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Posted on Techdirt - 23 June 2016 @ 8:33am

Russia's Problem (According To Russian Politicians): Not Enough Mass Surveillance

from the can't-be-too-careful dept

When you look back at Techdirt's coverage of Russia's attempts to control its people and shut down online dissent, it's unlikely you will be thinking to yourself: "What Russia really needs is more mass surveillance." But Russian politicians would disagree with you there, as they debate bringing in even more powers for the government:

A new bill in the Russian Duma, the country's lower legislative house, proposes to make cryptographic backdoors mandatory in all messaging apps in the country so the Federal Security Service -- the successor to the KGB -- can obtain special access to all communications within the country.

Apps like WhatsApp, Viber, and Telegram, all of which offer varying levels of encrypted security for messages, are specifically targeted in the "anti-terrorism" bill, according to Russian-language media. Fines for offending companies could reach 1 million rubles or about $15,000.
That's from a report in The Daily Dot. But it appears there's another angle here, too, as The Moscow Times explains:
The Russian State Duma has recommended new anti-terrorism measures requiring telecommunications operators to store phone and Internet records for three years.

Companies are currently only required to record and store connection details for six months. The new law would change the system to ensure that the content of any call or message would be saved for half a year, while the connection details would be stored for three years, the Interfax news agency reported Friday. All information would be available to state officials "on demand," the Meduza news website reported in May.
Of course, being able to read encrypted messages or inspect the internet activities of Russians for the last three years is hardly enough to keep everything locked down: what about all those websites stirring up trouble? The new measures wouldn't deal with them, would they? But don't worry, Russia's plucky Attorney General has spotted the problem, and is on it, as the Meduza site informs us:
Russian Attorney General Yuri Chaika has proposed granting regional prosecutors the authority to block websites without any judicial oversight, if the websites spread information about preparations for unsanctioned political demonstrations and calls to mass unrest.
Well, that's a relief: I was beginning to worry that Russia might be losing control of the situation.

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Posted on Techdirt - 17 June 2016 @ 11:46am

Top EU Court Advisor Makes A Strangely Sensible (But Only Provisional) Copyright Ruling On The Lending Of eBooks

from the evolutionary,-not-revolutionary dept

The Court of Justice of the European Union (CJEU), the EU's highest court, has a slightly unusual procedure for delivering its judgments. After a case has been referred to it by a national court, one of the CJEU's top advisors, known as an Advocate General, offers a preliminary opinion. This is meant to provide guidance to the judges considering the case, and generally indicates how the CJEU will rule. But it is by no means binding, and judges have been known to go completely against the advice offered to them. Let's hope that doesn't happen in a copyright case currently before the EU court.

The library association of the Netherlands wants to lend out ebooks as well as the dead-tree kind, but is concerned that the relevant EU directive on the rental and lending rights of books does not cover the digital ones. So it decided to take pre-emptive legal action against the Dutch organization tasked with collecting payments for authors, seeking a declaratory judgment from the court that it could indeed lend out ebooks without any problems. Since deep questions of EU law were involved, the District Court of The Hague in the Netherlands referred the case to the CJEU. That, in its turn, triggered a preliminary response from Advocate General Szpunar (pdf) as follows:

In today's Opinion, Advocate General Maciej Szpunar takes the view that the making available to the public, for a limited period of time, of electronic books by public libraries may indeed come within the scope of the directive on rental and lending rights.
He points out that the reason ebooks aren't mentioned in the EU directive is that the technology was still in its infancy, and so the question wasn't considered by the lawmakers.
He thus suggests that a 'dynamic' or 'evolving' interpretation of the directive should be applied, arguing, inter alia, that the lending of electronic books is the modern equivalent of the lending of printed books. According to the Advocate General, such an interpretation alone will be capable of ensuring the effectiveness of the legislation in question in a sector experiencing rapid technological and economic development.
Recognizing that the law needs to be interpreted in a way that takes account of technological change ought to be simple common sense. But in the backward-looking world of copyright law, it isn't -- even the tiniest advance has to be fought for, and can take years of effort. So the Advocate General's clear statement of that principle here is welcome. Of course, there's still plenty that could go wrong before this sensible view actually helps the group that asked for it. First, the CJEU must weigh in. As mentioned above, it would be surprising -- very surprising in this case -- if it diverged from the views of the Advocate General, but it could happen. After that, the case will be sent back to the District Court of The Hague to make the final ruling. Who knows? In a few years' time, EU libraries might even be given formal permission to lend out ebooks.

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Posted on Techdirt - 17 June 2016 @ 6:24am

Australian Electoral Commission Refuses To Allow Researchers To Check E-Voting Software

from the after-all,-it's-only-democracy-that's-at-stake dept

The fact that Techdirt has been writing about e-voting problems for sixteen years, and that the very first post on the topic had the headline "E-voting is Not Safe," gives an indication of what a troubled area this is. Despite the evidence that stringent controls are still needed to avoid the risk of electoral fraud, some people seem naively to assume that e-voting is now a mature and safe technology that can be deployed without further thought.

In Australia, for example, e-voting is being used for the elections to the country's Senate, but the Australian Electoral Commission (AEC) has refused to release the relevant software, despite a Senate motion and a freedom of information request. Being able to examine the code is a fundamental requirement, since there is no way of knowing what "black box" e-voting systems are doing with the votes that are entered. A story by the Australian Associated Press (AAP) explains why AEC is resisting:

The Australian Electoral Commission referred AAP to a decision by the Administrative Appeals Tribunal [AAT] in December 2015.

In that decision, relating to a freedom of information request, the tribunal found the release of the source code for the software known as Easycount would have the potential to diminish its commercial value.

"The tribunal is satisfied that the Easycount source code is a trade secret and is exempt from disclosure," the AAT said.
Placing trade secrets above the public interest is a curious choice, to say the least. It seems particularly questionable given Australia's recent experience with e-voting software problems:
When the ACT Electoral Commission released its counting code, researchers at Australian National University found three bugs which were subsequently fixed before an election.

When the Victorian Electoral Commission made its electronic voting protocol available to researchers in 2010, University of Melbourne researchers identified a security weakness which was then rectified before the state election.
As Techdirt readers well know, bugs are commonplace, and there's no particular shame if some are found in a complex piece of software. But refusing to allow independent researchers to look for those bugs so that they can be fixed is inexcusable when the integrity of the democratic selection process is at stake.

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Posted on Techdirt - 15 June 2016 @ 11:22pm

TPP's Corporate Sovereignty Chapter A 'Threat To Democracy And Regulation'

from the wrong-direction dept

When the negotiations for the Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada were concluded in September 2014, the text was finally released after years of secrecy. At the time, the Canadian Centre for Policy Alternatives put together what remains the best overall analysis of the main text's 1598 pages, in a series of studies collectively called "Making Sense of CETA." The same organization has now published a set of analyses looking at key aspects of TPP, entitled "What’s the big deal? Understanding the Trans-Pacific Partnership".

