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Mike is the founder and CEO of Floor64 and editor of the Techdirt blog.

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Posted on Techdirt - 22 February 2019 @ 3:31am

European Journalists Point Out That Article 11 Will Enrich Publishers At The Expense Of Journalists

from the this-is-not-helping dept

Promoters of the EU destructive copyright directive keep pushing the bogus line that it is necessary to give money to "artists and journalists." Take, for example, MEP Axel Voss (the EU Parliament member in charge of all of this nonsense) and his press release touting the final text:

Internet platforms face incentives to pay for artists and journalists’ work used

Except, actual journalists in the EU are realizing exactly what many of us have been talking about for months: nothing in the Directive will lead to more money for journalists. Instead, at best, it might lead to more money for publishers (though, even that is suspect, given the utter failure of similar plans already in place in Spain and Germany). While Voss's announcement claims that "Journalists must get a share of any copyright-related revenue obtained by their publishing house," journalists are pointing out that the opposite is actually true.

The International Federation of Journalists, along with the European Federations of Journalists put out a statement noting that Article 11 "makes a mockery" of their rights and will only serve to help publishers strip the journalists of their own rights:

While the directive acknowledges an obligation for journalists and all authors of the works incorporated in a press publication to receive an "appropriate share" of the revenues press publishers receive for the use of their publications online, it enables publishers to avoid such requirements by relying on existing "contractual arrangements" and "laws on ownership".

Such moves could deny journalists any revenue arising from the re-use of their work online.

These discriminatory provisions and proposals contained in Article 11 and Recital 35 of the text dash any hopes that the Directive would support authors in the press sector in obtaining fair and proportionate remuneration for their work under this law or in future national legislation. 

Instead they boost the system whereby powerful publishers force employed journalists and freelancers alike to sign contracts giving up all their rights – thereby offering them a proportionate or appropriate share of nothing

In short, the final text pays lip service to the idea that publishers should pass on money to journalists, but also provides a massive loophole in that all the publishers need to do is write this requirement out of any contract and not have to worry about it.

It appears that this kind of tactic is found throughout Articles 11 and 13. The text says you don't have to use filters, but provides no workable alternative. The text says that memes are allowed, but never explains how a site can comply with the law without blocking all memes. The text of the directive basically pays lip service to all the complaints and obvious consequences, but rather than deal with the consequences, it just says "and don't let those consequences happen." This is no way to make policy.

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Posted on Techdirt - 21 February 2019 @ 9:25am

Teen Musician Turns Down $3 Million Record Deal: No Need For A Label Thanks To The Internet

from the thanks,-internet dept

There's a pretty fascinating profile last week in Billboard magazine of teenage musician/rapper NLE Choppa who just turned down a $3 million record label deal. Choppa (real name: Bryson Potts) rocketed to fame thanks to YouTube, where his Shotta Flow video was uploaded just last month, but has over 10 million views.

When given the chance to sign with a bunch of different labels all bidding for him, he decided to take a very different deal -- one where he retains all the rights and just partners with a distribution company, UnitedMasters:

Within a month, Choppa, whose real name is Bryson Potts, had sparked a bidding war among record companies like Republic, Interscope and Caroline, with bids reaching as high as $3 million. This kind of story is familiar: Young, local rapper goes viral; labels pounce. But this week, the rapper tells Billboard, he turned down those offers to enter a distribution partnership with UnitedMasters, Steve Stoute’s independent distribution company, without an advance and while retaining full ownership of his master recordings.

And why doesn't he need a full on record label deal? Because of the internet and all of the various internet services out there that are already making him wealthy:

Stoute says that when the “Shotta Flow” music video caught the eye of UnitedMasters’ A&R team last month, he immediately reached out to Choppa and the rapper's mother, who was acting as his manager, offering distribution for the song. Choppa agreed. “Then, record companies are calling the guy and offering a bunch of money,” Stoute tells Billboard. “Here’s the issue: He’s already just seen, with him owning the rights and us doing distribution, he’s earning money on Spotify and Apple Music, and his song is growing on YouTube. What does he need a record company to do?”

Let's repeat that for those of you who are a bit slow in class:

He’s already just seen, with him owning the rights and us doing distribution, he’s earning money on Spotify and Apple Music, and his song is growing on YouTube. What does he need a record company to do?

Just last week we were talking about how many independent artists are embracing the internet to avoid the legacy gatekeepers.

Meanwhile, bureaucrats and recording industry lobbyists keep insisting that the EU needs Article 13 because the internet is unfair to artists? They're saying that there's a "value gap" because of YouTube? Maybe, just maybe, Article 13 has a lot more to do with the fact that the labels are losing relevance. When an artist like Choppa can retain his rights, build a massive audience, and make a ton of money thanks to internet platforms and does not need a label or all the downsides of a label deal, it certainly suggests that the "problem" Article 13 is claiming to solve might not be an actual problem. Indeed, the real "problem" that Article 13 seems to solve is the fact that the labels aren't needed as much any more. And that's not actually a problem for anyone who isn't, you know, a record label.

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Posted on Free Speech - 20 February 2019 @ 9:21am

Justice Thomas Is Apparently Serious About Completely Upturning Over 50 Years Of 1st Amendment Law

from the opening-up-our-libel-laws dept

It appears that Supreme Court Justice Clarence Thomas has decided to drop quite a First Amendment bombshell this morning -- suggesting that over half of a century of "settled" First Amendment law might not be so settled.

But, first, back during the 2016 campaign, then candidate Donald Trump uttered his famous "big idea" to "open up" libel laws in response to his displeasure that some of the media was criticizing much of his usual nonsense. This was, quite clearly, an attack on the 1st Amendment -- and it was those strong 1st amendment protections for free speech that have actually helped protect Trump himself from multiple lawsuits.

However, when discussing Trump's original promise to "open up" libel laws, many people pointed out that there really wasn't very much he could do. The 1st Amendment is the 1st Amendment -- not something that Trump can easily change. And specific defamation laws are from each state, not the federal government (and must be bounded by what the 1st Amendment allows). We did note that there were some ways that Trump could create free speech problems, but it was generally agreed upon that it was unlikely to happen in the courts. In 2016, Ken "Popehat" White had a detailed post on how it was exceedingly unlikely that the courts would change the key aspects of 1st Amendment law, with a particular focus on New York Times v. Sullivan, which is the seminal 1964 Supreme Court ruling credited with creating a "re-birth of the 1st Amendment."

As Ken wrote in his piece, NYT v. Sullivan is so settled that there's basically no movement at all to change it.

Unlike, say, Roe v. Wade, nobody's been trying to chip away at Sullivan for 52 years. It's not a matter of controversy or pushback or questioning in judicial decisions. Though it's been the subject of academic debate, even judges with philosophical and structural quarrels with Sullivan apply it without suggesting it is vulnerable. Take the late Justice Scalia, for example. Scalia thought Sullivan was wrongly decided, but routinely applied it and its progeny in cases like the ones above.1 You can go shopping for judicial candidates whose writings or decisions suggest they will overturn Roe v. Wade, but it would be extremely difficult to find on... chemtrail-level, but several firm strides in that direction. Nor is the distinction between fact and opinion controversial — at least not from conservatives. There's been some back and forth over whether opinion is absolutely protected (no) or whether it might be defamatory if it implies provably false facts (yes) but there's no conservative movement to make insults and hyperbole subject to defamation analysis. The closest anyone gets to that are liberal academics who want to reinterpret the First Amendment to allow prohibitions of "hate speech" and other "hurtful" words. It seems unlikely that Trump would appoint any of these.

In short, there's no big eager group of "overturn Sullivan" judges waiting in the wings to be sent to the Supreme Court. The few academics who argue that way are likely more extreme on other issues than Trump would want.

The key bit of NYT v. Sullivan was to establish that there's a very high bar in defamation cases involving a "public figure." Specifically, the standard the Supreme Court established is that in such cases, a plaintiff need to show "actual malice" -- which doesn't just mean that the defendant really dislikes the plaintiff. The actual malice standard isn't actually about "actual malice," but rather that the speaker made the statements knowing they were false, or exercising "reckless disregard" for whether or not they were true. The Supreme Court established that this high bar was necessary to satisfy the First Amendment, and guarantee that no laws were made that infringed up on the right of free expression.

So, the bombshell this week was a concurrence by Justice Thomas in denying a petition to rehear a defamation case concerning Bill Cosby and one of his accusers. The specifics of the case revolved around whether or not the accuser qualified as a "public figure" and thus had to clear the higher bar as established by the NYT's case. The 1st Circuit had ruled in 2017 that McKee was a public figure. The cert petition tried to challenge that decision. The Supreme Court decided not to hear it, which isn't all that surprising. What was surprising is that Thomas decided to use this decision not to hear the case (with which he agreed) to assert something much more controversial: that NYT v. Sullivan was bad law and shouldn't bind the court:

New York Times and the Court’s decisions extending it were policy-driven decisions masquerading as constitutional law. Instead of simply applying the First Amendment as it was understood by the people who ratified it, the Court fashioned its own “‘federal rule[s]’” by balancing the “competing values at stake in defamation suits.” Gertz, supra, at 334, 348 (quoting New York Times, supra, at 279).

We should not continue to reflexively apply this policydriven approach to the Constitution. Instead, we should carefully examine the original meaning of the First and Fourteenth Amendments. If the Constitution does not require public figures to satisfy an actual-malice standard in state-law defamation suits, then neither should we.

As Ken White had written in his piece, this is somewhat surprising -- bordering, but not quite, on chemtrails level nuttiness. Thomas goes on for pages explaining why he disagrees with the ruling in Sullivan, first arguing that because the standard itself is not in the Constitution, there's no Constitutional support for it:

But the Court also addressed “the extent to which the constitutional protections for speech and press limit a State’s power to award damages in a libel action brought by a public official against critics of his official conduct.” Id., at 256. The Court took it upon itself “to define the proper accommodation between” two competing interests—“the law of defamation and the freedoms of speech and press protected by the First Amendment.” Gertz, 418 U. S., at 325 (majority opinion). It consulted a variety of materials to assist it in its analysis: “general proposition[s]” about the value of free speech and the inevitability of false statements, New York Times, 376 U. S., at 269– 272, and n. 13; judicial decisions involving criminal contempt and official immunity, id., at 272–273, 282–283; public responses to the Sedition Act of 1798, id., at 273– 277; comparisons of civil libel damages to criminal fines, id., at 277–278; policy arguments against “selfcensorship,” id., at 278–279; the “consensus of scholarly opinion,” id., at 280, n. 20; and state defamation laws, id., at 280–282. These materials led the Court to promulgate a “federal rule” that “prohibits a public official from recovering damages for a defamatory falsehood relating to his official conduct unless he proves that the statement was made with ‘actual malice’—that is, with knowledge that it was false or with reckless disregard of whether it was false or not.” Id., at 279–280. Although the Court held that its newly minted actual-malice rule was “required by the First and Fourteenth Amendments,” id., at 283, it made no attempt to base that rule on the original understanding of those provisions.

That's a... somewhat bizarre version of Constitutional originalism, and would suggest that basically none of the standards the Supreme Court has established in its history have any merit. Yikes.

New York Times was “the first major step in what proved to be a seemingly irreversible process of constitutionalizing the entire law of libel and slander.”

