Cushing — Fri, 8 Mar 2013 17:32:00 PST

Bev Stayart, tireless bringer of lawsuits against various search engines for their supposed besmirchment of her good name by placing it next to words like "Levitra," "Cialis," and various porn-related ads, has batted a solid .000 thus far in her legal career.

In 2009, she sued Yahoo! for violating the trademark on her name (no. really.) with its search results, which often produced listings for porn sites and malware. (She, or her legal counsel/husband, also found time to threaten Techdirt with a lawsuit if it didn't remove certain comments on the original post. Techdirt didn't and the lawsuit failed to materialize.) This suit was dismissed later that year, with the court denying her request to refile.

So, Stayart tried a different tack, suing Yahoo! for violating her "privacy rights." This suit was also tossed. In between filing suits against Yahoo! and having them tossed, Stayart filed another "pissed-off-at-search-engines" suit against Google, this time because her name seemed inextricably linked with Levitra in Google's suggestion box. This suit was dismissed as well, as she again failed to prove that her name was a marketable term eligible for trademark protection. All the while, the obvious solution has continued to elude her --- stop suing and mentioning porn, malware and Levitra in your lawsuits and your name might stop being connected with those terms by search engine algorithms.

The latest court decision keeps her hitless string intact, again finding in favor of Google. Stayart's latest angle was to claim Google "misappropriated" her name because (mostly thanks to her legal efforts), "bev stayart levitra" remains a top search suggestion.

On Wednesday, however, the 7th Circuit Court of Appeals tossed her yet another loss in her lawsuit against Google, upholding a decision made by a district court in 2011. In the appellate case, Stayart argued that her rights under Wisconsin's right to privacy laws had been violated under §995.50(2)(b).

"The use, for advertising purposes or for purposes of trade, of the name, portrait or picture of any living person, without having first obtained the written consent of the person or, if the person is a minor, of his or her parent or guardian" constitutes an invasion of privacy, the law states.

But the Court disagreed.

"Stayart has not articulated a set of facts that can plausibly lead to relief under Wisconsin's misappropriation laws," the court wrote (PDF).

In fact, the court cited her own previous case against Yahoo!, in which that court found that there had to be a "substantial rather than an incidental connection between the use and the defendant's commercial purpose."

Many have tried but very few have proven (even in friendlier courts) that search engine algorithms just "have it in" for some people, linking them with ED drugs, porn, malware, Russian gang activity, etc. These many "victims" all share the same self-destructive tendency to file and refile lawsuits, with each filing further cementing the link between their names and the terms they'd rather not have connected with them.

But this lesson remains lost on Stayart. It looks like she's ready to step up to the plate again, in hopes of finally getting on base.

Stayart called Ars back, and said that she vehemently disagrees with the decision, and is considering appealing the case to the United States Supreme Court, as well as other suits. However, she noted that her counsel (also, her husband) will make those decisions.

She adds that she feels the decision was "economically-based" and favored the "one percent." I'm really not sure exactly WHY she feels this way, but I'm sure the future will be full of opportunities for her to explain herself. And when the legal paper starts flying again, Stayart will find herself relentlessly pursued across various search engines by her old nemeses, Levitra and Cialis.

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Court Orders Yahoo To Pay Mexican Yellow Pages Companies $2.7 Billion In Mystery Case

Timothy Geigner — Wed, 5 Dec 2012 07:29:51 PST

We've covered stories about the Yellow Pages and other directory companies in the past, as their business and general worth appears to be just short of evaporated, but this is a strange one. Frustratingly, there is a chasm worth of unknowns in this story, and not just by us here at Techdirt, but apparently by some of the players involved. Details are scant, due to the Mexican court system not having the kind of transparency of legal documents that we have here in the States. What we do know is that the result of a mystery lawsuit by two companies against Yahoo for "breach of contract, breach of promise, and lost profits arising from contracts related to a yellow pages listings service" is that Yahoo has been ordered to pay up $2.7 Billion (yes, with a "b") dollars. While the entire case represents something of a mystery to nearly everyone commenting on it, one commonality seems to be that everyone is confused.

If the ruling stands, Yahoo would be forced to part with nearly 36% of the $7.56 billion in cash it had as of September 30. It would be one of the first major challenges faced by CEO Marissa Mayer, who took the helm at Yahoo in July.

J. P. Morgan analyst Doug Anmuth was similarly stumped. A research note he issued Monday focused on the ruling, around which he said there is "little clarity." It's unclear how the court came to the $2.7 billion figure for the judgment, but Anmuth said it "appears high based on the seemingly small size of Yahoo's business in Mexico."

No one really seems to know what the hell is going on here, except everyone commenting agrees that the judgment amount is insane. That said, I should also note that the judgment is not final and that Yahoo is promising to exhaust every appeal avenue afforded to them, which you'd expect given that there's over a third of their cash assets on the line. Adding to the mystery of the case is the fact that not only are court documents unavailable, but virtually nobody is commenting on the matter either.

The lawsuit was brought by Worldwide Directories S.A. de C.V. and Ideas Interactivas S.A. de C.V. against Yahoo and Yahoo de Mexico, Yahoo said.

The companies could not be reached for comment, although Carlos Bazan-Canabal, who describes himself as a founder of Worldwide Directories, told Reuters via email that he had contracted a U.S.-based law firm to handle the Yahoo case. He declined to comment further on the matter.

For what it's worth, investors don't seem to think that the massive judgment is worth selling of Yahoo shares, as of yesterday, but with so few details it's hard to know what's going on. One thing is for certain, however: if judgments like these are validated, it would be a bright signal to tech companies throughout the world to avoid doing business in Mexico.

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Harvey Weinstein's 'Hang 'Em First' Approach To Piracy Hits All The Wrong Suspects

Mike Masnick — Tue, 16 Oct 2012 08:33:09 PDT

I've heard enough stories about the legendary film producers Harvey and Bob Weinstein to recognize that they're known as being characters around Hollywood -- and sometimes are known to make some quirky decisions. In a recent edition of Kevin Smith's Smoviemakers podcast, they discuss how the Weinsteins knew they had a terrible movie in Dracula 2000 but released it anyway because "it's called Dracula 2000."

So, somehow it doesn't surprise me that Harvey Weinstein recently complained publicly about piracy -- but seemed confused and ignorant about who to blame. His main target: the tech industry providing him all the tools to get into the 21st century. But, he seems determined to stay in the past -- and live in a world of ignorance. It's as if he's heard a few of the MPAA talking points, as well as some of the more hysterically misguided anti-piracy rants online... and synthesized them into the ultimate in clueless rants:

Hollywood power player Harvey Weinstein has urged Big Content to take a “hang ‘em first and talk about it later” stance when it comes to piracy.