They are all worth looking at, but Techdirt readers will probably be particularly interested in one called "Foreign investor protections in the Trans-Pacific Partnership." It's by Gus Van Harten, a professor at Osgoode Hall Law School of York University in Toronto, Canada, and a well-known commentator on trade law and policy. The first part of his analysis provides a good summary of the world of corporate sovereignty, or investor-state dispute settlement (ISDS) as it is more formally known. The later section looks at some new research that provides additional insight into just how bad corporate sovereignty is for those of us who are not insanely rich.

For example, Van Harten quotes some recent work showing that 90% of ISDS fines against countries went to corporations with over $1 billion in annual revenue or to individuals with over $100 million in net wealth. Similarly, the success rate among the largest multinationals -- those with turnovers of at least $10 billion -- was 71% in the 48 cases they initiated, compared with a success rate for everyone else of 42%. So any claim that ISDS is equally useful to all companies, including small and medium-sized businesses, is not borne out by the facts.

Van Harten also mentions some interesting figures for the financial winners and losers across all known corporate sovereignty cases. The largest corporations ended up with gains of around $6 billion; the thriving ISDS legal industry took home $2 billion; very wealthy individuals received around $1 billion; and large companies picked up another $500 million. As for the countries that were sued by these groups, their losses totaled some $10 billion. That's an important reminder that nations cannot win ISDS cases: the best they can ever hope for is not to lose. And they often do lose, as the high cumulative fines indicate.

Another fascinating insight comes from looking at the percentage of foreign-owned assets (that is, inward foreign direct investment) in the US economy that are covered by ISDS in trade and investment agreements. Currently, it is only around 10%, which is probably why corporate sovereignty is not a big deal for the US public today. If TPP is ratified, another 10% of foreign investments will be covered. But if the TAFTA/TTIP deal with the EU goes through, it would add another 60% to the total -- a huge jump. That would mean that TPP and TTIP together would make nearly all foreign investments in the US subject to corporate sovereignty.

Van Harten highlights another key aspect of TPP that has not received much attention. He points out that TPP goes beyond the older North American Free Trade Agreement (NAFTA), which is between the US, Canada and Mexico, but does not solve its serious problems, despite claims to the contrary:

anything that is apparently better in the TPP compared to NAFTA will very likely be lost in practice because a U.S. investor can bring a claim under NAFTA instead of the TPP. Also, anything worse in the TPP would not be displaced by NAFTA because a foreign investor could choose to bring a claim under the TPP. If a foreign investor was unsure which agreement offered the best chance to win compensation, it could bring a claim under the TPP and NAFTA, making a different argument under each and getting compensation if it won under either.
In other words, TPP has been written in such a way that the public always gets the worst of both worlds. Van Harten's chilling summary of the corporate sovereignty provisions in TPP is worth quoting in full:
The TPP would take us in the wrong direction and be very difficult to reverse. It would expand the transfer of power to ISDS arbitrators from legislatures, governments, and courts. The arbitrators would not be accountable like a legislature. They would not be capable of regulating like a government. They would not be independent or fair like a court.

At the core of the TPP's threat to democracy and regulation is the uncertain and potentially huge price tag that its ISDS process would put on any law or regulation that is opposed by a large multinational company or a billionaire investor. The problem is not that foreign investors would be too big to fail; it is that the TPP would make the biggest and richest ones too risky to regulate.

The TPP was an opportunity for countries to step back from and reform the flawed system of foreign investor rights and ISDS. Instead, the TPP would expand the system massively. That decision is reason enough to reject the TPP in order to protect the established institutions of democracy, sovereignty, and the rule of law in TPP countries.
Anyone who has any lingering illusions that it might be worth signing up to TPP should read this new analysis, which will dispel them rapidly.

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Posted on Techdirt - 15 June 2016 @ 3:26am

Ruling From EU's Top Court Confirms Copyright Levies Are A Ridiculous, Unworkable Mess

from the big-fat-nothing dept

In the last year, Techdirt has posted a couple of stories about court decisions that underline the fact that the EU system of copyright levies is an unworkable mess. A new ruling from the EU's highest court, the Court of Justice of the European Union (CJEU) has confirmed this once more, but for different reasons. The levies are supposed to compensate copyright holders for an alleged "loss" arising from copies made for personal use. The case concerns Spain's implementation of the system, which pays money directly from the state's budget. That's obviously much simpler than the complicated approach that involves collecting a levy placed on storage devices that varies according to their size -- a system used in other European countries. However, the CJEU has found a problem with Spain's method (pdf):

the Court notes that the [EU's] private copying exception is intended exclusively for natural persons who make, or have the capacity to make, reproductions of protected works or subject matter for private use and for non-commercial ends. It is those persons who cause harm to the rightholders and who are, in principle, required to finance, in return, the fair compensation payable to those rightholders. For their part, legal persons are excluded from benefiting from that exception.
The issue here is that under the 2001 EU Copyright Directive, only "natural persons" -- people -- are allowed to make personal copies, whereas "legal persons" -- companies -- are not. But in Spain, the private copying exception is funded from the general government budget, and therefore inevitably includes monies gathered as taxes from companies. The CJEU says that's not allowed, because it's the ones doing the private copying -- the "natural persons" -- who must pay, and no one else. The court pointed out:
it has not been established that there is a particular measure in Spain allowing legal persons to request to be exempted from contributing to the financing of that compensation or, at least, to seek reimbursement.
It's really not clear how that could be done in practice. Maybe by allocating a tiny tax rebate to companies by way of "reimbursement" for the copyright levy payment made from the state budget. But that would add yet another layer of complexity to the tax system, hardly a welcome outcome. It would be far simpler just to get rid of the unwieldy and anachronistic copyright levy system altogether. It's time to recognize that everybody has a fundamental right to make copies of stuff they own, and that the "fair compensation" for doing that is a big, fat nothing.

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Posted on Techdirt - 13 June 2016 @ 11:38pm

Corporate Sovereignty Finally Enters The Political Mainstream

from the yet-another-ratchet-clause dept

Techdirt has been writing about investor-state-dispute settlement (ISDS), aka corporate sovereignty, for more than three years now. During that time, we've published well over a hundred articles on the topic. Increasing numbers of people have become aware of the threat that ISDS represents to democracy because of the privileged access it grants companies to a parallel legal system. Now, it seems, it's beginning to enter the political mainstream around the world.

A couple of weeks ago, the leader of the UK's Labour Party, Jeremy Corbyn, promised to reject TAFTA/TTIP if he were in power, and to vote against it if he were in opposition. One reason for that, he said, was his concerns over:

the facility for corporations to sue national governments if regulations impinged on their profits.
The Labor Party in Australia has also started to make pronouncements about corporate sovereignty:
The opposition's trade spokeswoman, Penny Wong, said Labor would try to remove so-called investor state dispute settlement (ISDS) clauses from every trade agreement, and every bilateral investment treaty, that Australia has signed.

