Tiffany & Co. Files Trademark Infringement Suit Against Costco

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On Valentine’s Day, Tiffany & Co. filed a lawsuit in federal court against Costco, claiming that Costco engaged in “trademark infringement, dilution, counterfeiting, unfair competition, injury to business reputation, false and deceptive business practices and false advertising.” Last November, Tiffany and Co. was first informed of the alleged infringement by one of Costco’s customers. This customer expressed disappointment that the elite jeweler would sell its jewelry at Costco. After some investigation, Tiffany’s learned that Costco salespersons had been referring to certain engagement rings as “Tiffany ring(s)” and that signs that used the word “Tiffany” as part of the ring description were on display in Costco stores.

Tiffany & Co. claims that there are now “hundreds if not thousands of people” who have purchased Costco rings out of confusion, thinking they instead were buying a ring made by Tiffany & Co. Linda Buckley, Vice President of Worldwide Public Relations at Tiffany’s was quoted saying that the Tiffany’s trademark is a “federally registered uncontestable trademark, has been continuously used for over 175 years, and enjoys worldwide fame and recognition as designating superior goods from Tiffany’s & Co.” Tiffany’s attests that Costco purposely left the “Tiffany” description of the engagement rings off of their website to help avoid detection. For this, Tiffany & Co. is demanding profits from Costco’s use of counterfeited trademarks, damages, and attorney’s fees.

In its Answer and Counterclaims to Tiffany & Co.’s complaint, Costco claims that the word “Tiffany” is a generic word used to describe a specific ring setting. To support this, Costco included dictionary definitions and advertisements in their exhibits. Further, Costco says that their rings were not sold in the iconic robin’s-egg blue Tiffany’s box and that there was no brand name on the rings sold. Therefore, Costco wants the claim dismissed and requests attorney’s fees, as well as “such other and further equitable relief as the Court may deem just and proper.”

Tiffany & Co.’s strongest argument may be that Costco’s use of Tiffany’s registered trademark “causes a likelihood of confusion” at the time of the sale under 15 U.S.C. § 1114. If the court finds that consumers view the mark as meaning that the ring has come from Tiffany’s, then Tiffany & Co. has a good argument that using the “Tiffany” in Costco’s ring descriptions causes consumer confusion. However, a well-known principle of trademark law is that once a brand name has become generic, such that the word becomes a synonym for the item, the brand name loses legal protection. This has happened to many brand names, including aspirin, zipper, and palates. If Costco can prove that the term “Tiffany” is now a generic term for a type of engagement ring, Tiffany & Co. may regret bringing the lawsuit, as it may cause other sellers to begin using the term “Tiffany” in their ring descriptions. For Tiffany & Co., a company that relies on brand name, the outcome of this lawsuit could have huge consequences.

An Anniversary, and Asteroid Mining

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This week Planetary Resources, a company that aims to mine asteroids, is celebrating their one-year anniversary.  They are toasting the date with a Google Hangout on April 24th where they will, “provide a brief year in review, current status on the development of the Arkyd series of spacecraft, and an outlook to the future of asteroid prospecting, exploration and mining!”  To some people the prospect of mining space may seem overly optimistic and fantastical, but the technology is available, and both state and private actors are motivated to start doing it.  Several companies have been established for the purpose of extracting natural resources from asteroids.  Companies range from the fledgling Deep Space Industries to the better-known and aforementioned Planetary Resources, which has among its long list of billionaire investors two Google executives.  Along with mining companies are companies who hope to provide the infrastructure in space to support these companies.  The new startup company called Moon Express plans to be the FedEx of outer space.
http://www.wired.com/wiredscience/2013/04/moon-express-profile/all/