Right, because when you're ignorant and pointing the finger at innocent players, it's always better to kill first and realize you're wrong later.

Keynoting at the BFI London Film Festival, he railed against the online industries' approach to piracy, and slammed Apple and Google for “getting paid, not the actors.”

On what is he basing this? Both Apple and Google offer the ability to pay for movies, via deals negotiated with Hollywood. If the actors aren't getting paid -- then perhaps it's the studios' fault, with their fun tricks and Hollywood accounting, whereby they set up neat shell companies, who the studios charge huge fees to, so that their movies are never technically "profitable" and residuals never have to be paid. It couldn't be that, could it? Perhaps the reason actors aren't getting paid is because the studios are taking the money that Google and Apple are giving them... and playing accounting tricks.

"I think we are being done a massive disservice by these companies," he said.

Let's see, these are two companies who have built the key pieces of the modern distribution system that allows them to better deliver movies to consumers, including with unique and new monetization options? That's a disservice? Well, I'll grant you, perhaps Harvey's right that they've done a disservice to studio bosses in that they've disrupted them. The business of the studio used to be to act as the gatekeeper on promotion, distribution and monetization of movies. But Apple, Google and others are changing things so that the studio heads have less control over the market -- and the filmmakers can actually go direct. No wonder he hates them.

“I think after the [US Presidential] election we need to rally filmmakers, content providers and musicians around the world as long as these companies [continue to make content available] under the guise of free Internet.”

Good luck with that. Besides, he seems very confused in thinking that it's Apple and Google that are somehow broadcasting his content for free. That's not the case, and you'd think someone with more than two seconds of experience with the internet would recognize that.

“I love it when these Internet dudes say to me, hey man; we just want to be 'content neutral.' Next time, I'll say sure, I'll get my tie dye shirt and come and sit in your billion dollar mansion in San Francisco or Silicon Valley for a while, soak it up," he quipped.

Really no need to comment on that one. He then praised France's HADOPI three strikes law and pretended to prove a point.

"If an Internet company steals content, they shut it down. And let me tell you, Apple France, Yahoo France or Google France, none of them have gone out of business."

Of course, that's not true at all. He's displaying his near total ignorance (yet again). All Hadopi does is send individuals (not companies) accused (not convicted) of uploading unauthorized content, letters warning them that their connections could be cut off (and after three of these, they can lose service). So, no, they don't "shut down" an internet company. It has nothing to do with that at all. Also, it's been a colossal failure. Even after Hadopi fudged the numbers to make their results look better there has been no increase in sales and the current government has declared Hadopi to be a failure and wants to cut its funding.

The fact that it has done nothing to increase sales is the key point. Since Harvey was talking about "getting actors paid" (a red herring, of course, but...), you'd think that he'd be a lot more concerned about whether or not the 3 strikes policy actually worked to get more people paid. It hasn't. So, if his concern is getting actors paid, Hadopi hasn't actually helped.

There are plenty of discussions to be had about how to deal with whatever challenges and opportunities the film business currently faces. But this wasn't one of them. Pointing the finger and blaming tech companies, even though they're not doing what he claims they're doing -- and then praising a failed law that hasn't done what he thought it had done -- is not productive at all. It just makes him look out of touch.

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DailyDirt: Advertising Mistakes; Hilarity Ensues

Michael Ho — Mon, 9 Jul 2012 17:00:00 PDT

Advertising is a tricky business. Not only do you not know where half your marketing budget goes, but it's possible to waste 100% of your advertising with an innocent mistake. It's tough to try to make funny and catchy ads, and not everyone has the same sense of humor. Here are just a few examples of some ads that have backfired.

Automatically serving ads without a human editor to judge the appropriateness of the content can be a really bad idea -- especially when placing ads on news items. Yahoo News recently inserted ads for Express clothing on a news photo -- unfortunately the photo pictured a distraught man who survived an attack by Taliban militants. [url]
KFC ran a commercial in the UK a few years ago that set a record for complaints -- because viewers thought it encouraged bad manners and mocked people with speech impediments. This commercial has held on to its record to this day, but there probably aren't many agencies vying for the title. [url]
Pizza Hut knows its customers love pizza, but does a love of pizza correlate with disliking math? This commercial needs to show its work on how it arrived at its conclusion. [url]
Kenneth Cole is trying to raise "awearness" with some edgy ad campaigns. But one of its billboards generated some backlash from teachers when it suggested that teachers' rights were at odds with student interests. [url]

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

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Yahoo And Facebook Settle Patent Fight, But Damage To Yahoo's Reputation May Linger

Mike Masnick — Fri, 6 Jul 2012 15:20:00 PDT

Back in March, Yahoo made some news by suing Facebook for patent infringement. This was the first major initiative by new CEO Scott Thompson, who apparently was not only oblivious about why you shouldn't lie in your resume, but also completely clueless about how Silicon Valley views patent infringement claims as a sign of absolute weakness. It's a sign of a company that has ceased to innovate. The reaction was pretty loud... but was quickly drowned out by the furor over Thompson's resume, causing him to lose his job. Ross Levinsohn was put in his place, and it appears that his first major act of business was to settle the lawsuit without any money changing hands.

There's a cross-licensing deal as well as some vague claims of a "partnership." However, the details suggest the "partnership" is just a general agreement to try to work together. The licensing agreement involves about half of Yahoo's patents... but also a promise not to sue over the other half.

There were a bunch of patent lawyers -- and some clueless Wall St. types -- who cheered on the patent infringement lawsuit, because they view things in the ultimate short term: if you're not getting paid for your patents, then you're "leaving money on the table." Folks in Silicon Valley mostly know better. You don't build a successful long term strategy by suing other companies that it's going to make sense to work with in the future. You especially don't go patent crazy if you want to retain top engineering talent. This may be difficult for patent lawyers and Wall St. investors to understand, but playing for the long haul means recognizing that there's more than one move on the chess board, and attacking on every single play isn't a good strategy. The real question, though, is if the stink that was attached to Yahoo from this move lingers, or if the company is able to shake it off and just pin the blame on Thompson's brief and horrific tenure.

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Flickr Finally Realizes That Not All DMCA Takedowns Are Legit

Mike Masnick — Wed, 13 Jun 2012 10:54:00 PDT

A few months ago, we noted how in certain cases Flickr would completely delete images (and comments) when it received a DMCA takedown notice. That meant that even if the takedown was bogus -- as so many are -- after you contested the takedown and could put back the image, you probably lost everything else on that page. That's kind of ridiculous. As Jake Rome alerts us, Yahoo (owner of Flickr) finally realized that perhaps it should change its policy and, instead, put the targeted image in limbo to allow the uploader to contest the takedown:

We want to let you know that we have implemented a global change in the standard takedown process that will benefit the whole Flickr community going forward.