Well, yeah. Because, by definition, libel and slander impact speech, and the 1st Amendment says that you can't pass laws that prohibit free expression. So, unless Thomas is actually arguing that all defamation law is unconstitutional (which would be an even more extreme position), then this argument makes no sense. But he's not arguing that at all. It goes on for pages, talking about how early in the US's history libel laws were super important -- especially in protecting the reputations of famous people:

Far from increasing a public figure’s burden in a defamation action, the common law deemed libels against public figures to be, if anything, more serious and injurious than ordinary libels. See 3 Blackstone *124 (“Words also tending to scandalize a magistrate, or person in a public trust, are reputed more highly injurious than when spoken of a private man”); 4 id., at *150 (defining libels as “malicious defamations of any person, and especially a magistrate, made public by either printing, writing, signs, or pictures, in order to provoke him to wrath, or expose him to public hatred, contempt, and ridicule” (emphasis added)). Libel of a public official was deemed an offense “‘most dangerous to the people, and deserv[ing of] punishment, because the people may be deceived and reject the best citizens to their great injury, and it may be to the loss of their liberties.’”

After talking about a bunch of highly questionable cases from a century or so before the NY Times decision, Thomas concludes with the claim that states are more than capable of "balancing" the rights of free expression with "reputational harms":

We did not begin meddling in this area until 1964, nearly 175 years after the First Amendment was ratified. The States are perfectly capable of striking an acceptable balance between encouraging robust public discourse and providing a meaningful remedy for reputational harm. We should reconsider our jurisprudence in this area.

This is an ahistorical take on reality. Defamation laws were routinely used by the powerful to silence criticism. Indeed, that is still the case in many other countries that don't have a standard akin to the actual malice standard in the US. We routinely write about speech squelching cases in places like the UK and Australia. As the Atlantic's coverage of the 50th anniversary of the NYT v. Sullivan decision states:

If there were no Sullivan, there likely would not have been a release of the Pentagon Papers or a rigorous investigation into Watergate or much of any withering criticism of government that appears today in any medium.

The NYT v. Sullivan is a supremely important case in establishing the 1st Amendment as truly protecting free speech -- and specifically protecting the rights of anyone to criticize public officials. It is disappointing and somewhat shocking that any Supreme Court Justice is willing to even consider going back on that standard. Hopefully, the other 8 Justices retain their recognition of its importance.

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Posted on Techdirt - 20 February 2019 @ 3:23am

As EU Politicians Insist That It's All Just 'Bots' And 'Astroturf' Tons Of People Showing Up In Real Life To Protest

from the look-at-all-those-bots dept

One of the more obnoxious elements of the EU politicians brushing off the concerns of the public concerning the EU Copyright Directive, is their repeated, insulting and incorrect, claim that there really isn't a public upswell against Articles 11 and 13 and that it's all just manufactured by Google and "bots" and "astroturfing." We've already pointed out that nearly 5 million people have signed the Change.org petition protesting Article 13 -- making it the largest petition on that site ever. And those are real people signing on.

And those real people are now showing up to protest as well. As highlighted by Drew Wilson at FreezeNet:

The ink has barely dried on the finalizing of Article 11 and Article 13 and now, protests are beginning to emerge in Europe.

All over Twitter there are examples of large protests springing up over the Copyright Directive.

I especially like the text of this one which, translated, says "But we are all just bots."

Boy those "bots" sure crossed the uncanny valley in a hurry. Here's another one, saying: "We are currently at #Artikel13Demo the one in Cologne or as MEP of the CDU, Sven Schulze would say: "A real fake action."-Yes exactly! You see, we're all just bots!" Look at all those bots:

And some more bots:

I'm sensing a theme:

Damn, that's a lot of bots.

I'm beginning to think that European politicians who mocked critics of Articles 11 and 13 as "bots" may realize that that was a strategic mistake. The "bots" have mobilized -- and they sure look like human beings who will be voting for the EU Parliament in May...

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Posted on Techdirt - 19 February 2019 @ 10:44am

FOSTA Co-Sponsor Richard Blumenthal Tells Court FOSTA Didn't Change CDA 230 & That It Was Written To Violate 1st Amendment

from the saying-the-quiet-part-loud dept

Last week, the Wisconsin Supreme Court heard the Armslist case that we've written about a few times. This is the case where victims of a shooting are trying to sue the website Armslist that had hosted the ad for the gun that the shooter bought to use in the crime (likely legally). Most cases that have interpreted CDA 230 over the past twenty-odd years have agreed that the language of that law is clear that websites cannot be held liable for the actions of their users, but last year a Wisconsin appeals court decided otherwise. The Wisconsin Supreme Court agreed to revisit this decision, and last month we filed another amicus brief to explain the important issues at stake for the internet and free speech.

A number of other amicus briefs were filed as well -- including a stunning one on behalf of Senator Richard Blumenthal and some retired members of Congress, which first wrongly insisted that CDA 230 did not apply to the web platform being sued for actions of its users, and then went on to make some truly astonishing claims about FOSTA, a bill that Blumenthal was a key co-sponsor for.

It should be noted that Blumenthal and CDA 230 have a long history -- one that goes back to a time long before he was in the Senate. Back when he was merely a grandstanding Attorney General in Connecticut, Blumenthal regularly would threaten internet companies for the actions of their users, ignoring the fact that CDA 230 prevented Blumenthal from taking this action against them. He went after MySpace because some sexual predators used the site. He went after Facebook for the same thing. Oh, and how could we forget his years-long crusade against Craigslist. Basically, as Attorney General, every few months, Blumenthal would generate splashy headlines by grandstanding to the press about some evil thing that people had done on the internet -- and incorrectly blaming the tools and services that those had people used to do it.

So it was little surprise that when a chance came up to gut Section 230's critical protections for platforms, and by extension speech on the internet, Blumenthal became the key sponsor from the Democratic side of the Senate to push these changes forward (Senator Rob Portman was the key sponsor from the GOP).

Because it's long been apparent that Blumenthal has liked to ignore what CDA 230 did (and why), it is not too shocking that with this brief he attempted to make the Wisconsin Supreme Court ignore it too. But it is odd that he would do this by misstating how the bill he sponsored, FOSTA, changed Section 230, and would have had to change it if he wanted its protections to be curtailed, by pretending it didn't actually change it. Armslist, in its own brief, had correctly pointed out that the passing of FOSTA showed that CDA 230 provided platforms with broad immunity, and that Congress would have had to amend it if it wanted to exempt certain activities from its coverage. Yet somehow Blumenthal tries to argue that's not what FOSTA was for:

According to Armslist, “[t]hat Congress saw the need to amend the CDA to exclude protection for certain sex trafficking crimes” proves that the First Circuit’s broad reading of Section 230 was correct, because otherwise “the amendment would not have been necessary.” Respondents’ Br. 20. Armslist’s interpretation of FOSTA is astonishing, bold, and completely inaccurate.

[....]

The purpose of FOSTA was to “clarify” what was already true—“that section 230 of [the CDA] does not prohibit” suits like Backpage.com.

This last sentence is just wrong, and he should know that. He literally told reporters that the point of FOSTA was "that there's a need for stronger rules of the road when it comes to accountability in this industry." If CDA 230 wasn't already preventing the litigation he thought desirable, then there would have been no need to change it. And there certainly would have been no call for him to put out a press release praising the new "tools in our legislation" that FOSTA was intended to deliver if FOSTA did not make significant changes he thought were needed to hold platforms like Backpage liable.

The upshot is that with this brief, Blumenthal essentially admitted how unconstitutional FOSTA is. At best, if all FOSTA truly did was "clarify" how Section 230 operated, it was an unnecessary incursion on expression. But in bragging about the significant changes FOSTA brought, he also ends up confessing how they are an unconstitutional incursion on expression:

Congress did not enact FOSTA to narrow Section 230's applicability to traditional sex-trafficking actions. Traditional "sex trafficking crimes are clearly outside th[e] scope" of "speaking and publishing." FOSTA, however, created a new breed of sex-trafficking actions based on the sort of publication-related conduct that Section 230 ordinarily immunizes: (1) “facilitating a violation of” sex-trafficking law, including by “publishing information designed to facilitate sex trafficking,”

"Publishing information" is a 1st Amendment protected activity. Now it is possible that a court might determine that "publishing information designed to facilitate sex trafficking" falls into the somewhat ill-defined "speech integral to criminal conduct" exception to the 1st Amendment, but the "integral" part is a higher bar than you might think -- and speech that merely "facilitates" such activities seems unlikely to clear that hurdle (especially given that we already see FOSTA leading to the suppression of much broader speech than any that actually is involved in sex trafficking).

But, hey, I guess as long as Blumenthal is this committed to interfering with how Section 230 works, it makes sense that he'd have no problem interfering with how the First Amendment works too.

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Posted on Techdirt - 19 February 2019 @ 9:08am

German Politician Thinks Gmail Constituent Messages Are All Faked By Google

from the not-how-it-works dept

Christopher Clay alerts us to the latest Google Derangement Syndrome from an EU Bureaucrat. Last year, we noted that various EU politicians kept insisting that all of the complaints about their awful plan were due to Google lobbying and astroturfing -- when the reality showed that nearly all of the lobbying came from legacy copyright players.

However, German MEP Sven Schulze must have thought he was really on to something in claiming he had real proof of Google astroturfing. In a tweet (in German) he claimed that because all of the complaints he's getting seem to come from people with Gmail addresses, it's proof of fakery. No, really. Here's a translation (courtesy of Google, of course) of his tweet:

Now coming back every second of messages about # upload filter & # Article 13 pure. Apart from the fact that these contents are not correct, ALL come from # Gmail accounts. 🤔Man # google , I know that you are angry, but ye have this # fake really necessary action?

Really now? Perhaps Schultze is unaware that (as of the most recent public stats), Gmail is used by 1.5 billion people. These days, it's pretty typical for lots and lots of people to use Gmail as their personal (and often professional) email address. To claim that seeing Gmail emails proves Google is astroturfing is... nutty. And, it would appear that Schulze's followers recognize just how idiotic this looks.

How do you say ratioed in German?

And many of those 4.5 thousand replies are ruthlessly mocking him for being completely clueless.

I'm guessing he'll blame Google for all those replies as well?

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Posted on Techdirt - 19 February 2019 @ 3:04am

EU Commission Decides To Mock The Public; Insists Fears About EU Copyright Directive Are All Myths

from the really-now? dept

On Thursday, the European Commission posted -- on its official Medium page -- an astoundingly juvenile and obnoxious post, lashing out at those who have complained that Articles 11 and 13 in the EU Copyright Directive will be destructive. The post was snide and condescending, and suggested that most of the opposition was fake and "astroturfed" and that anyone who really believed that the EU Copyright Directive was a problem was brainwashed by Google and Facebook. It was... quite a post. On Friday evening, I wrote up a (mostly) line-by-line response to its utter nonsense and planned to post it this week once people were back in the office to review it. However, on Saturday, after widespread criticism, the EU Commission "removed" the post without an apology -- but with the standard cop out of someone who did something bad but can't admit it:

We have removed this article as it has been understood in a way that doesn’t reflect the Commission’s position.

"... it has been understood..." Not "we wrote an insulting, misleading and condescending article that we shouldn't have posted." Not, "we're sorry that we lashed out at the public we're supposed to represent." No, it's all your fault in that you "misunderstood" our obnoxious, snide remarks to be both obnoxious and snide.

