[I]n addition to carrying out background screening on all employees and third party contractors, the MPAA demands that all workers sign annual confidentiality agreements that forbid them from talking about protected content.
With an eye on local law, companies must also implement random searches of their workers for traces of MPAA content, including the removal of coats, hats and belts, the emptying of pockets, a full security pat-down, scanning with metal detectors and inspection of electronic devices.
Other obvious demands are included, all aimed at preventing the leak or physical theft of studio goods: no portable devices with storage capabilities, no baggy clothes, and employees' meals must be brought to work in transparent bags.
Interestingly, the MPAA's 2015 agreement with Amazon actually scales back some of its requirements. Demands that Amazon create an MPAA-specific security team and allow reps monthly access to inspect restricted areas are no longer in force. Other stipulations focused on the specific parameters of on-site, physical security have been loosened or removed completely, as well as specifications for CCTV footage storage, access and retention. The requirement that all involved third parties be CTPAT-certified (Customs Trade Partnership Against Terrorism) has also been dropped, suggesting the MPAA is about done humoring the DHS's paranoiac assertions that everything has a potential terrorism nexus.
But the adjustments made between the 2013 and 2015 edition of the MPAA's "rules" don't reflect a change in the MPAA's Ft. Knox mindset. Instead, it shows the MPAA shifting its priorities from physical protection to digital protection. The high-profile hacking of Sony likely contributed to new stipulations like these:
2015 MPAA added the requirements to perform quarterly vuln scans of external IP ranges, secure any point to point connections by using dedicated, private connections and by using encryption. Additionally the requirement to implement baseline security requirements for WAN network infrastructure devices and services.
2015 MPAA added controls around the encryption of content at rest and in motion. Additionally, procedures around the storage of public and private keys.
Also new to this ruleset is a whole section dedicated to "mobile security" that addresses the potential security holes created by a BYOD environment.
The documents show the MPAA can be forward-thinking when it comes to the distribution of content -- especially when trying to figure out how to stop it.
We've been discussing the concept of "fair use" and how ridiculous it is that the USTR seems to be ignoring it. Back in 2012 there was great fanfare out of the USTR, when they said, for the very first time, they'd be including "limitations and exceptions" in the TPP proposal. "Limitations and exceptions" being a misleading euphemism for fair use (and some other related concepts all focused on the public's rights). However, as we noted soon after, the leaked text showed that while it was true that this would be the first such agreement that included such a concept, it only did so by limiting the ability of countries to implement a full fair use regime.
Then, with the latest leak of the negotiating text (from right before the most recent round of negotiations) we noticed how ridiculous it was that the fair use section was voluntary while all the sections on copyright enforcement were mandatory. Specifically all the enforcement sections said that countries "shall" implement this or that. But when it came to "limitations and exceptions" it just said that countries "shall endeavour to achieve appropriate balance." In other words: you have to ratchet up copyright law, but with fair use, you know, maybe think about it and try your best.
As of last month, it seemed that all of the TPP countries had agreed to this language. In late July, however, tech companies' renewed pressure seemed to have changed the game. The USTR offered to go back in and revise these provisions ahead of the last negotiation round. According to a spokesperson for the U.S. Chamber of Commerce, in exchange for support for the controversial Fast Track legislation, the USTR promised to make the TPP's exceptions and limitations language more permissive and be a requirement, rather than being purely a suggestion, for all TPP countries.
And... guess who went ballistic? Yup. Hollywood.
According to Inside U.S. Trade, rightsholder groups like the Motion Picture Association of America (MPAA) are "livid" about the USTR's move to revisit the language on exceptions and limitations. They're pushing back hard, urging members of Congress—including every House member from California—to pressure the USTR not to touch these closed provisions. Why? Probably not because revisiting the language will actually cause any real harm to creators. The more likely explanation is that the copyright maximalists are worried that their tight grip over the USTR is slipping.
This isn't all that surprising. Remember, as part of the Sony email leak, one of the emails showed MPAA boss Chris Dodd freaking out about the possibility that the TPP might include some sort of fair use. From the letter Dodd sent to USTR Michael Froman::
I am writing to you today regarding your Wednesday remarks at the Center for American Progress. I am concerned about your suggestion that previous free trade agreements’ copyright provisions were unbalanced and that USTR has addressed this lack of balance by including “fair use” in the TPP. Quite to the contrary, the recently ratified US-Korea FTA was supported by a broad cross-section of US industry, from tech and the internet community to the copyright community, and furthermore has been held up as a model agreement.
As I know you are aware, the inclusion of “fair use” in free trade agreements is extremely controversial and divisive. The creative community has been, and remains, a strong and consistent supporter of free trade, but the potential export of fair use via these agreements raises serious concerns within the community I represent. Over the last 24 hours, I have received calls from my member companies questioning what they perceive as a significant shift in US trade policy and, as a consequence, the value of the TPP to their industry.
Amusingly, this is the same MPAA who ridiculously claims to love fair use. As Sutton notes, this reaction is almost certainly fear over losing lobbying control over the USTR -- a main channel through which it has pushed its agenda for the past few decades.
