Five Years Ago

This week in 2010, the Joel Tenenbaum continued to echo the Jammie Thomas case as a judge declared the damages to be unconstitutionally excessive. Meanwhile, a heated online debate about file sharing broke out between a teenager and a composer, with at least one music/media professor taking the right side. The never-normal Prince was making bold proclamations about the death of music and the internet, and Kara Swisher was taking his side, while we wondered just how many 'significant blows' against file sharing it would take to make any kind of difference.

We were also fresh out of one of the DHS' big domain seizure rounds, and discovering that they wanted to go after The Pirate Bay and Megaupload as well. Snoop Dogg was sued for sampling while the band Men At Work was ordered to pay 5% of all earnings on 'Down Under' to the publisher of an old folk tune — great examples of the sort of creative interference that doesn't happen in the copyright-free world of food. At least 'Hollywood Accounting' was starting to lose in the courts, while the Washington Post was recognizing how crazy Summit Entertainment can be about Twilight IP. A lawsuit was underway that explored the boundaries of Creative Commons, while we explored some nuances of using free as part of a business model — just don't tell that to the financial columnist who lectured a bunch of little kids for running a free lemonade stand.

Ten Years Ago

The iPhone was still two years out, but the rumors that Apple would be entering the phone business in some big, mysterious way had already been long-circulating, and resurfaced this week in 2005. SOPA was still six years out, but the German recording industry was already onto the idea of poisoning the DNS to block file sharing. The age of MMORPGS was already well underway, and we discovered the strange new industry of real sweatshops farming virtual goods. And people were beginning to realize just how little digital memories fade (even if you want them to).

The EU Parliament faced the question of software patents this week in 2005, and threw out the whole idea with a landslide vote. Back home, supporters of the Broadcast Flag were taking a sneakier approach to dealing with legislators and the public, obfuscating the facts like crazy. That kind of constant obfuscation is how you end up with people who completely fail to understand the difference between trademark and copyright.

A lot of people were focused on 'mobile music'... to a fault, in fact. Some were just worried about mobile phone etiquette in the office. Others were tracking the predicted blog bubble and debating the legality of open Wi-Fi. Amidst all this, though, one huge and sad story swept through the world: the London subway bombings, which served as a tragic coming-of-age event for the internet as news media.

Fifteen Years Ago

It was very quiet on Techdirt this week in 2000, but apparently we didn't stop posting entirely for the 4th of July holiday, especially since Techdirt was getting a bunch of new traffic from being voted 'Cool Stop on the Internet'. Meanwhile, this was still a time of great uncertainty in Silicon Valley, but it was starting to sort itself out: the IPO market clearly hadn't died entirely and a bunch of upcoming IPOs were from companies that were actually profitable, even as major dotcom failures were hurting partners like PR firms and law firms. Unfortunately some entrepreneurs were pulling deceptive tricks to catch the eyes of VCs — perhaps lending some credence to UK residents, who trusted old names more than flashy new dotcoms.

Tech adoption in the world was rapid and only accelerating. Mobile phone penetration kept blasting through more and more key threshholds, while we heard some of the first rumblings of the now-ubiquitous "camera phone". On the flipside, a lot of companies were struggling to accept and respond to online customer inquiries, while students were proving nervous about online college applications which felt a little too much like dropping your future into the void.

Seventy-Eight Years Ago

Film buffs, historians and fans of American culture will all feel a pang of sadness at mention of the Fox vault fire, which happened on July 9th, 1937 when canisters of nitrate film spontaneously combusted and destroyed the only copies of virtually every silent film Fox had made up to that date. It was a staggering loss for the history of cinema, and today we have only snippets and low-quality copies of a handful of the lost films — just enough to give us a taste of everything we're missing.

Today, of course, there's absolutely no good reason for something like this to ever happen again: new films, music, books, photographs and other forms of content can be stored digitally in thousands or millions of places, such that nothing short of the total breakdown of society could wipe them out. And yet the sad truth is that we haven't taken full advantage of this capability: all over the world, committed archivists are being blocked in their efforts by copyright laws, DRM and a general ownership mentality. Right now there are old films rotting in vaults — or getting ready to explode in their canisters — while historians line up outside only to be denied entry. So in truth there are only two things that can destroy our cultural heritage in the digital era: the total breakdown of society, and copyright law.

Plenty of people have tried to market various devices for keeping track of your keys or never losing your wallet, but they've tended towards the cumbersome and gimmicky, and have always been pretty limited in their function. This week, we're taking a look at a much cooler approach to the same problem: little computers called Trakkies that attach to your things and link them all up in a mesh network.

The Good

Trakkies are a great example of innovation at work. The problem — people losing their keys, forgetting their bags, etc. — has an obvious solution in a world of wireless technology, but implementing that solution in a functional and stylish way that makes people say "wow, I want that" is another challenge altogether. Trakkies go beyond a simple proximity or location system, and instead make all your stuff smart. The little node tags come in two sizes, each with a bunch of sensors and a big configurable button; they locate each other and form a mesh network with Bluetooth and NFC connectivity, and begin learning what you bring with you and when. Your wallet can warn you if you're leaving the house without your keys, and vice versa — or you can tap the button on any one tag to find out if all the others are with you. The associated mobile app is optional (a beautiful thing) and brings your phone into the mesh network without the need for an an attached node tag, plus provides additional tools like looking up the last known location of all your tags on a map.

The network can communicate with lots of other smart devices and can be hooked into IFTTT for programmable behaviours based on a wide variety of factors. And the buttons on each node can be set up with context-sensitive functions — so the button on your coat could be set to tell you if your phone isn't with you, but serve as a music skip control if it is; it could check for your wallet and keys when you're getting off the bus, but turn on and off your smart lightbulbs when you're at home. Trakkies take a big leap beyond solving a simple problem, and actually spark excitement about the new things they could enable.