When a photo is removed from the site based on a notice of alleged copyright infringement, we will temporarily show a placeholder and the member will have an opportunity to respond before the image is made unavailable.

If the alleged copyright infringement is found to be fraudulent, the image in question will be restored, and the photopage will look like before.

It's really quite amazing that it took this long for Flickr to realize this was needed.

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Ongoing Patent Fights Mean Startups Are Now Wasting What Little Money They Have At The Patent Office

Mike Masnick — Fri, 4 May 2012 17:31:00 PDT

Last week, I had the chance to chat with the General Counsel of a well known internet company -- not a "giant" one, but one you've almost certainly heard of -- and we got to discussing Twitter's new patent assignment agreement with its employees, and whether or not other tech companies would start offering the same thing. He was a bit skeptical, and pointed out that, even at a company the size of his (big enough to have a full time general counsel, for example) they had applied for exactly zero patents. He said he's tried, but none of the engineers at the company have any interest at all in patenting what they're working on (actually, in talking to someone else later on, I heard that the bigger issue is that some of the employees are thinking about ways to open source their work). Either way, the lawyer noted that, because of that, any patent assignment agreement was something of a waste of time. His company just wasn't interested.

Unfortunately, it appears that not all startups are working that way. With Yahoo's patent fight against Facebook getting so much attention these days (not to mention other big patent fights involving companies like Google, Apple, Microsoft, Oracle and others...), it seems that startups are (rather reluctantly) spending a lot more time (and money) at the Patent Office.

This is, to put it mildly, crazy. The two biggest scarce resources for startups are time and money. Throwing them away on getting patents is a huge waste, and it's main purpose is to act as insurance against failure or against jealousy over extreme success. Basically, most patents are completely useless. But if a company is failing, then perhaps it can sell off its patents. And, if a company is succeeding, then suddenly others will start suing it for patent infringement -- and the hope (rarely realized) is that having at least a few patents in the portfolio means that other practicing entities won't sue for fear of getting sued back (patent trolls are exempt from this, however).

It's really too bad that the state of the patent world today is such that are most innovative companies are basically forced to throw away time and money to apply for patents they never want to use.

One separate aside on this story. The article talks about the Twitter IPA agreement, and later quotes the founders of the startup Everyme as saying they support the IPA, but: "their first three apps were already with the U.S. Patent and Trademark Office by the time IPA was available, though, and they don’t plan to refile them." This sentence makes no sense. The IPA has nothing to do with the USPTO and the patent filing. It's merely a part of the assignment agreement, leaving some portion of control with the inventor. In fact, Twitter -- who does have some patents -- has said that it's using this agreement retroactively with patents that were applied for before the IPA existed. So there's no reason to refile the applications at all. In fact, the IPA is entirely separate from the actual patent application.

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Yahoo Says Facebook's Countersuit Doesn't Count Since Facebook Bought Its Patents

Mike Masnick — Mon, 30 Apr 2012 07:21:00 PDT

Yahoo has now responded to Facebook's patent countersuit, as the stupid and destructive nuclear war that Yahoo launched against Facebook out of spite and jealousy continues to expand. As you probably know by now, the incredibly desperate Yahoo sued Facebook (as it was laying off 2,000 employees), because it has no clue how to innovate any more, and decided the best course of action was to broadcast as loudly as possible to good software developers that they should work elsewhere (at least that seems to be the general interpretation of Yahoo's actions here in Silicon Valley). In response, Facebook hit back with a countersuit, claiming that Yahoo violated some of Facebook's patents.

As we noted at the time, most of the patents that Facebook was using in the counterclaims did not originate with Facebook, but were bought. Yahoo's response to Facebook's claims tries to make a big deal out of this, arguing that using such patents is not in "good faith."

In retaliation for Yahoo!'s good faith allegations of patent infringement, Facebook alleges infringement of ten patents as counterclaims. However, on information and belief, Facebook lacks a good faith basis for most, if not all, of its counterclaims, particularly those patents that it purchased from others.

Facebook purchased eight patents from non-practicing entities: two patents were purchased from "IPG Electronics 503 Limited," a San Diego-based patent aggregator; two patents were purchased from "Cheah Intellectual Property Licensing," a California-based patent holding company; one patent was purchased from "Right Point LLC," a Texas-based patent aggregator; and three patents were purchased from New York University's intellectual property licensing department. All eight of these patents were purchased by Facebook in the past five months, and several of these patents were purchased (independent of any separate technology acquisition or merger) after Yahoo! filed its complaint in this action. On information and belief, many, if not all, of these patents were acquired by Facebook for purposes of retaliation against Yahoo! in this case.

No employee or officer of Facebook or any affiliated company conceived of, reduced to practice, or developed the alleged inventions claimed in the eight patents acquired from non-practicing entities. In fact, the applications for many of these patents predate Facebook itself.

While all of those do highlight just how silly some of our patent system is, I have no idea what it has to do with the law. There's nothing in the law that says it's not in "good faith" to buy patents to assert against others. Though, amusingly, perhaps if Yahoo! wins this argument it could set a bizarre precedent that limits the usefulness of purchased patents -- but I can't see that happening.

Yahoo!'s argument is full of similarly bizarre assertions. For example, Yahoo! seems to have its feelings hurt that Facebook didn't contact Yahoo! before filing the counterclaims. While I can understand how it's obnoxious to use before reaching out under normal circumstances, Yahoo! seems to ignore that Yahoo! sued Facebook first. Then it gets upset that Facebook doesn't want to be all friendly? Really?!?

Yahoo! also claims that the parts of its business that Facebook thinks infringes are areas where the details are secret, so the only way that Facebook would know that Yahoo! infringed is if it "unlawfully acquired Yahoo! confidential business information." Because of this, Yahoo! actually goes so far as to ask for sanctions against Facebook's lawyers, which is a pretty extreme move in a case like this.

Yahoo! also goes into great detail to raise some procedural questions about the granting of some of the patents that Facebook is using in counterclaims. In other words, it's trying to find absolutely anything to hit back with.

Suffice it to say there is no love lost between these two companies at this point.

Oh yeah, just for fun, Yahoo! adds two more patent infringement claims of its own back at Facebook:

US patent 7,933,903: System and method to determine the validity of and interaction on a network
US patent 7,698,315: System and method allowing advertisers to manage search listings in a pay for placement search system using grouping

What isn't explained in the filing? How any of this actually helps make Yahoo! relevant again.