Although the technology to mine asteroids has been around for a while, the law has not kept up with the rapidly advancing technology, and international law rarely mentions private space actors, making it unclear if it is even legal to mine asteroids.  Although it is understandable that the law is vague since it was drafted at a time where the privatization of space discovery was unimaginable, this uncertainty in the law makes people hesitate to invest in new technology for asteroid mining that since it might not even be legal.  Several countries such as India, Japan, and China are working on launching space exploration trips that will determine the mineral composition of the moon and/or asteroids, but it is unclear if they are interested in the mineral composition for purely theoretical research reasons, or because they are interested in mining celestial bodies at some point. Because of uncertain legality of mining asteroid, countries probably would not admit to it even if there were interested in mining.  You can see India’s description of its mission to map minerals here: http://www.isro.org/chandrayaan/htmls/objective_scientific.htm

The reason so many actors are interested in asteroid mining is because there are so many valuable resources to be found that are so scarce on earth that it might justify the cost to mine them in space.  By some estimates, just one asteroid could contain a billion dollars in platinum alone.  In addition, many asteroids have palladium, osmium and iridium which are also rare and valuable minerals.

According to the Agreement Governing the Activities of States on the Moon and Other Celestial Bodies (Moon Agreement), which entered into force in 1984, any space resources that are found, mined, or collected in outer space are to be divided evenly among states by an international body that was supposed to be formed (but was never formed).  The Agreement says lunar property cannot become the property of “any State, international intergovernmental or non-governmental organization, national organization or non-governmental entity or of any natural person.”  None of the major space powers are party to this Agreement precisely for the reason that they do not want any resources gained in space to be the “common heritage of mankind” under the Agreement.  The Moon Agreement failed so badly, that it was completely ignored when it was due for review.  According to Article 18 of the Agreement, a conference to review the Moon Agreement was supposed to have been convened in the 1990s, but no effort was made to do this.  The Moon Agreement is considered dormant, and therefore does not prevent actors from mining asteroids and declining to divide it among all nations to be the “common heritage of mankind.”

The most influential space treaty, the Outer Space Treaty abandons the language, “common heritage of mankind” and adopts instead the notion that the exploration and use of celestial bodies, including asteroids is the, “province of all mankind.”  The Outer Space Treaty, also known as The Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, including the Moon and Other Celestial Bodies, became effective in 1967.  101 states are a party to the treaty, and 26 states have signed but not ratified the treaty.  Although treaty is not self-executing, but the U.S. is a party to the treaty and has passed it.  However, most agree that the treaty has risen to customary international law.

What does it mean for the “use” of asteroids to be the “province of all mankind” though?  Although elsewhere the treaty says outer space is “not subject to national appropriation by claim of sovereignty, by means of use or occupation, or by any other means,” this language is generally thought to be applicable to an entire celestial body and not applied to simply taking a mile or so of minerals.  So we are back to puzzling over what it means for the “use” of asteroids to be the “province of all mankind.”  Although scholars have speculated that the “province of all mankind” nods to a res communes notion of property that is owned by none, and subject to use by all, these philosophical musings do not translate well to mining.  If you do not own property, but you may make “use” of it, can you mine it?  Companies such as Planetary Resources are betting on yes.  Millions of dollars of investment are going into a company whose objective may not even be legal.  The uncertainty of the law is hindering investments in asteroid mining companies and whatever investments they have attracted so far are only a fraction of what they would get if mining were clearly legal under international law.  It takes billions of dollars of investment to make billions mining platinum from outer space.  Regardless of the large investments Planetary Resources has raised, it needs more to be successful, and the ambiguity of international law is not helping.

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April 21st, 2013 at 1:19 pm

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Using Technology to Combat Human Trafficking

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Human trafficking is a pervasive yet underemphasized issue that persists all around the world. The United Nations Global Initiative to Fight Human Trafficking estimate that millions of people are or have been trafficked into forced labor, and projects that, without more intervention and awareness, many more would fall victim to forced labor. However, in recent decades, there has been an increased amount of outreach and attention from the government, law enforcement, educators, and public interest organizations on this very serious issue.  For instance, Michigan Law launched a Human Trafficking Clinic in 2009 and a Human Trafficking Database in 2011 to increase awareness of this modern-day slavery and to actively find ways to eliminate this problem. Joining forces with those who wish to combat human trafficking, Google, through its generous donations of funds and technical assistance, recently helped launch a hotline network that allows for increased access to information gathering and sharing on the important details of human trafficking.