The Bad

Truthfully, at this stage, I don't have much bad to say about this project. I'm looking forward to seeing where it goes. The price isn't cheap, but it isn't prohibitive either, and the designers have made what I'd consider all the right choices. The "internet of things" has been looming on the horizon for some time now, and a device like this could represent a meaningful step in that direction.

The Background

There's an interesting bit of backstory to the Trakkies on the Kickstarter page: the whole thing actually started as a software pursuit. The original team was a research company at European Space Agency BIC, and was focused entirely on the data science and machine learning aspects of the project. The switch to a focus on hardware only came when the team realized that nobody was making hardware capable of doing what they wanted their software to do. That's the path innovation often takes, and beautifully illustrative of the fact that the simplest problems — people sometimes forget their keys — can yield the most interesting and groundbreaking solutions.

The DHS isn't the most responsive government agency when it comes to FOIA requests. In fact, this government in general isn't very responsive when it comes to FOIA requests. So, it's completely understandable why its brand new FOIA app is similarly unresponsive.

First off, searching the Google Play store for "DHS" or "FOIA" will NOT find the app. If you use both those words together, however, you'll find it at the top of the list. Clicking through brings you to the app's page, which shows that whatever the DHS paid for its development, it's going to be awhile before it ever returns whatever passes for ROI in publicly-funded app giveaways. 10+ downloads. That's hardly a sign of widespread adoption.

Once you click Install, you're given some information that makes no sense. Why would a government app need your location info? The question is unanswered anywhere in the app's notes. Yes, you do need to turn over a certain amount of personal information to file an FOIA request, but the location it's being sent from is irrelevant.

Now, the idea behind the app is a good one. If you're the inquisitive type, ideas for FOIA requests may strike at inopportune moments. Rather than holding onto it until you're in front of a proper computer, you can just fire one off immediately. IN THEORY.

The app doesn't store your personal information (probably a good thing), so this means every FOIA request will require you to type in your name, address, etc. all over again.

The app's shortcomings become apparent immediately. You're given a list of agencies you can request from, but it's far from complete. Most noticeably, the TSA is not on the list of available agencies and there's no option to add other DHS agencies to the list. Presumably, the TSA will be added when (or if) its FOIA system is told to play nice with the DHS app.


As for the actual entry of personal information (the thing you'll be doing EVERY SINGLE TIME YOU USE THE APP), it's a complete travesty. The UI seems to have been created by a person who knows what a fill-in-the-blank form looks like, but has never actually performed the act on anything but paper.

Look closely at this screenshot. I'm currently in the Zip Code field. You know how I know this? Because when I start punching in numbers, it starts filling up the field. There's no blinking cursor to let you know what field you're in. (Nor does it show up when you need to edit something. It only provides the little teardrop indicator underneath wherever it is [approximately] that you tapped the screen.]


The fields themselves are, um... not smart. Not a single field entry triggers uppercase letters, despite almost every field being the sort of information one normally capitalizes.

It gets worse.

Clicking on State gives you a menu of states to choose from. But not 50 of them. Not even a dozen of them. You'd better hope you live in states None-Colorado because there is no way to scroll down the list (it's static) or even manually enter your state's name.


At this point, I gave up. It's not even worth using as a last resort. You'd be better off writing a reminder in a functioning app and using the DHS's website (or a clearinghouse like MuckRock) to do this twice as fast with half the hassle. The fields are unresponsive, your keyboard routinely covers what you're trying to type in, and, for no apparent reason, the government now knows approximately where you last angrily yelled at its terrible app.

I am hoping this app improves over time -- not because I plan to make use of it, but because it will show the agency is actually trying to make its agency more accessible and transparent, rather than just settling for a "Will this do?" app that actually won't do. Not at all. And I guarantee the development of this app costs more than the development of apps with twice the capability and with at least a passing knowledge of common UI features.

Earlier this week the Ninth Circuit heard oral arguments in the appeal of Lenz v. Universal. This was the case where Stephanie Lenz sued Universal because Universal had sent YouTube a takedown notice demanding it delete the home movie she had posted of her toddler dancing, simply because music by Prince was audible in the background. It's a case whose resolution has been pending since 2007, despite the fact that it involves the interpretation of a fundamental part of the DMCA's operation.

The portion of the DMCA at issue in this case is Section 512 of the copyright statute, which the DMCA added in 1998 along with Section 1201. As with Section 1201, Section 512 reflects a certain naivete by Congress in thinking any part of the DMCA was a good idea, rather than the innovation-choking and speech- chilling mess it has turned out to be. But looking at the statutory language you can kind of see how Congress thought it was all going to work, what with the internal checks and balances they put into the DMCA to prevent it from being abused. Unfortunately, while even as intended there are some severe shortcomings to how this balance was conceptualized, what's worse is how it has not even been working as designed.

One such problem is with the content takedown system incorporated into Section 512. The point of Section 512 is to make it possible for intermediaries to host the rich universe of online content users depend on intermediaries to host. It does this by shifting the burden of having to police users' content for potential copyright infringement from these intermediaries to copyright owners, who are better positioned to do it. Without this shift more online speech would likely be chilled, either because the fear of being held liable for hosting users' infringing content would prompt intermediaries to over-censor legitimate content, or because the possibility of being held liable for user content would make being an Internet intermediary hosting it too crushingly high a risk to attempt at all.

Copyright owners often grumble about having the policing be their responsibility, but these complaints ignore the awesome power they get in return: by merely sending a takedown notice they are able, without any litigation or court order or third-party review, to cause online speech to be removed from the Internet. It is an awesome power, and it is one that Congress required them to use responsibly. That's why the DMCA includes Section 512(f), as a mechanism to hold wayward parties accountable when they wield this powered unjustifiably.