It means Labor plans to review three major trade agreements concluded by the Abbott-Turnbull governments -- with China, Korea, and the Trans-Pacific Partnership -- that have ISDS provisions.
That comes at a time when the current Australian government is thinking about doing exactly the opposite:
The Turnbull government is considering adding a controversial provision to the Japan-Australia free-trade agreement that would allow foreign corporations to sue the Australian government.
Here's why it's taking that odd course of action:
The negotiations have been triggered by a relatively unknown clause in the Japan-Australia agreement, which was signed by the Abbott government in 2014.

The clause states that if Australia's government signs any future trade deal with another country that includes an ISDS provision then the Japan-Australia deal would be subject to an automatic review "with a view to establishing" an ISDS provision in it.

The trigger for such a review was the China-Australia free-trade agreement, which came into force on 20 December 2015, because it included an ISDS provision.
In other words, this is yet another "ratchet" clause that ensures changes only ever move in one direction -- to the benefit of companies, and against the interests of the public. It's yet another reason never to include corporate sovereignty chapters in these so-called trade deals.

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Posted on Techdirt - 13 June 2016 @ 3:22am

Myriad Genetics Refuses To Accept That People Have A Right To Access Their Own DNA Sequences

from the just-because-it's-your-genome,-don't-think-you-own-it dept

One of the biggest victories on the patent front was when the US Supreme Court finally ruled that naturally-occurring DNA cannot be patented. The company involved in this case, Myriad Genetics, didn't give up at this point, but tried to claim that despite this ruling, its patents on genetic testing were still valid. Fortunately, the courts disagreed, and struck down those patents too.

However, as we noted at the time, there's another issue that remains unresolved, which concerns the huge database of DNA that Myriad Genetics has built up over years of sequencing the BRCA1 and BRCA2 genes that have variants linked to cancer. Because of Myriad's unwillingness to provide that important data to the people whose DNA was sequenced, the American Civil Liberties Union (ACLU) has decided to take action:

On May 19, 2016, the ACLU filed a complaint pursuant to the Health Insurance Portability and Accountability Act ("HIPAA") with the U.S. Department of Health & Human Services ("HHS") on behalf of four patients against Myriad Genetics, a genetic testing laboratory based in Utah. The complaint was filed by patients who have experienced cancer, including breast and bladder cancers, or who are members of families with substantial histories of cancer.
All of the patients received genetic testing from Myriad Genetics in order to determine their hereditary risk for various forms of cancer and to guide treatment decisions. They later asked for all of their genetic information, not just the results, but Myriad refused to provide it. As the ACLU explains:
The patients want full access to their genetic information because they know that the understanding of genes and their variants is constantly evolving, and they want to be able to proactively monitor their own cancer risk and that of their family members as scientific knowledge and clinical interpretation of genomic information advances. Most importantly, the patients, many of whom have uncommon genetic variants, are concerned that Myriad controls much of the data about BRCA1 and BRCA2 genetic variants in a proprietary database. This impedes the ability of researchers to better understand whether these variants are connected with various types of cancer. The patients want to have the option of sharing their data with the broader research community.
The last point is key. Myriad is sitting on a wealth of information that might well lead to new treatments and even cures for the many cancers involved. Instead, it is asserting its proprietorial right over DNA that comes from other people. That's particularly egregious since the scientists who first sequenced DNA on a large scale were pioneers in data sharing. As early as 1996, laboratories taking part in the Human Genome Project not only agreed to share their data, but to do so immediately, and with no restrictions. Myriad Genetics' action is totally at odds with the ethos of sharing that lies at the heart of genomics.

As a blog post on the ACLU site notes, on the eve of the HIPAA complaint being filed, Myriad suddenly agreed to provide the information requested, but only on a "voluntary" basis. That is, it refused to recognize the broader rights of patients to their own genetic information. However, the ACLU believes that the law is straightforward here:

Patients are guaranteed access to their health information -- including their genetic data -- under HIPAA. In 2014, the U.S. Department of Health and Human Services amended the HIPAA regulations to make clear that all laboratories, which were previously exempted, are subject to this obligation. And earlier this year, HHS released guidance stating that with respect to genetic testing, patients have a right to access "not only the laboratory test reports but also the underlying information generated as part of the test," including "the full gene variant information generated by the test, as well as any other information in the designated record set concerning the test."
Let's hope this case leads to yet another defeat for Myriad, and establishes once and for all that DNA sequences belong to the people from whom they were obtained. That way they will be free to make data available to researchers for the benefit of everyone, not just for a few companies like Myriad Genetics.

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Posted on Techdirt - 10 June 2016 @ 3:23am

Canada Post Drops Ridiculous Copyright Lawsuit Over Crowdsourced Postal Code

from the only-took-four-years dept

Just over four years ago, Canada Post filed a copyright infringement suit against, which describes itself as follows: is a public web service providing both free and commercial geocoding services for North America: Canada and the USA. Geocoding is the process of computing the latitude and longitude of a location.
That may not sound like an obvious target for copyright infringement, since latitude and longitude are clearly just facts. But since 2004, GeoCoder has been carrying out an interesting exercise in crowdsourcing:
When you make a query to geocoder containing for example this information "1435 Prince of Wales, Ottawa, ON K2C 1N5", we then extract the postal code "K2C 1N5" and insert it into the database that you may download for free on this website.
That freely-available Canadian Postal Code Geocoded Database became so useful that NGOs and others started using it for serious purposes, much to the chagrin of Canada Post, which provided the "official" database of postal codes and was really rather keen to license it to you for a hefty sum. As Michael Geist wrote back in 2012, the case raised a number of important questions:
Key issues include whether there is any copyright in postal codes (GeoCoder argues that postal codes are facts that are not subject to copyright, noting to conclude otherwise would result in “copyright infringement on a massive, near-universal scale”), questions on whether Canada Post owns copyright in the database if there is copyright (Canada Post relies on a section in the Canada Post Corporation Act that does not appear to exist), and a denial that the crowdsourced version of the database -- independently created by GeoCoder -- infringes the copyright of the Canada Post database.
Fortunately, a more recent post from Geist explains that Canada Post has finally dropped its lawsuit. According to the GeoCoder page on the litigation, the terms are confidential, but the agreed statement is as follows:
Canada Post commenced court proceedings in 2012 against Geolytica Inc. for copyright infringement in relation to Geolytica Inc.'s Canadian Postal Code Geocoded Dataset and related services offered on its website at The parties have now settled their dispute and Canada Post will discontinue the court proceedings. The postal codes returned by various geocoder interface APIs and downloadable on, are estimated via a crowdsourcing process. They are not licensed by from Canada Post, the entity responsible for assigning postal codes to street addresses. Geolytica continues to offer its products and services, using the postal code data it has collected via a crowdsourcing process which it created.
As Geist notes on his blog:
The settlement represents a big win for open data in Canada, as the lawsuit raised serious concerns about over-broad copyright claims given suggestions that Canada Post owned the copyright in all postal codes.
It's just a pity that it took four years for Canada Post to arrive at this commonsense decision.