Specifically, Google launched the Global Human Trafficking Hotline Network, which allows various organizations working within the United States, Asia, and Europe to share data and thereby detect patterns and discover more comprehensive approaches to tackling this worldwide dilemma. Not only will this network allow for greater access to detailed information and analysis on seasonal and geographic trends, this system also connects victims with proper authorities in a prompt and efficient manner. For example, when a call is logged into the system, the location and all relevant data provided by the caller is also documented. In turn, the compilation and analysis of such information provided by victims can paint a fuller picture of emerging patterns indicating where people are being trafficking and where they are working. With such valuable and important information along with the contributions of organizations and agencies interesting in combatting human trafficking, the government and local law enforcement can respond to this problem more proactively.

This is an exciting forward-step for those passionate about or interested in fighting the human trafficking problem and for victims who are now able to receive help more promptly and efficiently. This innovation would allow for more information gathering and sharing, meaning that more victims would be brought to light and then provided with safe accommodations and proper assistance. Despite the benefits brought to society by this technology advanced by Google, human trafficking still remains a huge dilemma, with many victims left in the dark and without any access to assistance. As technology continues to grow, however, I am optimistic that more innovative resources will be created to help victims obtain easier access to resources and for law enforcement, governmental officials, and public interest organizations to detect and thereby prevent forced labor in its early stages.

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April 21st, 2013 at 1:11 pm

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USPTO denies Apple’s iPad Mini trademark

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Recently Apple has been a prominent topic of discussion in intellectual property disputes. Most of the talk has been focused around various international disputes over Apple’s patents. The most recent topic, however, focuses on the US Patent and Trademark Office’s (USPTO) denial of a trademark for the iPad Mini.

The USPTO denied Apple’s trademark because the term was merely descriptive under the Trademark Act section 2(e)(1), 15 U.S.C. §1052. The examiner determined that the mark was merely descriptive because mini was simply descriptive of the smaller size of the new version of the iPad.

Interestingly, the examiner further suggested that the terms that make up iPad are descriptive, as well. In rejecting the iPad Mini trademark, the USPTO document stated:
“The term “IPAD” is descriptive when applied to applicant’s goods because the prefix “I” denotes “internet.” According to the attached evidence, the letter “i” or “I” used as a prefix and would be understood by the purchasing public to refer to the Internet when used in relation to Internet-related products or services. Applicant’s goods are identified as “capable of providing access to the Internet”. When a mark consists of this prefix coupled with a descriptive word or term for Internet-related goods and/or services, then the entire mark may be considered merely descriptive.

The term “PAD” is also descriptive of the applied for goods. The term “pad” refers to a “pad computer” or “internet pad device”, terms used synonymously to refer to tablet computers, or “a complete computer contained in a touch screen.” In addition, the attached excerpts from third party websites show descriptive use of the term “pad” in connection with tablet computers. This marketplace evidence shows that the term “pad” would be perceived by consumers as descriptive of “pad computers” with internet and interactive capability. Applicant’s goods are identified as “a handheld digital mobile electronic device comprising tablet computer”.”

Apple has already been granted a trademark for its iPad mark, but this excerpt suggests that it is possible that the USPTO may in fact decide that iPad itself is a merely descriptive term and is, therefore, not entitled to trademark protection. Of course, the USPTO could also decide that the term has acquired secondary distinctiveness through its use in commerce, under Trademark Act Section 2(f), 15 U.S.C. §1052(f).

Also, while the refusal of the USPTO to grant the iPad Mini trademark may be a setback for Apple, Apple will have the opportunity to revise its trademark application. In fact, the USPTO seems to have provided guidelines which will allow Apple to receive trademark approval once it amends its application.

