"All this to say they are protecting their cable and satellite partners by trying to force you not to become a cord-cutter."
This is an important point: Can you prevent cord-cutting with measures such as these. I would say no. As was mentioned earlier, preventing 'local viewers' from accessing content via these measures does nothing to prevent 'piracy'.
I think the IP lawyers in this case went overboard. Clearly, she wasn't infringing on on anything. Are words, phrases, & memes now subject to copyright law?
Her business of selling products based on a catchphrase from a satirical show, seems perfectly fine. There are business websites that sell T-Shirts, with satirical commentary on them that have never been attacked by lawyers. Her business shouldn't have been any different.
Shame on Zazzle for pulling her products, & affecting her business, so quickly without proper investigation.
"...Within the framework of his science fiction stories, Heinlein repeatedly addressed certain social themes: the importance of individual liberty and self-reliance, the obligation individuals owe to their societies, the influence of organized religion on culture and government, and the tendency of society to repress non-conformist thought." [Source: Wikipedia]
Movie industry profits where at an all time high last year. They gotta do something to protect their legacy businesses, I suppose.
"...serious questions about unclean hands in these cases..."
Perhaps that could be one other judgement against such companies, in a court of law; that use of honeypots to garner IP addresses is clearly wrong, if you are a representative of the rights holders, and are using such to sue people.
Could this be a reverse Streisand effect, in that the event starts with major publicity of the situation, but then the small business loses customers & trade, as people decide not to frequent their establishments; the business slumps into obscurity. This is directly as a result of their customer relations, or lack thereof. Micro management gone badly wrong.
It may seem a solution, although for use in a smaller artists budget, it may be more difficult to set up due to high costs. The tracks & albums will be pirated anyway, so it seems like an expensive way to ensure a short release window, to avoid bad reviews, perhaps?
If the purpose of the watermarking was to reduce piracy, then you could argue that it may have seemed an effective deterrent. However, these weren't files released to individuals who subsequently tried to pirate them. No: They were provided to an authorised agency dealing with paying customers!
Audiophiles, as with any eclectic bunch of hardcore users interested in a particular pastime, will most likely up sticks, & move to another service. If the only viable service around is untouched (or remastered) pirate copies, ergo, well....you know the rest.
Why is it, that time & time again, these major companies keep shooting themselves in the foot. Or, as a nod to the original analogy, keep blowing themselves up, taking the limbs with them.
Technology is always ahead of established businesses. What may mark individual companies as different, is their ability to use, or innovate, using existing & future technologies. Many of todays 'buggy-whip' manufacturers are innovating & using new technology with web sites such as Hulu, lastFM, Netflix or any of the more innovative firms trying to offer the legal services for consumers.
Although these 'buggy-whip' innovators are building on the established 'product' of Hollywood, MPAA, RIAA, etc, the companies producing & making this 'product' fail to see how well these other companies are marketing their [Hollywoods] wares.
Remember too, that the new fanged horseless carriages have flag bearing runners out in front, to warn pedestrians that they are coming; the various P2P, Torrent & streaming video sites fit well in this analogy, & yet Hollywood would prefer legal sanctions, & police action to shut them down, rather than welcoming new & innovative services that lead the way to where consumers want to go.