Given that so many people missed it and that I already had this post written with much of the original quoted -- what follows is my original post.


This is quite incredible. Earlier this year, we wrote about the Legislative Affairs Committee of the EU Parliament putting out a "Q and A" page about the EU Copyright Directive that was so full of wrong that it was insulting. However, now it appears that the EU Commission has decided to one up its colleagues in the Parliament by posting an article to Medium of all places (one of the many sites that will be massively harmed by the Directive) insisting that you're all fools for thinking that anything bad might happen, and that it's all the fault of Google/Facebook. Thankfully, for at least the time being, I am free to quote large parts of their article and respond to it without having to "buy a license" from the Commission, so let's take advantage of that remaining bit of freedom.

Take this test: Type in ‘EU Copyright Directive’ into the search box in Youtube. The majority of results in the top 20 will be passionately against it. Here’s some of the headlines, if you’re not sure:

‘Shocking update on the Copyright Directive.’ ‘Today Europe lost the Internet’ ‘How the new copyright laws will destroy the internet’ ‘Censorship machines’, ‘EU to end the internet’ or ‘Europe to ban all memes’

Of course, we know from recent elections and referendums that simple memorable slogans — however untrue or unobtainable — can go a long way to winning over hearts, minds and voters. And so it was, that the wholly inaccurate phrases ‘ link taxes ’ and ‘ censorship machines ’ started to be part of the campaign against the proposed Copyright Directive. Never let the truth get in the way of a catchy slogan.

Note the opening here is dripping with condescension, suggesting that even though basically everyone is not only against this law, but speaking out against it, they're all just silly fools, tricked by a slogan. Note that this does not respond to any of the massive problems many, many experts have raised about the approach in the Copyright Directive -- especially on Articles 11 and 13. It just sneers about what it says are inaccurate phrases (spoiler alert: those phrases are not inaccurate).

The idea behind the Directive is to bring copyright rules into the 21st century. The current rules are very analogue and designed for the world before the web. Things have changed. Search and social media platforms largely define the way we enjoy content today, but their market dominance has now tilted the balance in their favour and away from those who design and create original things.

This is hogwash. The "laws" they are trying to change include things like the EU's E-Commerce Directive that was (oh, look at that) passed in the 21st Century, when the web was already around and thriving. Second, the idea that search and social media platforms have "tilted the balance... away from those who design and create original things" is ludicrous. As we've shown for years, the internet has given a massive boost to content creation -- enabling more creation in nearly every single category. It has made it easier to create, produce, release, distribute, share, build a fan base and to make money than at any time in history. The internet has enabled more people than ever before in history to not just create, but to make money from their creations.

If you want to know who it's tilted the playing field against, it's the legacy gatekeepers: the old record labels, movie studios and publishers, who used to operate in an oligopolistic world, with little competition, where they could demand all of the rights from creators in exchange for a small chance of success -- and if success came, those gatekeepers would still suck up nearly all of the rewards. Can anyone tell me if Return of the Jedi is profitable yet? Has Lyle Lovett's record label paid him a dime yet? Meanwhile, artists who are embracing the internet are finding that it can pay off massively.

The world of Article 11 and 13 is a move towards going back to the old system. To force artists and creators into the arms of a small group of gatekeepers who decide if you can even post your content online at all, let alone try to make money from it. For the EU Commission to repeat a completely made up myth that artists are somehow worse off today is not just revisionist history bullshit, it's insulting.

As it stands, big internet platforms such as Facebook or Google make a lot of money from ads that appear on their sites alongside copyrighted material such as music or clips. The more people view, the more money platforms can earn from those adverts.

Very little of the content appearing on Facebook and Google is infringing. Yes, both sites will send a lot of traffic to content elsewhere, and make money on ads from that service, but that's different. Meanwhile, both Google and Facebook have spent many millions of dollars on automated filters to block out infringing content (or to allow copyright holders to monetize that content). So if the idea is to attack those companies with a new law requiring such filters, how does this law "improve" anything?

Answer: it does not. The new law is designed to ramp up the liability even higher -- such that when such filters fail (and they always fail because it is impossible to get right), the fines will be catastrophic. As such, the entire point of Articles 11 and 13 is to be so ridiculous and so draconian, that Google and Facebook would have no choice but to pay up to avoid getting hit with tons of lawsuits. It's an extortionate plan, put together by the EU bureaucrats, to favor legacy gatekeepers.

Just as Google and Facebook are being rewarded financially for all their hard work in producing amazing software, clever algorithms and exciting designs, we think authors, film-makers, journalists and musicians should also be rewarded for their endeavours too. At the moment the balance of power in who gets paid for such royalties resides overwhelmingly with the big Californian companies — who are worth around $1 Trillion.

This implies -- totally falsely -- that "authors, film makers, journalists and musicians" are not being rewarded today for their endeavors. They are. Some successfully. Some unsuccessfully. Demanding that EVERY INTERNET COMPANY that hosts content (not just Google and Facebook) cough up massive sums of money to gatekeepers (who have a history of not paying actual creators) doesn't seem like a smart path forward. It sounds like an utterly corrupt one.

The Copyright Directive is an attempt to create a level playing field where everyone can gain from the amazing options that the new technologies offer. Musicians, artists, video producers and the whole creative sector will benefit by having a fairer negotiating position.

"Everyone can gain"? By making platforms no longer work? By making it impossible to post and share content? By forcing small companies out of business? By killing off the ways in which many independent creators now earn their livings? The EU Commission is so bizarrely disconnected from reality.

Journalists and online publications will have more money to keep on financing quality research and news. Despite what you might read, the Copyright directive supports a free press and could enable journalists to get some money when their articles are shared online. Good journalism costs money and without a free press there is no democracy.

Remember, Article 11 has already been tried in both Germany and Spain, and failed in both places. It did not lead to more money for journalists or publications. It did not help support a free press. It actually harmed a free press. How the EU Commission can just push out blatant lies without people laughing at them is beyond me.

Fair remuneration for and from the platforms and a fairer market place is what we want. We cannot achieve a real European digital single market which makes us all better off, if copyrighted material is misused or poorly remunerated. Because if creative people don’t get paid, they can’t afford to be creative. No Mon = No Fun

Define "fair"? Is it "fair" that Return of the Jedi never made a profit and people who were supposed to share in its profits never did so? Is it fair that Lyle Lovett never received any royalties? It does seem fair that artists who build up a strong fan base, like Amanda Palmer, are able to earn a really nice living supported by her fans. It will be too bad when the platforms that helped her do so -- like Patreon and Kickstarter -- find that they are unworkable under Article 13. That seems... unfair. And again, right now more artists than ever before are getting paid. And that's happening because of the internet that Article 13 will fundamentally change.

And, uh, "no mon = no fun"? Isn't this the same damn post where the EU Commission itself was mocking "slogans"? But let's be clear here: there is currently both more "mon" and more "fun" based on literally every single study of the market place today. The internet has enabled wild creativity -- but also tremendous remuneration. The real problem that the EU Commission has is that this is now being spread around much further, and the old gatekeepers with their strong lobbying relationships aren't able to capture as much of it.

The EU Copyright Directive is corrupt cronyism at its worst.

Just like everyone else, the EU loves culture, cinema, art and music. We have no intention in restricting young people’s access to all these wonderful things on- or offline. Oh and by the way, no matter what some people (and paid-for campaigns) may tell you, you will never be prevented from having a laugh online. WE ARE NOT BANNING MEMES. On the contrary, there will be a guarantee that platforms respect your right to self-expression. That includes pastiche, critique and parody.

They keep saying this and it is nonsense. They demand filters -- and then say that platforms will have to "nerd harder" to figure out how not to use those filters to block memes. What they ignore (purposefully, because this has been explained in great detail) is that no filter can understand the context to recognize what is a "meme" or what is parody. Indeed, popular memes have been at the center of multiple copyright cases.

Nonetheless, it appears as if the largest search and video platforms in the world are afraid of regulation — despite having overwhelming dominance on the internet.

This might be the only accurate statement in this whole damn article. They may very well be afraid of regulation. And maybe for good reasons -- because such regulation will massively and fundamentally change the very nature of the internet -- not just for themselves, but for everyone else as well. That's the concern.

Furthermore, there is ample evidence from respected sources, here and here and perhaps here or here or indeed here that ‘Big Technology’ has even ‘created’ grassroots campaigns against the Copyright Directive in order to make it look and sound as if the EU is acting against the ‘will of the people’.

This is the absolute most disgusting part of this. In one paragraph -- much of it linking to a group of people known for (a) being paid by competitors to Google or (b) conspiracy-theory levels of insanity regarding the internet -- the European Commission simply brushes away millions of citizens and their views. While it's entirely possible that the big internet companies are pushing their viewpoint here, the above paragraph is overly inflated nonsense. The public is going crazy about this, in large part because of nonsense like this that is being put out, where it is clear that the bureaucrats in Brussels don't know (a) how the internet works, (b) what this law will actually do, or (c) what the public is actually saying.

Over at Change.org there's a petition protesting this with nearly 5 million signatures, making it the largest petition in Change.org's entire history. You don't fake that. People are angry. And with good reason, when the bureaucrats, who are supposed to represent their interests, are spewing utter nonsense along these lines.

And the most incredible part? Right after totally dismissing the views of the vast majority of the public, these numbskulls state the following:

That’s another myth. Unlike Google and Facebook, the EU is answerable to the public and to democratically elected politicians.

Answerable to the public? You just pretended the views of the public weren't legitimate. You ignored the largest petition in history. You are not representing the interests of the public, but rather a very small legacy industry which failed to adapt. The whole thing is completely disgusting.

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Posted on Techdirt - 15 February 2019 @ 3:30pm

Appeals Court Takes No Time At All In Rejecting Patent Troll's Ridiculous Lawsuit Against Cloudflare

from the buh-bye-now dept

You may recall that back in May of 2017, a patent trolling operation called Blackbird Technologies picked on the wrong internet company to troll. Having built up some success blasting frivolous lawsuits at other internet companies, it chose to go after Cloudflare. That was a mistake. Cloudflare didn't just hit back, it promised to destroy the patent trolling firm, Blackbird Technologies. It opened up a campaign to crowdsource prior art not just on the patent at issue in its lawsuit but on every patent that Blackbird Technology claimed to hold.

Almost exactly a year ago, Cloudflare won its case with the court invalidating the patent. It was such an easy decision that it took US District Court Judge Vince Chhabria barely over a page explaining why the patent was so clearly invalid and the case was dismissed.

Blackbird, for reasons that escape me, decided to appeal to the Federal Circuit. Now, we've spent the better part of two decades mocking the Federal Circuit and its history of nutty decisions, but there are some cases so obviously bad that even the CAFC can't fuck them up. This is one. A CAFC panel heard the case last week and found the situation so utterly stupid that it only took a few days for it to affirm the lower court ruling. Indeed, its ruling is even shorter than the district court's ruling. The CAFC opinion doesn't even say anything other than: "Affirmed."

Ouch.