The examiner seemed to be concerned that Apple did not specify that it was only attempting to trademark the term “mini” when used in the context of “iPad Mini,” and advised that Apple should specify that it only seeks to trademark “iPad Mini” and not “mini” on its own. The examiner notes that “an applicant may not claim exclusive rights to terms or designs that others may need to use to describe or show their goods or services in the marketplace.” Apple, consequently, cannot claim exclusive rights to the term “mini” because others may need to use “mini” to describe their products. The examiner, however, provided the disclaimer Apple could use to disclaim its right to the term “mini” while maintaining “iPad Mini” as a trademark.

While the refusal of the “iPad Mini” trademark is clearly not what Apple had hoped for, the USPTO seems to have provided clear guidelines for how Apple can revise its application in order to get its “iPad Mini” mark approved and registered on the Principal Register.

The F.A.A. Reassesses Electronics Restrictions

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So why do they make us power down all electronic devices before takeoff? We have all heard the rumors that electronic devices interfere with the pilots ability to fly the plane but it turns out there is no proof that electronics actually affect avionics. To add to your frustration, it has recently been discovered that while the Federal Aviation Administration (F.A.A.) prohibits passengers from using any electronic devices, even those on airplane mode, it permits iPads in the cockpit as flight manuals and for use by flight attendants to inform them on flight procedures.

Well, good news is on the horizon. Under pressure from numerous interest groups and Congress, the F.A.A. has announced that it plans to relax electronics restrictions (mostly concerning electronic reading devices) during takeoff and landing by the end of 2013 – although the relaxed rules will not include changes to cell phone restrictions. The F.A.A. created a working group to study the effects of using electronic devices on planes. The working group consists of representatives from several interested parties including Amazon, the Consumer Electronics Association, Boeing, the Association of Flight Attendants, and the Federal Communications Commission.

In Congress, Senator Claire McCaskill (D-MO) has indicated she will ensure the promised relaxed regulations will be announced by the F.A.A. by introducing legislation to require that the Administration does so.

With electronics becoming more and more a part of everyone’s daily lives, the Federal Aviation Administration is forced to make some changes. The number of arrests of airline passengers who have become aggressive and uncooperative when the outdated electronic regulations are enforced against them has increased. Wearable computers are becoming more popular. Nike has introduced FuelBand, a device that tracks daily activity and motivates the wearer to increase physical activity and an overall healthy lifestyle. Jawbone has introduced a similar product called UP. Google and Apple have announced their future wearable products – Google glasses and iWatch respectively. When electronics become a part of someone’s clothing and daily routine, it becomes more of an inconvenience to require that the device be powered down during takeoff and landing. Something must be done to adapt to the increasing presence of electronics in society. Special interests groups and Congress have done a great job of moving forward on this issue.

http://bits.blogs.nytimes.com/2013/03/24/disruptions-f-a-a-may-loosen-curbs-on-fliers-use-of-electronics/?ref=technology

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April 7th, 2013 at 7:32 pm

Posted in Commentary

Welcoming Social Media Evidence into Family Law Cases

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Family law is an area of law that is not typically mentioned in the same breath as technology. However, as internet use becomes increasingly pervasive, the separation between family law and technology is rapidly shrinking. Internet use, and social media use more specifically, is now frequently being introduced as evidence in family law cases. Unfortunately, judges presiding over family law matters—particularly custody disputes—have been inconsistent in their review of social media evidence.

In cases regarding custody and parental rights, trial courts have broad discretion to determine best interests of the child. In all states, there are various factors to be looked at to determine make a best interest determination. It has become apparent that evidence from social media sites like Facebook can be persuasive in the consideration of many different factors. In Lalonde v. Lalonde, a Kentucky Court of Appealsallowed the admission into evidence of Facebook photos of the mother in a custody dispute consuming alcohol. The judge held that the fact that the photos were uploaded by a friend of the mother’s and then tagged—versus being uploaded by the party herself—did not effect the photos admissibility.