Unfortunately this is a section of the statute that has lost much of its bite. A 2004 decision by the Ninth Circuit, Rossi v. MPAA, read into the statute a certain degree of equivocation about what the "good faith" requirement of a takedown notice actually demanded. Nonetheless, the statute on its face still requires that a valid takedown notice include a statement that the party sending it has "a good faith belief that use of the material in the manner complained of is not authorized by the copyright owner, its agent, or the law." (emphasis added)

The big question in this case is what the "or the law" part means in terms of making a takedown notice legitimate. No one is disputing that the notice that took down the dancing baby video was authorized by the agent in charge of administering the rights to Prince's music (at the hearing we learned that this is no longer Universal Music, but it was back then). But copyright is always contextual. In other words, just because someone uses (e.g., by posting to the Internet) a copyrighted work does not mean they have automatically infringed that work's copyright. There may well be circumstances enabling that use, like a license (including a statutory or compulsory license), or fair use.

Whether the "or the law" part included authorization pursuant to fair use is what a significant part of the hearing addressed. Universal said that it didn't, arguing that fair use was only an affirmative defense. By "affirmative defense" Universal meant that fair use was just something you could argue as a defense to being accused of copyright infringement in a lawsuit but not something that existed more integrally as part of copyright law itself. As such, Universal argued, it was not necessary to consider it when sending a takedown notice claiming that the use in question was not authorized.

EFF, arguing for Lenz, disagreed, however, arguing that the articulation of fair use in the statute, at 17 U.S.C. § 107, made fair use more than just a defense; rather, it is a statutory limitation constraining the scope of the copyright owner's exclusive rights and just as much a part of the law as the parts enumerating those rights. As a result, the EFF argued, a copyright owner sending a takedown notice always has to consider whether the rights the notice is seeking to vindicate are at all constrained by the sort of use being made of the work. If the copyright owner doesn't do that then it could be subject to the sanctions of 512(f).

Although one can never read the tea leaves from an oral argument, the judges did not seem to buy Universal's argument that fair use was just an affirmative defense. They seemed more persuaded by the EFF's position that it was enough a part of the copyright statute for at least some consideration of it to be required for a takedown notice to be valid. But then the court became concerned with the question of how much consideration was needed. After all, as Universal suggested (and EFF disagreed with), there may even be some question about whether the use of Prince's music in the dancing baby video was itself fair. Fair use is a very squishy thing always dependent on the particular context of a particular use of a copyrighted work. Often it takes massive amounts of litigation to determine whether a use was fair, so the judges spent a lot of time questioning both parties about what a copyright owner (or its agent), if the statute requires them to consider fair use, must actually do on that front in order to not run afoul of the law's requirements when sending takedown notices.

Universal argued that because it (and other similarly situated copyright holders) needed to send millions of takedown notices it would simply be too burdensome to have to consider fair use for each and every one of them. To this the EFF suggested that tools may be available to help triage the likely contenders needing closer analysis, but something else the EFF said I think drives the point home more aptly.

The DMCA also includes a "put back" process, at Section 512(g), so that Internet users' whose content has wrongfully been removed can have it replaced. Universal argued that this process should be enough to deal with any wrongful takedowns, as it allows for wrongfully removed content to be replaced. (Universal also argued that this "put back" notice was also necessary to give the copyright holder notice that fair use might be an issue to consider.) But if this were the case then why have a Section 512(f) in the statute at all? There is nothing in the statute that suggests that a "put back" notice needs to happen for Section 512(f) to be able to operate. Furthermore, although the record in this case was unfortunately poor as to what percentage of removed content was ever put back pursuant to 512(g) put back notices, as the EFF noted, even if it were a very small percentage of removed content, a small percentage of millions of instances suggests that quite a bit of non-infringing content is still getting removed.

Moreover, there is no reason to suspect that the content that has been restored in response to these put back notices represents the entire universe of wrongfully removed content. There is little basis to presume that everyone else who had their content removed simply shrugged it off as a fair cop. Because a put back notice can conspicuously put a user in the line of fire of a copyright owner many users might not have wanted to tempt the trouble. Also, as the EFF observed, the DMCA takedown system is fairly labyrinth and often needs the assistance of counsel to help navigate it. This form of support is likely not available to most, and even in the case of Ms. Lenz it did not readily result in her home video of her kid dancing being restored.

Ultimately Universal is arguing that this outcome is ok: despite this harm to legitimate speech, copyright owners should nonetheless be entitled to cause millions and millions of instances of user-generated content to disappear from the Internet with very little effort, inconvenience, or oversight on their part. But it's an argument that fails to recognize just what a privilege the takedown system represents. It is a huge shortcut, giving private parties the extraordinary power to be censors over Internet content without the trouble and expense of a lawsuit to first determine whether their rights have truly been infringed. With the DMCA copyright owners become judge, jury, and executioner over other people's speech all on their own, and when they decide to sentence content for disappearance they get to use the takedown notice as the gun to the head of the intermediary to force it do the deed.

Universal spent a lot of time arguing that the DMCA was intended to be this sort of shortcut in order to be a "rapid response" system to online infringements. But the "rapid response" the DMCA offers is that copyright owners don't first have to go to court. Nothing in statute suggests copyright owners are entitled to a response so rapid that they are excused from exercising the appropriate care a valid takedown notice requires – or that even a lawsuit would require. As Universal would have it, they get to be censors over other people's speech without any of the risk normally involved if they had to use the courts to vindicate their rights. Note that nothing in the DMCA precludes a copyright owner from suing an Internet user who has infringed its copyright. But with a lawsuit comes the risk that a copyright owner might have to pay the fees and costs of the defendant should their claims of infringement found unmeritorious (including because the targeted use was fair). According to Universal, however, copyright owners should face no similar consequence should the claims underpinning their takedown notices be similarly specious. Copyright owners should simply be able to cause content to be deleted at will, with no risk of any penalty to them for being wrong.

But that's not what the statute says. As was also argued at the hearing, Section 512(f) creates the penalty necessary to deter wrongful takedowns because without there being one, all the risk of the takedown system would be borne by those whose free speech rights (both to speak freely and to freely consume what others have said) are undermined by copyright owners' glib censorship. As the saying goes, with great power comes great responsibility, and it hardly misconstrues Congress's intent, or the express language of the statute, to demand copyright owners to carefully exercise that responsibility before letting their takedown notices fly, and to sanction them when they don't.