According to Cloudflare's General Counsel, Doug Kramer, in a blog post on Cloudflare's site, the CAFC panel didn't have a single question for the company's lawyers (which is nearly unheard of), leaving him with tons of extra time:

A panel of three judges from that court heard arguments on the appeal last Friday, but didn’t ask our attorney a single question about the substance of our argument on the abstractness of the patent. He sat down with almost half of his 15 minutes of argument time left because there was nothing more to say. Yesterday, just three business days after that hearing, the court affirmed the lower court’s decision in summary fashion, which means they didn’t even write about the claims or arguments, they just said “Affirmed” (see below).

Of course, as Kramer further notes in the post, even "easy victories" take a ton of time and resources, not to mention other kinds of costs that can impact a business in lots of ways:

Blackbird filed this case in March 16, 2017. For nearly two years, anyone doing due diligence on Cloudflare might have had questions about whether there was a cloud over our rights to our technology. And we had to go through a lot of briefing, and the related legal expenses, to get to this point. Blackbird’s combined legal filings at the district court and appellate court amounted to more than 650 pages, our responsive briefs were more than 900 pages.

The two courts spent less than two pages describing a result that was obvious to them, but it took us two years of uncertainty and cost to get there. Federal court litigation doesn’t make anything easy. Even if Blackbird had won the case, it is not clear they would have been able to collect significant damages. Our allegedly infringing use was not a product or feature that we charged for or made money from – it was essentially posting interstitial messages for various errors. Even though we were able to win this case early in the legal process and keep our costs as low as possible, it’s possible we spent more money resolving this matter than Blackbird would have been able to collect from us after trial.

This is why trolling works. This is why so many plaintiffs use the judicial system as a weapon, even when their lawsuits clearly have no merit. Even to get an "easy win" you can lose, big time.

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Posted on Techdirt - 15 February 2019 @ 1:42pm

Can Russia Actually 'Unplug' From The Internet?

from the it-won't-be-easy dept

As you may have heard, Russia recently announced a plan to run a "test" by which it would disconnect from the internet:

Russia is considering a plan to temporarily disconnect from the Internet as a way to gauge how the country's cyberdefenses would fare in the face of foreign aggression, according to Russian media.

The general idea behind this is to see what would happen if other countries (such as the US...) decided to try to cut Russia off from the internet:

The bill would require Internet providers to make sure they can operate if foreign countries attempt to isolate the Runet, or Russian Internet. It was introduced after the White House published its 2018 National Security Strategy, which attributed cyberattacks on the United States to Russia, China, Iran and North Korea.

As part of the experiment, communications oversight agency Roskomnadzor would examine whether data transmitted between Russia's users can remain in the country without being rerouted to servers abroad, where it could be subjected to interception.

Of course, this shouldn't come as a huge surprise. Over the past few years, Russia has made a bunch of fairly significant moves leading up to this. In 2014, it passed a new law demanding that user data remain on Russian soil, and threatened multiple US companies for failing to do so. Also, almost exactly two years ago, a top Putin adviser hinted at a similar plan to experiment with disconnecting the country from the internet to see how resilient a domestic Russian internet would be.

So the real question is whether or not this would actually work. Wired has a pretty thorough analysis of just how difficult this might prove for Russia:

“What we have seen so far is that it tends to be much harder to turn off the internet, once you built a resilient internet infrastructure, than you’d think,” says Andrew Sullivan, CEO of Internet Society, a nonprofit that promotes the open development of the internet.

[....]

The process by which it would do so remains challenging. “In short, Russia would need to do two things: Ensure that the content Russians seek to access is actually located somewhere in the country, and ensure that routing and exchanges could all occur domestically,” says Nicole Starosielski a professor at New York University and author of The Undersea Network.

[...]

No matter how much Russia has prepared, however, unanticipated issues will almost certainly arise if it tries to dissever from the rest of the world. “I’m absolutely sure that’s the case. It may not break from the perspective of their major infrastructure grinding to a halt, but that’s a risk that they’re taking,” says Paul Barford, a professor at the University of Wisconsin–Madison who studies computer networking. It’s difficult for internet service providers to know precisely how reliant they are on every piece of infrastructure outside their borders. “Because of the complexity across all levels of the protocol stack, there could be catastrophic failures somewhere,” says Barford.

There's a lot more in the Wired piece, but it certainly suggests that Russia might find it more difficult than it expects -- but I guess that's the reason why the country is considering this as a "test," rather than finding out how well it works out of necessity at some later date. To some extent, this sounds like a nation-state level experiment along the lines of Kashmir Hill's recently journalistic experiment in cutting out the various tech giants, which alone proved to be significantly harder than most people would have expected.

There is, of course, a larger point here. The value and importance of the internet is built quite heavily into the fact that it is a borderless, global network that allows information sharing and communication nearly anywhere. There have, obviously, been some limited challenges to that (China being the most notable), but it still remains mostly true. There have been increasing fears of a "fragmenting" internet, and Russia toying with this "test" only drives home how real that fragmentation may become in the very near future.

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Posted on Techdirt - 15 February 2019 @ 10:44am

Calling Out Copyright Troll Mathew Higbee

from the copyright-trollin'-trollin'-trollin' dept

Over the last few months, I've been hearing an awful lot about a copyright trolling operation that goes by the name Higbee and Associates. We had written about them years back when they (incredibly) threatened Something Awful for using a photo in a movie review (which was clear fair use). A few months back we wrote about them again when they (you guessed it) threatened Something Awful again over someone in its forums hotlinking a picture of Hitler that was actually hosted on Imgur.

While that's all we've written about the firm on Techdirt, Higbee's name keeps coming up in other conversations -- among copyright lawyers who have been seeing a massive increase in Higbee demand letters, and even from some friends who have received such letters (which nearly always involve clearly bogus threats). One thing that has happened over and over with Higbee claims that I've been privy to is that they are over unregistered images, meaning that Higbee is unlikely to actually be able to sue over those images, and even if they could, it wouldn't be for statutory damages. And yet, the threat letters tend to allude to statutory damages are part of the scare tactic.

Public Citizen's Paul Levy has apparently seen enough of Higbee and Associates and their trolling activity that he's done a pretty thorough investigation of Higbee's activities and written up a long description calling out many of the sketchy practices of the firm and its principal, Mathew Higbee:

Either in concert with a specialized search firm or using his own firm’s software, this firm patrols the Internet looking for graphics (especially photographs) that have been copied improperly from online sources. The firm then sends a demand letter bearing Higbee's signature, threatening to seek up to $150,000 in statutory damages as well as attorney fees unless the target of the letter promptly agrees to pay a specified amount. Deploying a tactic that is all too familiar from the depredations of Evan Stone and Prenda Law, the specified amount is low enough – usually in the low four figures, but I have seen high three figures —that it is not likely to be cost-effective for the target to hire a knowledgeable copyright lawyer to litigate an infringement lawsuit, even if the claim is bunk or, at least, if there is good reason to believe that the claim can easily be defended. The letter encloses a document identifying the allegedly infringing use as well as the online location where the work was found; another document that purports to authorize the firm to represent the copyright holder in seeking damages in connection with the work; a proposed “settlement agreement”; and a credit card payment form. If the target of the letter does not respond, or responds without agreeing to pay, then the Higbee firm increases the pressure: a non-lawyer who calls herself a “claim resolution specialist” sends an email warning that the claim is going to be “escalated to the attorneys,” at which point “[t]claim gets more stressful and expensive,” and an assurance that “my goal is to not let that happen to you.”

The documents linked above all relate to a single Higbee demand to a single target, but I have seen a number of other demand letters and ensuing emails from this firm, and spoken to several other copyright lawyers who have helped clients respond to Higbee’s blustering and threats, and it appears to me that these are pretty standard exemplars. Indeed, when I was reaching out to some other copyright lawyers to try to get their sense of some of the documents I was reviewing, a number of them guessed that it was Higbee based only on what I said I wanted to ask about, based on work they had done for their clients trying to address his threats against them. Plainly, this is a copyright troll with an outsized reputation.

Levy took on a client who had received one such letter from Higbee and noticed a bunch of problems with Higbee's standard practices:

More than six years later, on January 2, 2019, Mathew Higbee sent HUFF his demand letter, accompanied by the other documents described above. Several things jumped out at me. First, instead of reciting that the copyright in the photograph had been registered, and either attaching the registration or at least citing the registration number, the letter recited the photo’s “PicRights Claim Number” – a matter of utterly no consequence for the recipient of the demand. The registration number, by contrast, is far more significant in this context, because, for most copyrighted works (the exception is discussed below), a copyright holder cannot bring suit for infringement until the copyright has been registered, and regardless of the exception, a copyright holder cannot seek statutory damages or attorney fees for infringements that take place before registration, or even for infringements that continue after registration unless the copyright was registered promptly after the work was first published. Because this photograph appeared in the New York Times within a day after the photo was taken, and more than six years before the demand letter was sent, a failure to register would have meant that the letter’s warning about statutory damages and attorney fees was an empty bluff meant to intimidate.

Second, the letter was plainly a boilerplate form, containing somewhat stilted language that was poorly adapted to the specifics of HUFF’s claimed infringement. For example, the letter varies back and forth between referring to the recipient in the second and third person singular, suggests that HUFF might have its wages garnished, warns of action against “the business owner,” and refers to “the attached exhibits” even though only one exhibit was attached. Indeed, the “representation agreement” that was provided along with the demand letter, purporting to show that Agence France-Presse, PicRights and a European version of PicRights had authorized Higbee to pursue claims on its behalf about HUFF’s alleged infringement with respect to this specific photograph, did not identify the photograph but simply indicated that Higbee was handling “a copyright infringement matter.”

Third, the exhibit revealed Higbee’s recognition that the “infringing location” for the copyrighted work was not HUFF’s own web site but rather the web site of the New York Times which, presumably had licensed the photograph (I was able to confirm that assumption by contacting the Times’ legal department). And the Court of Appeals for the Ninth Circuit has decided, in Perfect 10 v. Amazon, that Google does not infringe a photographer’s copyright by including images in its search results, because American copyright law does not prevent the “framing” of deep-linked images that actually sit on the server of a party that is entitled to display the photograph and serve copies of the image to visiting viewers; it is only displaying and distributing from the defendant’s own server that violates the copyright laws (the “server test”).

Levy goes into great detail about his interactions with Higbee that are well worth reading. I will only post a snippet here, but I recommend going through and reading the whole thing. Levy first told Higbee that he planned to go to court ahead of Higbee and file for declaratory judgment of non-infringement, and suddenly Higbee started throwing everything he could at the wall:

What followed was a rapid retreat by Higbee, accompanied by some truculence while, at the same time, he signaled his recognition both that he had no basis for seeking any monetary relief for his client, and that I knew that he hadn’t a leg to stand on. First, he sent me an email on February 1, dropping PicRights as a client, insisting that he had a viable basis for suing on the image (while implicitly admitting that his client had not registered the copyright), and implicitly dropping as well the demand for $1775; instead, he asked me to make “some reasonable offer” comparable to the cost of filing a federal court complaint ($400) as well as service costs (which would have been free under the waiver of service procedure”). The redacted email address on the cc line was my client’s email, violating his ethical obligations given that the client was represented by counsel. (In a separate email chain, Higbee tried to excuse this violation by claiming that he had no idea I was a lawyer, but I found that statement less than credible, particularly considering that I know of at least one other situation in which his firm made contact with a party after an attorney contacted the Higbee firm on the party's behalf in in response to the demand. Higbee also asked me how a lawyer not belonging to the California Bar could help a California client in a copyright matter. The mere fact that he thought he had to make this point told me how desperate he was getting to avoid the merits).

