In the arguments over ACTA, one criticism seemed widely accepted: that it tries to bundle together two quite different challenges -- tackling counterfeit goods, like fake medicines, and dealing with unauthorized file sharing. One popular suggestion was that ACTA should be split in two in order to handle those separately – for example, David Martin, the politician who played a key role in convincing the European Parliament to reject ACTA this week, supports this approach.
A New York federal court has ordered a rare default judgment in favor of John Wiley & Sons, one of the world’s largest book publishers. Robert Carpenter from Poughkeepsie, New York, has been ordered to pay the publisher $7,000 in damages for sharing a copy of "WordPress All-in-One For Dummies" on BitTorrent. According to Judge William Pauley, the man is guilty of both copyright and trademark infringement.
The judge specified that $2,000 of those damages were "for Carpenter’s counterfeiting of Wiley’s Trademarks". As TorrentFreak notes:
To our knowledge, this is the first time that sharing files on BitTorrent has been viewed as counterfeiting, a description that’s usually reserved for fake goods sold as the real deal.
That's troubling, because it would seem to open the door for anti-counterfeiting measures aimed at tackling serious trademark infringement to be applied routinely to P2P sharing of copyright files simply because they are exact copies of originals. That, in its turn, would mean that separating ACTA's measures against counterfeit goods from those dealing with online infringement might not be enough to solve the treaty's problems, since the former would still apply to the digital world. Yet another reason to bin ACTA completely and to start again from scratch.
Recently, the Association of National Advertisers (ANA) and the American Association of Advertising Agencies (4A's) put together a statement of best practices as part of an "International Anti-Counterfeiting Conference." The best practices say that advertisers and marketers should be explicit that they don't want their ads on "rogue" sites. This leads to a bunch of thoughts.
First up, as Dan Mitchell at Fortune points out, the companies that already advertise on "rogue" sites aren't the major advertisers. For all the talk by copyright maximalists of how big companies are getting rich off of rogue sites, that shows they don't know much about how advertising works. The ads that show up on most of those sites is the crappiest of the crappiest of advertising -- the pure bottom-filler type crap that doesn't pay very much at all. While Mitchell uses this to suggest that such a best practices won't "staunch the flow of revenues" to these sites, he totally ignores the more important point: that it shows that these sites aren't making very much money in the first place because all the advertisers who actually pay decent ad rates have already made sure their ads don't show up on these sites.
Second, this raises questions about why the MPAA was so insistent on the need for SOPA. It sure looks like the major players in the industry are already doing things like blocking ads from "rogue" sites voluntarily. It's amazing how the entertainment industry likes to pretend that companies would never do such things without a law, when they do it all the time anyway.
Finally, the Adweek article (first link above) notes that ad giant GroupM already had put in place a blacklist. But what the Adweek article unfortunately left out was that the "list" GroupM came up with was a complete joke -- listing all sorts of perfectly legitimate sites, like the Internet Archive, Vimeo and Soundcloud. Oh yeah, and a bunch of hip hop blogs... and 50Cent's personal website. It's great to declare that they won't let ads show up on "rogue" sites, but it gets worrisome when they define "rogue" sites so broadly.
As Michael Geist and others have pointed out, ACTA is the Anti-Counterfeiting Trade Agreement without the main sources of counterfeits being involved -- notably, China. This has required some skilful footwork on the part of ACTA supporters, who need to justify the ratification of a loosely-worded treaty with potentially harmful effects on Internet service providers, civil liberties and developing countries, but which doesn't provide the key benefit claimed in its name.
Here's how the European Union's representatives tried to deal with this issue in a "statement on IP Enforcement Trends" made at the WTO Council for TRIPS:
ACTA is an agreement between a limited number of countries.
But it is a significant first step. It establishes a nucleus of countries that are committed to the highest standards of intellectual property rights enforcement. A nucleus that will grow. The World Trade Organisation had a different name, a weaker structure and only nine members when it started out in 1948. After Russia’s accession later this year, nearly all world trade will be bound by its rules.
We would have liked to have negotiated this agreement at a global level. That was not possible. But the countries who have joined us in this agreement will soon begin to see the benefits of good enforcement, in terms of investment and in terms of innovation.
Since the vast majority of ACTA's participants already have "good enforcement", the last sentence only makes sense if it's referring to signatories like Mexico and Morocco. So is the EU seriously claiming that ACTA is going to lead to a flood of investment in those nations? If so, when? Immediately? In ten years? All-in-all, it seems a pretty dubious metric for the success of ACTA, and a poor incentive for others to join.
That's especially the case for China, which probably needs investment less than any nation on earth, since its currency reserves are currently around the $3 trillion mark. But even if external investment isn't much of an incentive, maybe there are others.