Genetically modified organisms (GMOs) are more common than many people think. Diabetics nowadays who rely on insulin shots aren't getting their medicine from pigs/cows or other mammals -- and haven't been for decades. Modern sources of insulin come from vats of genetically engineered bacteria. So what about GMOs and GMO-produced products in our food supply? Most Americans have definitely eaten some GMO food, but is there any end to GMO experimentation in the wild now?

• In France, a lamb that was genetically modified with jellyfish DNA got into the retail food chain -- and some people have probably eaten it without knowing. This wasn't an accident, apparently. A disgruntled worker (and possibly some co-workers) purposely sold a lab animal to a slaughterhouse. It's probably not going to kill anyone, but this is how the dinosaurs get out of Jurassic Park World, IRL. [url]
• In 2013, the USDA's Animal and Plant Health Inspection Service (APHIS) found genetically engineered wheat in Oregon -- where it shouldn't have been. Since then, there has been some concern that more GMO wheat is growing in the wild without anyone knowing.... [url]
• You can thank GMOs for making billions of pounds of cheese sold today (ie. most of the cheese you see in US stores). Fermentation-Produced Chymosin (FPC) is used instead of a calf stomach extract -- and it just wouldn't be possible to make as much cheese as we do without FPC (unless the veal industry suddenly exploded). [url]

After you've finished checking out those links, take a look at our Daily Deals for cool gadgets and other awesome stuff.

If you pay any attention to Valve's Steam platform, you've probably already at least heard about the hot-selling game NotGTAV. The game, just to be clear, is not Grand Theft Auto 5. It's actually not even close. It's a parody game, built to play more like a clone of Snake or something similar. But it is most certainly not GTA5. And nothing in the game is GTA5 either. Here's how the developers of the game explain themselves:

This game is a parody. It is definitely, positively and (hopefully) legally, not the game Grand Theft Auto Five. Sure, it’s called NotGTAV, but those letters stand for Great Traffic Adventure and the V is silent. Like the one in “lawsuit” (which, you’ll notice, is also invisible).

This short tour of the glories of the UK’s M4 corridor is easy to play, hard to master, addictive, very funny, and cheap. 100% of the profits from this game go to young people’s charity Peer Productions. Without Peer Productions the NotGames team would never have met. By buying this game you can help us pay something back.

Now, a parody game would be protected as fair use and going legal on a game that is built specifically to give money to charity would be a public relations nightmare. Not that any of that kept the game from being removed from Steam over a copyright claim, of course. The inevitable claim came and Steam took the game down from the marketplace. Everyone immediately thought that Rockstar games had been the one issuing the takedown, even though the fact that the GTA series essentially relies on parody to exist and survive the lawsuits idiotic celebrities have levied against the company. Indeed, when Steam informed the developers of the takedown, its notice named an employee of Rockstar as the complainant. And so the developers put their plan B into effect.

“We’re currently in the process of getting our game back on Steam, by re-branding to NotDMCAV,” Kendall said earlier today, shortly after NotGTAV’s removal from Steam. “The issue that Rockstar took was with the usage of ‘the Grand Theft Auto V acronym and title GTA’—apparently you can now own a series of letters, even it’s already a police crime in the first place. Our initial reaction was—and remains—that we’re protected under parody protection laws, and we’ve made it clear that we’re not accepting in any way, shape or form that we’ve infringed copyright, we’re just trying to be as compliant as possible right now.”

While I love some good snark as much as anyone, it turns out this good snark was wholly unneccessary. As the team worked to rebrand their hot-selling game, which involved a hell of a lot of work, they were also working with Steam to figure out just what the hell was going on. Turns out, Steam put the original title back in the marketplace having found that the complaint from "Rockstar" was actually "bullshit."

In what has quickly become the weirdest day of our lives, and one of the most hectic, we’ve just received news from Valve that the plaintiff of our DMCA is now being treated as a false complainant.

NotGTAV lives!!!!!!

We’re half-way through rebranding the game as NotDMCAV, and the store page we’ve designed gives us a huge giggle, so we’re leaving you some of our new artwork (you may be able to tell it was done in a bit of a hurry) for a couple of days but, as we’re not being sued, the name and game will be remaining the same.

So good on Rockstar for not filing this complaint and great for the developers, but all this shows is why the permission culture and takedown-first attitude make d-bags out of everyone else. The summary here, should you lose sight of it due to the NotGTAV folks' awesome attitudes, is that some nobody put in a copyright claim that took their work off the market, caused them to begin work rebranding, even though that work wasn't necessary, and then Steam put the game back up. In other words, the mere existence of the claim is all it took to keep the sales from rolling in, even if only temporarily. That's bullshit. It's a wonderful example of how copyright laws and the way that platforms like Steam choose to interact with those laws is a clamp on legitimate speech and art, not to mention tools for jerks to screw with content producers.

After Grooveshark shut down a few months ago, some individuals set up a site that looked kind of like Grooveshark, but with a totally different backend, and used a variety of URLs that included Grooveshark on different top level domain systems. The RIAA, as it's been known to do, freaked out, and filed a lawsuit. As part of this, it sought a restraining order and injunction, which it got. The RIAA then insisted that the restraining order applied to CDN provider Cloudflare, despite not actually being a part of the case. Cloudflare, as a non-party worried about the impact of such a restraining order, stepped into the case to protest, but the judge still ruled against Cloudflare despite the fact that the ridiculously broad injunction went really far, basically saying that no site with the word "Grooveshark" in the domain could use Cloudflare, even if that was a domain like "GroovesharkSucks-GoBuyMusic.com."