But there is another important point in Sutton's post: why should it require Google and other internet companies to step up before the USTR took this issue seriously? Plenty of us out here in the public have been arguing about this issue for years -- including in letters sent directly to the USTR. But we're totally ignored until "big industry" comes along and says the same thing. That's really messed up.
The big media lobbyists' theatrics over this minor amendment are embarrassing, but they do raise one important issue: our trade negotiators are a lot less interested in the needs of ordinary users and creators than the needs of powerful companies. Why else was a last-minute intervention by Google sufficient to bring the USTR back to the negotiating table on this topic, where the sustained interventions of EFF and 10 other major public interest groups from around the world were not?
These kinds of regulatory laundering efforts shouldn't be at the whims of big companies, whether or not you agree with the policies being pushed. I'm just as uncomfortable with internet companies pushing the agenda as I am with Hollywood companies doing so. This entire process has been a ridiculous lesson in corporate give aways with little interest for the public. The only thing "transparent" here is how the USTR is focused solely on the desires of big companies, with absolutely no concern for the public interest. That seems like a fairly big problem, especially considering that Congress basically abdicated its (Constitutionally-guaranteed) role to step in and block bad provisions of these agreements.
The MPAA has been working on a number of tricks to find a SOPA through the backdoor in the last few months -- more on some of the many attempts coming soon -- but in one attempt, it's suddenly walking away. A few weeks ago, all of the major movie studios filed a lawsuit over the website MovieTube (actually a series of websites). While it may well be that MovieTube was involved in copyright infringement (and thus a lawsuit may be perfectly appropriate), the concerning part was that, as a part of the lawsuit, the studios were demanding a remedy that is not available by law: that anyone who provides any kind of service to MovieTube be forced to stop via a court injunction. This was the kind of tool that was a part of SOPA, which (you may recall) never became law. Among the requests in the lawsuit:
That the Registries and/or Registrars be required to transfer the domain names
associated with Defendants’ MovieTube Websites, or any subset of these domain names
specified by Plaintiffs, to a registrar to be appointed by Plaintiffs to re-register the domain names
in respective Plaintiffs’ names and under Plaintiffs’ respective ownership.
That content delivery networks and domain name server systems be required to
cease providing services to the MovieTube Websites and/or domains identified with the
MovieTube Websites and disable any access to caches they maintain for the MovieTube
Websites and destroy any caches they maintain for the MovieTube Websites.
That third parties providing services used in connection with any of the
MovieTube Websites and/or domain names for MovieTube Websites, including without
limitation, web hosting providers, cloud services providers, digital advertising service providers,
search-based online advertising services (such as through paid inclusion, paid search results,
sponsored search results, sponsored links, and Internet keyword advertising), domain name
registration privacy protection services, providers of social media services (e.g., Facebook and
Twitter), and user generated and online content services (e.g., YouTube, Flickr and Tumblr) be
required to cease or disable providing such services to (i) Defendants in relation to Infringing
Copies or infringement of Plaintiffs’ Marks; and/or (ii) any and all of the MovieTube
A few days later, the good folks at EFF reminded everyone that SOPA did not pass, and this attempt to require a SOPA-level block is not actually what the law allows. Of course, as we noted soon after the SOPA fight, it appeared that some courts were pretending SOPA did pass, mainly in a variety of lawsuits involving counterfeit goods (rather than copyright infringement). And the movie studios rely on that in their more detailed argument in favor of this broad censorship order on third parties who aren't even a part of this case:
Courts have granted similar interim relief directed to third-party service providers in
cases with similar facts. The first such case, The North Face Apparel Corp. v. Fujian Sharing
Import & Export Ltd. (“Fujian ”), 10-Civ-1630 (AKH) (S.D.N.Y.), was brought against
defendants in China selling counterfeit goods through the Internet directly to consumers in the
United States. In Fujian, the district court granted an ex parte temporary restraining order,
seizure order, asset restraining order, and domain-name transfer order, later continued by a
preliminary injunction order.
Of course, last week, a bunch of internet companies -- Google, Facebook, Tumblr, Twitter and Yahoo -- filed an amicus brief highlighting how ridiculous the widespread demand is:
Plaintiffs are asking the Court to grant a preliminary injunction not just against
the named Defendants, but also against a wide array of online service providers—from
search engines, to web hosts, to social networking services—and require them to “cease
providing services to the MovieTube Websites and Defendants[.]” None of those
providers is a party to this case, and Plaintiffs make no claim that any of them have
violated the law or play any direct role in the Defendants’ allegedly infringing activities.
Plaintiffs’ effort to bind the entire Internet to a sweeping preliminary injunction
is impermissible. It violates basic principles of due process and oversteps the bounds of
Federal Rule of Civil Procedure 65, which restricts injunctions to parties, their agents,
and those who actively participate in a party’s violations. The proposed order also
ignores the Digital Millennium Copyright Act (“DMCA”), which specifically limits the
injunctive relief that can be imposed on online service providers in copyright cases.
Even if Plaintiffs had named those providers as defendants and obtained a final
judgment against them, the DMCA would not permit the relief that Plaintiffs are asking
for at the outset of their case, where they have not even tried to claim that these
nonparties have acted unlawfully.