Levy also details another case, in which another recipient of a Higbee letter tried to take Higbee (not Higbee's client) to small claims court, and Higbee then dragged the case into federal court while at the same time insisting he had closed the case:

In the meantime, I learned about some astonishing developments regarding a demand letter that Higbee had made to a community college professor named Claudia Eckelmann relating to the inclusion of a cartoon in the online syllabus that she had provided for her students’ edification. She responded to Higbee’s demand letter and subsequent bullying emails by filing a complaint against Higbee’s firremoving the state-court proceeding to federal court, asserting both that the court had subject-matter jurisdiction because the dispute was really about copyright infringement (Higbee seems to have ignored the rule that, for a removal to be proper, federal jurisdiction has to be shown on the face of the state-court complaint, and the state complaint does not make clear whether Eckelmann seeks a declaration of non-infringement or a judgment under state unfair business practices law). Indeed, his notice implicitly suggests, at the same time, that there was no case or controversy because, given Eckelmann’s recalcitrance, his firm had decided to “close” the case. Of course, if there was no case or controversy there would be no Article III jurisdiction to hear the removed case.

There's a lot more in the post, but it pretty thoroughly demonstrates the sketchy nature of many Higbee letters, which appear designed to do little more than just get people to pay up over exaggerated claims. Somewhat incredibly, Levy got one of the people who work for Higbee to be a lot more honest about the situation than Higbee himself. Of course, this only occurred after Higbee claimed the case was "closed" and yet his employee was still demanding money...

The HUFF matter would have ended with Higbee’s statement to me that he had “closed" the case, as he claimed to have done with respect to Eckelmann, except that, a couple of days later, I received this remarkable email from one of Higbee’s "claims resolution specialisists," Rebecca Alvarado. Here she was, AFTER her boss had "closed the case," responding to my initial email to Higbee on behalf of HUFF, and warning that, despite my points, the “fact is there is a copyright claim on the table” and that she was “willing to work with me to see that the claim is resolved.” She gave me her direct line, so I called her to find out just what resolution she had in mind, as well as what she might tell me about the nature of the firm’s practice.

The call was enlightening. Unlike Higbee, who never directly responded to my question about whether the copyright was reg..., defensively, that the demand letter did not say that statutory damages would be sought, but only that these might be “possible” in some circumstances. She told me that her client was only seeking actual damages, in terms of the lost licensing fee — but she could not tell me what that licensing fee was (so, how could she “resolve” the copyright claim?). And she admitted that her firm’s business model involves paying its clients a fractional share of the moneys that they wring out of their victims. She told me that she did not know what the fraction was, but Higbee told Fast Company that clients who came to him through a no-longer-existing service called “Copypants” received 50% of the financial gain. Moreover, he boasted as well that some 75% to 80% of the targets who receive his demand letters pay him without having to be taken to court.

I recognize that photographers who hire Higbee may think they're getting in on some new revenue stream, but when that comes at the expense of ethically dubious shakedowns, they might want to think twice.

Meanwhile, Higbee has shown up in the comments to Levy's post to "defend" himself by insisting that everything his firm does is totally aboveboard, and sometimes things just fall through the cracks in deciding who to send shakedown letters to (that would be more convincing if we didn't keep seeing more and more of them from Higbee, with nearly all of them being questionable):

Our clients choose which cases we pursue. Generally, our clients choose to have us only pursue unauthorized use of their work by persons or entities that provide or promote goods or services for a fee, generate ad revenue, or solicit contributions. We never intentionally pursue private non-commercial infringements. That being said, often times it is difficult to accurately assess an infringer based on the limited information available, especially when the natural tendency of most websites is to make the entity look bigger and more successful than it is. Whenever we discover a case is outside our firm’s or our client’s enforcement parameters, we close it (even if offers to settle have been received) and take any necessary steps to prevent similar errors in the future.

While this may be true in some cases, in at least a few cases I'm aware of (including the SomethingAwful cases), I find this nearly impossible to believe. And, of course, we've heard similar pleadings from the likes of earlier copyright trolls like John Steele of Prenda and Evan Stone. Higbee is building up a reputation and it's not a particularly good one.

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Posted on Techdirt - 15 February 2019 @ 3:16am

Sony Using Copyright To Take Down Its Own Anti-Piracy Propaganda

from the copyright-inception dept

Sony has apparently decided that you can't see its anti-piracy propaganda, because it might be pirated.

There are a few iconic sitcoms I remember from my childhood and What's Happening!! is probably near the top of that list. What I had forgotten, is that the show once included a two part episode all about the evils of bootlegging, with guest stars, the Doobie Brothers. In that "very special episode," the character of Rerun is caught trying to secretly tape the Doobie Brothers playing a show at their high school. Or as Mental Floss puts it:

The band, who are so upstanding they named themselves after an illegal drug, proceed to lecture the youngsters on morality and righteousness.

So, that's cool. Either way, DC policy advocate Josh Lamel recently went looking for clips of that episode and discovered that they've all been taken down:

Indeed, if you try to visit any of the clips of that episode, you get this following:

And, obviously, this is Sony's choice. The clips may, indeed, be infringing. But it does seem to show the level of insane protectionism that the copyright maximalist mentality leads to, where you hyper vigilant focus on taking down all the things includes you sending copyright takedowns of your own propaganda on why piracy and bootlegging is so bad...

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Posted on Techdirt - 14 February 2019 @ 12:17pm

Study Reinforces How Much The Internet Has Enabled Content Creators To Make Money

from the everyone-creates dept

A year ago, we wrote about a wonderful study that showed how the internet and its various platforms were (contrary to the stories that the legacy entertainment industries keep spreading) enabling more content creators to make more money than ever before. That study, by the Re:Create Coalition has just published an updated version of that study, again showing how important the internet has been in enabling creative people to make money from their creations.

Somewhat hilariously, some of the "complaints" I've seen from legacy copyright industry lobbyists is that it shows a fairly small amount of earnings per individual. But that's actually the whole point. The study itself is not about major stars. It is focused directly on small independents who previously would have made absolutely nothing:

This study also focuses on independent creators, distinct from mainstream artists such as Ariana Grande or Dwayne Johnson who generate substantial income flows from their Instagram brand sponsorships, YouTube revenue-sharing and other means.

This is a point that has been frustrating for quite some time that I think is worth calling out specifically. One argument I've seen made repeatedly is that the long tail distribution of earning power for content creators is meaningless, since for so many along the curve the total earnings are so low. Indeed, some will argue, the average earnings looks much lower than under the "old" system. But that's lying with statistics -- namely by excluding all of the zeros. That is: under the old system, if a gatekeeper didn't let you in, your expected earnings from your creativity was literally $0. You could not make any money. There was no way to even enter the system if you weren't anointed (in exchange for usually giving up your copyright and nearly all earnings). But those who point to the old system cut all of those $0 earners out of the equation when they add up the "average earnings." If you add them back in, you find that the curve is much more democratized. It is possible that some at the upper ends earn less (though I'm not sure there's evidence of that), but all of the people who previously earned $0 under the old system can earn something under the new system.

Here's a quick and dirty graph to show what I mean, comparing revenue streams under the new v. the old system. It's one thing to say that under the old system successful artists made a lot of money -- but that only works if you pull out of the average everyone who was blocked out of the system, thereby stacking the deck by changing the denominator in the equation. If you add back in all of those "zeros under the old system" suddenly the equation changes:

And, indeed, that's what this latest study appears to show. There are lots of creative types down the long tail who are making some money -- almost all of which is only enabled by these new platforms. And that raises some significant policy level questions. Is the goal of US copyright policy to encourage lots of people to make new works, including providing some remuneration to lots of those creators, or is it to enable a few gatekeepers to pick and choose the winners under their elitist rules, and block everyone else out. I'd argue that these platforms have done much more for creativity in democratizing the opportunity for almost any creator to make some money, than they have in supposedly "destroying" the ability for legacy gatekeepers to retain their old business model.

And, of course, as I noted last year, this study's findings are clearly on the conservative side, in large part because they leave out many of the top platforms used by creators today, including Kickstarter, Patreon, IndieGogo, BandCamp, Spotify, Apple, and more (it only looks at Amazon publishing, eBay, Etsy, Instagram, Shapeways, Tumblr, Twitch, WordPress and YouTube). Given how much some of the "missing" platforms are now considered the go to starting places for independent artists, it seems likely that the "undercounting" here is significant, which drives the "traditionalists'" narrative even more off the rails.

The internet has been an amazing platform for creators to make money -- and that includes millions of people who probably wouldn't have made any money in the past. The gatekeepers, such as the RIAA labels and its lobbyists, will sneer at the small sums, but really all they're doing is reinforcing their gatekeeper mentality. If someone isn't making a lot of money from this new system, clearly (to them) it's because they're "no good." But, that kinda proves the point: nothing in copyright law or the intention of copyright was for solely supporting the absolute best creators as chosen by gatekeepers.

So, from a policy standpoint, are we trying to enable everyone to be creative -- and maybe make some money from their creativity -- or are we trying to set up gatekeepers who pick and choose a few small winners and send everyone else home. Perhaps there's a legitimate policy argument for the latter position, but it's a pretty blatant lie that those pushing for such a world are "supporting creators." They are not. They are supporting a small class of creators -- but mainly they are supporting the gatekeepers. A policy that truly encourages overall creativity is one that creates platforms that enable anyone to create, to share, to distribute and to make some money from their creations (if they want to try to do so, and there's a reasonable market for it).

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Posted on Techdirt - 14 February 2019 @ 9:13am

Someone Impersonated New Jersey's Attorney General To Demand Cloudflare Takedown 3d Printed Gun Instructions

from the faking-takedowns dept

Buckle in, folks. Here's a crazy one involving 3D printed guns, angry lawsuits and an apparently forged letter from the New Jersey Attorney General.

Over the past few years, we've been highlighting a whole bunch of stories concerning the lengths that some people will go to in an effort to block certain content online. One version that we've seen quite a bit in the past few years is forging takedown demands, including forged court orders. However, now we've seen it expand to a different arena -- touching on another issue we've written about before. Last year (not for the first time) we wrote about the moral panic and hysteria around 3D printed guns that had resulted in a few states claiming the right to order 3D files offline.

Not much had seemed to happen on that front, until a week or so ago when various 2nd Amendment groups, including the somewhat infamous Defense Distributed (makers of 3D printer files for firearm components) filed a lawsuit, seeking an injunction against New Jersey's Attorney General, Gurbir Grewal, arguing that he had sent an unconstitutional takedown letter to Cloudflare, which was the CDN service that Defense Distributed was using for its website CodeIsFreeSpeech.com.

In theory, this was setting up an important potential 1st Amendment case. But, on Tuesday, something unexpected happened. The State of New Jersey showed up in court to say no one there actually sent the takedown -- and that they believed it was forged, and sent via a proxy service in the Slovak Republic. Really.

The Attorney General’s Division of Criminal Justice (DCJ) has concluded that a key document supporting Plaintiff’s TRO application—a “takedown notice” purportedly sent by DCJ to CloudFlare, Inc., which hosts one of the plaintiff’s websites, CodeIsFreeSpeech.com—was not in fact issued by DCJ, and appears to have been issued by some entity impersonating the Attorney General’s Office.