Cloudflare complied, but asked the court to modify the ridiculously overbroad injunction, as it could easily be read to say that Cloudflare itself then had to proactively police every use of its service to make sure no one tried to similarly post a Grooveshark-related site. Instead, it asked the judge to, at the very least, require the RIAA to alert Cloudflare to sites that it believed were violating the injunction. The RIAA, of course, argued that Cloudflare had the full responsibility of proactively making sure no new Groovesharks showed up. The judge has now clarified the original injunction, saying that, yes, the RIAA needs to alert Cloudflare to any future problematic sites, but denying Cloudflare's request for a five day turnaround time.

The initial injunction still seems tremendously problematic in just how broad it is. Here's what it covers, saying that basically anyone is barred from:

1. Using the Grooveshark Marks in any manner in connection with the advertising, offering for sale, or sale of any service or product, not provided by or authorized by Plaintiff UMG.
2. Committing any acts calculated to cause consumers to believe that the Counterfeit Service or any other use of the Grooveshark Marks is offered under the control and supervision of Plaintiff UMG or sponsored or approved by, or connected with, or guaranteed by, or produced under the control and supervision of Plaintiff
3. Infringing any of the Grooveshark Marks and damaging Plaintiff goodwill;
4. Otherwise competing unfairly with Plaintiff UMG in any manner; or
5. Using, linking to, transferring, selling, exercising control over, or otherwise owning the domain names grooveshark.io or groovesharkpw or any other domain name that incorporates, in whole or in part, any of Grooveshark Marks (the "Infringing Domain Names").
6. Directly or secondarily infringing Plaintiffs' copyrighted sound recordings via the Counterfeit Service or any variations thereof.

While I don't care what happens to Grooveshark itself or these copyrights, it seems quite disturbing that a judge can issue such a broad injunction that can impact so many third parties, potentially making them liable should someone do something that "unfairly competes with Universal Music in any manner." Part of the point of SOPA was to add these kinds of injunctions to the law but Congress did not approve SOPA. So why is the court acting like it has this power?

Again, it's easy to say "meh, no big deal, whoever set up these sites were clearly infringing" or even to attack them for setting up a fake Grooveshark. But this goes beyond that, and raises serious questions about the court's powers to order third parties to block all access to websites without full due process.

The Supreme Court's punt on true threats vs. free speech in the Elonis case has managed to pay off for one convicted criminal. While the nation's top court waits for the system to generate a better test case (and for defense lawyers to add up billable hours), the country will have to make do with the with the answers/non-answers provided by the decision.

Because the Supreme Court's ruling doesn't explicitly consider the First Amendment question, neither will anyone else, which makes a SCOTUS rematch slightly more unlikely. And the vague set of "rules" handed down in the decision that only sort of determined what the law is not have been applied to Clifford Houston and his angry, lawyer-directed phone calls.

Houston is a lifelong criminal who was tried for his involvement in a robbery/shootout that left a sheriff's deputy and his ride-a-long dead. Houston's lawyer, James Logan, managed to extricate Houston from felony murder charges in two consecutive trials, which resulted in a mistrial and an acquittal, respectively. That's some good lawyering.

Logan, however, was under the illusion that Houston would pay his legal bills. Houston obviously thought all legal work done on his behalf should be pro bono. Logan decided the only way he was going to get paid was to exercise his lien on Houston's property, something he acquired up front before taking Houston's case. Houston, back in jail for a firearms offense, soon expressed his displeasure at Logan's move against "his" property.

Houston called his girlfriend from jail and said the following:

HOUSTON: I'll kill that motherf[***]er [referring to Logan] when I get out. Hey, I ain't kidding! I ain't akidding! They can record it! They can do whatever the hell they want! That motherf[***]er opens up my house, I'll kill his ass! When I get out of this motherf[***]er, he's dead! . . .

HOUSTON: The only thing [Logan]'s gonna get from me is a f[***]ing bullet! That's the only thing that son of a b[****] gonna get from me! That's the only damn thing! They better get somebody to lock that son of a b[****] up! 'Cause I've got something for Mr. damn Logan! You let me get out of this motherf[***]er in any shape, form, or fashion, and he's got a damn problem! . . .

HOUSTON: You tell any of my family, you tell Cody, you tell Rachel, any of them, to kill that son of a b[****]! . . . Any of my, any of my people has got my permission to kill that son of a b[****]!

HONEYCUTT: They ain't gonna do that. I mean, they ain't gonna shoot nobody.

HOUSTON: Well, I ain't got no damn problem with it. I ain't got no damn problem with it.

Pat Honeycutt, the voice of reason in this exchange, calmly noted that Houston's extended family was probably not going to shoot a lawyer for foreclosing on property owed to him by Houston.

This conversation led to yet another indictment for Houston, this time for "transmitting a threat in interstate commerce." At his trial, the district judge issued the following instructions to the jury:

“A statement is a true threat if it was made under such circumstances that a reasonable person hearing the statement would understand it as a serious expression of intent to inflict injury.”

Houston was found guilty and sentenced to five years in prison. Houston appealed this decision, which worked out well for him as the Supreme Court was just reaching its Elonis decision. In the decision, the Supreme Court basically invalidated this jury instruction, stating that, as delivered, it failed to account for other mitigating factors.

"A statement is a true threat when a defendant intentionally makes a statement in a context or under such circumstances wherein a reasonable person would foresee that the statement would be interpreted by those to whom the maker communicates the statement as a serious expression of an intention to inflict bodily injury or take the life of an individual.”

Once again, there's nothing in this decision that even comes close to addressing how much distance actually lies between free speech and true threats. It's a longish procedural discussion centering on the difference between "negligence" and "awareness." Of the areas the appeals court explores, the discussion of Houston's mental state during the phone calls is the closest it comes to addressing speech protections (or the lack thereof).

Anyone listening to Houston’s recorded diatribe (and we have had the pleasure) could plausibly think one of two ways about it. One possibility is that he meant just what he said, creating liability no matter what the standard is. The other possibility is that the recording caught him in a fit of rage in a prison cell (where he was in no position to act on his thoughts and where he did not necessarily know anyone other than his girlfriend was listening).

As the court notes, both possibilities remain about equally probable, at least in terms of theoretical jury members.