We represent Plaintiffs in the above-titled action. We write to inform the Court that after
Plaintiffs filed their Complaint (and presumably in response thereto), Defendants shut down their
infringing websites, and as of today, such websites remain offline. Plaintiffs are no longer
seeking preliminary injunctive relief at this time but will seek permanent relief as soon as
possible. Defendants’ time to answer or otherwise respond is August 19, 2015.
Moreover, because Plaintiffs have withdrawn their motion for preliminary injunctive
relief, the arguments offered by Amici Curiae... in opposition to that motion are
not ripe for consideration and are otherwise inapplicable. Accordingly, Plaintiffs have not
addressed them here. To the extent Amici are requesting what amounts to an advisory opinion,
such a request is improper and should not be entertained.
In short: we had hoped to quietly get a court to pretend SOPA existed so we could point to it as proof that this is perfectly reasonable... but the internet folks spotted it, so we'll just walk away quietly, and hope that next time, those darn internet companies, and those eagle-eyed lawyers at the EFF aren't so quick to spot our plan.
You had to know this was going to happen. Now that the US Trade Rep (USTR) has fast track authority after Congress caved in and passed the Trade Promotion Authority bill, efforts have ramped up to complete the Trans Pacific Partnership Agreement with meetings in Hawaii this week. Of course, with fast track in hand, the USTR doesn't need to concern itself at all with things like the "public interest" anymore and can focus on the real agenda: big corporate interests. Reports from the negotiations include one from the legal policy adviser from Doctors Without Borders, noting that the USTR organized a briefing for "US stakeholders," but only invited industry representatives. Oh, and the US Chamber of Commerce (the main lobbyists for SOPA) was allowed to book a room next to the negotiating room and got a private briefing from the USTR. Meanwhile, James Love from KEI notes that in a USTR briefing, USTR staffers are deliberately ignoring anyone representing the public interest.
You know who they are listening to, however? You guessed it: Hollywood. Politico notes that now that fast track is in hand and the USTR has more or less free rein in completing the negotiations, Hollywood has jumped in with a bunch of demands to expand copyright laws via TPP:
We've seen the Hollywood versus tech copyright fight play out over everything from SOPA to the Library of Congress. Now the major movie studios are pushing for key items on their wish list as negotiators hammer out the final details of an Asia-Pacific trade agreement. The studios hope the 12 countries working on the pact will agree to copyright protections that, in many cases, last longer than what’s currently in place, Pro Trade’s Doug Palmer reports.
The movie studios also want stricter penalties on piracy, especially as Internet access expands throughout the region.
And, because the USTR almost always gives in to Hollywood (it helps that the MPAA hired the top USTR negotiator on IP last year, so the current negotiators recognize that their next jobs are on the line with this agreement), it appears that the US has convinced a bunch of other countries -- who should know better -- to agree to lock in a life + 70-year copyright term, even as the US Copyright Office has suggested that current copyright terms are too long and should be scaled back.
There is no way to explain this as anything but selling out the public interest to appease corporate interests of Hollywood. It's a fairly disgusting display of the kind of "dealmaking" that the USTR has been pushing for more quietly for years, but now that it has fast track, it knows it can play hardball to help its friends in Hollywood. Fuck the public domain, Hollywood wants to keep getting paid for works from decades ago.
If you talk to the reporters who work for various big media companies, they insist that they have true editorial independence from the business side of their companies. They insist that the news coverage isn't designed to reflect the business interests of their owners. Of course, most people have always suspected this was bullshit -- and you could see evidence of this in things like the fact that the big TV networks refused to cover the SOPA protests. But -- until now -- there's never necessarily been a smoking gun with evidence of how such business interests influences the editorial side.
Earlier this month, we noted that the Hollywood studios were all resisting subpoenas from Google concerning their super cozy relationship with Mississippi Attorney General Jim Hood, whose highly questionable "investigation" of Google appeared to actually be run by the MPAA and the studios themselves. The entire "investigation" seemed to clearly be an attempt to mislead the public into believing that it was somehow illegal for Google's search engine to find stuff that people didn't like online. A court has already ruled that Hood pretty clearly acted in bad faith to deprive Google of its First Amendment rights. As the case has continued, Google has sought much more detail on just how much of the investigation was run by the MPAA and the studios -- and Hollywood has vigorously resisted, claiming that they really had nothing to do with all of this, which was a laughable assertion.
However, in a filing on Thursday, Google revealed one of the few emails that they have been able to get access to so far, and it's stunning. It's an email between the MPAA and two of Jim Hood's top lawyers in the Mississippi AG's office, discussing the big plan to "hurt" Google. Beyond influencing other Attorneys General (using misleading fake "setups" of searches for "bad" material) and paying for fake anti-Google research, the lawyers from Hood's office flat out admit that they're expecting the MPAA and the major studios to have its media arms run a coordinated propaganda campaign of bogus anti-Google stories:
Media: We want to make sure that the media is at the NAAG meeting. We propose working with MPAA (Vans), Comcast, and NewsCorp (Bill Guidera) to see about working with a PR firm to create an attack on Google (and others who are resisting AG efforts to address online piracy). This PR firm can be funded through a nonprofit dedicated to IP issues. The "live buys" should be available for the media to see, followed by a segment the next day on the Today Show (David green can help with this). After the Today Show segment, you want to have a large investor of Google (George can help us determine that) come forward and say that Google needs to change its behavior/demand reform. Next, you want NewsCorp to develop and place an editorial in the WSJ emphasizing that Google's stock will lose value in the face of a sustained attack by AGs and noting some of the possible causes of action we have developed.