The filing recognizes that New Jersey's legislature did pass a law late last year restricting the distribution of such 3D printed instructions, but that the state's law enforcement arm has yet to do anything to enforce it, and most certainly did not send the letter in question.

As noted, we have no reason to believe the Attorney General’s Office filed this takedown notice with Cloudflare, and our investigation thus far demonstrates the office did not do so. We have conferred with all relevant parties within the Attorney General’s Office—including DCJ and the New Jersey State Police—and there is no evidence that anyone within the Office authorized its filing. In an effort to determine who, in fact, issued the notice, DCJ assigned two investigators to review the matter, who obtained the IP address of the device used to submit the notice to Cloudflare, and learned that the IP address is associated with a server located in the Slovak Republic. This IP address is not connected to DCJ, nor would DCJ use this type of proxy server for routine communications with third parties.

Intrigue.

Cloudflare has similarly posted a blog post giving its side of the story, noting that there were some oddities with the notice, but considering that it doesn't actually host the content in question, it followed its standard operating procedures of filing the notice along to the actual host. But then they started to notice some oddities:

A few days after we forwarded the complaint, we saw news reports indicating that the website operator and a number of other entities had sued the State of New Jersey over the complaint we had forwarded. That lawsuit prompted us to take a closer look at the complaint. We immediately noticed a few anomalies with the complaint.

First, when law enforcement agencies contact us, they typically reach out directly, through a dedicated email line. Indeed, we specifically encourage law enforcement to contact us directly on our abuse page, because it facilitates a personalized review and response. The NJ-related request did not come in through this channel, but was instead submitted through our general abuse form. This was one data point that raised our skepticism as to the legitimacy of this report.

Second, the IP address linked to the complaint was geo-located to the Slovak Republic, which seemed like an unlikely location for the New Jersey Attorney General to be submitting an abuse report from. This particular data point was a strong indicator that this might be a fraudulent report.

Third, while the contact information provided in the complaint appeared to be a legitimate, publicly available email address operated by the State of NJ, it was one intended for public reporting of tips of criminal misconduct, as advertised here. It seems unlikely that a state attorney general would use such an email to threaten criminal prosecution. On occasion, we see this technique used when an individual would like to have Cloudflare’s response to an abuse report sent to some type of presumably interested party. The person filing this misattributed abuse report likely hopes that the party who controls that email address will then initiate some type of investigation or action based on that abuse report.

Cloudflare further notes that, having learned that this notice was forged, it has now found "other abuse reports submitted from this IP address" and established "a clear pattern of fake abuse reports," such that abuse reports from that IP will no longer be allowed.

There are, of course, some larger issues here. As we've noted for years and years and years -- mainly with regard to the DMCA notice-and-takedown process -- when you have a process that allows for notice and takedown it will get abused. Widely and continuously. Expanding notice and takedown to other arenas only means it will get abused more and more, and the abuse will become increasingly sophisticated.

We should be especially concerned about things like the EU's Terrorist Content Regulation, which will not only deputize random law enforcement officials to send such takedowns to various platforms, but also mandate that platforms takedown any such content within one hour of the notice being sent. If you don't believe that process won't be abused in a similar manner to what we see above, you have not been paying attention. Giving people tools for censorship will lead to censorship, and often it will be done in very surreptitious ways.

We should be extra careful about enabling more such activity under the false belief that only the "good guys" will use such powers, and that they will only use them for good.

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Posted on Techdirt - 14 February 2019 @ 2:10am

EU Moves Forward With Agreement To Fundamentally Change The Internet From Open To Closed

from the closing-down-the-internet dept

Despite the fact that even the staunchest supporters of Article 13 were asking for it to be dropped from the final version of the EU Copyright Directive, that didn't happen. In the final trilogue negotiations between the EU Council, the EU Commission and the EU Parliament, it appears that the agreed upon "compromise" is basically as bad as we feared. It will fundamentally change the entire nature of the internet. And not in a good way. As we recently discussed, the only way this makes sense is if the goal is to have the law be so bad that big internet companies feel forced to pay their way out of it.

And it appears that's what we've got. MEP Julia Reda's summary of the final deal highlights many of the problems with both Articles 11 and 13. Here's the mess with Article 13:

  • Commercial sites and apps where users can post material must make “best efforts” to preemptively buy licences for anything that users may possibly upload – that is: all copyrighted content in the world. An impossible feat.
  • In addition, all but very few sites (those both tiny and very new) will need to do everything in their power to prevent anything from ever going online that may be an unauthorised copy of a work that a rightsholder has pointed out to the platform. They will have no choice but to deploy upload filters, which are by their nature both expensive and error-prone.
  • Should a court ever find their licensing or filtering efforts not fierce enough, sites are directly liable for infringements as if they had committed them themselves. This massive threat will lead platforms to over-comply with these rules to stay on the safe side, further worsening the impact on our freedom of speech.
  • And with Article 11:

    The final version of this extra copyright for news sites closely resembles the version that already failed in Germany – only this time not limited to search engines and news aggregators, meaning it will do damage to a lot more websites.

    • Reproducing more than “single words or very short extracts” of news stories will require a licence. That will likely cover many of the snippets commonly shown alongside links today in order to give you an idea of what they lead to. We will have to wait and see how courts interpret what “very short” means in practice – until then, hyperlinking (with snippets) will be mired in legal uncertainty.
    • No exceptions are made even for services run by individuals, small companies or non-profits, which probably includes any monetised blogs or websites.

    If this becomes law, I'm not sure Techdirt can continue publishing in the EU. At the very least, it will require us to spend a large sum of money on lawyers to determine what our liability risk is -- to the point that it might just not be worth it at all. Article 13 makes a commenting system untenable, as we simply cannot setup a filter that will block people from uploading copyright-covered content. Article 11 potentially makes our posts untenable, since we frequently quote other news sites in order to comment on them (as we do above).

    This is, of course, the desire of those supporting both bills. It is not just to close the (made up, mythical) "value gap." It is to fundamentally change the internet away from an open system of communications -- one that anyone can use to bypass traditional gatekeepers, to a closed "broadcast" system, in which key legacy gatekeepers control access to the public, via a complicated set of licenses that strip all of the benefits and profits from the system.

    Not only will this do great harm to the general public's ability to communicate freely over the internet, it will do massive harm to artists and creators -- especially more independent ones, who will be effectively blocked from using these platforms to connect directly with their fans. Rather they will be required to go through "licensed" intermediaries, who will demand a huge cut of any money. In other words, it's a return to the pre-internet days, where if you wanted to become a professional creator, your only options were to sign away all your rights to giant conglomerate record labels/studios/publishers.

    It is incredible -- and incredibly disappointing -- that the EU is moving towards bringing back such a world, but that is what the latest agreement means.

    There is still a chance to stop this from becoming law, though it will take a lot of effort. As Reda explains:

    We can still stop this law

    The Parliament and Council negotiators who agreed on the final text now return to their institutions seeking approval of the result. If it passes both votes unchanged, it becomes EU law, which member states are forced to implement into national law.

    In both bodies, there is resistance.

    The Parliament’s process starts with the approval by the Legal Affairs Committee – which is likely to be given on Monday, February 18.

    Next, at a date to be announced, the EU member state governments will vote in the Council. The law can be stopped here either by 13 member state governments or by any number of governments who together represent 35% of the EU population (calculator). Last time, 8 countries representing 27% of the population were opposed. Either a large country like Germany or several small ones would need to change their minds: This is the less likely way to stop it.

    Our best bet: The final vote in the plenary of the European Parliament, when all 751 MEPs, directly elected to represent the people, have a vote. This will take place either between March 25 and 28, on April 4 or between April 15 and 18. We’ve already demonstrated last July that a majority against a bad copyright proposal is achievable.

    The plenary can vote to kill the bill – or to make changes, like removing Articles 11 and 13. In the latter case, it’s up to the Council to decide whether to accept these changes (the Directive then becomes law without these articles) or to shelve the project until after the EU elections in May, which will reshuffle all the cards.

    If you're an EU citizen, this next bit is important. Now is the time to start speaking up:

    This is where you come in

    The final Parliament vote will happen mere weeks before the EU elections. Most MEPs – and certainly all parties – are going to be seeking reelection. Articles 11 and 13 will be defeated if enough voters make these issues relevant to the campaigns. (Here’s how to vote in the EU elections – change the language to one of your country’s official ones for specific information)

    It is up to you to make clear to your representatives: Their vote on whether to break the internet with Articles 11 and 13 will make or break your vote in the EU elections. Be insistent – but please always stay polite.

    Together, we can still stop this law.

    229 Comments | Leave a Comment..

    Posted on Techdirt - 13 February 2019 @ 2:42pm

    Interested In Helping Advance Tech Policy In The Right Direction? Here's An Amazing Opportunity

    from the go-do-something dept

    There are a few common themes around Techdirt: (1) the lack of tech understanding among people crafting policy these days, and (2) our general annoyance at the cynics who insist there's nothing to be done to stop bad policy making. Well, here's an opportunity to actually do something, and to help be in a position to craft better, knowledgeable tech policy. The Aspen Institute recently launched a new Aspen Tech Policy Hub out here in the Bay Area, with a program designed to "train the next generation of policy entrepreneurs." The approach they're taking is a good one. I've complained many times in the past that the way that most DC folks try to "bridge the gap" between tech and policy is to come out to Silicon Valley and wag their fingers at annoyed entrepreneurs and technologists, lecturing them on how they need to care about policy -- when so many of those entrepreneurs and technologists believe the answer is just for policymakers to "stay out of the way."

    Of course, if anything has become clear over the last few years, it's that folks in DC (and Brussels and lots of other places) have no interest or intent in staying out of the way, and much of the rest of the world also wants them to get more and more engaged in directing and regulating technology. And if that's going to happen, we'd all be a lot better off if the folks making the decisions actually knew what the hell they were talking about.

    That brings us to the new Fellowship Program that the Aspen Tech Policy Hub is launching. They're comparing it to a startup incubator like Y Combinator, but for getting technologists and entrepreneurs (and journalists) up to speed on tech policy.

    Incubator fellows will spend a minimum of 2 months with us for mandatory programming in summer 2019, from early June to mid-August 2019. The fellowship is tentatively scheduled for June 10 through August 9, 2019. The exact start date for this pilot cohort is still tentative based on space availability and fellow scheduling....

    This is an intense, full time program, and we expect fellows’ full attention while they are participating. Fellows will be paid a stipend of $7,500/month for 2 months to defray their living costs in the Bay Area, with an option to apply for a 3rd month of stipend funding if the fellow is available to remain in residence for an additional month after formal programming concludes. (We will provide office space, but fellows will need to find their own housing if they are not already local.) We also have limited funds to assist with relocation to the Bay Area if needed. So long as space is available, fellows are eligible to continue to work out of our facility for an additional three months free of charge, through November 2019.

    During residence, fellows will be required to create at least one practical policy output—for instance, mock legislation, toolkits for policymakers, white papers, op-eds, or an app. Fellows have to propose a possible project in their application for the fellowship, but they are not tied to working on that project once in residence. In fact, we encourage fellows to work together to identify new ideas for projects on arrival.