Recognizing that Houston was speaking with his girlfriend, a jury could reason that he was venting his frustration to a trusted confidante rather than issuing a public death threat to another. That Houston’s girlfriend dismissed some of his comments out of hand (“[T]hey ain’t gonna shoot nobody”) would allow a jury to infer that he was ranting and raving rather than expressing an intent to cause harm. Houston was furious, to be sure, but he was not necessarily cogent— perhaps not even cogent enough to recognize the risk that his words would be perceived as a threat, which is what even the recklessness standard would require.

It goes on to point out that because both explanations are equally credible, Houston stood a reasonably good chance of being acquitted of the threat charges, but only up until the trial court tipped the balance with its erroneous instruction to the jury that "negligence" was the same as criminal intent. Weighing this with the Elonis decision, the appeals court finds in favor of Houston, reversing his conviction and kicking it back to the lower court.

One interesting aspect of this case that has nothing to do with threats, free speech or anything else the court might have needed to consider before reaching this conclusion is the "interstate" portion of the charges. Houston also protested this section of the charges. The government claimed that the "interstate" aspect of the charge was supported by the fact that -- despite it being a Tennessee-to-Tennessee phone call -- the call was routed through a Louisiana server.

The court bought this assertion, claiming a "reasonable juror" would find this logical. I'm not so sure. Because this aspect will rarely, if ever, be central to a disputed case, it's likely to remain unexamined. The problem is that prisons -- both public and private -- rely on a variety of (overpriced) private service providers for phone connections. Some may be located out of state for purely self-interested reasons, like dodging more restrictive local regulations. Some prisons may route calls less directly simply because it is more profitable for them -- and the contractors they retains -- to do so. So, in many cases, every call, no matter how local, could be considered "interstate," a term that tends to add additional months and years to violators' sentences.

As part of the Digital Single Market (DSM) communication, the European Commission has discussed the possibility of imposing a "duty of care" on Internet intermediaries, which would require Internet platforms to take a more active role in policing user content.  Forcing Internet intermediaries to monitor and remove their users' communications is ill-advised from both an economic and human rights standpoint.

The rapid growth of the Internet was not merely the function of technological innovation.  This fundamental restructuring of commerce and communications would not have been possible but for substantive legal reforms that adapted legacy legal concepts to comport with the realities of a hyper-connected Internet age.  Arguably the most important legal and legislative development of the Internet era was the concept of intermediary liability limitations for Internet service providers.  Or, stated in a less legalistic way, the policy choice that Internet services should not bear blame for bad people saying or doing bad things on the Internet.  Given the size and scope of the Internet and the volume of online communications, it is safe to say that Facebook, Twitter, Google, Yelp, YouTube, Allegro, and Dailymotion would not exist today if the law evolved to hold websites and Internet services liable for the actions of their users. Further, imagine operating a telecommunications network with the sum of all this information passing through without being shielded from responsibility for the actions of all of your users.  What venture capitalist in her right mind would invest in a platform that was exposed to liability for billions of websites beyond its control or trillions of posts composed by third parties?  What would Internet business models look like if companies had to pre-screen all user communications before they went live?

Recent developments in Europe, including the Delfi ruling and the DSM "duty of care" proposal, suggest that Internet services may soon be asked to take a more active role in filtering user content. Yet even with advanced filtering tools, unlawful speech is almost always context dependent.  Libel and defamation would not be obvious to a filter.  Even more complex is when lawful speech is used unlawfully, as in the case of copyright and trademark infringement.  Given that rules about these various types of speech are often the product of complex legal cases, even human review of every online communication would not completely shield an Internet company from liability, given that different people can come to different conclusions about whether speech is "harmful." Not to mention that standards for what is permissible speech vary widely from country to country.

Besides the commercial impact, the implications for free speech would also be disastrous. Protections from intermediary liability enable platforms to give people around the world a simple way to express themselves and to share what they love with the world, and to challenge the restrictions of oppressive governments. One study found that when online platforms are regulated on the basis of content submitted by their users, they remove large amounts of controversial but legal content for fear of facing penalties. The UN's Joint Declaration on Freedom of Expression on the Internet recognizes the success of laws such as the CDA, DMCA, and the E-Commerce Directive, stating that "intermediaries should not be required to monitor user-generated content and should not be subject to extrajudicial content takedown rules which fail to provide sufficient protection for freedom of expression."

Even if pre-screening and filtering at scale were feasible, the value of each individual communication — whether it takes the form of a website, a tweet, a Facebook post or a YouTube video — is negligible, where the potential legal exposure is huge; the potential damages for copyright law can reach $150,000 per work infringed.  So, in a world where Internet companies were liable for the communications of their users, a rational company would be incentivized to aggressively censor content, leading to significant blocking of ostensibly legal speech as the costs of under blocking are significantly more than the costs of over blocking.

Historical Context on Intermediary Liability

Initially, the legal status of Internet companies was uncertain.  Problematic cases arose where the courts found Internet companies liable for user-generated content.  However, both the United States and the European Union were relatively quick to act.  In the United States, Congress passed Section 230 of the Communications Decency Act in 1996, which shielded Internet service providers from liability for a variety of actions that were committed by their users.  Although §230 specifically did not include intellectual property infringement, Congress passed the Digital Millennium Copyright Act in 1998, which shielded Internet platform providers from liability for their users' infringement provided they acted quickly to remove infringing content when notified.  In the subsequent report that accompanied the bill, the Senate Judiciary Committee made clear that these intermediary liability provisions were necessary given that the size and scope of the Internet made it functionally impossible for Internet service providers to monitor all the material that they served or indexed.  At the time, Yahoo!, the illustrious example used by the Committee, indexed 800,000 websites.  Counting just websites, and not other forms of content on social media, the number of sites Yahoo! indexed in 1998 was less than 0.1% of the size of the current web.  As new Internet entrepreneurs seek to join the Yahoos, Twitters, and Facebooks of the world, it is imperative that those companies are afforded the same legal protections that allowed the prior generation of Internet success stories to achieve scale.