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Posted on Techdirt - 9 June 2016 @ 3:25am

Uruguay Politicians Give Unanimous Preliminary Approval To Copyright Reform, Publishers Fight It Anyway

from the well,-of-course-they-do dept

All around the world, people are pushing to get copyright updated to reflect the digital world we live in. And all around the world, copyright industries are fighting tooth and nail to stop them. Here's an example from Uruguay, where something good could be about to happen on the copyright front, as a post on the Creative Commons blog explains:

Uruguay is in the process of updating its copyright law, and in April a bill was preliminarily approved in the Senate. The law introduces changes that would benefit students, librarians, researchers, and the general public by legalizing commonplace digital practices, adding orphan works exceptions, and removing criminal penalties for minor copyright infringements. University students were the original proponents of the limitations and exceptions bill.
Of course, all that was totally unacceptable to the local publishing industry, which got together and wrote a document outlining what it would like to see instead. By an amazing coincidence, its suggestions would neuter most of the changes that might benefit the public by:
Eliminating the exception that permits copying for personal use

Retaining the possibility for criminal penalties for minor infringements

Drastically limiting the scope of exceptions and limitations for education

Adding severe restrictions on libraries

Enacting restrictions on freedom of panorama
The Creative Commons post has the details, and summarizes:
Their document recommends scaling back most of the user-friendly provisions in the bill, cuts other items that were drafted by the Council of Copyright in the Ministry of Education and Culture -- and which already received unanimous political support by all parties in the Senate.
That last point about the unanimous cross-party political support shows that the copyright maximalists care as little about democracy as they do about the public. All they want is to retain the privileges they have enjoyed for hundreds of years, and to hell with anyone else.

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Posted on Techdirt - 8 June 2016 @ 12:04am

Go Home, State Council Information Office Of The People's Republic Of China, You're Drunk

from the ever-been-to-tibet-bro? dept

Techdirt has written plenty of stories about the Chinese government's attempts to stifle dissent online using a variety of heavy-handed approaches. But a story in the Washington Post shows China's State Council Information Office trying a refreshingly different approach:

On May 28, a Twitter account purporting to represent China's State Council Information Office, a real government body, went off-script, asking an account called @Tibetans, "Have u ever been to Tibet bro?"

The tone of the tweet is so strikingly at odds with the Communist Party's turgid pronouncements that China-watchers were at a loss. When scholar Tricia Kehoe asked the State Council Information Office if the Twitter account (@chinascio) was real, the office replied that it was just "trying to fit in," adding an "LOL" for good measure.
As the article explains, the weird tweets kept on coming for a while, which obviously made people wonder whether the account had been hacked or subverted in some way. The Washington Post checked with whoever was running the Twitter account, and the latter insisted the comments were legitimate, but there was no confirmation of that from the State Council Information Office itself. Those entertaining tweets have now gone from the account's timeline, but fortunately they are preserved in this tweet by the Twitter account of, an organization that monitors online censorship in China:
In case you can't see that,'s apt comment is simply: "go home State Council Information Office, you're drunk." LOL.

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Posted on Techdirt - 6 June 2016 @ 11:23pm

India Seeks To Renegotiate 47 Investment Treaties Because Of Their Corporate Sovereignty Clauses

from the leading-the-way dept

Corporate sovereignty has become a big issue as a result of its inclusion in TPP and TAFTA/TTIP, but it's present in hundreds of other trade and investment treaties.The heated discussion of investor-state dispute settlement (ISDS) chapters in those negotiations has led some countries to realize that corporate sovereignty could prove very costly to them one day. As we've written, both South Africa and Bolivia have decided to dismantle the ISDS provisions by renegotiating treaties, and according to a new report in The Economic Times, India has decided to do the same on a large scale:

India has written to 47 countries to nullify the existing bilateral investment agreements and ink fresh treaties that will make it mandatory for foreign investors to exhaust local judicial remedies before seeking arbitration.
Forcing foreign investors to use domestic courts is designed to stop them circumventing Indian's laws by going outside the system to arbitration tribunals. Among the 47 treaties that India wants to renegotiate are relatively new ones, as well as others that can be cancelled quite easily. The Economic Times provides some information on the growing magnitude of India's ISDS problem:
The government amended the text after being dragged into international arbitration by as many as 17 companies or individuals including Deutsche Telekom of Germany, Vodafone International Holdings BV, Sistema of Russia, Children's Investment Fund and TCI Cyprus Holdings. India even lost an international arbitration case involving White Industries of Australia.
This is a very sensible move by the Indian government, and a great signal to other countries exposed to the threat of costly corporate sovereignty claims in the future. It will be interesting to see who is next now that India has helped legitimize further the idea of renegotiating these deals.

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Posted on Techdirt - 3 June 2016 @ 6:30am

EU-Funded Study On The Cost Of Copyright Infringement Dismisses Key Real-World Factor As 'Outside Its Scope'

from the fantasy-economics dept

One of the less well-known outposts of the European Commission is the EUIPO Observatory. Here’s how it describes its objectives:

Provide evidence-based contributions and data to enable EU policymakers to shape effective IP enforcement policies and to support innovation and creativity

Provide data, tools and databases to support the fight against IP infringement

Provide knowledge and learning programmes for IP and enforcement authorities as well as for businesses and IP practitioners

Develop initiatives to help innovators, creators and businesses (especially SMEs) protect their IP rights

Design campaigns to raise awareness of the value of IP and the negative consequences of IP infringement
You may notice a certain one-sidedness there: this is all about infringement and enforcement, with nothing about whether the current copyright laws are part of the problem, or whether they are even fit for the digital age. Given that bias, the subject of the Observatory's latest report will come as no great surprise: "The economic cost of IPR infringement in the recorded music industry." Here are the main results:
In 2014, the recorded music industry lost approximately €170 million of sales revenue in the EU as a consequence of the consumption of recorded music from illegal sources. This total corresponds to 5.2% of the sector's revenues from physical and digital sales. These lost sales are estimated to result in direct employment losses of 829 jobs.