In other words, Jim Hood and the MPAA were out and out planning a coordinated media attack on Google using the editorial properties that supposedly claim to have editorial independence from the business side. Notice that with the WSJ piece, they flat out admit that the editorial will be based on the ideas that "we" have developed. If you work for the WSJ, your editorial independence just got shot down. Remember when CBS stepped in and interfered editorially with CNET for giving an award to Dish at the same time that CBS was in a legal fight over that same device? That resulted in reporters quitting.
This is worse.
This is an out and out case where the MPAA is admitting to a plan whereby it will use mainstream media properties to run bogus and misleading stories to "attack" Google, to further the MPAA's (believed, but misleadingly so) business interests. Is this really how the Today Show and the WSJ pick their editorial topics?
The "plan" goes even further after that, getting the MPAA to find (and almost certainly pay for) a lawyer to work with the "shareholder" previously identified to file legal filings against Google.
Following the media blitz, you want Bill Guidera and Rick Smotkin to work with the PR firm to identify a lawyer specializing in SEC matters to work with a stockholder. This lawyer should be able to the [sic] identify the appropriate regulatory filing to be made against Google.
As Google notes in its legal filing about this email, the "plan" states that if this effort fails, then the next step will be to file the subpoena (technically a CID or "civil investigatory demand") on Google, written by the MPAA but signed by Hood. As Google points out, this makes it pretty clear (1) that the MPAA, studios and Hood were working hand in hand in all of this and (2) that the subpoena had no legitimate purpose behind it, but rather was the final step in a coordinated media campaign to pressure Google to change the way its search engine works. It's pretty damning:
The document thus shows that the CID was not the foundation of a legitimate
investigation—rather, it was a “final step” that would be issued only “if necessary” to further
pressure Google to capitulate to the demands of AG Hood and his supporters.
The court has yet to rule on what else Hollywood needs to turn over, but just from what's coming out already, serious questions are being raised (1) about Jim Hood and his office and what they were up to as well as (2) the editorial independence of the media arms of the MPAA studios, including both NBCUniversal ("the Today Show") and NewsCorp. (the Wall Street Journal).
Hollywood's efforts to win political clout have always stretched across the country, from glitzy campaign fundraisers in Beverly Hills to cocktail parties with power brokers in Washington.
Last year, the film industry staked out another zone of influence: U.S. embassies. Its lobbying arm paid to renovate screening rooms in at least four overseas outposts, hoping the new theaters would help ambassadors and their foreign guests "keep U.S. cultural interests top of mind," according to an internal email.
That was the same year that the Motion Picture Association of America, which represents the six biggest studios, reported it was lobbying the State Department on issues including piracy and online content distribution. Hollywood's interests – including its push for tougher copyright rules in the Trans-Pacific Partnership trade pact – often put the industry at odds with Silicon Valley.
The only public indication of the embassy-theater initiative was a February 2015 press release from American officials in Madrid, titled "U.S. Embassy Launches State-of-the-Art Screening Room." It credited "a generous donation" from the MPAA.
Asked about its gifts to the State Department, the lobby group declined to say how many embassies got donations or how much they were worth.
"Because film is a great ambassador for U.S. culture around the world, MPAA assisted with the upgrade of some embassy theater facilities," said spokeswoman Kate Bedingfield. "All gifts complied with the law as well as with State Department ethics guidelines."
Nicole Thompson, a State Department spokeswoman, said at least three embassies besides Madrid received between $20,000 and $50,000 in entertainment upgrades last year – London, Paris and Rome. The revamped screening rooms, she said, aren't intended to entertain U.S. officials, but rather to help them host screenings to promote an American industry and sow goodwill.
Thompson said the donations were proper and that all gifts to the department are reviewed to avoid even the appearance of a conflict of interest. "The department has explicit authorities to accept gifts made for its benefit or for carrying out any of its functions," she said.
The State Department routinely accepts gifts from outside groups, Thompson said. She couldn't provide any other examples of major gifts from groups that simultaneously lobby the agency. Thompson declined to list the items given by the MPAA or their total value, and wouldn't say whether the group had made similar gifts in the past.
There was at least one precedent. A spokesman for Warner Bros. Entertainment said the studio helped pay for the refurbishment of the screening room at the U.S. ambassador's home in Paris in 2011. "This donation was coordinated with the State Department and complied with all appropriate rules and regulations," the spokesman said.
State Department policies posted online specifically permit gifts from individuals, groups or corporations for "embassy refurbishment, " provided that the donors are vetted to ensure there's no conflict or possible "embarrassment or harm" to the agency. The posted policies include no caps on the value of donations, nor any requirements for public disclosure of foreign or American donors. The rules also say that the donations can't come with a promise or expectation of "any advantage or preference from the U.S. Government."