Europe was also quick to embrace the concept of liability limitations.  In 2000, the European Union adopted the e-Commerce Directive, which endorsed a similar notice-and-takedown framework of Internet service providers for most Internet content.  Since it was a directive that needed to be interpreted by individual European countries, it resulted in some inconsistency of application that provided somewhat less certainty to Internet companies than the U.S. versions of Intermediary liability.  Nevertheless, it has provided the necessary legal foundations for the Internet to grow and expand in Europe.

These laws do not create any general monitoring or filtering obligations for illegal or harmful content. US law states that a service provider need not monitor its service or seek out infringing activity in order to qualify for the DMCA safe harbor.  (This provision is intended to protect user privacy.  Without safe harbors in place, website administrators might be required to search through and peer into their users' otherwise hidden conversations.) Under the e-Commerce Directive, states may not impose general obligations on intermediaries to monitor information or to actively seek out unlawful activity.

If any reform of the e-Commerce Directive is needed, it should be in the direction of giving EU startups and platforms greater assurance that they will not be found liable for the speech of their users.  Adopting a liability regime closer to §230 would provide a critical boost to the growth and global competitiveness of EU communications platforms, review sites, social media platforms, dating apps, e-commerce sites, and the next generation of digital innovators.

Intermediary Liability Enables Flexible Responses to Harmful Content

The existing rules in place in the US and EU have led to strong respect for rights.  Internet platforms already take down a significant amount of content that infringes copyright.  In addition, platforms respond to court orders and cooperate with law enforcement on issues like child sexual abuse imagery.  Finally, while there's no one-size-fits-all solution to the problem of online abuse, many platforms have evolved highly effective community policing and report abuse systems that help stop the spread of harassment, hate speech, and other harmful content.  For example, anyone on YouTube can flag a video for review, and Google employees review those flagged videos for abuse 24 hours per day. In 2014, 14 million videos were removed from YouTube for violation of the site's Community Guidelines.  (Twitter and Facebook also have similar guidelines and flagging procedures that can lead to removal of content and the termination of accounts.)

Unfortunately, as part of its DSM initiative, some are calling for a re-opening of the e-Commerce Directive and implementing a new "duty of care" on Internet service providers.  This "duty of care" would be effectuated by either narrowing, or completely removing, the liability safe harbors available to Internet companies under the e-Commerce Directive.  According to the Staff Working Document that accompanied the DSM communication, the European Commission noted that it was considering "whether to enhance the overall level of protection from harmful material through harmonised implementation and enforcement of conditions which allow online intermediaries to benefit from the liability exemption."  Furthermore, as part of this examination, the Commission is also asking "whether to ask intermediaries to exercise greater responsibility and due diligence in the way they manage their networks and systems… so as to improve their resistance to the propagation of illegal content."

The same document also acknowledges that the intermediary liability safe harbors included in the e-Commerce Directive "underpinned the development of the Internet in Europe."  Let's hope this last statement is borne clearly in mind if any updating takes place, remembering that a consistent process across Europe could be useful, but that a weakening of the liability shield and an extension of proactive monitoring would be economically and socially disastrous.

Economic Effects of a "Duty of Care"

The ramifications for future competition and innovation are also dire if the European Union were to enact a broader duty of care provision for Internet intermediaries.  Given the limitations of automatic filters, and the fact that harmful, illegal content is context dependent, new online companies that offer communications platforms will need to employ large teams of human filters to review user-generated content.

What does that mean for competition and innovation?  It likely means that startups and new business models will be disproportionately affected.  From a venture capital perspective, the imposition of new regulatory costs on traditionally lean startups means that fewer new ideas get funded.  Given that Internet platforms often spend years developing a user base before they devise ways of turning their popularity into revenue, the added costs will also mean that many of these ideas either don't get funded, run out of money before achieving the necessary scale, or simply prove unable to turn a profit.

The companies best positioned to bear these new cost burdens are the current Internet incumbents who have large legal departments and significant revenue.  And depending on how new regulation might be written, even a large number of human reviewers still cannot catch everything.  The number of humans needed to review 500 million tweets a day or 1 trillion Facebook posts is mind-boggling.  In the YouTube example alone, 300 hours of video uploaded per minute makes 18,000 hours per hour or 432,000 hours per day.  That would require non-stop oversight from 18,000 people to vet everything–and that's assuming they never get a day off and never sleep. (Not to mention, this makes it harder to push back against laws from more authoritarian regimes demanding the censorship of "harmful information".)

Higher regulatory and legal burdens threaten the robust competition and disruptive innovation that has characterized the Internet ecosystem over its short history.  High regulatory costs entrench incumbents.  This could disproportionately affect European companies, as none of the top 15 global Internet companies are European.  However, Europe does have a high-share of the so-called "unicorns" — startups that are valued at more than $1 billion. (And, according to a recently released study, the unicorn population of Europe grew by 13 between 2014 and 2015.)  Furthermore, nearly one quarter of the startups at the 2015 Consumer Electronics Show were French!  As higher regulatory burdens harm smaller companies more than large ones, such an imposition of regulatory costs hurts these plucky startups more than the Googles and Facebooks of the world.

Increasing Liability Would Harm Startups, SMEs and the Broader European Economy

Imposing a duty of care on Internet services wouldn't just harm new startups in the EU.  As we have discussed before, the Internet has transformed the world's economy and spurred economic productivity.  The majority of these benefits accrue to traditional industry, not "Internet companies," through streamlining logistics and reducing frictions in international commerce.  In fact over the last 20 years, the U.S.'s greater economic productivity growth relative to Europe has been powered by its better integration of Internet and networked technology into the overall economy.  Given the role Internet platforms have played in this economic transformation, creating legal frameworks that enable the creation and foster the growth of Internet platforms — such as social media, e-commerce, financial services, crowdfunding, cloud computing, advertising, etc. — is important not just for the Internet sector, but for the broader economy that relies on them to enable their day-to-day business operations.