If the knock-on effects on other industries and on government revenue are added, when both direct and indirect effects are considered, infringement of IPR in this sector causes approximately €336 million of lost sales to the EU economy, which in turn leads to employment losses of 2,155 jobs and a loss of €63 million in government revenue.
I predict we'll be seeing these numbers a lot in the future, because the music industry will be quick to seize on them as "objective" figures that are above suspicion, unlike industry-sponsored analyses. But of course, things are not always what they seem, and it's worth reading the full report in order to find out what is really going on here. Nearly half of the 48-page is taken up with appendices outlining the forecasting model used to calculate those "lost sales." The mathematics there is pretty enough, but ultimately undermined by the following admission made earlier in the report:
It is important to note that the lost sales estimated in this report represent hypothetical additional revenue that the recorded music sector would have earned, had infringement not taken place. It is not an estimate of the value of the illegally acquired music recordings; nor is it an estimate of the substitution effect -- that is, the question of the extent to which the illegally consumed music would have been bought from legal sources had piracy not been possible, which is outside the scope of this study.
Thus it is taken as axiomatic that every lost sale would have converted to a real sale if a magic wand had been waved, and piracy had become impossible. No justification is offered for this huge assumption, and that's not surprising, since it doesn't exist: in the real world only a fraction of those "lost sales" would ever be converted to actual sales. So even if we accept the modelling in the appendices is correct, the figures that result must be reduced by some factor to take account of this. It's hard to say what that factor is, but it affects all the headline figures -- the 5.2%, the 2,155 jobs, and the €63 million in government revenue. Actually, things are even worse than they seem, because the study doesn't explore the possibility that online sharing boosts sales, rather than reduces them. It only mentions that crucial issue right at the end, where it says:
The question of whether piracy reduces sales of recorded music has been the subject of many studies, sometimes with contradictory results. Some authors have claimed that piracy actually increases sales by allowing consumers to sample music they would not otherwise have considered purchasing. However, a recent literature survey by Danaher et. al. (2016) shows that out of 25 studies reviewed, 22 found that piracy reduced the revenue of the legal industry. Thus, the results of the present study are in line with the prevailing consensus, albeit utilising a completely different methodology.
However, the methodology adopted by the report may be skewing the results by removing perhaps the most "advanced" digital market -- Sweden, the home of Spotify -- from the modelling because it is viewed as an outlier. And as for that 2016 study by Danaher et al., here are some of the 22 datasets showing that piracy "reduced the revenue of the legal industry":
1994-98 IFPI worldwide CD sales data and physical piracy rates

1998-2002 worldwide CD sales, IPSOS survey data for piracy downloads

1997-2002 country-level data on music sales and broadband usage.

1990-2004 consumer spending on cassette tapes, LPs, and CDs.
It seems unlikely that the analog world of cassette tapes and LPs tell us very much about what young people are doing online with digital files today. Of course, there's more recent data in the list, for example, this set:
2008-2011 iTunes music sales in France and other European countries
Which apparently showed the HADOPI anti-piracy law "caused iTunes music sales to increase by 22-25% [in France] relative to changes in the control group [countries]." Except that it didn't, as Techdirt noted at the time.

This quick run-through of the cited datasets is not meant to be a rigorous rebuttal, but it does indicate the superficial nature of the new report's analysis, which accepts uncritically the Danaher paper, instead of exploring properly the really important question of whether piracy drives or depresses sales. Coupled with a failure to consider substitution effects, that renders the EUIPO report's results of little value. What makes things worse is that the music industry will doubtless use them anyway to foist its copyright maximalist agenda on policymakers, who may mistakenly assume the Observatory's work can be relied upon.

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Posted on Techdirt - 2 June 2016 @ 3:29am

It's Official: US International Trade Commission Predicts Negligible Economic Benefits From TPP

from the and-that's-even-before-you-start-to-factor-in-the-costs dept

Techdirt has written hundreds of stories about TPP over the years. So many of those have revealed troubling aspects of the deal that it's hard to single out the worst. But there can be no doubt that one of the most extraordinary facts is that the US and the other TPP nations were negotiating for eight years the biggest so-called trade deal in history with only the sketchiest idea about its likely benefits. Instead, politicians and supporters simply assured the public that it would all be great, honest. And yet when the rigorous econometric studies began to appear, they consistently showed that TPP would produce almost no benefits whatsoever.

Upon hearing that a planned course of action designed to bring financial gains would do nothing of the kind, most rational people in ordinary life would try something else. But not the politicians and TPP negotiators, who carried on despite these clear signs that TPP was simply not worth the effort. They either ignored these studies completely, or at most said that the only reliable predictions worth considering were the official ones, which would come from the US International Trade Commission (USITC) once TPP's text had been finalised. Last week, the USITC released its massive 792-page report (pdf). Here's a key part of the summary:

The Commission used a dynamic computable general equilibrium model to determine the impact of TPP relative to a baseline projection that does not include TPP. The model estimated that TPP would have positive effects, albeit small as a percentage of the overall size of the U.S. economy. By year 15 (2032), U.S. annual real income would be $57.3 billion (0.23 percent) higher than the baseline projections, real GDP would be $42.7 billion (0.15 percent) higher, and employment would be 0.07 percent higher (128,000 full-time equivalents).
Like all the figures mentioned there, that 0.15% GDP boost would be achieved in 2032, which means that on average TPP is expected to produce an extra annual GDP boost of roughly 0.01%. Public Citizen's Global Trade Watch (pdf) pulled out a few other interesting figures from the report, which:
Estimates a worsening balance of trade for 16 out of 25 U.S. agriculture (p. 124), manufacturing (p.228), and services (p. 340) sectors that the ITC selected to feature. This includes vehicles, wheat, corn, autoparts, titanium products, chemicals, seafood, textiles and apparel, rice and even financial services. Autoparts would be hard hit with employment projected to decrease by 0.3 percent.

Estimates the TPP will increase the U.S. global trade deficit by $21.7 billion by 2032.

Projects even the U.S. services trade balance will worsen by 2032 as service imports of $7 billion swamp the estimated increase in exports of $4.8 billion (p. 35).
Global Trade Watch also notes that the USITC's track record for predictions is not good:
The actual outcomes of past trade pacts have been significantly more negative than ITC projections generated using the same methodology employed for the TPP study. This makes today’s unusually negative ITC findings on the TPP especially ominous.
The economist Dean Baker from the Center for Economic Policy Research (CEPR) agrees about the USITC's past failures:
The USITC also has not done well in projecting winning and losing sectors from trade agreements. A recent analysis by CEPR found no relationship between the industries that were projected to be export and import gainers and losers from the trade deal with Korea and the actual outcome.
He goes on to point out an even more worrying aspect of the latest modelling:
this analysis does not seem to incorporate any of the losses associated with the stronger and longer patent and copyright protection required under the TPP. Higher prices for drugs, software and other protected items are likely to impose substantial costs on the United States and other parties to the agreement. For example, the New Zealand government estimated that just one provision -- extension of copyright protection from 50 years to 70 years -- would cost the country 0.024 percent of GDP. This amount is 10 percent of the total gains projected in the USITC report. It is entirely possible that a full assessment of the cost of these provisions would show that the TPP would lead to a net reduction in income for the United States and other countries in the pact.
That's a hugely important point. On the rare occasions when TPP supporters have made specific claims about the economic benefits of TPP, they have consistently failed to take into account any downsides. It's like going into a business deal only looking at the benefits, and ignoring any possible costs. Against this chorus of disapproval, it's interesting to see how TPP supporters try to spin the USITC's miserable figures. Here's what the Business Roundtable, "an association of chief executive officers of leading U.S. companies", has to say:
"The release of the ITC report marks an important step in the process for considering the TPP. We look forward to reviewing the report's findings as we continue to highlight the benefits of the TPP to American businesses, farmers and workers," said Tom Linebarger, Chairman and Chief Executive Officer of Cummins Inc., and Chair of the Business Roundtable International Engagement Committee. "The TPP will remove many foreign barriers to U.S. goods and services and impose strong, enforceable rules for trade -- enabling U.S. manufacturing, services and technology companies to grow their sales to important international markets."

