Matt Schruers

Today a federal appeals court in California rejected an effort to use copyright to suppress the distribution of a controversial film online, echoing sentiments I previously expressed in two posts on what I called “IP immigration” [1] [2].  Others have discussed the case at length today [1] [2] [3] [4].  In short, the Ninth Circuit court of appeals rejected a copyright infringement claim by the plaintiff Cindy Garcia, who had been deceived into appearing in a short film titled “Innocence of Muslims,” which made insulting and inflammatory statements about Islam.  When the film was posted to YouTube and translated into Arabic, it resulted in threats to the plaintiff Garcia.

The court’s opinion today recognized that the plaintiff could not and did not have a copyright in her five-second, otherwise-unfixed performance.  As the court put it, the activities surrounding Garcia’s unwitting participation in the film may leave her “with a legitimate and serious beef, though not one that can be vindicated under the rubric of copyright.”  (A separate opinion released today observed that compelling YouTube to take down the video based on threats was a prior restraint of speech prohibited by the First Amendment.) MORE »

{ 0 comments }

As a fight over the trade promotion authority (TPA) bill “engulfs the capitol,” debate has arisen over whether Congress should identify obtaining balanced copyright language as a U.S. trade priority. Both the Internet Association and the Computer & Communications Industry Association (where I work) criticized the bill’s failure to acknowledge the importance of promoting balanced copyright among U.S. trading partners, since the absence of these protections limits growth opportunities abroad. The Consumer Electronics Association, while applauding the legislation, expressed a similar view, observing that “[f]uture trade agreements should include not only include strong intellectual property protection and enforcement, but also robust and flexible limitation provisions.”

In response to the concerns voiced by the Internet sector, Geoffrey Manne appears to disagree, writing for Truth on the Market that “mandated ‘fair use’ language has no place in trade promotion authority.” (It is important to recognize that these statements do not call on Congress to “mandate fair use” in TPA. The question is whether Congress should direct the U.S. Trade Representative to promote balanced copyright in foreign markets that U.S. Internet companies are entering.)

This issue is important because of the high stakes. Manne is right in saying that trade promotion authority is important, but this glosses over how controversial it can be. As former Deputy USTR Miriam Sapiro wrote at Brookings this week, “the stakes as well as the hurdles for getting trade promotion authority from Congress are high. Critics of trade agreements have been well organized and mobilized.” Trade needs every friend it can get right now, which is why it would be a grave mistake to throw Internet concerns under the bus. This is particularly the case given that the Obama Administration’s last trade effort, ACTA, foundered several years ago due to the perception that the agreement was anti-Internet.

MORE »

{ 0 comments }

Yesterday Austin-based Usenet provider Giganews was awarded more than $5.6 million in attorney’s fees and costs by a federal court in California, relating to its lengthy battle to exonerate itself of spurious infringement allegations from serial copyright litigant Perfect 10.  The court awarded fees in order to “discourage serial litigants from bringing unmeritorious suits and then unnecessarily driving up litigation costs in order to drive a settlement.”  (A statement by Giganews and link to the order are here.)

Represented by “high stakes” IP litigator Andrew Bridges of Fenwick & West, Giganews has been slugging it out with adult content purveyor Perfect 10 since 2011.

Perfect 10 is likely no stranger to copyright nerds; its litigation campaigns against a who’s-who of Internet properties in the previous decade yielded few victories for the company, but did lead to important precedents on intermediary liability and fair use, including search engines’ use of thumbnails.  (Some of these cases comprise the so-called Perfect 10 “trilogy”; including Perfect 10 v. Google, Inc., Perfect 10 v. Amazon.com, Perfect 10 v. VISA, Perfect 10 v. CCBill LLC.) MORE »

{ 0 comments }

An expert panel convened on Capitol Hill this morning, discussing new research on the detrimental effect that regulatory uncertainty has on Internet investment (as well as additional copyright law and policy challenges, which we live tweeted on @DisCo_Project).

The new research quantifies the impact of Internet regulations, including intermediary liability limitations, by showing their effect on early-stage investment.  A new report by Fifth Era and Engine finds that legal uncertainties for digital content intermediaries discourage early-stage investment around the world, reinforcing findings from a 2011 report that found early-stage investors in the United States were considerably less likely to invest in new online services exposed to legal risks.

In a similar vein, another 2011 paper found that changes in copyright policy changes could spur demonstrable investment in new online services.  Comparing investment in online services in the U.S. and Europe in the wake of the 2008 Cablevision case — a federal appellate court ruling widely heralded as giving additional legal certainty to online platforms — researchers found that U.S. investment increased considerably.  In contrast, a follow-up study by the same authors explored the impact of judicial decisions in Europe that increased legal exposure for online platforms, and found decreased investment when applying the same methods.

The Fifth Era report reinforces this conclusion, providing further evidence that additional risk and uncertainty in the online environment decreases investment.  This conclusion is not entirely surprising — but the authors’ specific findings provide impressive data on how severely risk can stifle early-stage investment.

MORE »

{ 0 comments }

At a hearing on Capitol Hill tomorrow, a Senate subcommittee will hear different perspectives on the degree to which competing music publishers should be permitted to coordinate licensing activities through performing rights organizations (“PROs”), such as ASCAP.  Music publishers have expressed a desire for fewer antitrust constraints on their coordinated behavior, while users and distributors of music will call for greater transparency in the music marketplace.