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Facebook Has Been Sued Five Times For Patent Infringement In Two Months Since Filing For Its IPO

Mike Masnick — Tue, 17 Apr 2012 03:03:00 PDT

We recently wrote about a Rob "CmdrTaco" Malda column for the Washington Post, which suggested that getting sued for patent infringement was like frat hazing for tech companies that file to go public. If that's true, then it appears that Facebook is taking its paddle whacks from quite a few upper classmen. In a larger report about the Facebook/Yahoo patent battle, M-CAM mentions as an aside that Facebook has been sued five times for patent infringement in just the two months since it filed for the IPO:

Patent infringement lawsuits can be problematic during a company's quiet period. In the two months since filing for its IPO in February 2012, Facebook has been the target of five such suits: three from non-operating entities, one from Mitel, and one from Yahoo!.

This isn't a coincidence. This is about companies hoping to cash in by filing questionable patent lawsuits at a very inconvenient time for Facebook. These are companies who know the history of similar lawsuits, where many companies feel compelled to "settle" at almost any cost, due to pressure from Wall Street investors who don't understand patent battles, and fear that any prolonged fight is too costly. So companies are sometimes willing to pay through the nose, not because there's any validity to the lawsuits, but because the massive influx of cash from a successful IPO is worth a lot more than fighting the patent lawsuit. In fact, I wouldn't be surprised to see a few more trolls try to jump in before the IPO gets off the ground.

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The Social Networking Patent Thicket Consists Of At Least 30,000 Patents

Mike Masnick — Tue, 10 Apr 2012 14:25:00 PDT

M-CAM's analysis of the Yahoo/Facebook patent nuclear war has some interesting points. It's worth checking out the full thing, but I wanted to call attention to two them. First, in showing just how ridiculous the patent situation is in the social networking space, M-CAM looks just at the 10 patents that Facebook is asserting in its counterclaims against Yahoo, and discovered that there are over 30,000 related patents that cover similar aspects -- many of which have been around for a while. Notably, IBM (who just sold Facebook a bunch of patents) holds the largest batch of such patents, but that's only 270 patents, meaning these patents are really widely spread out.

In other words, there's a massive patent thicket in the social networking space. I don't how see anyone can legitimately suggest that the patent system is working when someone developing a social network has to be concerned about the fact that they might get sued over upwards of 30,000 patents. If anything, this is just another example of the point that Tim Lee and Christina Mulligan recently made in showing how it's mathematically impossible to avoid infringing on patents if you're developing software these days. No sane person thinks that 30,000 patents make sense for social networking.

As the report notes, a very large number of these patents are "functional forgeries" in that they cover stuff that's in other patents. Really what this goes back to is the fact that the patent system relies on patent examiners to magically know what's new and non-obvious. But, if it's impossible for those who actually work in the space to know about the 30,000 related patents, how do you think a patent examiner does it? The answer is they don't. Patent examiners simply don't scale, and that's a huge problem with the way the system is designed today.

And that brings us to the second point in the M-CAM report, which highlights just how ridiculous the process is to get patent examiners to approve a patent can be. M-CAM looks specifically at the process that got Patent 8,150,913 approved (which happened the same day that Facebook used it in the lawsuit). The report notes that the 913 patent was originally rejected by patent examiner Bharat N. Barot, but the filer amended the claims, and the second time around Barot found them suddenly worthy of a patent. You might think that the changes to go from non-patentable and obvious to patentable and non-obvious would be pretty big. Not so much. M-CAM puts the original claim 1 and the approved claim next to each other and highlights the only difference in blue, which was a ridiculously minor word change towards the end.

Original Submitted Claim 1 of US 8,150,913 Dated: August 22, 2011

Issued Claim 1 of US 8,150,913 Dated: April 3, 2012

1. A computer system that provides a service for controlled access over a network to user profiles having associated image content provided by registered users of the service, the computer system comprising:

a networked server system accessible by remote user devices via the network, the networked server system comprising at least one processor and at least one memory; and

at least one database accessible by the networked server system and configured to store the user profiles of the registered users, image content items associated with the user profiles, and relationship data that specifies access relationships established between the registered users;

the networked server system being programmed, via executable program instructions, to:

allow users to register with the service and the registered users to each create a user profile comprising profile information about the respective registered user and a plurality of image content items of data types corresponding to one or more of photo data or video data; allow a first registered user to identify other registered users via a user interface and to indicate a desire to establish an access relationship with the other registered users, wherein each access relationship allows the first registered user to access a user profile of an identified other registered user via the user interface and image content items of the identified other registered user via the user interface;

establish access relationships between the first registered user and the other registered users without requiring the other registered users to individually approve the access relationships; allow the first registered user to select from the user interface the user profile of another registered user with respect to which an access relationship has been established with the first registered user, in response to which the networked server system provides the selected user profile for display to the first registered in the user interface, wherein the selected user profile includes representations of at least some of the image content items associated with the selected user profile;

allow the first registered user to select and view one of the image content items in the user interface; and

allow the first registered user to interact with the selected image content item via interactive controls of the user interface.

1. A computer system that provides a service for controlled access over a network to user profiles having associated image content provided by registered users of the service, the computer system comprising:

a networked server system accessible by remote user devices via the network, the networked server system comprising at least one processor and at least one memory; and

at least one database accessible by the networked server system and configured to store the user profiles of the registered users, image content items associated with the user profiles, and relationship data that specifies access relationships established between the registered users;

the networked server system being programmed, via executable program instructions, to:

allow users to register with the service and the registered users to each create a user profile comprising profile information about the respective registered user and a plurality of image content items of data types corresponding to one or more of photo data or video data; allow a first registered user to identify other registered users via a user interface and to indicate a desire to establish an access relationship with the other registered users, wherein each access relationship allows the first registered user to access a user profile of an identified other registered user via the user interface and image content items of the identified other registered user via the user interface;

establish access relationships between the first registered user and the other registered users without requiring the other registered users to individually approve the access relationships; allow the first registered user to select from the user interface the user profile of another registered user with respect to which an access relationship has been established with the first registered user, in response to which the networked server system provides the selected user profile for display to the first registered user in the user interface, wherein the selected user profile includes representations of at least some of the image content items associated with the selected user profile;

allow the first registered user to select and view at least one of the image content items associated with the selected user profile in the user interface; and

allow the first registered user to interact with the selected image content item via interactive controls of the user interface.

Yes, the words in blue are apparently the sum total of the difference between something that's unpatentable and something that gives you a monopoly you can sue over.

Any patent lawyers want to defend this kind of ridiculousness?

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Facebook Hits Back Hard On Yahoo Patent Claims, Countersues Over Its Own Patents: Nuclear War Begins

Mike Masnick — Tue, 3 Apr 2012 14:02:00 PDT

It's not surprising, after Yahoo sued Facebook and Facebook stocked up on a bunch more patents, that Facebook would respond with guns blazing at Yahoo for the lawsuit. As we've been arguing for the better part of a decade, in many cases, patents are basically just nuclear stockpiling, where companies get a ton of patents to hopefully ward off strikes from competitors. But every so often, nuclear war breaks out. It seems like that's the case here.