That wasn't the case back in 2010, when China was unconvinced about the value of ACTA:
Causing particular concern to them [India and China] is the draft Anti-Counterfeiting Trade Agreement (ACTA) being negotiated by Australia, Canada, the EU and its 27 member states, Japan, Rep.Korea, Mexico, Morocco, New Zealand, Singapore, Switzerland and the US.
Briefly, China's and India's lengthy statements argued that ACTA and other agreements could:
Conflict with TRIPS Agreement (a reference to TRIPS Art.1.1) and other WTO agreements, and cause legal uncertainty
Undermine the balance of rights, obligations and flexibilities that were carefully negotiated in the various WTO agreements
Distort trade or create trade barriers, and disrupt goods in transit or transhipment
Undermine flexibilities built into TRIPS (such as for public health, and trade in generic medicines)
Undermine governments’ freedom to allocate resources on intellectual property by forcing them to focus on enforcement
Of course that was two years ago, and ACTA has changed during that time. Perhaps China is more positive about it now. This is how it felt last week, when it was at that same WTO Council for TRIPS meeting:
China said many provisions of ACTA go beyond the TRIPS provisions.
Still not happy, apparently. But maybe China doesn't like the Western bias of ACTA, which basically consists of the US and the EU, plus a few other smaller nations thrown in to give a semblance of globalization. Perhaps China will join TPP instead?
For evidence of China's vision for an integrated East Asian political economy -- binding China, Japan, and Korea -- look at remarks of China's Commerce Minister yesterday in Beijing. Speaking at a press conference during the ongoing Chinese National People's Congress, Minister of Commerce Chen Deming's said of that Japanese entry into negotiations of the Trans-Pacific Partnership (TPP) trade pact, if it happens, "Should not be allowed to influence progress on other types of cooperation in the East Asian region."
Translation: Japan should give priority to and focus first on the talks being promoted by Beijing to create a regional Free Trade Agreement (FTA) which would closely bind China, Japan, and Korea.
In other words, far from contemplating joining TPP -- and thus helping to address the same issues about that treaty failing to deal with counterfeiting in the same way that ACTA fails -- China clearly wants to promote its own regional Free Trade Agreement (FTA) for leading East Asian nations. One reason is that China would be the clear economic heavyweight of that group, not the US as in ACTA or TPP.
That's the key problem with the ACTA proponents' vague hope that China will one day join a treaty it had no input on and which aims to shut down parts of its economy: ACTA would not only diminish China's sovereignty in terms of limiting what laws it could pass, it would also undermine its attempts to strengthen China's position as the undisputed regional leader in South-East Asia.
There is simply no benefit for China to join ACTA or TPP; and without China, both become largely pointless exercises.
It stars ICE Director John Morton, reprising his usual ridiculous refrain in which he conflates actual counterfeit goods with copyright infringement. But this time, he shows off his ability to stroll quickly through a warehouse while doing a walk-and-talk. I have to admit that it feels like a parody video most of the time. He kicks it off with a claim that he's explaining how to "steal an American job." Then he claims, "here's how to save an American job: IPR enforcement!"
He's wrong. First of all, the "job loss" from counterfeits is totally and completely exaggerated. As has been shown by multiple studies, most people buying counterfeits (hell, and downloading infringing works) wouldn't have bought the real thing instead. They know they're buying a fake good. So no "job" is lost there. And, as the government's own GAO noted last year, the idea that this all leads to lost jobs simply isn't supported by the data.
Second, enforcement does not "save jobs." It does put massive burdens on legitimate sites. Something Morton should know about since he's been taking down legitimate American sites with no legal basis for quite some time.
But before we get to that, he shows off some counterfeit products. There's a handbag, some fake drugs (they always have to show the fake drugs, despite it being a tiny issue, but they have to show some sort of "danger"). And then there's a video game mod chip. He says it "allows you to hack into video games and steal the game for free. That's illegal. That's IP theft." Of course, it's debatable if mod-chips are really illegal. They have substantial non-infringing purposes other than "hacking into video games to steal them for free" (do people steal stuff not for free?). But, you know, that's ICE under John Morton: declaring it illegal for you to modify products you legally purchased, like your gaming console. Thanks, US government!
Then we get to website censorship. And boy is he proud of that. You can see him gleaming as he says that ICE has "done a phenomenal job" and "every time they make a bust, every time they make an arrest, an American job is saved."
So, I wonder, can John Morton explain whose job was saved when his staffers incorrectly seized and censored Dajaz1.com for over a year? I'm curious. Because it sure seems like he actually hurt the ability of the Americans who run that site to make money. I'm curious whose job was saved when his staff deported a missing teen to Colombia (where she was not from). Is that the kind of "phenomenal" work under John Morton we should expect more of?
