A Copyfighter’s Musings

See Peter Junger’s letter for details on the after the fact editing of Seth Finkelstein’s Greplaw interview.

This concerns me on a number of levels.  On a journalistic level, I think the edits are rather unbecoming of Greplaw. By inserting Mr. Godwin’s words into the middle of the interview, Greplaw reframes Seth’s words, creating false implications about what he actually said. Greplaw’s paraphrasing of Godwin, rather than directly quoting him, enhances this effect, for the implication about Seth’s words appears to come from Greplaw itself. Seth did not sign up for a point-counterpoint with his critics; in the context of an interview with a single person, these methods seem rather inappropriate. To go back and make these edits after the original posting seems even worse. If anything, Greplaw should have allowed Godwin to post a separate, follow-up response, directly quoting him, while allowing Seth to respond if necessary.

I’d be interested in hearing Greplaw’s side of things.  Perhaps there’s something I’m missing.

Filed by Derek Slater at 10:57 pm under Big Ideas
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Jason’s got the scoop, and, from the quotes he pulls, this looks really interesting.

[later:] Ernest is on the case – he captures my sentiments, particularly with regard to it inspiring and frustrating.  I’m going to chew on this on my way to NY this evening – it’s a lot to take in.  The copy and access control distinction is indeed rather murky.  The court boldly brought 1201(c) to bear (SethF, I imagine, is as surprised as I am).  The court says anti-trust and misuse still apply, regardless of the DMCA.  The court even says that Chamberlain’s interpretation of the DMCA would make it borderline irrational under the test expressed in Eldred.  Here are some of the money lines:

“The statutory structure and the legislative history both make it clear that the DMCA granted copyright holders additional legal protections, but neither rescinded the basic bargain granting the public noninfringing and fair uses of copyrighted materials,

Filed by Derek Slater at 10:13 pm under Big Ideas
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Numerous posts out there about Valenti’s latest interview silliness.  What’s most sad and most enlightening about the interview are the technical non sequiters that Prof Felten points to.  The security design process is apparently just about “stuffing … algorithms,” really cramming them in there, and then hurf, thunk, clatter, out pops DRM – “technological magic.”

Valenti is always colorful and uses simplifying rhetoric.  What I hear most clearly, though, are the DRM vendors speaking through him.    As I have experienced, DRM vendors speak just like this about security.  They go around to conferences and board meetings, hocking magic pixie dust and hornless unicorns.

So Valenti didn’t invent this view of DRM, but he’s not just innocently following the vendors – that is, he’s guilty of a sort of “willful blindness.”  The DRM vendors give Valenti the excuse not to listen to the actual experts.  DRM vendors will always tell him what he wants to hear.  Real security experts will not.  Thus, the latter are just dirty hackers, while the former are wonderful magicians.

When people choose not to listen, there is no convincing them, and thus I’m not optimistic about convincing Valenti’s kind.   For awhile, they won’t listen to these arguments about DRM.  They will, however, listen to their bottom line.  As they continue to give their money to DRM vendors, and piracy does not decline, they’ll listen to the fly buzzing out of their wallet.  Then, instead of an argument between magic and reality, we’ll just confront the reality, and argue from there.  That’ll be the day.

(This is not to minimize the potential importance of other reasons the content industries use DRM.  But I do think that they actually believe in DRM’s efficacy in preventing piracy, and that remains a major impediment in their thinking and in the larger debate.)

Filed by Derek Slater at 9:20 pm under General news
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Some new potentially illegal art, designed by a friend of mine: The Che Moore T-shirt.  Let’s count the rights it might violate.

Filed by Derek Slater at 2:49 am under General news
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PaidContent points to reports that the new Microsoft Music Store will debut September 2.  It seems like we’ve been hearing rumors of this forever (or, at least as far back as February).  Apparently, the Store will integrate with Microsoft search and IM and will debut with over 600k songs at 99 cents each.  Given the coming of Janus, a subscription service is no doubt on the way as well.

Microsoft is also about to start a massive Windows Media marketing campaign, centered around its new “Plays for Sure” compliance mark.  Paidcontent puts it, “Microsoft is planning to tout its interoperability (some would say it is just about ubiquitous monopoly).”  Well, monopoly may be a little strong, but ubiquity really is the key.  Go back to Cory’s response to Scoble.  To rephrase SethS’s comment, interoperability is not the same as ubiquity.  You still have to ask MS’s permission to create interoperable software and hardware. 

With DRMed digital media, backed by the DMCA, nothing plays for sure.  Please, somebody start THAT campaign, rather than playing these silly games.  Your digital media is forever tethered to the DRM owners and relevant copyright holders.  Your digital media plays the way they say it can be played, that’s for sure.  But you will never truly be able to use your digital media however you want on whatever device you want – we will never see true interoperability.