Facebook hasn't just responded to Yahoo's claims by insisting that they're totally and completely bogus, it's also countersuing over a bunch of its own patents. Most of Facebook's response to Yahoo's claims are basically that it "denies the allegations" made by Yahoo. Sometimes, however, it takes some potshots.

Facebook admits that messaging and privacy are offered as options on certain websites. Facebook denies that “[w]ithout Yahoo!’s achievements, websites such as Facebook would not enjoy repeat visitors or substantial advertising revenue.” Facebook further denies that the functions identified in this paragraph of the Complaint involved any innovation by Yahoo!.

For defenses, it basically brings out every possible argument. It says it didn't infringe. It says the patents are invalid. Those are pretty typical. However, Facebook also points out that Yahoo sat on these patents for ages and did nothing with them, so it argues that the doctrine of laches bars the claims (basically saying you can't wait forever before suing) and similarly that any damages would be limited by the amount of time that Yahoo sat on these patents and did nothing. They're also using Section 287 of the patent law to argue that Yahoo's failure to "mark" their inventions as patented severely limits or bars any damages. Basically, every possible defense shows up.

And then come the counterclaims on 10 specific patents, listed here:

Patent 7,827,208: Generating a feed of stories personalized for members of a social network
Patent 7,945,653: Tagging digital media
Patent 6,288,717: Headline posting algorithm
Patent 6,216,133: Method for enabling a user to fetch a specific information item from a set of information items, and a system for carrying out such a method
Patent 6,411,949: Customizing database information for presentation with media selections
Patent 6,236,978: System and method for dynamic profiling of users in one-to-one applications
Patent 7,603,331: System and method for dynamic profiling of users in one-to-one applications and for validating user rules.
Patent 8,103,611: Architectures, systems, apparatus, methods, and computer-readable medium for providing recommendations to users and applications using multidimensional data
Patent 8,005,896: System for controlled distribution of user profiles over a network
Patent 8,150,913: System for controlled distribution of user profiles over a network

It's worth noting that only the first two of those patents initially started life with Facebook. The others it picked up along the way. Though, it does appear as though that last patent was issued... today. Overall, these patents look just about as silly as most of the ones that Yahoo used to sue in the first place, but that's the nature of patents these days (especially software patents). Facebook is using what it has to fight back against Yahoo, but the whole thing seems like an incredibly silly waste of time, money and resources for both companies.

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AOL Won't Go Full Yahoo Patent Troll... But May Sell Patents To A Patent Troll

Mike Masnick — Tue, 27 Mar 2012 06:20:47 PDT

It appears that AOL isn't going down the Yahoo patent trolling path directly, but it is looking to sell off its patent portfolio -- meaning they may end up in the hands of trolls anyway. You can understand why AOL is doing this. It's been struggling to find its footing for quite some time now, and patents are selling for crazy amounts these days. So they get sold... and abused to sue others. It's the sad reality of the patent system these days. While it's nice to see that AOL isn't doing a full Yahoo, the selling of a patent portfolio to the highest bidder can be just as bad in the long run.

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Is Getting Sued For Patent Infringement The Equivalent Of Frat Hazing For A Growing Tech Company?

Mike Masnick — Mon, 26 Mar 2012 05:31:47 PDT

Rob "CmdrTaco" Malda's first column in his new job at the Washington Post (I'm still trying to make sense of this myself) is a good one. He looks at the Yahoo patent lawsuit against Facebook, and posits that getting sued on your way to an IPO is like a Silicon Valley fraternity hazing ritual. He doesn't go quite this far, but there certainly are some similarities. It's an insanely pointless process with significant costs, often disgusting to those going through it... but which they eventually grudgingly admit is worth going through to get to the end goal of being "in the club." I'm not sure it's totally true of just IPO-bound tech companies. I think it's just the nature of just about any semi-successful tech company these days. You get sued for patent infringement. It's just what happens. And it's there where the analogy falls down a bit. You can avoid fraternity hazing by not pledging a fraternity. You have no such choice when it comes to getting sued for patent infringement.

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Facebook Has To Waste Money On 750 IBM Patents Just To Ward Off Other Patent Lawsuits

Mike Masnick — Thu, 22 Mar 2012 19:22:36 PDT

It's been a pretty open secret for quite some time that Facebook is actively in the market to buy a bunch of patents, and now it's done its first big deal, scoring 750 patents from IBM to add to the 56 patents it currently has (some of which it purchased, and some of which it applied for). There's been plenty of talk about people who don't really know much about patents about how Facebook "needs" more patents, and the ridiculous Yahoo lawsuit only increased the attention the issue is getting. Plus, there are some investors who still -- for whatever reason -- think that the number of patents in a portfolio are a reasonable proxy for innovation or the ability to control a market. Of course, none of these patents will help Facebook against its most common legal foe: the patent troll. They're really only useful either against other operating companies (to ward off patent nuclear war cross-suits) or if Facebook decides to become obnoxious like Yahoo and start suing others offensively.

What this really shows is just how broken the patent system is. Facebook basically just had to waste a large chunk of money on a bunch of patents that have nothing to do with innovation, which won't help Facebook provide a better product for its users and which will only serve to create more money for lawyers somewhere down the road. That's not a healthy system. That's not an efficient system, and it's not one that's good for innovation or economic growth.

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DailyDirt: Airing Out Dirty Corporate Laundry

Michael Ho — Thu, 15 Mar 2012 17:23:00 PDT

Big companies often pride themselves on the corporate cultures they've developed. But over time, maintaining the same culture can become difficult as industries change and when shareholders aren't so happy with a company's performance. When employees leave a big firm, the culture can quickly bleed away. Here are just some examples of employees publicly pointing out some corporate culture shifts.

Greg Smith resigned from Goldman Sachs, and he had a lot to say about how the company changed on his way out. "People who care only about making money will not sustain this firm..." [url]
Stephen Elop's "burning platform" memo was published a little over a year ago in 2011. Has Nokia hit the water yet? [url]
Brad Garlinghouse wrote Yahoo's "Peanut Butter Manifesto" back in 2006. It looks like that peanut butter is being spread thick on patent trolling now. We should all hate peanut butter, indeed. [url]
James Whittaker says there's a big difference between the Google culture and the newer Google+ culture. Guess which one he thinks is double plus ungood. [url]
To discover more interesting business-related content, check out what the deal is on StumbleUpon. [url]

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

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Former Yahoo Employee Regrets How Yahoo Patented His Work

Mike Masnick — Thu, 15 Mar 2012 07:36:52 PDT

It's become fairly standard in Silicon Valley for companies to apply for a bunch of patents, even though the vast majority of software developers hate patents and think they're a disaster that holds back innovation. Yet people are told time and time again that companies simply have to file for patents, to put together a stockpile to be used defensively. Companies that don't do so are mocked. Over the years Google has been mocked for not having enough patents, as has HTC and, most recently, Facebook. All of those companies eventually start ramping up their patenting effort -- all while insisting to the engineers that it's just for defensive purposes. But, even if that's meant to be the case, things change, and companies that swear patents are only used defensively either change management or are acquired, and suddenly those "defensive-only" patents are offensive weapons (and I mean offensive in multiple ways here).

