Instead of just saying "feel free ..." why not create a torrent themselves. In full HD quality with commercials. It seems to me by tracking the torrent they would be able to give advertiser considerably more data. Specifically they could report on how many people downloaded the show, geographic region, etc.
By giving people the content they want at quality they could minimize illegal downloads and give advertisers added value by inserting their commercials into the downloaded versions.
The real meat of LV's claim is not in Trademark confusion but rather the dilution of the LV mark to stand for generic luxury rather than their line of goods.
(Dilution is the diminishing of a famous mark’s distinctiveness. It is actionable regardless of confusion or competition - see 15 USC 1125)
The problem, from the view of most Techdirt readers, is that dilution treats Trademarks as though they are the intellectual property of the owners rather than as the means of minimizing customer confusion. Thus the problem with LV's lawsuit is more of a general disagreement behind the purpose of trademark law than the lawsuit itself.
That being said I doubt there was any actual dilution here but thanks to the Trademark Dilution Revision Act of 2006 all LV needs to prove is that the basketball was likely to cause dilution.
For an independent invention defense you would probably need to prove independent invention/lack of copying. For example the insanity defense is an affirmative defense. There the defense must prove insanity; the prosecution is under no burden to prove sanity.
I believe the economic theory behind not having an independent inventor defense is that by giving all the rewards to the first inventor there is increased incentive to invent and disclose as soon as possible. In theory this increases the speed of invention. Again in theory, the public good of earlier invention and disclosure outweighs the cost of decreased competition and increased price.
However I (and most economists I have spoken to) believe this theory fails to take into account the slowing of improvements or other future inventions due to patent infringement and legal uncertainties. As a result while the public good for the first invention may outweigh the costs, one of the first invention's costs is slowing of future inventions as patent boundaries and licenses are determined. As this increases exponentially based on the number of patents and the difficulty in making the information available to the inventor the costs begin to outweigh the benefits and the economic theory fails.
"In the meantime, it makes you wonder what the hell anyone was thinking in sending out such a bogus DMCA. Do people really not recognize the consequences?"
Apparently someone doesn't as this continues to happen. It's either poor lawyering or clients who are unwilling to heed their lawyers' advice (I'm guessing the first). To me this is a sign that I will be successful post law school even in this over crowded JD market; it is clear that too many people don't understand the legal and business implications of their decisions.
There is another site that has been around for a 1.5 now that does something similar. Instead of a video ad before downloading content you get DRM-free content but with a advertisement at the start of the song. The ads seem to primarily be the artist introducing the song like a dj and saying brought to you by ________ advertiser.
So far the site appears to only have independent bands.
It's an interesting business model with a presumably cheaper CPM. While I expected the ads to be incredibly annoying I have found that they aren't that noticeable. It's not necessarily the answer but it is another model trying to make it work.
For a great overview of the concepts of Economics and Patent law I highly recommend David Friedman's Book Laws Order: What Economics Has to Do with Law and Why It Matters which he has made available online here: http://daviddfriedman.com/laws_order/index.shtml
(specifically chapter 11 on IP)