Filed by Derek Slater at 1:48 am under General news
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…then Ernest is going to rock web radio.  He’s got a new series on ITConversations called The Importance of the Law and IT.  The first edition is about MGM v. Grokster, starring C.E. Petit, FvL, Denise Howell, and Tim Wu.  I haven’t heard it yet, but I don’t need to to recommend it.

Filed by Derek Slater at 3:24 am under General news
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Lots of news.  Ernest and Copyfight have great coverage of the Don’t Induce Act as well as JibJab’s victory.  Prof Felten has two nice posts on innovation.  Frank has plenty of links up, with some particularly interesting ones involving colleges and digital music services.  And Judge Posner is blogging up a storm over at Lessig’s.

Filed by Derek Slater at 3:21 pm under General news
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Check out C.E. Petit’s elaboration on his previous posts in response to my post.  I’ve written Petit with a few questions to better understand his point before I write up another comment.   I know exactly nothing about civil procedure so I’ll defer to those with sufficient expertise here – I would love to hear what others have to say about these issues as well.  It still seems strange that, given the standards articulated in Napster, Grokster, and the court of appeals in Aimster, intent is a primary factor in the application of Sony in any of the cases.  But that might just be my inability to untangle this complex topic properly, which is all the more reason for you to read Petit’s interesting take.

Also, a couple other links worth reading, along with the appeals court decisions listed in the previous post:

Napster district court decision, Aimster district court decision, Grokster district court decision, EFF amicus criticizing Aimster district court decision

Filed by Derek Slater at 12:44 am under General news
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Almost a year ago, the EFF agreed to defend Ross Plank, who claimed that the RIAA had mistakenly identified him as an infringer.  According to this article (via Furdlog), Plank paid an $11,000 settlement “after lawyers found on his computer traces of hundreds of songs that had been deleted one day after he was sued.”  Ouch for Mr. Plank, and perhaps a bit of egg on the face for the EFF.  It’s not clear whether the songs they found were the ones originally cited in the lawsuit or others.  I wonder what he told the EFF before they took on the case and if they were given the full story.  Who knows?

Filed by Derek Slater at 6:00 pm under General news
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He’s blogging over at Lessig’s.  UPDATE and edited: Whoops, thought he had already started, but Tim Wu posted, “Who Cares About Innovation?” (thanks Peter).  Silly me.  This post was originally written with Judge Posner in mind….

Let’s add a few more questions to [corrected:] Wu’s list.  It’s not just how to balance innovation v. other social values substantially, but who gets to do it and how is it done procedurally.  Given that innovation does not trump all, when an innovation runs up against social values, what method will we use to balance the values at stake?  More narrowly, what should be the role of the courts in this balancing?

Certainly in the indirect copyright liability context, my thinking would differ quite starkly from Judge Posner’s.

Filed by Derek Slater at 5:49 pm under General news
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C.E. Petit has some interesting commentary post-Grokster.  See his two posts.

I don’t quite understand Petit’s distinguishing Napster and Aimster based on intent.  In Napster, there was evidence that the system operators intended the system for infringement, but the court’s ruling didn’t rest on that at all.  In the contributory section, the court focused on Napster actual knowledge of specific infringements; the vicarious section focused on the right and ability to control in a similar fashion.  As was the case in Napster and was further clarified in Grokster, actual knowledge of specific infringement must be received at a time when the receiver is capable of acting on that knowledge, and the right and ability to control is fully cabined within existing architecture.   I’m not sure how you can read either of those cases to rest on an intent-based standard.

In Aimster, intent took on greater importance, but I’m not sure it was as critical as Petit makes it out to be.  Judge Posner notes that Aimster willfully blinded itself to infringements and that Aimster’s docs were focused on infringing content (like Napster’s).  However, he speaks of that in the context of noting that there was sufficient evidence for infringing uses and essentially no evidence of non-infringing uses.  Indeed, basically that encompasses the holding of the case, and everything else is dicta.  If you accept the rest of Posner’s standard as more than dicta, intent still isn’t the determining factor. He explains that infringing and non-infringing uses should be balanced, taking into account their probability and the ability for system operators to redesign to prevent infringement.  Intent can be factored in particularly when considering the redesign, but it hardly seems to be determinative.

Speaking of dicta in the Aimster opinion, that actually appears to me to be a sound reason why the SC wouldn’t accept cert.  The narrow holding is that, to meet the Sony standard, something more than mere speculation about non-infringing uses is required.  That’s fairly consistent with Grokster and Napster and overall not that big a deal.  Looked at that way, there is no circuit split.  Posner’s broader interpretation of Sony was irrelevant to the Aimster case, and thus its conflict with Grokster may also be irrelevant. 

In a comment, Doug Hudson makes a related point.  He argues that the difference is that Aimster requires economically substantial uses and Grokster required technically substantial uses.  Again, that conflict is much narrower than the split between Grokster‘s knowledge and conntrol requirement and Posner’s balancing test approach. 