Former Yahoo employee Andy Baio reacted to the news of Yahoo's stupid patent lawsuit against Facebook the way much of the internet world did: with pure disdain. But, in his case, it's personal. Even though (thankfully) none of the patents with his name on them are in this particular suit, he knows that Yahoo has four patents with his name on them... and he very much regrets going along with the effort to patent things. He talks about how after Yahoo acquired his startup Upcoming.org, they asked him to get patenting.

After we moved in, we were asked to file patents for anything and everything we’d invented while working on Upcoming.org. Every Yahoo employee was encouraged to participate in their “Patent Incentive Program,” with sizable bonuses issued to everyone who took the time to apply.

Now, I’ve always hated the idea of software patents. But Yahoo assured us that their patent portfolio was a precautionary measure, to defend against patent trolls and others who might try to attack Yahoo with their own holdings. It was a cold war, stockpiling patents instead of nuclear arms, and every company in the valley had a bunker full of them.

Against my better judgement, I sat in a conference room with my co-founders and a couple of patent attorneys and told them what we’d created. They took notes and created nonsensical documents that I still can’t make sense of. In all, I helped Yahoo file eight patent applications.

Years after I left I discovered to my dismay that four of them were granted by the U.S. Patent and Trade Office.

I thought I was giving them a shield, but turns out I gave them a missile with my name permanently engraved on it.

He insists that he'll never let that happen again, but it's a good lesson for others. Those who claim that they're only getting patents for defensive purposes have to recognize that those patents may not always be under benevolent control. You are creating a weapon -- a potentially broadly powerful and destructive weapon. And while you can hope it won't be used, that's rarely your choice in the long run.

The scary part is that even the most innocuous patent can be used to crush another’s creativity. One of the patents I co-invented is so abstract, it could not only cover Facebook’s News Feed, but virtually any activity feed. It puts into very sharp focus the trouble with software patents: Purposefully vague wording invites broad interpretation.

This is the world we live in... and it's a big, big problem for innovation.

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Dave Gorman, Victim Of A Bogus DMCA Takedown, Highlights Flickr's Horrible DMCA Takedown Policy

Tim Cushing — Tue, 13 Mar 2012 15:12:52 PDT

Dave Gorman, a Flickr user whose photo was taken down by a bogus DMCA notice, is fighting with Flickr to get it to, if nothing else, change the way it handles takedown requests. Gorman's photo, along with all of its comments and views, was deleted based on the "strength" of a scatter-shot DMCA issued by Degban, supposedly on behalf of porn producers Wasteland.

Obviously, his photo was not property of Wasteland. While Degban's CEO continues to claim this is a result of having its software hacked (despite the fact that the alleged hacking occured 12 days after the takedown notice was issued), Flickr has basically responded with... nothing.

Flickr's system for handling DMCA requests is even more screwed up than the DMCA process itself, if that can be believed. Gorman, artist that he is, has crafted a handy flowchart illustrating just how screwed Flickr users are if they should find themselves on the receiving end of a DMCA takedown.

On the upside, if you are a US resident and the takedown is issued by a US-based company, all that will happen is the image itself will be removed and replaced with a message stating "THIS IMAGE HAS BEEN REMOVED DUE TO A CLAIM OF COPYRIGHT INFRINGEMENT." Once everything is sorted out, it's simply a matter of restoring the photo if the DMCA notice is challenged successfully. (Taken from Flickr's Help Forum.)

What does this mean?

-- US members will still receive a warning that contains the name of the complainant and now will include a link to the image where the content has been removed.

-- The original image will be stored by Flickr. Should we receive notice from the US Copyright Team to replace the original, we will be able to do so. *** Please note will be able to do so as long as the original photo.gne page is left in place. If a member chooses to delete the photo.gne page we'll assume that they're not interested further activity like restitution of the image. ***

-- The existing title, description, comments, tags, notes, etc. will be available. The image can still be added to sets and groups.

-- Blog This, Edit in Picnic, "replace this image" and the EXIF info will be disabled.

-- The image will be flagged NIPSA and as such will not return in search results nor be available in the API.

For the rest of the world

-- The existing process of photo removal will continue. We're going to begin reaching out to the other regional copyright teams to see if they would like us to enact this feature where they are. Given that the counter-claim process is unique to the DMCA, we'll need to work out how image restoration will work elsewhere.

Unfortunately, should you be a resident of any other country in the world, Flickr will continue to simply delete your photo and everything attached to it. Even if, as in Gorman's case, the DMCA takedown notice is successfully challenged, it is left up to the user to repost the image on their own. All attached comments are permanently gone, along with the view count, and anyone linking to that particular photo is left with a useless dead link.

Now, according to the terms of the DMCA, the service provider is supposed to replace the content it removed. Flickr is obviously not interested in doing that. It's not as if Flickr doesn't have the technology. Gorman pointed out on Twitter that Flickr has restored deleted accounts in the past, which means that a permanent backup of Gorman's entire page probably still resides on its servers. It even repaired external links for the user. But for some reason, Flickr is simply unwilling to fix this for Gorman or change how it handles foreign accounts.

Flickr did not respond to Gorman's emails. Yahoo!, which owns Flickr, did, but its "answers" were completely useless.

I have to communicate with flickr and Yahoo! separately. Flickr have yet to reply to a single email about it. Yahoo do reply. Eventually. It takes them 5 days. And then it's the kind of reply that doesn't actually reply to anything. Imagine typing a reply to someone who's asked 4 questions, knowing that you've not attempted to address 3 of them, and still ending it with the words, "we trust this answers your concerns"? It doesn't. And they know it doesn't. That's Yahoo.

Gorman did receive a phone call from Flickr's senior community manager, but found that conversation to be nearly as useless as Yahoo!'s incomplete answers:

When I asked Zack if he could tell me why the rules were different for non-US based customers he said that he couldn't tell me. I asked if he knew and couldn't tell me because he wasn't allowed to or if he couldn't tell me because he simply didn't know. He replied that he couldn't tell me that either. When I asked if he thought they could replace the photo he said he didn't know. I told him that I knew they had managed to replace a whole account that had been deleted recently, and he told me that replacing an account was not the same as replacing a page. I asked him why he thought they didn't have to comply with the terms of the DMCA and replace the photo and he told me he wasn't able to answer questions like that.