Further complicating matters is the fact that the child’s use of social media in custody cases can have an effect on the judgment. Trial courts have held that both parents must be allowed a weekly review of a teenage child’s Facebook and that simply creating a social media profile for a child is not a reason to modify a custody award.

The growing importance of social media evidence is quickly becoming apparent to family law attorneys. Practitioners are now advising their clients to curtail their use of these sites so as not to provide courtroom fodder. In addition to providing practical advice to clients, attorneys will need to understand how social media evidence is being used in order to provide comprehensive representation.

 

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April 5th, 2013 at 2:52 pm

Posted in Cases,Legal/Tech News

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Want Out of Sorting Through Physical Junk Mail: Try Outbox

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The instant delivery of e-mail has left many wondering if mail delivered via the U.S. Postal Service is slowly becoming a dying breed. In an attempt to revolutionize the process of receiving snail mail, Outbox, a start-up company with customers in Austin, Texas and San Francisco, California, has developed an application to digitize physical mail.

By subscribing to Outbox, for just $4.99 a month, customers can have their physical mail delivered digitally to a mobile device or computer. Outbox operates by having a driver, referred to as an “unpostman,” visit subscribers homes three times a week. The “unpostman” collects the physical mail delivered to subscribers’ mailboxes by official postal workers and delivers the mail to a warehouse. At the warehouse, the mail is opened and photographed. Subsequently, the digital files are sent to the subscriber’s tablet through the Outbox website, iPad, or iPhone apps.

While advantages include getting rid of the need to sort through physical junk mail, the ability to categorize mail on your computer or mobile devices, and access to your physical mail while traveling, there are legal obstacles in the way of the success of Outbox. Tampering with mail is a federal offense. According to 18 U.S.C.A. §1705, “Whoever willfully or maliciously injures, tears down or destroys any letter box or other receptacle intended or used for the receipt or delivery of mail on any mail route, or breaks open the same or willfully or maliciously injures, defaces or destroys any mail deposited therein, shall be fined under this title or imprisoned not more than three years, or both.” Therefore, there might be legal questions surrounding a third party removing mail from a mailbox even if there was consent. In response to the issue of mail tampering, Will Davis, the co-founder of Outbox, argues that “once a piece of mail has been delivered, it becomes just another unregulated piece of paper.”

Furthermore, legal issues about privacy might arise due to the fact that Outbox employees will be opening, photographing, and digitally sending mail containing financial and personal information. In response to privacy concerns, Outbox has responded by saying that their employees go through more extensive background checks than U.S. Postal service employees. Additionally, Outbox uses an encryption device to ensure the digitized mail is sent to the intended recipient.

While there have been no legal challenges, the above issues could arise in litigation if Outbox becomes a successful company that poses a threat to the business of the U.S. Postal Service or if secure financial or personal information is leaked. In addition to possible legal issues, the time lag for customers who could just go to their mailbox and get the mail instead of waiting for it to be sent to them digitally, presents another problem to Outbox. Thus, while Outbox presents a novel idea, it is premature to say the age of digitized postal mail has arrived.

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April 4th, 2013 at 2:26 pm

Posted in Commentary

For those about to (Secure Intellectual Property Rights), We Salute You

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Martin Guitars, a high-end acoustic guitar manufacturer (seriously, check out this one), began using a unique method of guarding against counterfeit- DNA identification.  Martin partnered with Applied DNA Sciences in order to apply a unique Martin DNA symbol to each guitar.  The location of the DNA mark is known only to Martin, and of course it would be impossible to replicate the DNA mark itself.  Not only is Martin doing with this with their guitars themselves, but their strings as well.  Martin is hoping that this will discourage counterfeiters – because now fakes will be so much easier to spot.  The Department of Defense is using the same method to prevent counterfeit goods from entering into their supply chain by DNA marking their circuit boards.