Obtaining an advantage, albeit a nonspecific one, sounded like the goal when a Sony Pictures Entertainment official wrote to the studio's chief executive officer, Michael Lynton, to relay a request to fund the screening rooms from Chris Dodd, the former U.S. senator who heads the MPAA. The executive writing the note – Keith Weaver – sought to assure the CEO that such a donation wouldn't be improper.
"The rationale being that key Ambassadors will keep U.S. cultural interests top of mind, as they screen American movies for high level officials where they are stationed," reads the message, included in a cache of emails hacked from Sony and which were posted online by the website WikiLeaks.
"The cost implication is estimated to be $165k (aggregate of $$$/in-kind) per embassy/per studio. Apparently, donations of this kind are permissible."
Besides Sony, the MPAA represents Disney, Paramount, Twentieth Century Fox, Universal Studios and Warner Bros. Entertainment. The e-mails suggest that Sony executives decided against contributing to the project for budget reasons.
The MPAA has long been a powerful presence in the nation's capital, spending $1.34 million on federal lobbying last year, according to data compiled by the Center for Responsive Politics. One of its flashier tools has been to host exclusive gatherings at its Washington screening room, two blocks from the White House, where lawmakers get to watch blockbuster films, rub elbows with celebrities, and up until several years ago, enjoy dinner – a perk scuttled because of stricter rules on congressional lobbying.
Hollywood studios depend on foreign markets for much of their profit but the MPAA's interests don't always align with those of other major American constituencies. For example, Hollywood studios have moved some film production to Canada to cut costs. American film workers have tried to get the federal government to stop the outsourcing of jobs, but have been met with resistance from the MPAA.
The trade group has also pushed federal officials to pressure foreign governments into adopting stricter copyright laws. An MPAA-funded study found that in 2005 worldwide piracy cost American studios $6.1 billion in revenue. That number has been disputed by digital rights advocates.
For the TPP trade deal, the MPAA has discouraged the American government from exporting "fair use" protections to other countries. In a hacked message from Dodd to the U.S. Trade Representative, the MPAA chief warned that including such provisions, which in American law allow limited use of copyrighted materials without permission, would be "extremely controversial and divisive." Digital rights activists have characterized the efforts as overzealous.
"They're basically encouraging other countries to adopt the most draconian parts of U.S. copyright law and even to reinterpret U.S. copyright law to make it more stringent," said Mitch Stoltz, an attorney for the Electronic Frontier Foundation. "Broadly speaking broadening copyright law harms free speech in many cases by creating a mechanism for censorship."
The state-of-the-art screening rooms are a relatively minimal investment by Hollywood as it works to strengthen connections abroad.
This spring, the U.S. ambassador to Spain, James Costos, brought a group of foreign officials to Los Angeles for a meeting hosted by the MPAA. Among them were representatives from the Canary Islands, who came prepared to discuss filming opportunities and tax incentives for American studios in the Spanish territory. The State Department touted the trip as an opportunity to "expand bilateral trade and investment, including through ties between the entertainment industries."
It's not known whether the path to that particular meeting was eased by the new screening room in Madrid. At the theater's debut in February, the ambassador's guests were treated to a dark tale of corruption, lobbying and double-dealing in Washington – the Netflix series "House of Cards."
We've already covered some of the details coming out in the flurry of legal filings in the dispute between Google and Mississippi Attorney General Jim Hood (helped along by the MPAA which financed and ran Hood's investigation). However, there is one little tidbit mentioned towards the end in one of the MPAA's many filings resisting subpoenas from Google to turn over internal documents. The MPAA's lawyers at Jenner & Block not only argue that much of the material being requested is "privileged," and thus allowing the requests will lead to lawsuits over the legality of those requests, but further argues that the emails in the Sony hack are similarly privileged and should not be available for use in lawsuits:
Quite apart from the policy concerns that arise if lawyers are allowed to use confidential
documents first obtained by hackers, the fact that some privileged documents were published in
the wake of the Sony hack will trigger subsequent litigation over privilege assertions. Privileged
documents obtained by hackers and later published nevertheless remain privileged. Presumably,
given Google’s apparent interest in the documents, Google will contest the privilege assertions.
This seems like a pretty longshot legal argument. It's pretty typical in business settings that once documents are out there in the public, any legal restrictions on them vanish. The idea that these documents, widely discussed publicly and in the press, would magically be banned from use in a legal case that was brought on because of those revelations is a huge stretch.
The whole legal fight between Google and Mississippi Attorney General Jim Hood has been pretty nasty from the very beginning, but it's been getting even nastier as it drags on. Even in many high stakes lawsuits involving large companies and the government, the filings tend to remain somewhat bland and low key. But this particular fight seems personal to many of the parties involved (going beyond just Google and Jim Hood to the MPAA and the studios it represents). If you don't recall, for a few years now, Hood has been bizarrely blaming Google for the fact that people do bad stuff online, rather than understanding that a search engine isn't responsible for the content that it finds. The reasons for Hood's ignorance became a lot more clear after the Sony Hack, when internal emails revealed that Hood was acting as a puppet for the MPAA whose hand was shoved so far up Hood's behind that it was a bit unseemly.