The hearing occurs during an ongoing Justice Department review of the consent decrees that govern PROs.[FN1] Music publishers and PROs are presently subject to oversight to the extent that PROs coordinate behavior among publishers who ostensibly should compete with one another.  Competitor coordination usually violates antitrust law, but because collective licensing also helps reduce the high transaction costs in music licensing, exceptions have been made for PROs.  A PRO can offer a single performance rights license to a user or distributor for all the works controlled by multiple publishers – one-stop shopping for a huge number of works.  But because one entity is nevertheless coordinating business transactions for a large group of companies that should be competing, antitrust oversight remains necessary.

MORE »

{ 0 comments }

Far from Washington or any other place associated with Internet policy-making, a federal district court in Jackson, Mississippi is considering a case that could dramatically alter the regulation of Internet speech.  The case pits Google against the Mississippi Attorney General, Jim Hood, over the question of whether Hood can launch a sweeping investigation of Google after the search provider declined to block websites at Hood’s discretion, absent any court order.

Some background:  Among the leaks that resulted from the 2014 hack of Sony Pictures was the revelation of so-called “Project Goliath,” a secret initiative of major film studios and the MPAA.  The project involved enlisting State Attorneys General (AGs) like Hood in taking up one of Hollywood’s “key issues and asks” since the spectacular 2012 failure of the Stop Online Piracy Act (SOPA): extra-judicial site blocking.  As an article by The Verge makes clear, the funding of high-priced private law firms to ghost-write legal demands from AG Hood to Google was a major element of “Goliath.”  (It’s like Uber, but for State AGs.) MORE »

{ 0 comments }

We’re taking part in Copyright Week, a series of actions and discussions supporting key principles that should guide copyright policy. Every day this week, various groups are taking on different elements of the law, and addressing what’s at stake, and what we need to do to make sure that copyright promotes creativity and innovation.

Last week at the Future of Music Coalition blog, Casey Rae discussed how transparency is so crucial in the music marketplace. ([1], [2])

As Casey points out, marketplace transparency is a necessary (but not sufficient) condition to ensure artists get a fair and competitive deal.

Digital services have similar needs.  Just as artists need accurate and reliable information to know they are receiving a square deal, music delivery services need accurate and reliable information to know what they can play, and what they’ll have to pay, and to whom.  Most (but not all) participants benefit from a more transparent marketplace.

MORE »

{ 0 comments }

As Jon noted on Friday, the Supreme Court invited the views of the U.S. Solicitor General on whether to hear the Oracle v. Google case.  This suggests the Court is far likelier to review the Federal Circuit’s decision regarding copyright, interoperability, and the Java APIs (previously discussed here).

The Solicitor General (SG) coordinates the U.S. Government’s litigation before the Supreme Court, and the Court from time to time will invite the SG’s views on whether to take a case.  Roughly a dozen times a year, the SG is asked to file such briefs, in an order referred to by Supreme Court wonks as a “CVSG order” (which calls for the views of the Solicitor General).

Empirical evidence suggests that (a) this bodes well for the petition, and (b) that the substantive views of the SG can be influential.

MORE »

{ 1 comment }

As noted in our two preceding posts about the introduction of the “ancillary right” in Spain (here and here), Google announced it would discontinue operation of the Google News product in Spain, starting tomorrow, December 16.  (Wired UK cites a potential fine of up to €600,000 (~$746,000) for non-compliance after the January 1 deadline.)  In a statement, the Spanish Government shrugged off the company’s response to the “so-called Google tax” as a “business decision.”

Google’s decision surprised no one save perhaps the Spanish news publishers’ association (AEDE).  Responding to the announcement, the AEDE released a statement last week arguing that Google had a dominant position in the news market, and demanded that it not be permitted to exit the market.  Note that the data doesn’t seem to bear this assertion out; relying on data from Similarweb.com, it appears Google.news.es ranks 226th in Spain, miles behind Elpais.com at 16th, and elmundo.es at 18th.  If one limits the data strictly to news media, Google News Spain is still bringing up the rear (at 26th) behind yahoo.com (1st), elpais.com (3rd), msn.com (4th) elmundo.es (5th), and abc.es (7th).

In any event, the association’s about-face epitomizes its love-hate relationship with news search and aggregation: its members love the free traffic that they drive to publishers’ ads, but hate that news search providers and aggregators don’t pay for that privilege.

MORE »

{ 0 comments }

As Jakob explained yesterday, the recently enacted “ancillary right” law in Spain is prompting Google News to fold up shop there; it will cease displaying Spanish publications and Google News Spain will exit the market on December 16.

(For background on the ancillary right, see our “explainer” post here.)

The ancillary right fad is but one of several protectionist measures recently launched in European states that extract rents from or restrict market access to technology companies — companies which are often U.S.-based.  (Another example is the misguided “right to be forgotten.”)  This particular Spanish law, set to go into effect in 2015, has been criticized as “ill-conceived” and even “mercantilist.”

While any protectionism should be a cause for concern, this particular instance of heavy-handed regulation merits attention because it so conspicuously violates existing international trade law.  By adopting the ancillary right levy, Spain has broken with clearly established law and the international community.

MORE »

{ 0 comments }