Petit provides some other reasons why cert might not be provided.  He notes that the Aimster case was at a different appeal stage, and that both the Ninth and Seventh circuits reached the same conclusion regarding centralized services.

Meanwhile, Tim Wu offers reasons to believe cert is likely.

Filed by Derek Slater at 5:10 pm under General news
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By now, you’ve probably heard the wonderful news about the Grokster victory and that you’ve read the litany of posts (catalogued by Ernest).  I’ll assume you’ve already done so and touch on a few leftover points:

1.  The opinion is remarkably clear and straightforward.  It builds on the already solid district court opinion and clarifies a few of the details regarding incidental elements of centralization.  My biggest worry was that the court would get caught up in those details, like the relevance of Streamcast’s XML files, and make some vague or elaborate arguments.  Worst case scenario: exemptions for these services, but open-ended language that allowed for suits to be brought again should they add another “incidental” feature that cumulatively could lead to liability.  Instead, the court made fairly clear divisions between these merely “incidental” features.  While not entirely limiting the relevant factors, they stick to hosting lists of infringing files and login servers as key.  The issue is control, and if the other features don’t build in any control over user’s actions, then they can be set aside.

2.  While appropriately narrowing Napster‘s broad holding in this manner, the court followed Napster in its treatment of remedies.  As I discussed before, the Napster decisions went awry when they effectively decided that, once liable, a technology company can be forced to redesign its software in any manner.  Had the Napster courts truly restricted Napster’s policing to the limits of its architecture, it would have helped preserve the thrust of Sony in a significant way.  I can’t really blame the Grokster court for following Napster‘s approach, since even the defendants basically accepted this view so that they could effectively make their argument about vicariously liability.

3.  A lot of folks are bemoaning the decision because it will ratchet up pressure for the INDUCE Act.  Fine – I agree with that take on things to an extent.  It’s unfortunate, but to some extent it was also inevitable.  It’s still worth celebrating that the court got it right.  That’s big.  And until today, the Aimster and Napster decisions were alone as circuit court P2P opinions.  Following Aimster, this decision could have come out the other way.  Now Grokster exists as a contrary circuit court decision.  This could all be rendered irrelevant by INDUCE, but at least this decision gives everyone a chance to fight another day.  Had this gone the other way, we would have two circuits with harsh liability, probably both adopting something close to a negligence approach.  That could have been Game Over – losing in Congress wouldn’t really matter, because we’d already have lost in the courts.

4.  INDUCE might pass in some form before the SC even gets a chance to look at this case.  But if INDUCE gets massively delayed, and SC takes this case before passage of any new laws, that could be quite messy.  Given that the circuits are now split on the standard – expressed explicitly as discussed in footnote 9 – it seems like now would be the time for the SC to step in.  Some people have mentioned that Congressmen may listen to the wisdom of the Grokster decision’s last few paragraphs.  Sounds doubtful.  Would they take more heed if that wisdom came from the SC?  Maybe.  Or, the SC could simply reverse the decision and use something like Aimster’s approach.

At the same time, at least Mary Beth Peters and Co. can no longer treat the Grokster decision as the result of some rogue district court judge.  This is a well-reasoned, unanimous opinion.  Sure, they can still argue that the doctrine is bad, but it’s a bit harder to argue that the court’s interpretation of the doctrine was obviously wrong.

5. I spent a little time today reviewing my thoughts post-district court decision.  Like Judge Wilson, this court clearly did their homework on the technical aspects.  Also, see my earlier article called, “Protecting Sony and the Internet: A Discussion and Critique of Imposing Harsher Secondary Copyright Infringement Rules to Inhibit Peer-to-Peer File-Sharing.”  Hopefully, I’ll be actually finishing that draft sometime in the future and updating it to reflect this case and INDUCE.

Filed by Derek Slater at 8:47 pm under General news
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Today, Real announced a campaign to support interoperability and an amazing, if temporary, 50% price cut on all songs and albums at the Real Music Store.  Let me take each issue in turn.

1.  As for the Freedom of Choice campaign, it still doesn’t answer any of the questions I had before.  Why did Real use the proprietary Helix if it wants interop?  Why did it sue Streambox?  But, all things considered, not speaking to these points doesn’t surprise me.

What surprises me is Public Knowledge’s support for the Freedom of Choice campaign.  Yes, Real happens to be supporting interop in this narrow instance and, yes, PK only addresses that narrow point.  I still don’t see why Real deserves such pronounced support for this. These are the same guys who sued Streambox, and it’s not like I’ve seen them at the forefront of DMCRA campaigners (which is not to say they haven’t contributed; I don’t know what/if they’ve contributed).  At the very least, PK’s support should have been qualified with a statement that broader issues are at stake here and the DMCA is at the root of the problem.  I know PK has the best of intentions here and I respect them a great deal, but I strongly disagree with the manner in which they have supported this campaign.