The MPAA's lawyers ran the entirety of Hood's "investigation." Those lawyers actually wrote the subpoena that Hood sent Google (Hood merely added the opening and his signature). The studios paid for the investigation, and the program itself was explicitly designed not to protect anyone online but to bring down Google (dubbed "Goliath" in the documents). The MPAA hired Hood's best friend, mentor and predecessor to lobby Hood on this... and (coincidentally, I'm sure), Hood hired the very same guy, Mike Moore, to help with the investigation -- which should raise serious conflict of interest questions. As these details were revealed, Hood launched into a bizarre anti-Google rant that was both ill-informed and often flat out incorrect. He insisted perfectly legal things (a news site about dark markets) were completely illegal, he blamed Google for not doing things it actually had done, and he couldn't seem to figure out the first thing about how the internet -- or the First Amendment -- actually work.
With this new info in hand, Google went to court to argue that Hood's demands were illegal, and a clear attempt of abusing the power of his office to attack a business. The courts have overwhelmingly sided with Google up to this point -- putting his demands (written by the MPAA) on hold and saying that it was clear Hood unconstitutionally acted in bad faith in violation of the First Amendment.
The judge also ordered Hood to cough up his communications with the MPAA -- something Hood was refusing to do the last time we checked in on this case about two months ago.
Since then, there has been a flurry of activity in multiple courts as Google, Hood and the MPAA fight it out in increasingly emotional terms. As Hood tried to resist, Google opened up another front in this and sent subpoenas to the Hollywood studios directly for those same communications and more. The studios have resisted strongly, claiming that their own documents are unrelated and they're not a party to the lawsuit. Google, however, has pointed out that since the MPAA was running the government's investigation almost entirely, it seems reasonable to argue that that information should be disclosed:
Each Subpoenaed Party asserts "work
product protection," but none can identify any litigation they contemplated at the time the
requested documents were created. They claim there is a "First Amendment privilege"
shielding their activities from discovery, but they cannot explain how it applies here where they
are engaged in lobbying government officials, where that lobbying is a matter of public record,
and where their conduct is in no way likely to meet with government reprisal. And they assert
"common and joint interest privileges" but cannot articulate any valid "interest" that creates or
preserves a privilege. While some responsive documents might theoretically be subject to the
attorney-client privilege, the Subpoenaed Parties have not collected or reviewed such
documents, let alone provided a privilege log for them.
The studios then hit back angrily at these requests arguing that Google is going way overboard in asking for basically all of its anti-Google documents, even those it never actually sent to Hood (after finally agreeing that they would produce its communications with Hood):
The MPAA and Jenner have already agreed to produce all responsive documents they
exchanged with Attorney General Hood prior to Google’s lawsuit; after all, only documents that
Attorney General Hood actually saw could conceivably influence him. That should suffice if
Google wants to probe the Attorney General’s motives.
Google filed the present motion because it insists on more. Google demands documents
that the Attorney General never saw, and that instead include the internal deliberations of the
MPAA, its communications with its members, and the legal advice of Jenner, as well as
communications with others similarly aggrieved by Google’s conduct, on the misguided theory
that such documents somehow are probative of Attorney General Hood’s intent. Moreover,
Google’s demands impose very substantial burdens on the subpoenaed parties, not only because
they require a wide-ranging search for documents, but more importantly because many of the
documents are protected by the attorney-client and First Amendment associational privileges.
Not only would the MPAA and Jenner be required to devote countless hours to the creation of
privilege logs, but further time-consuming and expensive litigation with Google over the
privilege assertions would be a near certainty.
Then, last week, Google hit back in a flurry of additional filings concerning the MPAA and Hood. Many repeat the same basic points, but it's clear that the battle is getting angrier and angrier on all sides. You can sense the exasperation on the part of Google's lawyers as they explain, again, that the studios are clearly trying to hide the details of their plan to use Hood to attack their company in violation of the Constitution:
The Honorable Judge Henry T. Wingate has ruled that Google is likely to succeed against AG Hood under Constitutional and federal law.
It is undisputed that the parties before the Court on this motion — Twenty-First Century Fox, Inc. (“Fox”), NBCUniversal Media, Inc. (“NBC”), and Viacom, Inc. (“Viacom”) (collectively “the Subpoenaed Parties” or “the Studios”) — played key roles in AG Hood’s unlawful conduct. The record already shows that as part of a secret plan called “Project Goliath,” they spent hundreds of thousands of dollars lobbying state attorneys general to pressure Google to alter its search results and other products in service of their agenda on federal copyright issues. In connection with Project Goliath, lobbyists for the Subpoenaed Parties formulated AG Hood’s demands to Google and ghost wrote AG Hood’s talking points, letters and even the CID that prompted Google’s lawsuit and Judge Wingate’s injunction.
Despite this extensive involvement in the events giving rise to the underlying litigation, the Subpoenaed Parties claim here that: (a) documents regarding Project Goliath, beyond their direct communications with AG Hood, are irrelevant; (b) they should not, in any event, be burdened to produce what they have; and (c) that such materials might be privileged — but it is “premature” to assess that issue. None of these arguments has merit.