    I have no association with the organization. I just think it's a great program concept. The tech policy world is quite small, and right now the vast majority (though certainly not all...) of the people who end up in that world tend to be lawyers, rather than technologists and entrepreneurs. Nothing against the lawyers, but the tech policy world could use some other perspectives as well. So if you've always complained about dumb policy makers and you're actually interested in breaking through the cynicism and actually doing something, check out the program and apply.

    19 Comments | Leave a Comment..

    Posted on Free Speech - 13 February 2019 @ 10:53am

    Utter Bullshit: Reporter Maria Ressa Arrested Over Bogus Charges For Her Critical Reporting

    from the free-speech-has-to-matter dept

    We've written about reporter Maria Ressa, who started the successful news site The Rappler in the Philippines. Ressa, herself, is a force of nature, who has upset a lot of people with her incredibly detailed and thorough reporting. Last year, we wrote about how the Duterte government was trying to intimidate and silence her with bogus charges, claiming that because she had accepted grant money from US foundations, she was engaged in tax evasion.

    Today things ramped up quite a bit with the National Bureau of Investigation (NBI) (the Filipino equivalent of the FBI) coming to arrest Ressa at her offices, claiming that she violated a "cyberlibel" law. Incredibly, the article that the government claims is libelous... was written four months before the law they claim it violated actually became law.

    The Department of Justice (DOJ) recommended the filing in court of cyber libel charges against Ressa and former Rappler researcher Reynaldo Santos Jr over a story published in May 2012 – or 4 months before the law that they allegedly violated was enacted.

    The case, filed by the DOJ, stemmed from a complaint by businessman Wilfredo Keng, who was identified in a Rappler article as the owner of the SUV that then-chief justice Renato Corona had used during the impeachment trial.

    Keng complained not about his alleged ownership of the vehicle, but about the backgrounder on him as having alleged links to illegal drugs and human trafficking, based on intelligence reports.

    When the officers came to arrest Ressa at her office, some of her colleagues tried to film the situation on their mobile phones, and the NBI agents tried to get them to stop:

    In response to this Rappler has said it will not give in to the intimidation:

    “We are not intimidated. No amount of legal cases, black propaganda, and lies can silence Filipino journalists who continue to hold the line. These legal acrobatics show how far the government will go to silence journalists, including the pettiness of forcing me to spend the night in jail.”

    The statement further lays out why the charges are clearly bogus and trumped up:

    A complaint was filed by businessman Wilfredo Keng 5 years after a story was published on May 29, 2012, or months before the cybercrime law was enacted. Our story said former chief justice Renato Corona used a vehicle registered under the name of Mr Keng, who, based on intelligence reports and previously published stories, had alleged links to illegal drugs and human trafficking. We called Mr Keng and got his side before the story was published.

    The filing of the case is preposterous and baseless. No less than NBI Cybercrime Division chief Manuel Eduarte closed an investigation in February 2018 after finding no basis to proceed, given that the one-year prescriptive period had lapsed. Eight days later, however, the NBI revived the case, and filed it with the Department of Justice on the basis of a theory they call "continuous publication."

    This is a dangerous precedent that puts anyone – not just the media – who publishes anything online perennially in danger of being charged with libel. It can be an effective tool of harassment and intimidation to silence critical reporting on the part of the media. No one is safe.

    This is why in the US (and other countries) we have what's known as the single publication rule, in that the date of original publication is the date at which any statute of limitations clock starts ticking (mostly). Yet, it appears the Philippines is arguing for no single publication rule and that "continuous publication" means liability can last forever. Furthermore, even if this was libelous (which sounds questionable), shouldn't libel be a civil matter between two private parties, rather than involving the criminal justice system?

    And, of course, remember, that the Philippines' Constitution has a close analogue of the 1st Amendment in the US (there it's their Section 4):

    No law shall be passed abridging the freedom of speech, of expression, or of the press, or the right of the people peaceably to assemble and petition the government for redress of grievances.

    That would certainly suggest that the law being used to arrest Ressa is unconstitutional. Various journalism organizations are already condemning this arrest as a clear attempt at silencing Ressa and Rappler in their critical reporting of the Duterte government:

    "The Philippine government's legal harassment of Rappler and Ressa has now reached a critical and alarming juncture," said Shawn Crispin, CPJ's senior Southeast Asia representative. "We call on Filipino authorities to immediately release Ressa, drop this spurious cyber libel charge, and cease and desist this campaign of intimidation aimed at silencing Rappler."

    74 Comments | Leave a Comment..

    Posted on Techdirt - 13 February 2019 @ 9:43am

    Obsolete Hot News Doctrine Back In The News As Bloomberg Is Sued For Reporting Too Quickly

    from the oh-come-on dept

    It's been a few years since we've really talked about the Hot News doctrine, which was a mostly obsolete and, frankly, bizarre attempt to turn the idea of publishing a similar news story too quickly after the original reporters broke the story into a form of "misappropriation." It stems from the International News Service v. Associated Press case from a century ago (literally: 1918), in which the AP argued that even though there is no copyright in facts, having INS release a similar story too quickly to AP's articles was a form of "misappropriation" of its "hot news." Incredibly, the court agreed. However, multiple later cases, plus the entire rewriting of copyright law in 1976 had most people believing that the entire concept of "hot news" was obsolete and effectively dead.

    Indeed, in 2003, Judge Richard Posner suggested that the entire concept "can be jettisoned" and he later committed to that in some of his rulings. However, around 2010, a variety of hot news cases popped up, and yet basically all of them have been losers (the one exception I can think of being a default judgment where the defendant didn't even show up).

    Still, over the last few years it felt as though we were back to the general feeling that "hot news" was a dead letter. Except... DC news organization Capitol Forum is now suing Bloomberg under the Hot News doctrine, in yet another attempt to revive the silly concept. The complaint makes a valiant effort, but one that seems likely to fall way short. The lawsuit also argues copyright infringement, and we'll get to that in a second, but the attempt at crying "hot news" seems particularly week:

    In addition to violating Capitol Forum’s copyright protection, Bloomberg’s conduct also violates Capitol Forum’s proprietary rights under the common law tort of “hot news” misappropriation. This doctrine prohibits free riding by competitors. It prohibits a direct competitor from acquiring and republishing time-sensitive news and analysis generated by its competitor and intended only for its competitor’s subscribers and authorized recipients.

    The timeliness of business and financial news reporting is essential to Capitol Forum’s subscribers. Bloomberg competes directly with Capitol Forum for subscriptions by end-users, and Capitol Forum and Bloomberg’s products are marketed and sold to the same customer base. Bloomberg’s conduct in this regard necessarily diverts business opportunities from Capitol Forum.

    This free riding on Capitol Forum’s reports impairs Plaintiff’s incentive to provide that reporting as an exclusive service to its existing subscribers and to potential new clients. To the extent that Plaintiff is deprived of the intended exclusivity of its reports as a result of its being made available by Bloomberg, such conduct by Bloomberg reduces the value of the reports to Capitol Forum’s subscribers. It has already caused Capitol Forum subscribers to cancel their subscriptions because they can obtain the same Capitol Forum news and analysis from Bloomberg’s First Word service. If left undisturbed, Bloomberg’s conduct inevitably will, among other things, adversely affect Capitol Forum’s willingness to continue to make substantial investments in generating and distributing such reports

    This argument may have been successful in the 1920s, but given all of the precedent against this kind of thing between now and then, it seems like quite a stretch to think that courts will be willing to bring back Hot News -- especially given the 1976 Copyright Act, which more or less pre-empts any state law attempts to create copyright-like regulations.

    So what about the copyright claims in the lawsuit? That may come down to specifics, but from Capitol Forum's own description of what is happening, it seems like a difficult case to make:

    On numerous occasions, Bloomberg has impermissibly solicited and obtained Plaintiff’s proprietary reports, has copied and quoted the most creative and original aspects of the reports, has published its own summary or abstract of the content of the reports in the form a “news alert,” and has distributed these “news alerts” to its own subscribers on its “First Word” news service. While Bloomberg cites Capitol Forum as the source of its summaries and abstracts, it does not undertake creative or journalistic efforts of its own to transform Plaintiff’s work into something new or different from Capitol Forum’s original report. Other than including a current market price or a reference to a past article, Bloomberg does not add any of its own analysis or contribute any meaningful reporting to Plaintiff’s work. Bloomberg’s “news alerts” simply extract the key information from Plaintiff’s reports, and repackage Capitol Forum’s work in a bullet-point form for a quick read. The purpose of Capitol Forum’s reports and Bloomberg’s “news alerts” are precisely the same: to inform their subscribers of Capitol Forum’s copyrighted and proprietary reporting. Bloomberg’s conduct constitutes direct infringement of Plaintiff’s exclusive right under the Copyright Act to reproduce, use, and control its copyrighted works.

    The filing, notably, provides no actual examples of the copying. And from this description, it certainly sounds quite possible that Bloomberg is not infringing at all. Quoting other sources is likely to be fair use, and repackaging their work "in bullet-point form for a quick read" could certainly be seen as transformative in a fair use analysis. Indeed, Capitol Forum flat out admits above that Bloomberg has "published its own summary of the content, which again suggests fair use and not infringement. The whole thing seems to be a situation of Capitol News trying to plead a hot news claim under copyright law (which isn't going to fly at all). Of course, specific examples might result in a different analysis, but if the infringement argument was strong, you'd think the actual complaint would demonstrate it much more clearly (including identifying actual examples of the copyright-covered content being copied).

    There are two other elements in the filing that seem worth commenting on. First, in an attempt to claim that this infringement is "willful" Capitol Forum points to an important fair use case (also filed against Bloomberg) in which the 2nd Circuit ruled that Bloomberg reposting an entire earnings call was fair use (i.e., a win for Bloomberg). However, Capitol Forum is pointing to Bloomberg's filings in that case saying that there the company "conceded that the fair use exception does not apply when the copyrighted material is based on an analysis—and is not just reporting 'facts.'" That... seems unlikely to be a fair or accurate statement of Bloomberg's position. There are many cases in which fair use applies to analysis and not just facts.

    There's also this:

    Bloomberg’s knowledge is also demonstrated by Bloomberg BNA’s copyright guideline, which states that it is a copyright violation to summarize a Bloomberg article.

    And the simple response there is that Bloomberg BNA's internal guidelines are (a) legally meaningless and (b) bullshit. That's not an accurate statement regarding copyright law. It is not a copyright violation to summarize anyone's articles.

    The other interesting element of the filing is the claim of vicarious infringement, in that Capitol Forum argues that a Bloomberg employee, Joshua Fineman, induced a Capitol Forum subscriber to pass along its news alerts.

    For example, commencing around December 2016, and continuing through December 2017, Joshua Fineman of Bloomberg’s First Word news service induced one of Capitol Forum’s subscribers, a West Coast hedge fund, to provide him with Capitol Forum reports in exchange for providing the hedge fund with market information that it did not possess. This arrangement continued until Capitol Forum learned of its subscriber’s actions and demanded that they stop. The hedge fund informed Mr. Fineman that it would no longer agree to trade information with him. In response, Mr. Fineman acknowledged that their actions were illegal and stated that he would not put the hedge fund in that position again. Despite this recognition of illegality, Mr. Fineman continues his infringing activities with respect to other Capitol Forum subscribers. Mr. Fineman continues to induce and encourage other Capitol Forum subscribers to directly infringe Capitol Forum’s copyright protections by soliciting those subscribers to send Capitol Forum copyrighted articles to him.