I don't believe Zack's employers are giving him the tools required to do his job.
"If it's possible to replace the photo, will you do so?"
"Ack... I ... um... that's tricky... I can't say yes to that."
"But the only reason you wouldn't say yes to that, is if you can imagine a situation in which you discover it is possible but still don't do it?"
"Yes."
"And can you imagine that happening? Can you imagine one of your engineers saying that he can replace the photo... and you deciding not to do it?"
"Well... no."
"So promise me that if it's possible to replace it, you will replace it."
"I don't think I can do that."

Following this disheartening phone call came Flickr's official response to Gorman's situation, and it appears that the photo service is not going to deal with this at all.

"After reviewing your recent correspondence, we have no further comments to make regarding this case, and consider it closed."

That's no way to run a social service on the internet. Your users are from all over the world, and while it is extremely difficult to play by the hydra-esque rules of a multitude of rightsholders, there are a million better ways to service the needs of your customers—and Gorman is indeed a paying customer with a Pro account. If the comment thread on Gorman's picture is any indication, Flickr is going to start leaking users simply because it refuses to budge an inch on its so-called DMCA response policy.

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Delusions Of Grandeur: Yahoo Officially Sues Facebook, Laughably Argues That Facebook's Entire Model Is Based On Yahoo

Mike Masnick — Tue, 13 Mar 2012 07:45:22 PDT

Already an also-ran laughingstock in the internet space, on Monday Yahoo decided to shoot itself in the remaining foot by following through on its silly threat to sue Facebook for patent infringement. That lawsuit is now official, and apparently even folks within the company are not at all pleased with the decision. As Kara Swisher has been reporting (in much more detail than most folks covering this story), apparently this effort was driven almost entirely by new CEO Scott Thompson with help from legal boss Michael Callahan. Almost everyone else was kept out of the loop. Much of the decision to sue was apparently also driven by an "activist" board member looking to goose the stock.

If that's the goal, it seems to have failed. The immediate reaction on Wall Street to the news was a collective "meh," with the stock dropping a bit after close.

Even more ridiculous are the insane hubris and delusions of grandeur found in the lawsuit and the statements about the lawsuit, starting with this whopper:

Facebook's entire social network model, which allows users to create profiles for and connect with, among other things, persons and businesses, is based on Yahoo!'s patented social networking technology.

Yeah, you see, if that were actually even close to true, then people would be spending all their days on Yahoo!. But they're not. They're spending them on Facebook, because Facebook innovated and built a better system while Yahoo languished and did nothing of consequence.

For much of the technology upon which Facebook is based, Yahoo! got there first and was therefore granted patents by the United States Patent Office to protect those innovations. Yahoo!'s patents relate to cutting edge innovations in online products, including in messaging, news feed generation, social commenting, advertising display, preventing click fraud, and privacy controls. These innovations dramatically improve user experience, privacy, and security and enhance the ability to connect with users.

Again, if that's the case, why does Yahoo have a dreadful user experience that has been causing users to leave in droves for years, and why has it so totally failed to connect with users?

Yahoo! is harmed by Facebook's use of Yahoo!'s patented technologies in a way that cannot be compensated for by payment of a royalty alone.

Right, because no one cares about Yahoo any more and just tossing a bunch of money Yahoo's way won't bring back all the users they've lost to Facebook. Why? It's got absolutely nothing to do with Yahoo's patents, and has a hell of a lot to do with developing a product users actually want -- which is entirely unrelated to patents.

If this plan is actually based on some clueless exec's idea of how to boost Yahoo's share price, not only is that sadly mistaken, but it also kills off the only chance Yahoo might have had to boost its sale price going forward. Stupid, anti-innovation patent lawsuits against better, faster, more innovative competitors might seem like a short-term strategy that makes sense, but in Silicon Valley, it's the death knell of any company. It's when the last of the smart engineers -- the people you actually need if you really want to innovate -- know that it's time to brush up the resume and take jobs at more innovative companies. It's the last throes of any good Silicon Valley company.

And pretty much everyone realizes it.

As for the patents in question, here's the list:

US Patents 6,907,566, 7,100,111 and 7,373,599: Method and system for optimum placement of advertisements on a webpage
US Patent 7,668,861: System and method to determine the validity of an interaction on a network
US Patent 7,269,590: Method and system for customizing views of information associated with a social network user
US Patent 7,599,935: Control for enabling a user to preview display of selected content based on another user’s authorization level
US Patent 7,454,509: Online playback system with community bias
US Patent 5,983,227: Dynamic Page Generator
US Patent 7,747,648: World modeling using a relationship network with communication channels to entities
US Patent 7,406,501: System and method for instant messaging using an e-mail protocol

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You Don't Need A Mythical Club Membership To Call Yahoo's Patent Threat Against Facebook Desperate

Mike Masnick — Wed, 29 Feb 2012 15:06:32 PST

We just wrote about Yahoo admitting to the world that it was done and cooked as an innovative company when it chose to threaten to sue Facebook over patents. Plenty of other commentators wrote similar stories. We've all seen this pattern before: Company that used to lead the market, but has become an also-ran, suddenly pops up with patents to sue the hot new thing. It's a sad statement of a company that just can't compete any more. However, in a really, really bizarre screed, hedge fund investor Eric Jackson seems to suggest there's a crazy conspiracy of hypocritical bloggers making these statements.

It should be noted that Jackson has a bit of a reputational stake here: four months ago, he specifically called on Yahoo to do exactly what it's doing now. So, now he seems to want to defend this turf, but his argument is bizarre and nonsensical. It starts off with a crazy conspiracy theory about how Silicon Valley bloggers have a special "clubby" relationship with VCs:

If you’re a blogger, you play nice to keep future sources happy (unless you’re someone like Kara Swisher and reached another level of appreciation/admiration). If you’re a VC, what makes your $10 million check more valuable than the next guy’s? Of course, you’re going to be nice. It’s all about access for these non-engineers. If you’ve been black-balled in Palo Alto – whether you’re a VC, blogger, or PR person — what advantage do you have?

Considering that I am a "Silicon Valley blogger" and have been around and doing this longer than anyone he mentions, I find this curious. I know it's become a popular talking point lately -- this supposed close relationship between VCs and bloggers -- but I seem to get by just fine without such relationships (yeah, I know some VCs, but I don't recall ever using one as a source, other than on information they stated publicly -- so not as a "scoop"). As for "what advantage" you have, if you don't have VCs feeding you information, that's a ridiculous question. Plenty of blogs have advantages in the community of readers they have and the analysis and insight they provide. Jackson seems to believe that the way a blogger can provide value is by being first. He's wrong.