"The TPP sets high standards and reflects American priorities, and if the United States doesn't take the lead in shaping international trade rules, our economic competitors will," continued Linebarger.
That's it: the Business Roundtable could not find a single number to quote that made TPP look like a good deal. What about the ultimate TPP cheerleader, US Trade Representative Michael Froman? What did he have to say about the report? This:
"The ITC report illustrates for the American people and members of Congress the benefits TPP will deliver in their own backyards. If you are a poultry farmer in Delaware this report shows that chicken exports will increase by $174 million annually under TPP. If you are a rancher in Nebraska this report shows that beef exports will increase by $876 million annually under TPP. And if you build cars in the Midwest, this report shows that auto exports will rise $1.95 billion annually. With today's study as another important data point, our work with Congressional leaders on TPP implementation and enforcement will continue and accelerate in the days and weeks ahead."
Froman decided to pretend it was all about little numbers, and to gloss over the fact that when you add up all those little numbers to find out TPP's total still get a little number. Froman also fell back on that old favorite -- fear-mongering about China:
"What cannot be quantified in this study or any other is the cost to American leadership if we fail to pass TPP and allow China to carve up the Asia-Pacific through their own trade agreement. If we allow China to beat us in defining the rules for trade it will undercut our workers and businesses and prevent us from taking badly needed steps to improve worker rights, bolster intellectual property protections, and protect the environment through TPP."
In other words, yes, it's true TPP offers absolutely negligible benefits for the US but oh, look, a squirrel...

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Posted on Techdirt - 1 June 2016 @ 3:20am

China Gets Its First 'Right To Be Forgotten' Lawsuit

from the even-the-Great-Firewall-of-China-couldn't-keep-it-out dept

Techdirt has written a number of posts about the controversial "right to be forgotten" idea -- strictly speaking, a right to be de-listed from search engine results. As Mike noted a couple of months ago, there is no doubt that this idea is starting to "infect" an increasing number of governments and legal systems around the world. The Fei Chang Dao site has a fascinating post about what appears to be China's first "right to be forgotten" case. It includes a translation of the following background information provided by the court itself:

Recently the Haidian Court concluded a case involving a lawsuit filed by Plaintiff Ren against a certain Internet Services Company for infringement of the right of reputation, name, and general personality. On May 13, 2014, a European court issued a final judgment confirming that ordinary citizens have a "right to be forgotten" with respect to personal information, and following that the European Union has established the scope of a "right to be forgotten." During the two year period following the European court's recognition of the "right to be forgotten," the Haidian Court has concluded proceedings in the first case involving the scope of judicial protection of the "right to be forgotten" for a citizen's personal information. This case study has significant theoretical and practical value with respect to the issue of how China will conduct regulatory development and judicial practice to safeguard the "right to be forgotten" for personal information in the Internet age.
It's fascinating to see a Chinese court pointing to these developments in Europe, even though it later goes on to emphasize:
China's law as it exists today is unable to define a category of rights that is the so-called "right to be forgotten." The "right to be forgotten" is only touched upon in foreign statutory and case law, which cannot serve as the legal basis for China's protection of this kind of right.
If you're interested in the details of the case, the Fei Chang Dao site has a good summary, with full translations of all the relevant information. Suffice it to say that the court rejected Mr Ren's request to remove certain links, and gave the following explanation why:
the information at issue in this lawsuit regarding [the plaintiff] Ren Jiayu's work history relates to very recent events, and he continues to work in the business administration education profession. This information happens to form a portion of his professional history, and his current individual professional credibility is both of directly relevant and of ongoing concern. Ren Jiayu hopes to make use of his own good reputation in the industry to attract customers and students going forward, but information about his personal qualification is important information that customers and students rely on in making a judgment.
That eminently sensible reasoning augurs well for the future, if and when China decides to join the burgeoning "right to be forgotten" club officially by bringing in new laws on the matter.

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Posted on Techdirt - 20 May 2016 @ 12:48pm

Chile's New Copyright Legislation Would Make Creative Commons Licensing Impossible For Audiovisual Works

from the no-freedom-to-make-it-free dept

Techdirt has written many times about the way in which copyright only ever seems to get stronger, and how different jurisdictions point to other examples of excessive copyright to justify making their own just as bad. In Chile, there's an interesting example of that kind of copyright ratchet being applied in the same country but to different domains. It concerns audiovisual works, and aims to give directors, screenwriters and others new rights to "match" those that others enjoy. Techdirt has already written about this bad idea in the context of the Beijing Treaty on Audiovisual Performances. But it turns out that Chile's proposed copyright legislation adds an extra twist that makes it even worse, because these rights will be unwaivable -- an approach we've seen before in Portugal. Here's what that will mean in practice, as explained on by Luis Villarroel, from the Chilean organization Innovarte:

the music composer of a work embedded in any audiovisual work, the writer of the drama, the Director, the camera man, etc, will not be able to waive their rights or license for free through a creative commons license or any other open licenses, or give works to the public domain.

To make it worse, because of the national treatment obligations this bill will also apply to foreign audiovisual works.
According to Villarroel, the legislation is being promoted by the International Confederation of Societies of Authors and Composers -- and by Chilean collecting societies. By an amazing coincidence, the new licensing fees will all be administered by the latter. Villarroel first wrote about this move last year, when the legislation was approved in Chile's House of Representatives. Despite the delay, it is apparently back on the agenda, and will be considered by the Senate, the country's upper house, soon.