He then shows off "the news coverage" that ICE has gotten for seizing websites. Notice that he leaves out the stories about the mistaken seizure of multiple websites beyond Dajaz1. Like the seizure of 84,000 legitimate sites that were replaced with a statement claiming that they were all involved in child porn. Somehow those clips just didn't make the cut. Phenomenal work "saving American jobs!"
Morton goes on to talk up how "proud of the results" he is over the seizing of websites. Once again, no mention of the ones he seized by mistake, causing tremendous harm to those who he falsely declared as criminals. What's amazing is that he's never issued an apology over those false seizures. Instead, he's "proud of the phenomenal job" his team has done? What a joke.
Finally, he highlights the PSA that ICE put on the websites they forfeited. What he leaves out, of course, is that the PSA was both created by and owned by NBC Universal -- something ICE has never publicly admitted, but which we found out via FOIA requests. It's still shocking that a government agency would be using misleading propaganda from a private company and pretending that it's an official government production. Even worse, despite numerous requests, ICE has failed to show any proof that it properly licensed the video from NBC Universal, leading us to wonder if they "pirated" it.
ICE under John Morton has become a massive joke and a disgrace to American ideals of innocent until proven guilty and important things like free speech and due process. Rather than making this joke of a video (which certainly has Hollywood-style production... I wonder how that happened...), Morton should be issuing apologies for the mistakes that were made under his watch, and tendering his resignation. Instead, he's celebrating? Sickening.
Torrentfreak was the first to point out that Homeland Security's ICE group has ramped up their domain seizures, seizing 131 domains on Friday. They also grabbed one more today. That last one is interesting, since the seizure came on a .com that was actually transferred from a DNS provider in Australia, which raises additional questions about ICE's jurisdiction here (though may explain why the transfer came two days later). Update: that last one looks like it was a prank. However, ICE has officially announced that it seized 150 domains -- and of course, timed it to coincide with "Cyber Monday." Nothing like the feds propping up a marketing campaign.
It looks like, as it has done recently, most of these seizures focused on trademark issues with sites selling counterfeit goods. These are somewhat less troubling than some of last year's seizures of blogs and forums that had tons of protected speech -- and which appeared to link to content that was sent by copyright holders directly for promotional purposes. Still there are significant questions concerning the legality of such seizures, with ongoing challenges. It kind of makes you wonder if ICE is ramping up these seizures for a reason. The challenges concerning its authority to do so continue, while SOPA and PIPA, which would expand its ability to do these kinds of seizures, has been running into more speedbumps than expected. So might as well seize as many domains as possible before the party ends...
Earlier this year, the US government admitted that it was funding special programs in conjunction with WIPO (the World Intellectual Property Organization) to help push anti-counterfeiting enforcement efforts around the globe, despite tons of evidence that counterfeiting isn't a big problem, and actually is massively smaller than the industry makes it out to be. That US funding led directly to a secretive meeting in the Philippines, that was entirely one-sided, focusing solely on companies and their desire for greater enforcement against counterfeits.
Over the weekend, however, Cory Doctorow called WIPO out on this meeting, noting that it wasn't even on WIPO's website, and appeared to go against WIPO's own agenda concerning recognizing the "broader societal interests." This resulted in WIPO giving a weak defense of the event -- while also distancing itself from the event (saying it was only part of the first two days -- and the rest were from the Philippines government).
That, in turn, resulted in this somewhat hilarious attempt at a defense of the event from the Philippines IP Office. The IP Office first denies that this is a one-sided event designed to help big sponsoring companies... and then goes on to admit that's exactly what it was about in the very next sentence:
“Strictly speaking, the workshops sponsored by these corporations will, of course, teach our law enforcement officers how to act in the interest of those business entities,” observed Ricardo R. Blancaflor, Director General of Intellectual Property Office of the Philippines (IPOPHL). “However, it is also true that these brands are the most pirated in the country. They have lost a lot of profits due to piracy.”
A few weeks back, we wrote about a bunch of new domain seizures by Homeland Security's ICE division, and wondered why ICE hadn't said anything publicly about them. Well, it's finally put out an announcement about these domain seizures, including the fact that it had the operator of one site arrested for selling counterfeit Sons of Anarchy apparel. That guy, Ryan Breen, now faces 10 years in jail and fines up to $2 million. It seems there's a fair bit of irony in the fact that DHS/ICE is so thrilled about busting a guy selling apparel for a TV show that plays up an outlaw motorcycle gang known for its illegal weapons trafficking. Let's celebrate the gun runners... and punish the guy who made some t-shirts with 10 years in jail, huh? I have to admit that I'd much rather see Homeland Security and ICE actually focus on protecting the country, rather than some guy in upstate NY selling some t-shirts to fans of a TV show. And, of course, once again, it appears that most of the domains seized were taken without any notice, without any opportunity for the domain holders to respond. ICE has made it abundantly clear that they don't care about due process or the First Amendment in seizing domains, and frankly I find that a lot more troubling than some guy selling t-shirts online.
