The Solicitor General’s Peculiar Brief in Google v. Oracle

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Last week, the Solicitor General of the United States filed a very peculiar brief advising the Supreme Court not to hear Google’s appeal from the Federal Circuit’s decision last year that the Android application program interface (API) infringed Oracle’s copyright in the Java API. We previously discussed the Federal Circuit’s May 2014 decision here, here, here, and here; and the significance of the Court’s call for the views of the Solicitor General here.

The SG’s brief is peculiar in several ways. First, it reflects a profound misunderstanding of the Copyright Act subsection that codifies copyright’s “idea-expression dichotomy” by prohibiting protection for ideas, systems, and methods: 17 U.S.C. § 102(b). Second, it completely ignores the obvious “circuit split” between the federal courts of appeal, which has been exacerbated by the Federal Circuit’s decision. Third, it mistakenly concludes that Google’s “substantial and important” concerns about the impact of the Federal Circuit’s decision on “interoperability and lock-in effects” are better addressed through the fair use doctrine than the idea/expression dichotomy.

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Royalties Ruling Reflects Anti-Innovation Bias

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As the national press noted two weeks ago, Judge Louis Stanton in the Southern District of New York sided with BMI in a dispute with Pandora over royalty rates for public performance of musical compositions administered by BMI.  That ruling was finally unsealed yesterday, and it reflects another example of copyright law penalizing new technology.

The upshot of yesterday’s decision [PDF here] is this: while radio broadcasters everywhere pay 1.7% of their gross revenues in public performance royalties for musical compositions, Pandora should pay 2.5% of its gross revenue to BMI.

As I have noted in previous posts, Internet radio broadly gets a bad deal in the copyright regulatory framework.  The fact is that the current copyright system tends to discriminate against newer forms of technology, and in favor of existing technologies.  This isn’t a recipe for promoting progress.

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Bigger than Geo-blocking: How the European Commission’s Sector Inquiry Can Set E-Commerce Free

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Early this month the European Commission unveiled its Digital Single Market (DSM) strategy. The strategy has the very laudable goal of promoting the digital economy by furthering Europe’s integration in this sphere — something a borderless Internet is indeed ideally placed to do. It encourages European companies, citizens and institutions to think more digital and sheds some of the barriers that citizens and companies face when engaging in business transactions online.

While the DSM strategy’s vague discussion of online platforms and geo-blocking were among the issues that received most media attention, it is worthwhile to recall that a fully fledged competition sector inquiry into e-commerce is formally a part of the strategy. Expressed in competition policy terms, the sector inquiry will look at private barriers set up by companies that lead to territorial fragmentation and to restrictions of price competition.

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The EU’s Better Regulation Agenda is a timely contribution to the digital policy debate

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In case you missed it, last week (May 19) the European Commission presented its ambitious Better Regulation Agenda.[1] Its noble aim is to “improve the quality of new laws through better impact assessments”, public consultation, openness, and transparency in the EU decision-making process. It is laudable that the Commission wants to “rigorously assess the impact of legislation in the making…so that political decisions are well-informed and evidence-based.”

One policy area can in particular benefit from these better regulation principles:  “The digital economy is a better regulation challenge,” the Commissioner responsible for the Better Regulation Agenda said yesterday.  This policy area is characterised by rapid innovation, disruption, technical complexities, confusions, and jurisdictional overlaps.  These features have traditionally made digital policy challenging for regulators.  The Commission presented on May 6 its new Digital Single Market Strategy outlining the EU’s regulatory focus on digital policy in years to come.

Let’s have a look at whether the EU lawmaker adheres to its principles of better regulation using its Digital Single Market Strategy as a test case.  I will focus this (admittedly non-academic) test on the two most controversial areas in the Strategy: “Duty of care” and “Platform regulation”

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Wine Online: How The Internet Is Revolutionizing The Wine Market

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Think of the wine trade and what image comes to mind? Probably a bunch of old men having a point-scoring chat about carbonic maceration, in fancy accents. Well, you’re wrong: the Internet is changing what we drink, how we buy it, and how we talk about it.

One of the most basic changes is transparency — especially of pricing. In the same way that a quick search allows one to have a good nose at the price of anything from neighbours’ houses to transatlantic flights, websites like New Zealand’s Wine Searcher, Vinopedia and Bring A Bottle let you track down that elusive Saint-Veran at the click of a mouse. If you have price transparency, the next logical step is an index: the online exchange Liv-Ex tracks 25 million sets of historic and current data to show the market value of fine wines.

If you’re more into buying a bottle of something cheap and tasty on the way home on Friday than keeping wooden cases of Lafite as an investment, the same applies: with so much information available, it’s simply easier to find what you’re looking for. Anyone can, and does, write about wine now: there are a plethora of blogs for everything from vertical tastings* of niche Bordeaux to the best wine to unwind when you’ve spent all week managing three children and a household.

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The Battle Over FDA’s E-Labeling: The Paper Industry’s Attempt to Prevent Sensible Safety Notice

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We know the familiar story.  New forms of competition arise and the incumbents rebel.  The free market usually permits consumer choice to govern and the marketplace decides which products will prevail.  But incumbents try to use regulation to prevent new products and competition.

The latest example is the almost decade long effort by some parts of the paper industry to prevent the Food and Drug Administration (FDA) from bringing drug notices into the 21st century.  Most are familiar with drug safety disclaimers to consumers, written in incredibly small font (perhaps the font size is promoted by opticians?) that consumers simply discard.  Well, there are similar, much more important notices to healthcare providers which provide even greater detail about safety and drug administration.  This information includes potential warnings and drug interactions, each of which are critical pieces of information for the healthcare provider. Known as “prescribing information,” these notices are incredibly long – they look like old-fashioned road maps and also are printed in incredibly small font.