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Posted on Techdirt - 19 May 2016 @ 11:41pm

New Leak Reveals Proposal To Extend Corporate Sovereignty Massively To Include Intra-EU Investments

from the most-toxic-acronym-in-Europe dept

As Techdirt has reported, the public backlash against corporate sovereignty in TAFTA/TTIP was so strong in the EU that the European Commission was forced to come up with Plan B. It now wants to replace what has been called "the most toxic acronym in Europe" -- ISDS, which stands for "investor-state dispute settlement" -- with ICS: the investment court system. That was little more than a re-branding exercise, since most of the key flaws remained, but at least it suggested that the European Commission recognized that corporate sovereignty had become a serious problem that needed to be addressed. However, it seems that others didn't get that memo -- or, more likely, just don't care what the EU public thinks. A new leak reveals that a group of EU governments want to extend the use of ISDS, and to embed corporate sovereignty even more deeply in the fabric of the European economy.

The plan by the five countries -- Austria, Finland, France, Germany and The Netherlands -- is to give corporate sovereignty rights for all cross-border investments made within the EU. That would allow EU companies to challenge EU governments over things like local health and safety laws, or environmental regulations, with the public paying for any losses in the ISDS tribunals. The original rationale for corporate sovereignty was to protect only foreign investors when they put money into a country; this has been turned on its head in a so-called "non-paper", now leaked, which calls for domestic investors to enjoy the same special extra-judicial rights (pdf). The background to this extraordinary idea is a move last year by the European Commission to terminate some old bilateral investment treaties (BITs) between European Union members:

Many of these intra-EU BITs were agreed in the 1990s, before the EU enlargements of 2004, 2007 and 2013. They were mainly struck between existing members of the EU and those who would become the "EU 13". They were aimed at reassuring investors who wanted to invest in the future "EU 13" at a time when private investors -- sometimes for historical political reasons -- might have felt wary about investing in those countries. The BITs were thus aimed at strengthening investor protection, for example by means of compensation for expropriation and arbitration procedures for the settlement of investment disputes.

Since enlargement, such 'extra' reassurances should not be necessary, as all Member States are subject to the same EU rules in the single market, including those on cross-border investments (in particular the freedom of establishment and the free movement of capital). All EU investors also benefit from the same protection thanks to EU rules (e.g. non-discrimination on grounds of nationality). By contrast, intra-EU BITs confer rights on a bilateral basis to investors from some Member States only: in accordance with consistent case law from the European Court of Justice, such discrimination based on nationality is incompatible with EU law.
As the European Commission rightly points out, one of the key points about the EU is that it offers the same protection to all EU investors, wherever they are based, and wherever they put their money in the European Union. And yet, rather than complying with that call from the Commission, the five countries involved in this new plan want to go in precisely the opposite direction. The leaked "non-paper" even has the gall to use the biased nature of ISDS as a reason to extend it yet further:
modern guarantees on investment protection are necessary to the level playing field for EU-investors vis-à-vis their foreign competitors, to ensure the continued availability of competitive financing terms for EU-investors and to promote intra-EU investments. The dismantling of intra-EU BITs will be perceived by investors, banks and creditors alike as an overall decrease in the legal protection for EU investors and create a competitive advantage for foreign investors who can rely on clearly defined and uniform protection standards under the forthcoming EU agreements or on Member States’ BITs. If EU investors are not afforded comparable protection as their foreign competitors, incentives for EU investors to locate their foreign investments outside the EU will be created and the functioning of the internal market will be compromised.
By an amazing coincidence, in February the Business Europe lobby group sent a letter to the European Commission calling for corporate sovereignty to be extended to intra-EU investments. It's not hard to guess why there is this sudden push from countries and companies. As Techdirt has reported, the corporate sovereignty provisions are without doubt the most contentious part of the proposed TAFTA/TTIP agreement, and many are demanding that they be dropped completely. The introduction of corporate sovereignty for all intra-EU investments would allow supporters of ISDS in the EU-US trade agreement to argue that the same protection must be offered to US companies investing in the EU -- the perfect circular argument.

The reverse is also true, as the leaked document itself recognizes:

If one postulates that such provisions are not required within the EU due to the very nature of the internal market or to the level of development of EU Member States, it would then be even more difficult to argue in favour of investment chapters within the TTIP or other FTAs with developed countries.
But the European Commission is indeed arguing that such provisions are not needed in the European Union. Awkward.

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Posted on Techdirt - 18 May 2016 @ 11:51am

IBM Wants To Patent A Printer That Won't Let You Output Unauthorized Copies

from the I'm-sorry-Dave,--I'm-afraid-I-can't-print-that dept

Stories about copying turn up a lot on Techdirt. That's largely as a consequence of two factors. First, because the Internet is a copying machine -- it works by repeatedly copying bits as they move around the globe -- and the more it permeates today's world, the more it places copying at the heart of modern life. Secondly, it's because the copyright industries hate unauthorized copies of material -- which explains why they have come to hate the Internet. It also explains why they spend so much of their time lobbying for ever-more punitive laws to stop that copying. And even though they have been successful in bringing in highly-damaging laws -- of which the DMCA is probably the most pernicious -- they have failed to stop the unauthorized copies.

But if you can't stop people copying files, how about stopping them from doing anything useful with them? That seems to be the idea behind an IBM patent application spotted by TorrentFreak, which it summarizes as follows:

Simply titled "Copyright Infringement Prevention," the patent's main goal is to 'restrict' the functionality of printers, so they only process jobs when the person who’s printing them has permission to do so.

It works as follows. When a printer receives a print job, it parses the content for potential copyrighted material. If there is a match, it won't copy or print anything unless the person in question has authorization.
As with so many patents, the idea is simple to the point of triviality: only a company more concerned about the quantity of its patents, rather than their quality, would have bothered to file an application. Nonetheless, it's a troubling move, because it helps legitimize the idea that everything we do -- even printing a document -- has to be checked for possible infringements before it can be authorized and executed.

But why stop with printers? We've already seen Microsoft's Protected Media Path for video, a "feature" that was introduced with Windows Vista; it's easy to imagine something a little more active that matches the material you want to view or listen to against a database of permissions before displaying or playing it. And how about a keyboard that checks text as you type it for possible copyright infringements and for URLs that have been blocked by copyright holders?

There is a popular belief that the computer in Stanley Kubrick's "2001: A Space Odyssey" was named "HAL" after IBM, by replacing each letter in the company name with its predecessor. That's apocryphal, but with this latest patent application IBM is certainly moving squarely into HAL territory.

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Posted on Techdirt - 17 May 2016 @ 11:40am

Russia Provides Glimpse Of A Future Where Powerful Facial Recognition Technology Has Abolished Public Anonymity

from the are-we-really-ready-for-that? dept

As hardware and software advance, so facial recognition becomes more accurate and more attractive as a potential solution to various problems. Techdirt first wrote about this area back in 2012, when Facebook had just started experimenting with facial recognition (now we're at the inevitable lawsuit stage). Since then, we've reported on an increasing number of organizations exploring the use of facial recognition, including the FBI, the NSA, Boston police and even the church. But all of those pale in comparison to what is happening in Russia, reported here by the Guardian:

FindFace, launched two months ago and currently taking Russia by storm, allows users to photograph people in a crowd and work out their identities, with 70% reliability.