This got me thinking (and googling!)…what are some other crazy uses of IP in the guitar world? After all, acoustic guitars have been around for thousands of years, electrics since 1937, and without a certain design to trademark or copyright (like the iconic Fender headstock or Les Paul designs), what forms of IP protection are manufacturers left to?  Patents would seem an unlikely answer due to their shorter lifetimes, but there are actually many design patents  – here is the original Fender one from 1951.  This has been narrowed a bit today – companies commonly seek protection for the pick guard or some other ornamentation that might not be “thick” enough for copyright or trademark protection.

That still leaves some very…interesting patents out there.  Here is one for a hollow body guitar to be filled with a colorable liquid. The body of an electric guitar is typically a single piece of material (usually some kind of wood composite). The idea here is that the color the body can be changed at any time by putting differently colored liquids into the body.  Of course, we might be leaving the ear of solid guitars behind, as Samsung recently filed an application for an air guitar system, or as they put it a “portable communication device capable of virtually playing musical instruments.” Finally, check out this one, invented by a certain Mr. Edward Van Halen, which shows a very (interesting) method and apparatus for playing a “stringed musical device.” Van Halen might not talk about love, but he sure knows how to talk about patent law.

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April 4th, 2013 at 12:00 pm

Posted in Commentary

How Copyright Law Can Spur Innovation (Ridiculous, Expensive, “Rube Goldberg-ian” Innovation)

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Recently, the Second Circuit denied a preliminary injunction motion raised by the plaintiffs in WNET, Thirteen et al v. Aereo. The plaintiffs, copyright owners all, had alleged that Aereo’s video-streaming and recording technology violated the public performance rights associated with their works. The Second Circuit’s denial of the motion depended heavily on the technology Aereo developed with the precise intention of carefully skirting the limits of copyright law. Some might look at this as a victory for those seeking sanity among the copyright morass, but it actually represents how convoluted and absurd copyright law has become.

The public performance right grants copyright owners the exclusive right to “perform the copyrighted work publicly.” 17 U.S.C. 106(4). The distinction between “public” and “private” performances has produced a great deal of judicial interpretation, and the ensuing uncertainty has only been exacerbated by the rise of streaming video and audio technology, like DVRs, music-streaming services like Pandora, or absurdly over-engineered services like Aereo. Statutorily, to perform a work publicly means:

  1. to perform or display it at a place open to the public or at any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered

17. U.S.C. 101. The Second Circuit, in Cartoon Network v CSC Holdings, Inc, had previously held that there is no violation of a public performance right where DVR stream buffering technology makes a single transmission to a single subscriber using a single copy “made” (read: initiated or requested) by that subscriber. The legal analysis essentially argues that if the transmission is made to a single subscriber, it is thereby not public (not “outside” of a place where a normal family/social acquaintances is gathered).

Aereo takes the legal conclusion of Cartoon Network and takes it to its technologically illogical end. Aereo’s technology fills data centers with hundreds, thousands of tiny (dime-sized) attenae, each designed to transmit a single, unique copy of a program channel to a single subscriber. The Second Circuit, in denying the preliminary injunction, relied upon Cartoon Network, and found that this technology meant the potential audience for each copied program was a single individual, and thereby not the public.

Give credit where it’s due: to the probably too-clever-for-his/her-own good engineer who designed the Aereo system; but decry the redundancy, cost, and inefficiency of a system necessary to avoid legal liability. Wouldn’t it be simpler (and probably more environmentally friendly) to have a single server farm that can simultaneously stream multiple copies of programs to multiple paying subscribers? Of course it would. But that would violate US copyright law, and infringe the rights of copyright owners that refuse to provide their works to the public in an easily accessible form. One might think that Aereo’s solution to the public performance right issue in copyright law is fairly tongue-in-cheek, but, sadly, it is an all-too-realistic approach to providing content to consumers in a legally permissible manner.

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April 4th, 2013 at 9:18 am

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Maxis, Google, and the Rise of Services

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Two stories in the past week have called attention once again to the growth of the service industry and a corresponding decline in the amount of products/property available to the public.