    As such, Mr. Fineman and Bloomberg have induced, caused, encouraged, and materially contributed to the direct infringement by Capitol Forum’s subscribers. Mr. Fineman and Bloomberg are aware that the Capitol Forum material is copyrighted and that Capitol Forum subscribers who transmit these reports violate Plaintiff’s copyright by sending them to Bloomberg.

    It is possible that this part of the filing might create a bit more of a headache for Bloomberg. Even if the practice of forwarding such emails is not just standard across industry, but practically second nature to almost everyone, it might still be seen as infringing. Still, it does seem like Capitol Forum's bigger issue, then, would be with the subscribers who are infringing on their works directly by distributing its alerts, but (not surprisingly) the company probably is less interested in suing its own customers -- especially when they likely have smaller pockets that Bloomberg.

    No matter what, this will be an interesting case to follow, but hopefully not one that gets very far, especially in its attempt to revive "Hot News."

    Read More | 38 Comments | Leave a Comment..

    Posted on Techdirt - 12 February 2019 @ 9:53am

    Key Supporter Of FOSTA, Cindy McCain, Misidentifies 'Different Ethnicity' Child; Claims Credit For Stopping Sex Trafficking That Wasn't

    from the see-something,-shut-up dept

    In the wake of 9/11, the Metropolitan Transit Authority (MTA) in New York City hired an ad agency, Korey Kay & Partners, to come up with a "creative exercise" in dealing with the post-9/11 world. They came up with slogan "If you see something, say something" and plastered it all over subways. Incredibly, the MTA trademarked the term (despite its lack of "use in commerce") and later licensed it to DHS (insanely, the MTA has been known to threaten others for using the slogan). However, despite now sounding like common wisdom, the program has been an utter disaster that has not stopped a single terrorist, but has created massive hassles for innocent people, and law enforcement who have to deal with busybodies freaking out about "weird stuff."

    Take, for example: Cindy McCain. The wife to the late Senator John McCain, recently decided she had seen something and had to say something. Specifically, as she herself claims, she was at an airport and saw a woman with a child of a "different ethnicity." And, rather than thinking "how nice" or "maybe I shouldn't be racist," she thought "I must go tell the police." Specifically,as she told an Arizona radio station:

    “I came in from a trip I’d been on and I spotted—it looked odd—it was a woman of a different ethnicity than the child, this little toddler she had, and something didn’t click with me,” McCain said in the radio interview. “I went over to the police and told them what I saw, and they went over and questioned her, and, by God, she was trafficking that kid.”

    By God, no she wasn't. The police did go check it out, and whatever McCain thinks happened... did not.

    Phoenix police said Wednesday that while officers did respond to the Jan. 30 call, at McCain’s request, they were able to determine “there was no evidence of criminal conduct or child endangerment.”

    McCain is now trying to brush away the criticism by insisting she was just seeing something and saying something:

    Of course, there's more backstory here and it's kind of important. Over the last few years, McCain has been really heavily focused on playing up the exaggerated moral panic around sex trafficking. As we've discussed many times, sex trafficking is a real issue, but a very small one. The numbers around it are massively exaggerated or distorted, leading to crazy moral panics, and a desire by the police and the press to rush to talk about breaking up sex trafficking rings that don't seem to actually exist.

    A more cynical person than I might point out that Cindy McCain's focus on "sex trafficking" seemed to coincide with her focus on Backpage, and a desire to extract some level of revenge from that company's owners, who also, for a time, owned the Phoenix New Times, which published a series of unflattering articles about Cindy McCain (and John McCain).

    But, even leaving that aside, in the run up to the debate over FOSTA, multiple people told me that more sane and reasonable versions of the bill were well positioned to move forward until Cindy McCain got involved. Prior to that, there had been real, serious discussions, understanding the problems with the FOSTA/SESTA approach, and an attempt to create a more reasonable policy to deal with (what little) sex trafficking that actually happens online. However, then Cindy McCain "got involved" and basically everyone was told that the awful approach found in FOSTA was what would be in the law.

    Of course, since then, we've highlighted how FOSTA has failed miserably. Just as many of us had predicted, it has resulted in widespread censorship, many closed services, an increase in online sex ads, and more womens' lives at risk.

    And Cindy McCain "seeing something" and "saying something" and then taking credit for stopping trafficking, when she was really just hassling a diverse family. Maybe we should stop listening to Cindy McCain on this particular topic.

    68 Comments | Leave a Comment..

    Posted on Free Speech - 11 February 2019 @ 1:45pm

    Google Caves On Russian Censorship

    from the be-evil? dept

    Late last year, we were among those disappointed by leaked news from Google that it was toying around with a censored search engine for China -- a country that the company had mostly left nearly a decade ago. After loud complaints both from people outside the company and many within, reports in late December said that the company had quietly halted efforts to build a censored Chinese search engine.

    But now... the company may be dipping its toe in the evil pool again, as it has apparently agreed to cooperate with Russia's censors. This is a battle that's been going on for some time. Over the last few years, Russia has passed a number of internet censorship laws, and there have been lots of questions about how Google and other tech giants would respond. A year ago, we noted that Facebook/Instagram had decided to cave in and that ratcheted up the pressure on Google.

    It should be noted that Russia has been on Google's case for a while, and the company had been resisting such pressure. Indeed, the company actually shut down its Russian office a few years back to try to protect itself (and its employees) from Russian legal threats.

    But, apparently, something has changed:

    The business news source Vedomosti is reporting that Google has struck a deal with Russian censors to continue operating in the country by deleting websites that are banned in Russia from its results. The government censorship agency Roskomnadzor maintains a registry of sites that may not be distributed on Russian territory, but Google is one of a few search engines that does not subscribe to that registry. However, the company regularly deletes links from its search results that Roskomnadzor has banned, sources within both Roskomnadzor and Google told Vedomosti.

    The report notes that, previously, Roskomnadzor had just been fining Google for its failures, and the company had been simply paying the fines. Now, however, it will sign up to censor the official list of sites, which is large and constantly growing. Given what the company just went through with the whole China debacle, you would think the company would be more thoughtful about this kind of thing. This is an unfortunate decision.

    27 Comments | Leave a Comment..

    Posted on Techdirt - 11 February 2019 @ 9:39am

    Article 13 Was Purposefully Designed To Be Awful For The Internet; EU Moves Forward With It Anyway

    from the just-admit-it dept

    As was widely expected, even if it's unfortunately, on Friday evening the EU Council voted to move forward with the latest draft of the EU Copyright Directive, including the truly awful "compromise" version of Article 13 hacked out by the Germans and the French. This happened despite the fact that there's basically no one left who supports this version of Article 13. The public is widely against it. The internet companies are against it. And, perhaps surprisingly, even the legacy copyright companies -- who pushed so hard for this -- are still angry about the result, which they insist is too lenient on the internet.

    I've been left scratching my head over why the copyright holders are still pushing for more here. To be clear, the version that the EU Council approved last week would fundamentally change the internet in a massive way. It would, effectively, make it nearly impossible for any website to ever host any user-generated content. In nearly all cases it would require expensive and problematic upload filters. In the few "exceptions" to that, it would still require a massive amount of concessions from internet platforms to avoid liability.

    However, the reality here is simple: Article 13 (and, to a lesser extent, Article 11 with its snippet tax) is purposely designed to be awful. The supporters of these efforts keep insisting that it's not going to harm the internet at all, and that it's just about "closing the value gap" or "making the playing field even" or other nonsense along those lines. They insist that it won't create any harm to user-generated content platforms, or to legitimate, non-infringing works. Given that we've already seen how these kinds of systems work in practice, everyone knows that's a laughably false proposition.

    However, a bit of truth came out a few weeks back, when Axel Voss, the MEP pushing this Directive forward, put out a "Q and A" page attempting to defend both Articles 11 and 13. We walked through that page sentence by sentence to debunk it, but I kept thinking about why the EU and Axel Voss would push such utter nonsense. Normally, politicians at least try to put forth a flimsy attempt at pretending they're based in reality. But not here.

    However, in rereading the "answers" to the questions in the document, the whole thing makes sense under one, and only one, condition: if Articles 11 and 13 are purposefully designed to be internet-destroyingly awful, then the belief is that it will force internet platforms to negotiate some sort of "global licensing" deal. Professor AnneMarie Bridy made this point last month, in noting the following:

    But, as you read through Articles 11 and 13 and Voss's "answers" and the comments from the legacy copyright players, it all "makes sense" if you believe the entire point of these bills is not to set up a system whereby the internet companies are installing actual filters and blocking infringing works. Rather, they only make sense if the goal is to make things so goddamn awful for the internet companies that they pay the legacy copyright holders not to sue them. Indeed, the Q&A comes the closest to saying exactly this:

    Large online platforms and news aggregators will have more reason than currently is the case to strike fair remuneration (licensing) agreements with artists and media houses who would have identified themselves beforehand as the owners of a piece of work. A platform or news aggregator will be further incentivised to strike such agreements because, in the absence of them, it would be directly liable if it hosts a piece of work with an unpaid licence fee. The current legislation offers more wiggle room for platforms to absolve themselves from this liability.

    As we pointed out last time, this is utter nonsense, as nothing in the draft actually sets this up. But it does make sense if the entire point of the bill is to be so onerous as to be impossible -- creating a shotgun situation in which the platforms feel the need to pay off the copyright holders not to sue them (jokingly referred to here as "licensing agreements.") This is why the copyright holders are so upset about any form of safe harbor or any way in which platforms might avoid massive, crippling liability. Because if there's a path to abide by the law, then there will be less incentive to pay off Hollywood not to sue. It goes on:

    The draft directive will not be the source of censorship. By increasing legal liability, the draft directive will increase pressure on internet platforms/news aggregators to conclude fair remuneration deals with the creators of work through which the platforms make money. This is not censorship.

    Again, this makes no sense, as the entire point of the draft directive is increased censorship... unless every internet platform pays off Hollywood to leave them alone.

    And, again, as Prof. Bridy rightly points out above, all of this only makes sense in the context where there is a fairly small number of rightsholders and an even smaller number of internet platforms, who can gather together and hash out "don't sue us" deals (i.e., "licenses" < -- sarcastic quotes implied). And, again, that only works if the actual provisions of Articles 11 and 13 are so laughably stupid, so ridiculously onerous, so painfully destructive, that the internet platforms are left with no choice (well, that, or shut down, which many would likely have to do).

    And thus, it would be better for all involved if Hollywood, the big news publishers, and the record labels just admit this upfront. The entire point of Articles 11 and 13 are that they are awful and destructive to the internet. It is a form of regulatory extortion. "Pay us, or we destroy your internet." At least admitting that would be intellectually honest.

    Still, given that, wouldn't it be better for Axel Voss and others to just do what clearly is intended here and write a law that is a lot more honest and just says "Google and Facebook need to pay &euro:X amount to satisfy these flopping legacy industries that failed to innovate." At least that would be much more direct and honest. But, alas, it appears that's wishful thinking. Instead, the EU Parliament will now gather with the EU Council and EU Commission for a new round of "trilogue" negotiations, where everyone will pretend that there's some good reason for this set of regulations, when even the key rationale in support of the effort is that following the law will be so painful and so destructive that the internet platforms will pay off copyright holders to avoid having to comply.

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