And then, after the MPAA revealed some of the requested documents, Google went back to court to highlight that what's been emailed only serves to more strongly support the claims of a questionable relationship between Hood and the studios, which should support their arguments for more information. It starts out with Google outright mocking the MPAA's argument that it's unfair to force them to hand over documents to a court in Mississippi, since they're NY-based companies not operating in Mississippi. Google points out that the MPAA and the studios seemed to have no problem at all going to Mississippi to hang out with Hood, so it seems odd for them to suddenly act as if Mississippi is out of the way.
The MPAA and Jenner claim that Google somehow “dragged [them] into its dispute with [the] Attorney General.” ... The DCA portrays itself as a mere amicus of the Mississippi court, and reassures this Court that it “does not do business in Mississippi.” ... Their rhetoric does not match reality.
The Subpoenaed Parties sought out Mississippi when they co-opted the state’s Attorney General for their anti-Google campaign. Documents withheld by the MPAA until last week reveal a stunning level of involvement in Mississippi’s affairs. The MPAA and Jenner repeatedly travelled to the state to meet with the attorney general; they hosted campaign fundraisers and made contributions for Attorney General Hood (“AG Hood”); and they controlled the pen used to draft AG Hood’s illicit demands and threats to Google. The DCA (funded by the MPAA) likewise visited with AG Hood in Mississippi, established a presence on the ground, and regularly communicated with him — retaining Mississippi’s former attorney-general, Mike Moore, to lobby AG Hood as part of “Project Goliath.” It was Google that was “dragged” into this dispute by the Subpoenaed Parties, and not the other way around.
And then there's more:
The Subpoenaed Parties have made clear that they have no problem acting in Mississippi when it suits their ends. After their years of direct involvement there, litigating objections to a single subpoena in the state could not be an undue burden.
The filing notes that while the MPAA revealed its communications with Hood to Google, it did so only if Google promised to keep them confidential. Google notes that there is no legal reason to do so, but for now it agrees to do so. However, it does reveal the nature of what's in some of them. And what it shows is the MPAA and Attorney General Hood working hand in hand, with the MPAA basically calling the shots.
The Subpoenaed Parties and their representatives made repeated visits to AG Hood’s office in Mississippi to guide his anti-Google work. Even when they weren’t physically at AG Hood’s office, they may as well have been, getting together with him in Denver and Santa Monica and holding a fundraising dinner for him in New Orleans. But those interactions only scratch the surface, as the documents reveal remarkably cozy and constant communications between the Subpoenaed Parties and AG Hood... (MPAA’s Brian Cohen greeting one of AG Hood’s staffers with “Hello my favorite” and offering to send her pictures of his vacation in New Zealand); .... (discussing a meeting with AG Hood’s staff the MPAA’s Cohen gushed “OMG we spent 3 hours.”). This pattern of sustained, intimate contact is hardly the mark of a party that merely “communicated with Attorney General Hood” “previously” as the MPAA characterizes itself.
Despite protesting that Google has “inappropriately grouped” it with the MPAA and Jenner ..., the DCA is no different. It retained Mike Moore, Mississippi’s former attorney general, as a lobbyist to influence AG Hood regarding his Google investigation, even while Moore was serving as a deputized agent of AG Hood in connection with that same investigation. Alongside the MPAA lobbyists, Moore too was in constant contact with AG Hood regarding Google. And he co-hosted the campaign dinner for him that the MPAA put on. ... Similarly, the DCA’s Executive Director, Tom Galvin, was personally involved in discussions with AG Hood, also traveling to Mississippi to meet with him.... Although the DCA claims it “does not do business in Mississippi” ..., its “business” is lobbying and manufacturing press at the behest of the MPAA which heavily funds it. It was extremely active in that regard in Mississippi. The Subpoenaed Parties did not act alone in animating AG Hood with respect to Google, they coordinated their efforts with the major Hollywood studios who make up the MPAA, including Fox, NBCU and Viacom (collectively the “NY Parties”). That coordination continues to this day — the NY Parties are using the same law firm, Jenner, to resist subpoenas from Google, and in the Southern District of New York, they have made relevance, burden and privilege arguments that are virtually identical to those that the Subpoenaed Parties have advanced here.
There's a lot more in the documents being filed (some of which we'll cover in other posts), but suffice it to say this fight is getting even nastier as it continues, and it sounds like the contacts between the MPAA and Jim Hood (the same emails that wanted a ridiculous amount of money to reveal following our public records request) show that the relationship was even tighter than was revealed from the leaked Sony emails.
There's that old joke that you've probably heard (in part because we've mentioned it in other contexts), about the drunk man searching for his keys under a streetlight, while admitting that he lost them further down the street. When asked why he's looking over by the light instead, he says "because that's where the light is." People even refer to this as the streetlight effect. And you can see it in all sorts of odd places.
These spots will be showing in theaters across the country, because that's exactly what people who just paid huge sums of money to watch a movie want to see: an extra commercial before the film they paid to see telling them them to stop being dirty pirates, with the usual claptrap about all of the poor workers that piracy impacts (leaving aside that those people aren't paid based on movie revenue...).
It's the streetlight effect all over again. The incompetent and ineffective Chris Dodd-run MPAA feels the need to do something, so they fall back on the same old game plan:
"Hey, let's advertise to try to make people feel guilty!"
"That's never worked before despite us trying for decades."