Maxis, a video game developer and subsidiary of video game giant Electronic Arts, released the first iteration of the renowned and beloved SimCity franchise in nearly 10 years, to resounding disgust and anger. While Maxis had made some gameplay changes that disappointed long-term fans of the series, the most egregious mistake in the eyes of consumers was the requirement of an active Internet connection to play the game at all times, including as a single player. Maxis originally stated that the internet connection was necessary to outsource SimCity’s supposedly robust artificial intelligence and simulation calculations to more powerful, company-owned servers, but gamers soon found those claims overblown at best: the game could be hacked to play offline with no significant drop in performance. EA’s attempts to respond: improving server performance, disabling certain game features, and handing out free games to disgruntled purchasers, have not met with much gratitude.

Meanwhile, Google made two controversial decisions of its own: shutting down its relatively dominant RSS aggregator, Google Reader, and pulling AdBlock (an app that, well, blocks advertisements) and other, similar software, from its mobile app store, Play. Google’s stated reason for the Reader shutdown was a declining user base, but there is widespread speculation that this is yet another attempt to bolster Google+, Google’s social network.. The AdBlock decision was ostensibly a means of preventing unauthorized access of other services or products, but considering Google’s heavy dependence on online advertising, concerns over the true motives for restricting access to programs that prevent those ads from reaching consumer eyes are not ungrounded.

Whatever their stated reasons, the Maxis and Google decisions are further evidence of how far afield the state of online and cloud business has come from more traditional notions of property and consumer rights. Much of what may have been “infrastructure” or “property” in earlier times are now considered “services,” and are owned not by the eventual purchasers, but by the suppliers and producers. At some fundamental level, the process of handing over money for a copy of a game like SimCity (even a digital copy), feels like a purchase of property. The vast majority of purchasers would likely understand this to be an exchange of ownership, yet from a legal standpoint, they are increasingly licenses. If one purchases a “copy” of SimCity, one is actually purchasing a license to use the program on Maxis’ and EA’s servers; there is no usable copy without server access, unless one wants to break the shrinkwrap licensing contractual agreement and mod or hack the game.

The “property rights” gained by the consumer in such a transaction are severely limited: there is no opportunity to resell (as in Vernor v Autodesk, a 9th Circuit opinion on which the Supreme Court denied certioari). Vernor actually represents a dangerous precedent for consumer rights in such situations, as one of the criteria for determining whether the transaction was a “sale” or a “license” was the imposition of notable use restrictions on software. Restricting SimCity gameplay to online-only thus operates to prove the very reason the usage restriction exists in the first place: it becomes a license, with attendant restrictions on resellability, fair use, digital rights management circumvention, and the like. How much of what they purchase do customers actually own?

Similarly, the Google decisions are stark reminders of how little dependence the public can have on the continued existence of useful and (often) necessary services. Much like SimCity, the unilateral decision to pull Google Reader is a reminder of how little the public owns the cloud services it spends considerable time and energy investing in.

The Google Play store is ostensibly an open platform for innovation and consumer choice. This decision, like those previously made by Apple to pull apps over fears of moral conduct, are proof that these platforms are not quite as open as the public might want. This is as equally injurious to businesses as consumers: AdBlock is free, but other companies depend on the revenue earned by selling their software on an easily accessible platform like the Play store. Critics of the move, like the Electronic Frontier Foundation, argue that this is de facto censorship. At some point, Google and Apple’s utter and complete control of platforms that are increasingly functioning like utilities, but treated as services, might feel less like a welcoming hand, and more like an iron glove.

At some point, the legal characterization and treatment of these online services has to change. Platforms that have become necessary for mass communication might be better classified and regulated as utilities instead of services, at least as far as the public interest is concerned. Intellectual property laws will have to address the growing use of licensing as an alternative to sales. Meanwhile, the list of rights the public has in the software it consumes and the platforms it employs for business, entertainment, and communication is shrinking rapidly.

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April 3rd, 2013 at 2:50 pm

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