Since 2007, the FDA has valiantly attempted to take the radical, death-defying step of actually permitting these notices to be made available electronically.  In particular, the FDA has sought to permit “e-labeling” – allowing drug manufacturers to provide information electronically.  This week, the FDA closed public comments on a proposed rule focusing on moving nearly all prescribing information online.

The advantages of e-labeling are obvious to anyone who has entered the 21st century.  E-labeling will reduce costs and is far more likely to be accessible to busy professionals.  E-labeling will be more current than old-fashioned paper notices and can be updated easily.  As the FDA observed:

FDA is taking this action so that the most current prescribing information for distributed prescription drugs will be available and readily accessible to health care professionals at the time of clinical decisionmaking and dispensing.

So why has it taken the FDA nearly a decade to finish a sensible, consumer-driven rule?  The paper industry.  In the United States, there are a number of paper printing companies that specialize in manufacturing drug labeling paper forms.  With the FDA proposing a rule that may diminish pharmaceutical companies’ demand for paper and printing services, it is unsurprising that they are strongly fighting against e-labeling.

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The FTC is Looking to Tackle Internet Users’ Privacy Priorities

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Last Wednesday, Federal Trade Commission (FTC) Chairwoman Edith Ramirez announced that on September 9 the FTC will hold the first seminar of its “Start with Security” campaign (which we previewed in March).  The campaign is aimed at helping small and medium sized companies improve their data security practices based on the knowledge the FTC has accumulated over a decade of enforcement action.  Also last week, the FTC launched IdentityTheft.gov, a website that offers victims of identity theft tools to report and recover from identity theft and data breaches.

The FTC’s recent focus on privacy issues, particularly identity theft and data security, is a recognition of the priority consumers place on trust in the Internet.  Trust in the integrity and security of the Internet and associated products and services is essential to its success as a platform for digital communication and commerce.  One of the earliest government reports on the viability of the Internet for commerce said, in 1997, “[i]f Internet users do not have confidence that their communications and data are safe from unauthorized access or modification, they will be unlikely to use the Internet on a routine basis for commerce.”

Internet users continue to prioritize confidence in the security of digital services above all other privacy concerns online.  In late 2013, CCIA commissioned a survey of Internet users that aimed to better identify the priorities and concerns of Internet users with respect to the handling of the information they share online.  As far as privacy risks go, the study found that nothing is more important to Internet users than the security of their information online, in particular ensuring that their personal data is out of the hands of those who would do them harm.

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Appellate Court Rejects Attempted Copyright ‘Immigration’ Claim in Garcia v. Google

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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.)

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Unbundling elections: How the Internet revolutionized British democracy

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The British election is over: David Cameron is busy picking his cabinet for the first conservative majority government since 1992. While some are popping champagne, others are joining rival political parties and calling for change to Britain’s antiquated electoral system. Known as “First Past The Post” (FPTP) this winner-takes-all system means the 650 seats aren’t distributed on the basis of proportional representation, but that each one is decided independently. In a typical town, a winning candidate might receive around a third of the votes cast — meaning everyone who didn’t vote for him or her doesn’t have their wish reflected in the country’s government. People aren’t happy. And how do we know so much about their level, and flavour of political engagement? Because there was a revolution this election.

It wasn’t the revolution Russell Brand asked for: after the tight-trousered Get Him to the Greek star urged people not to vote, turnout rose slightly, to 66.1% from 65.1% last time round. It wasn’t Nigel Farage’s “purple revolution” either: the UK Independence party (UKIP) leader failed to win a seat in parliament. Instead, we saw a disruptive revolution which gave smaller political parties of every stripe unprecedented access to voters in the run-up to the election — and could well change things for good.

In this election, a greater proportion of the vote went to minor parties than ever before, marking a shift in the way British politics works — as this nifty selection of charts from the FT shows. Those smaller parties made full use of the power of the internet. “Campaigning online meant we could campaign,” said Kate Bisson, who stood for the Green Party in the Northern English city of Leeds. “You don’t have to have an office, or a budget, you just need a laptop.”

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Competition Authorities and Regulators Should not Worry too much about Data as a Barrier to Entry into Digital Markets

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Data is often presented as the lifeblood of our digital economy (please see here why it should not be referred to as the ‘oil’ of the 21st century). Data is everywhere and is collected by Internet companies as well as more traditional businesses like banks. Data has been used by industries for years – think about grocery store reward cards – but advances in the speed of data analysis and the quantity of data available today brought new attention to its use. Of course, data analytics and processing help companies to better understand their customers, providing them with services and products tailored to their needs and preferences.

At the same time, it has been suggested that the possession and accumulation of big data ought to result in more rigorous competition law enforcement. But this argument fails to take into account the low barriers to entry in this market and the disruptive nature of Internet businesses that quickly allow a startup to topple even the most entrenched incumbents. One also needs to remember that the existence of barriers to entry does not in itself mean that competition authorities need to intervene. Competition law is concerned with anticompetitive conduct causing consumer harm. Hence, a competition law analysis of barriers to entry only becomes relevant in merger cases and in determining whether a given company is dominant in a relevant market. Traditional barriers to entry include for example exceptionally large capital investments into a sophisticated distribution network, economies of scale and even the need for large marketing investments (for a discussion of these traditional barriers to entry see the CJEU’s judgment in United Brands v Commission).

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