"This time it will work! It must work! Because they must all feel guilty! And once they see how guilty they should really feel, they'll stop pirating! Because I have no other ideas!"
"Okay, but where will we best place these advertisements to reach the right people?"
"I've got that one all planned out! We'll get them in the best possible spot: in the movie theaters! The theaters will show those ads for free and we've got a real captive audience!"
"But it's a captive audience who has already shown that they're willing to pay. Why should we advertise to them?"
"Didn't you hear me!?!? It's a captive audience and the theaters will let us do it for free! Piracy is solved!"
Good luck, guys. Once again, if you're looking for better ideas, maybe fire the content protection team, and hire some folks who actually get the internet.
For many years, we've written about what an incredible scam state tax subsidies to filmmakers are. Various states shove each other aside trying to throw more money at Hollywood, if they just agree to make their films locally. Hollywood insists that these subsidies are good for the states, because they "create jobs." But the details almost always show otherwise. They are almost always a massive loss to the taxpayers. What jobs are created are temporary -- and often filled by people who fly in from out of town. What "downstream" economic benefits are created are marginal at best. Almost every study of these subsidies has found that they lose money overall. And yet, the states keep expanding these programs, sometimes betting pension funds on them.
So the big question has to be: why do states keep throwing money at Hollywood this way?
The answer, it appears, may have an awful lot to do with out and out corruption.
In the past few years, film programs across the country have been wracked with criminal charges and convictions. Louisiana is in the midst of a criminal trial against individuals charged with fraudulently collecting more than $1 million in state film tax credits for the creation of a film studio in New Orleans. Massachusetts has faced its own criminal trials over tax credit fraud. And in Iowa, a state audit found $26 million in improperly issued tax credits, and a subsequent investigation resulted in 10 criminal cases and 7 convictions. The state ultimately suspended its program in 2009. Nearly six years later, the state is still in the midst of sorting out the criminal trials surrounding its program.
This corruption has also extended to those in positions of determining how these programs work and who receives the available funds. California is currently in the midst of its own film-subsidy scandal involving a state senator, Ron Calderon, who headed the select committee on film and television and was a member of the California Film Commission. Indicted on 24 felony charges, and facing a maximum sentence of 396 years in federal prison, Calderon is accused of accepted cash bribes from an undercover FBI agent who he thought was associated with an independent film studio. In exchange, he agreed to advocate for an extension of the film tax credits.
And then, of course, there's the fund-raising hook. Hollywood scratches a politician's back? The politician scratches Hollywood's back:
Politicians also use their support for incentives, or the threat of removing them, to induce political contributions for Hollywood beneficiaries. For example, in another Sony an email dated January 6, 2014, NY Governor Andrew Cuomo’s “people” request Sony commit to raising $50k by July of 2014. The email continues, “$50k is a heavy lift since most of it needs to come from individual contributions (only $5k can come from corp.)” There are then severalotheremails from Sony’s head of government affairs soliciting contributions. In one of them he notes “Thanks to Governor Cuomo, we have a great production incentive environment in NY…Because of all of this, I think it’s important to significantly support his reelection efforts…”
So, notice that there are three parties at work here -- but only two of whom are actually represented. Cuomo gets campaign funds he wants. Hollywood gets tax breaks they want. It's just the taxpayers who aren't represented and get shafted.
And, as Koopman notes, each year the MPAA sends out a celebratory email highlighting just how much the studios have been able to fleece from taxpayers:
As you have requested annually, attached is the State Government Affairs Department Annual Report for 2013. As you will read, this year MPAA saved the member companies collectively an estimated $110.08 million in corporate tax liability on an annual basis and approximately $86 million in potential regulatory, administrative, compliance and legal fees, also annualized, as a result of accomplishing legislative objectives in the states.
Since 2007, the aggregate annual savings secured by MPAA for the member companies in connection with key corporate state tax legislation is approximately $439.08 million. This is a result of the enactment of single sales factor apportionment in California, and New York City as well as favorable advertising and licensing corporate tax sourcing formulas adopted in North Carolina, Michigan, Illinois and Louisiana.
In addition, states awarded an estimated $1.5 billion in production tax credits in 2013, according to the Los Angeles Times, which MPAA either was engaged in enacting or keeping in place. The majority of those credits went to MPAA member companies as a result of motion picture and television location production in various states, with per project savings ranging from 10 to 30 per cent.
We had another successful year thanks to the hard work of Melissa Patack, Angela Miele, Sarah Walsh, Brian Cohen and Carlin Scrudato, as well as all of your tremendous support, engagement, and encouragement. Also, special thanks to the executives on the state tax, legal and IP working groups, whose expertise and involvement is invaluable. As you know, our contract advocates in the 50 states, who are critical to our success, work tirelessly for MPAA and the member companies. Our coalition partners also played major contributing roles, in particular NATO, DGA, SAG, IATSE and Teamsters.
I don't begrudge the MPAA/studios doing this. Of course, they're going to scrounge for free money from the states who are willing to give it. But it seems problematic given how these programs time after time after time have been shown to be massive failures, often leaving states in serious trouble. At the very least, it seems to deserve deeper scrutiny by the public and government officials as to exactly why states are so ready to hand out this kind of money.