In the last few weeks, Homeland Security's ICE division has once again been seizing servers. TorrentFreak noticed a group of five domains seized recently, and SD pointed us to details of five more domains seized a little over a week earlier. From the domain names, it's clear that ICE is mostly focusing on sites that sell counterfeit goods right now, which is slightly less controversial. Pretty much all of the names (e.g. lacosteshoesmall.com and newerahatss.com) involve some sort of brand name. The site owners are unlikely to protest because they're likely engaged in trademark infringement. However, that doesn't make the legality of simply seizing such domains prior to an adversarial hearing any less questionable. It's just that ICE is doing the same thing that police have been known to do with drug dealers: seize stuff knowing that the people they're taking from don't want to go to court. It basically becomes a license for law enforcement to steal.
Of course, it's highly questionable how effective any of this. Maybe it makes someone sitting in an ICE office excited, but the counterfeiters are still counterfeiting and still selling their goods. Hiding their website doesn't do much to stop anything. But perhaps a bigger question is why ICE isn't hyping up these seizures? Perhaps it's trying to avoid all of the backlash when it screws up?
Eriq Gardner points our attention to the news that French first lady and singer Carla Bruni is suing a French newspaper claiming "counterfeiting," after it posted a 50-second clip of her singing Douce France, a 68-year-old song by Charles Trenet. As Gardner notes, in the US, this would almost certainly be fair use. But, in France... apparently it's considered "counterfeiting," because the snippet heard "was a simple draft version, a preparatory work and not a definitive recording." Is it any wonder that her husband, Nicolas Sarkozy, has been working hard to make sure France has the most draconian copyright laws around?
Senator Ron Wyden (who just joined Twitter) was kind enough to send over the remarks he made to the Senate Judiciary Committee concerning COICA. It's an excellent read that highlights many of the points we've been making. Basically, he says that we need to be careful not to decimate basic principles of free speech and create all sorts of collateral damage in an effort to go after a few bad actors who can be targeted via other laws:
Make no mistake, I share the committee's goal of fighting counterfeiting and protecting our creative industries and the good paying jobs they support. The Internet has unquestionably created new opportunities to traffic in counterfeit and illegal goods. The fact that the law has not always kept pace with technology may make it easier for bad actors to exploit new opportunities. Congress is right to want to go after those who are "stealing American intellectual property." However, in writing laws to target the bad actors, Congress cannot afford to forget that the primary uses of the Internet are activities protected by the First Amendment, not civil or criminal violations.
Yes, the Internet needs reasonable laws and bad actors need to be pursued, but the freedoms of billions of individual Internet users cannot be sacrificed in the interest of easing that pursuit. The decisions we make to police the Internet today will also govern how this relatively new medium will continue to develop and shape our world. I objected to last year's Combating Online Infringement of Copyrights Act not because it might reduce the Internet's ability to facilitate infringement, but because I believe it went about it in a way that would also reduce the Internet's ability to promote democracy, commerce and free speech.
He also laid out six specific points to consider in dealing with these issues. I agree with all six, and am particularly happy to see him mention the importance of separating counterfeiting from copyright protection, a key point that we've discussed here, but I had not seen anyone in politics pick up on until now.
Don't be hasty. Good public policy is not made on the back of a galloping horse. While both Congress and law enforcement are understandably eager to go after bad actors, both must be mindful of the precedents that they are setting in the U.S. and around the world. The law is best applied when the government's assertions can be challenged before its actions are approved.
Avoid collateral damage. Granting law enforcement broad authority to censor online content has a chilling effect on free speech. Narrowly focus law enforcement’s authority on those who are deliberately breaking the law or infringing on others’ property rights for commercial gain.
Preserve Fair Use and secondary liability protections. These safeguards are fundamental to Internet commerce and explain why American companies have been so successful in the global marketplace. The network effect is such a powerful driver of commerce on the Internet that any restriction on links and referrals is a serious barrier to economic activity.
Be mindful of how remedies can threaten and shape the integrity or architecture of the Internet. Decisions made today can have lasting results.
Avoid taking actions that will empower foreign regimes to censor the Internet. The United States has led the world in promoting free speech; our example cannot be allowed to give authoritarian regimes any excuse to go backwards.
Recognize the difference between copyright infringement and counterfeits. A one-size-fits-all approach towards trademarks and copyright may not be appropriate.
Once again, it's great to see Senator Wyden speaking out on these issues, but it's shame that he remains one of our only elected officials willing to pay attention to the problems with COICA and domain seizures.