Not surprisingly, small and medium size businesses often benefit the most from these platforms, as Internet platforms enable them to immediately build infrastructure, conduct traditional back office operations, take payments, easily target advertising to prospective consumers, and reach consumers worldwide through e-commerce platforms in ways that were not possible before the rise of Internet commerce.  With this in mind, it's not surprising that SMEs who heavily utilize that Internet are 10% more productive (and export two times as much products and services) as companies that do not.  Also not surprisingly, SMEs were the key to the U.S. economic and jobs recovery, and are seen as key to powering the European economic recovery.  As European policymakers sit poised to decide the nature and scope of Internet regulation as part of the Digital Single Market (DSM) initiative, creating a legal and regulatory environment for Internet platforms to thrive (and new ones to be created) should be a top priority.  Ensuring that robust online intermediary liability protections extend across the European Union stands as arguably the most important policy imperative of the DSM if Europe wants its vibrant, connected digital economy to thrive in the 21st century.

If anything, for the Internet to continue to grow and thrive, liability limitations for online companies should be expanded and strengthened.  It is a worthwhile and important endeavor for the European Commission to clarify and harmonize liability safe harbors across Europe.  However, harmonization with a weakening of these safe harbors will have negative effects for both freedom of expression and Internet commerce.

Reposted from the Disruptive Competition Project

South Park creators Trey Parker and Matt Stone have built an entire comedy empire on the back of free distribution. The pair first came to fame by circulating their animated short, The Spirit of Christmas, for free first as a popular bootleg VHS and later on the Internet. They also were among the first TV show creators to operate their own web portal to provide content for free, striking a (at the time) groundbreaking 50/50 ad revenue sharing deal with Viacom. They were the grandfathers of viral content, with free distribution leading them to the mammoth financial and critical success South Park saw at its peak, and continues to enjoy today.

So with the news that Parker and Stone have struck a new, $192 million exclusive, walled off South Park streaming deal with Hulu, it's a little odd to see Stone suddenly forget what made much of his rise to success possible. In an interview discussing the huge Hulu deal, Stone laments how amorphous, villainous "tech guys" demanded he make his content available online, for free:

"This is now particularly satisfying," said Stone in a recent discussion. "It comes full circle since the tech guys came to Hollywood and said you better give us your stuff for free to put online or else it will be taken from you anyway."

The argument that "tech guys" just want everything to be free is a fairly normal response by those who don't understand the digital economy, and are informed that you can reduce piracy by incorporating free into your business model. But again, this is a particularly weird comment coming from Stone, whose entire career foundation was built on such models (apparently begrudgingly). That freemium models help reduce piracy is something Stone appeared to understand perfectly well when talking to Boing Boing back in 2008:

"Basically, we just got really sick of having to download our own show illegally all the time. So we gave ourselves a legal alternative."

Both Stone and Parker also seemed to perfectly understand the benefit viral, free distribution had when talking to the New York Times in 2010 about their continued success:

"NY Times: You’re now about two years into the operation of your South Park Studios Web site, where just about all the content is available for free. Does the gamble seem to be paying off?

PARKER: To be honest, we don’t care about the money. We both have all the money we need. It’s really just about the survival of the show. First hearing about, O.K., we’re going to be putting everything on the Internet for free, I was like, Really? Wow, O.K. [laughs] That’s the world we live in. I’m actually surprised at how smooth the transition is going.

STONE: If we had years and years to discuss it, and we had determined what the right course of action was – but we don’t have years and years. We’re doing the show right now in 2010, and the reality is, we have to have our show on the Internet. Would the network like it if everyone who watched it for free on the Internet actually had to pay? Yes. But it always ends up helping us when people can see the show.

Yet here we are, the better part of a decade later, with Stone clearly annoyed by what he insists is Silicon Valley's demand that he not get paid for his hard work:

"Frankly, in the past I haven't much liked dealing with the people from Silicon Valley. I don’t like our stuff being talked about as content. Spoons are metal and guns are metal, but they're not the same thing. We don’t make content. We make television. And that's now what digital understands it has to pay for."

Arguing that "content" is a reductive word is understandable, but this narrative that ambiguous "digital" enemies in Silicon Valley don't want to pay for television programming is odd, since "digital" has been paying an arm and a leg for content since inception. Netflix, for example, is expected to spend as much as $5 billion in 2016 on programming, making the streaming operator the second largest content buyer behind ESPN. Does that strike you as a "digital" industry that doesn't think there's a price tag for quality television? Perhaps Stone is just developing a nasty case of "get the hell off my lawn" and no longer has the best memory, perched as he is upon precariously-leaning towers of money.

Streaming companies, broadcasters, and content creators alike also don't appear to understand the potential pitfalls these exclusive streaming arrangements create. While 2015 has been a banner year for the evolution of internet video by any standard, there's been a troubling rise in not only exclusive content deals (Hulu, owned by Comcast/NBC, also shelled out $160 million for exclusive streaming rights to Seinfeld), but also standalone streaming services from every broadcaster under the sun (even those B-grade schlock masters over at Lifetime), each of which is going to be eager to lock their own content down exclusively to keep it out of the hands of more successful third-party operators.

While streaming operators might correctly believe that having exclusive access to select programming can lure customers in the short run, fracturing the content availability landscape in such a fashion could have some nasty downsides. Making consumers hunt and peck their way through an endless variety of $7 to $40 streaming packages for what they want might easily drive annoyed consumers back to piracy (something we've been saying for years). Streaming operators also risk driving those users back to cable if the industry ever wakes up and decides to offer a more uniform value proposition. Right now that's not a risk, since cable execs are still obliviously raising rates in the face of increased competition; but it will be.

Internet video was supposed to be something different and better, built on the legacy dinosaur bones of an industry obsessed with turf protection and utterly terrified of disruption. There were notable lessons learned during internet video's rise during this period; hopefully they're not all mysteriously and suddenly forgotten just as internet video starts reaching its true potential and the money truly begins to flow.