If you look closely, Freedom of Choice’s goal is not really the same as Public Knowledge’s in this regard. Freedom of Choice urges companies to license their DRM standards. PK, in advocating for the repeal of the DMCA, argues that you shouldn’t even need a license. Real shouldn’t have to beg Apple to license and then put themselves in legal jeapordy; neither should Streambox or 321 Studios. Legitimate circumvention and reverse engineering for interop should be allowed in general.  But in the press release, PK merely states that interop is necessary to create a better alternative to P2P and tech companies and copyright holders should work together on this issue.  Nothing whatsover is said about the DMCA or DMCRA.  PK ends up sounding like just another group that supports the mythical “open” DRM standards.

That’s too bad, because they’re far more than that.  They are concerned not just with making tech companies shake hands in this narrow instance, but in creating a generally better legal environment.  Instead of patting Real on the back for this, PK should have told them to put all that marketing money into ensuring the DMCRA gets passed. 

Maybe PK thinks that by pushing this narrow campaign along others will eventually buy into the broader point. Perhaps other tech companies will also become born again interop believers.  I suspect that many will simply pursue whatever is in their immediate interest, as I believe Real is doing now.

2.  On the pricing front, I think this could be an interesting turning point in the market.  If Real actually throws some marketing muscle behind the discounting, we may start to see some limited price competition.  Wal-mart’s lower pricing is basically insignificant because hardly anyone even knows about their site, I suspect.  If Real’s buyers increase by several multiples, it will put pressure on every other Store, regardless of the fact that Real will be losing money on every sale.

Remember, Real pursued a similar price drop with Rhapsody.  Burns originally cost 99 cents, and then Real temporarily dropped them to 49 cents.  Burns tripled, and Real subsequently set the price permanently at 79 cents.

Which is not to say that Real’s move will vault them ahead or will enhance the long term prospects of the downloads market.  Subscriptions still have the best prospects.  This price drop will simply be interesting as a real world test of what consumers might be willing to pay for online music.  It can lay the foundation for strategies and biz models that may help lead to price competition and drops generally.

Filed by Derek Slater at 1:31 am under Big Ideas
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Do go check out JD Lasica’s and Marc Canter’s posting about the Open Media project.  I (we?) often focus first on music, then on text (blogging) when it comes to digital media.  Come pervasive broadband, video will play an increasingly important role.  This is an exciting project that will hopefully harness video’s potential in the personal/grassroots media ecology.

Filed by Derek Slater at 11:00 pm under General news
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Following up on all the commotion about Real’s “Harmony“, Virgin Mega has filed suit against Apple in France for its use of FairPlay.  I’m not exactly sure what claims they’re making – sounds like some sort of anti-trust issue.

In other news, Roxio has sold off everything except for its Napster division and in fact is going to change its name to Napster.  Even though they’ve been behind iTunes in the downloads market and Rhapsody in the subscriptions market, they’re committed to this as-of-now relatively small market.  Interesting.

PaidContent has some nice notes from the conference call today.  Apparently, the Napster division had another losing quarter, but they’re projecting significant growth in Q3.  So far, the gross margins on downloads are 10 percent, while they’re 40 percent for subscriptions. Growing the subscriptions market is imperative.
 
Given that, here’s what’s unclear to me: why would they want to charge more for the Janus enabled, “portable” subscriptions?  I suppose they think that consumers will start buying into the subscription model soon and thus providing a low price is long run counterproductive.  Moreover, portable subscriptions will take away from the people who’re buying today’s subscriptions and then purchasing individual tracks.  But will the subscriptions market really grow so quickly?  It seems to need a kick-start right now.  I’m not sure that most people are going to want to pay spend between 11-20 for a portable subscription, when totalled over the course of a year that’s well over the average person’s spending on music (so is today’s regular 10 dollar subscription fee).  Furthermore, by price discriminating and segmenting based on usage restrictions, consumers might grow even more frustrated with DRM offerings in general.

One thing to keep in mind: who knows what the royalty rates are for the portable subscriptions.  Permanant downloads with download royalties via a subscription service spelled the death of E-music.  I wonder what sort of compromise the labels made in this regard. Maybe they’re the reason why the portable subscription fee will be higher.  Meanwhile, Canadian publisher agreements are supposedly holding back Napster venture up north.

According to Napster’s execs, the labels have cooperated with the discounted licensing to universities.  As expected, university income is basically nothing.  They’re just using the licenses to build the brand.

And now that Roxio/Napster is concentrating solely on digital music, what else might the brand be used for?  They already have some tie-ins with hardware developers, but they may decide to go after that market even more as their focus shifts.

Filed by Derek Slater at 10:50 pm under General news
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