He follows this up with an argument that doesn't make any sense at all -- something about the fact that new nominees to Yahoo's board are all from New York... and that means something crazy about the "negative reputational effects" it would have on anyone in Silicon Valley to serve on Yahoo's board. I have no idea what this means. I can't think of any negative reputational effect it could possibly have. He also mentions the "open secret among Silicon Valley elites that Yahoo! is in great need of reform." Wait. That's an "open secret"? How about it's not a secret at all. It's common sense to anyone who has watched Yahoo fade from glory and fail to actually keep up in the marketplace. Suggesting all this stuff about "open secrets," "Silicon Valley elites," and "reputational effects" just makes it sound like there's a conspiracy going on where there's none. Someone has hit the paranoia sauce hard.

What does all of this have to do with patents? I have no freaking idea. And neither does Jackson, who transitions with the grace of a rhinoceros ballerina, by simply switching to the patent question and insisting that this somehow "proves" the nonsense he just spouted.

But the vocal, nonsensical, and hypocritical response this morning to Yahoo! serving Facebook notice that it’s in violation of 10 - 20 key patents by several Silicon Valley watchers takes this clubbiness to new heights.

A bunch of veteran Silicon Valley observers, who know damn well what Yahoo's move is a sign of, isn't evidence of any "clubbiness." It's evidence that a bunch of people who know this space have seen this train wreck before. He then attempts to explain the "two big problems" with people pointing out that Yahoo's actions are a bad sign.

The merits of their assertion that anyone claiming intellectual property rights is somehow a “troll” and “not innovating.” When did we decide that IP is reprehensible? I missed that lesson at blogging school.

Er. It's not "blogging school." It's just Silicon Valley (and history) in general. We believe in innovating in the marketplace, not fighting in the courtrooms for the most part. A study last year suggested that somewhere between 70% and 80% of folks in Silicon Valley are generally distrustful of patents. I learned that by paying attention to reality. Not blogging school.

Should no company be able to “innovate” something without it immediately being copied by dozens of other firms? Is mass copycatting preferable to having rule of law saying someone should be able to come up with a new idea — as recognized by an impartial third party — and then have that idea protected for some period of time (not forever)?

Actually, there have been studies and research that suggest that despite Jackson's mocking rhetoric, indeed, yes, the ability to copycat is preferable to monopolies on ideas. Why? Because merely being a copycat isn't particularly effective. First movers have an advantage, and you win in the marketplace not by copying, but by out-innovating and providing something better. Even better, as others copy you and try to out innovate you, you get to learn from them too. And thus, innovation accelerates. That's a good thing.

If Sarah Lacy et al. find IP so reprehensible, I would ask them: are you arguing for Silicon Valley to be a place much closer to China where Internet firms can engage in mass copycatting immediately as a normal course of business? Is that what you want? Is that what your sources at Facebook, LinkedIn, Digg, and all the other great Web 2.0 companies of the future want?

It's already the normal course of business for the most part. We see copying happen all the time, and history has shown that's where much of Silicon Valley's innovative nature comes from. And I have no idea what the sources at these companies want -- but in general, yes, most of the folks I know in Silicon Valley seem to prefer to compete in the marketplace. I was at a roundtable of entrepreneurs not too long ago, meeting with some federal officials, discussing patents, and the officials seemed to expect that everyone would talk about the importance of more patents. Instead, every single entrepreneur talked about how patents were a distraction and a hindrance to their business. Multiple entrepreneurs talked about how they didn't care if people copied them, because they understood their own customers better and were already ahead in the market. Jackson seems to ignore all of this.

The obvious hypocrisy between these Valley-types criticizing Yahoo! and yet whistling past the Cupertino graveyard with Apple is what’s really galling to me. If all of you are so incensed by a company protecting its IP rights, why are you not picketing in front of Tim Cook‘s house? Hasn’t Apple pursued this line of defense/offense for its business most aggressively of anyone in the Valley?

Er... we've criticized Apple's patent strategy plenty and have done done so for years.

It goes back to clubbiness. One of the rules of the Valley is that no one criticizes Apple (or Google for that matter).

Geez. I guess all those blog posts above don't exist. And, honestly, that's just crazy talk. I know tons of "Silicon Valley bloggers" who criticize Apple (and "Google for that matter") all the time. Just for the hell of it, since all the links above are about Apple, here are some criticizing Google too, for "that matter."

Does Jackson even read the blogs he's slamming?

And for those saying that Yahoo! caved to Wall Street pressure to launch a patent fight now against Facebook prior to its IPO, this avoids looking at some key facts. Starting in 2005, Yahoo! began to make a concerted effort to develop its patent portfolio. According to PatentVest, Yahoo! was granted 20 patents in 2002 by the US PTO, 50 in 2006, 80 in 2008, 300 in 2010, and 325 in 2011. One of the key IP lawyers at Yahoo! in 2006 left the company shortly thereafter to take a more senior job at Google doing the same thing.

All companies in Silicon Valley recognized this trend and began investing in protecting their IP starting in 2006. Yahoo! was one of many doing this. When Yahoo! began growing its portfolio, it was before anyone realized Facebook was going to be the size it is today. Of course, Yahoo! famously tried to buy Facebook for $1 billion in 2006 — which was seen as an outlandish number to pay at the time by the blogosphere.

This is a convenient rewriting of history. While he's right that many companies in Silicon Valley started investing heavily in obtaining patents around that time, it wasn't to use them as an offensive weapon -- but as a defensive weapon against silly lawsuits from dying companies... like what we're seeing with Yahoo today.

Which brings us to today. Yahoo! has a case against Facebook. It might have cases against others in the future. Yahoo!’s owned by its shareholders – not the clubby bloggers of Silicon Valley.

Let the bloggers do what they need to do to protect their self-interests. Yahoo! will do the same.

But that's the thing: this strategy never works. That's what the bloggers were saying. Because we've seen it. The companies that start suing more nimble, more successful competitors over patents, always end up failing in the long run. That's why it's a clear indicator of a company that's done innovating. Breaking out the "sue over patents" folder is a key sign of a company that knows it can't compete. Because when you can beat the competition by innovating, suing over patents is always seen as a waste of time.

Shareholders in Yahoo -- and Jackson admits that he is one -- may get some short term benefits, if it happens to get a chunk of cash from some company, but when a company that fits Yahoo's profile starts suing over patents, it's a clear, clear sign that it's time to short that stock. The company has given up.

And I'm still wondering when I get invited into this supposed "club."

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