It works by comparing photographs to profile pictures on Vkontakte, a social network popular in Russia and the former Soviet Union, with more than 200 million accounts. In future, the designers imagine a world where people walking past you on the street could find your social network profile by sneaking a photograph of you, and shops, advertisers and the police could pick your face out of crowds and track you down via social networks.
One of FindFace's founders, Alexander Kabakov, points out the service could have a big impact on dating:
"If you see someone you like, you can photograph them, find their identity, and then send them a friend request." The interaction doesn't always have to involve the rather creepy opening gambit of clandestine street photography, he added: "It also looks for similar people. So you could just upload a photo of a movie star you like, or your ex, and then find 10 girls who look similar to her and send them messages."
Definitely not creepy at all.

Of course, a 70% hit rate isn't that good: perhaps FindFace isn't really such a threat to public anonymity. The trouble is, the Guardian article reports that the company has performed three million searches on its database of around a billion photographs using just four common-or-garden servers. It's easy to imagine what might be achieved with some serious hardware upgrades, along with tweaks to the software, or with access to even bigger, more complete databases. For example government ones: according to the Guardian, FindFace's founders think the big money will come from selling their system to "law enforcement and retail." Although they've not yet been contacted by Russia's FSB security agency, they say they'd be happy to listen to offers from them. Perhaps comforted by the thought of all that future business coming his way, Kabakov is philosophical about the social implications of his company's technology:

"In today’s world we are surrounded by gadgets. Our phones, televisions, fridges, everything around us is sending real-time information about us. Already we have full data on people's movements, their interests and so on. A person should understand that in the modern world he is under the spotlight of technology. You just have to live with that."
That may well be true. But the question is, are we ready to do so?

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Posted on Techdirt - 17 May 2016 @ 3:31am

German Publishers Whine Because They Must Pay To Authors Misappropriated Copyright Levies

from the no-wonder-authors-struggle-to-make-a-living dept

Techdirt has been writing for some years about the illogical mess that is the European copyright levy system -- effectively a tax on blank media that is supposed to compensate copyright holders for an alleged "loss" from copies made for personal use. Last November, the Court of Justice of the European Union (CJEU), Europe's highest court, issued an important judgment in this area. It said that Belgium's levies on multifunctional printer sales were incompatible with EU law because they failed to distinguish between private use and commercial use, and between legal and illegal copying. Along the way, the CJEU said that copyright levies must be paid to authors only, and not go to publishers.

As Boing Boing points out, the effects of that decision are now being felt in Germany. An organization set up in 1958, called Wort (literally "word" in German), receives a portion of the German copyright levies that are collected, which it has been sharing between both authors and publishers in roughly equal amounts. The CJEU's decision last November ruled that was illegal, and Germany's top court, the Bundesgerichtshof, has confirmed that position in a recent judgment (original in German). As a result, German publishers now find themselves obliged to pay their authors the copyright levies the industry received over the last few years -- more than €100 million according to the German site Übermedien.

That same article notes the cries of despair in the wake of this decision, as German publishers claim that they are doomed, and that the end is nigh for books in Germany, etc. etc. What's extraordinary is that there is no sense of regret that for years they have been depriving authors of considerable sums of money. That omission is made worse by the fact that publishers have been happy to use the difficulties that authors face in scraping together enough to live on as an excuse for demanding longer and stronger copyright. But as in the music and film industries, the problem is not that copyright is too weak or too short, but that many publishers -- like many recording companies and film studios -- have been only too happy to rip off authors while simultaneously claiming to have their best interests at heart.

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Posted on Techdirt - 13 May 2016 @ 3:24am

At The Behest Of Big Pharma, US Threatens Colombia Over Compulsory Licensing Of Swiss Drug

from the destroying-lives,-destroying-peace dept

As Techdirt readers well know, Big Pharma really hates compulsory licensing of its patented drugs, where a country steps in and allows an expensive drug to be made more cheaply in order to provide wider access for its people. Such massive pressure is applied to nations contemplating this move, that even global giants like India quail. A new story is unfolding that reveals just how far companies are prepared to go in order to prevent it from happening. It concerns Colombia's possible use of a compulsory license for the drug imatinib, sold under the name Glivec, and used to treat leukemia. Despite the fact that the company holding patents on the drug, Novartis, is Swiss, the US has started to lean heavily on Colombia in order to persuade it not to go ahead with the move.

KEI has obtained a copy of a letter from Andrés Floréz at the Embassy of Colombia in Washington, DC, to the Minister of Health in Colombia, reporting on a meeting between embassy officials and Everett Eissenstat. He's the Chief International Trade Counsel for the US Senate Committee on Finance, under Senator Orrin Hatch. Apparently, Eissenstat conveyed quite forcefully his views on the negative consequences for Colombia if it decided to issue a compulsory license on the cancer drug Glivec:

Eissenstat mentioned that although Novartis is not an American company, the US pharmaceutical industry was very worried about the possibility that the case would become a precedent that could be applied to any patent in any industry which, according to him, could lead to the reputation of our country's respect for intellectual property rights being viewed as impaired and Colombia becoming one among those countries that would have special treatment...

Einssenstat also mentioned that, if the Ministry of Health does not correct this situation, the US pharmaceutical industry and related interest groups could become very vocal and interfere with other interests that Colombia could have in the US.
Nice little country you have there -- be a shame if something happened to it. Stat News mentioned a couple of forms that "special treatment" might take:
A free-trade treaty between the two countries went into effect four years ago, which obligates Colombia to comply with various international trade laws. Florez also cautioned that issuing a compulsory license for the Novartis drug may "weaken support" for bringing Colombia into the Trans-Pacific Partnership, a trade pact between 12 countries in the Asia and Pacific regions that must still be approved by Congress.
But the most extraordinary threat is the following, reported here by KEI:
Senator Hatch was so opposed to the idea of a compulsory license on the patent for a $40+ Billion cancer drug made by a Swiss company that he was willing to find an extremely sensitive area for the Colombian people and use it as leverage. The [Paz Colombia] peace process in question is the hopeful conclusion to decades of fighting in the country with guerrilla rebels that has led to hundreds of thousands of deaths.
The US is willing to jeopardize the entire "Paz Colombia" peace plan, all because Big Pharma is outraged a developing country might dare to use its international right to issue a compulsory license. As KEI Director James Love commented:
The use of these back channel methods of conveying threats and pressure is common, and the leak of these two letters provides insight into why governments that have the right to issue compulsory licenses rarely do. The fact that after meeting with Eissenstat, the Colombian Embassy connects the patent dispute to the funding of the Colombian peace process illustrates how the United States can link health and national security together in ways that a harmful to both.
It can surely only be a matter of time before Colombia obediently toes the line, and recognizes that Big Pharma's patents and profits are much more important than the health and lives of its people.

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