Archive for August 2009

Bill Would Give President Emergency Control Over Internet

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Speaking of destroying the internet, CBSNews.com reporter Declan McCullagh reports Senators Jay Rockefeller (D-W.V.) and Olympia Snowe (R-Maine) recently introduced legislation that would give the president the authority to seize control of the Internet and order a shut-down of Internet traffic during a “cybersecurity emergency.”

Despite vocal concerns from telecommunications companies and civil liberties groups, the bill’s sponsors maintain that the bill is necessary  to protect the nation’s cyber infrastructure security. “We must protect our critical infrastructure at all costs–from our water to our electricity, to banking, traffic lights and electronic health records,” Rockefeller said. Agreed. Sort of. “At all costs?” That might be  a bridge too far. Cybersecurity should be a top government priority, given our national infrastructure’s dependence on the Internet, but at what cost?

President Obama has acknowledged that the United States is “not as prepared as we should be,” when it comes to cybersecurity, and in May said that “[the government’s] pursuit of cybersecurity will not — I repeat, will not include — monitoring private networks or Internet traffic.”

As with campaign promises, that may have been wishful thinking on the president’s part. The bill’s text takes a markedly different tack, calling for the White House to engage in “periodic mapping” of private networks to determine which of those networks are “critical” to national security. Those companies that maintain critical private networks are then required to share certain requested information with the government, but the Rockefeller-Snowe bill, in its current form, lacks the necessary internal checks on the vast power it grants the president over private networks and fails to spell out exactly what limitations would be placed on the government in the monitoring process. Before the telecommunications industry (not to mention the general public) can rest easily, the amorphous powers granted in the bill will need to be reigned in to curb opportunities for abuse of those powers.

Not everyone is concerned about the bill’s prospective reach, however. According to McCullagh, a Senate source familiar with the legislation likens the president’s authority to shut down the internet to President Bush’s grounding of all aircraft immediately proceeding the Sept. 11, 2001 terrorist attacks. The obvious difference between the two examples is that the government is not required to access vast quantities of sensitive personal information in order to ground airplanes. Shutting down critical networks in the event of a cyber emergency means knowing exactly which private networks are “critical,” which by necessity means some level of monitoring. Without an appropriate process for administrative review and healthy checks on the extent of the government’s monitoring power, the bill will have a hard time garnering the necessary support to get passed.

Posner’s idea to save the newspaper industry: Get rid of the internet.

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Richard Posner, 7th circuit appellate judge and expert on all things law and economics, recently commented on the impending death of newspapers. His post blames the “free riding” of blogs and other websites for the year-over-year decline of newspaper revenue. Many accuse the web of  killing newspapers, but only Posner could come up with an idea to save the news by destroying the internet.

Expanding copyright law to bar online access to copyrighted materials without the copyright holder’s consent, or to bar linking to or paraphrasing copyrighted materials without the copyright holder’s consent, might be necessary to keep free riding on content financed by online newspapers from so impairing the incentive to create costly news-gathering operations that news services like Reuters and the Associated Press would become the only professional, nongovernmental sources of news and opinion.

Judge Posner is known for having some wildly unconventional ideas. Perhaps his new copyright scheme is just a modest proposal because, if taken at face value, it would destroy the internet as we know it today. Cyberspace is really nothing more than a series of individual pages connected through hyperlinks. A statue requiring websites to obtain advance permission before creating links to other pages would have the immediate effect of destroying every search engine and directory service with the rest of the internet not far behind.

The news industry does not need additional help from copyright to prevent unwanted linking and paraphrasing. Simple technology to prevent linking has existed for years. News organizations may litigate into oblivion any blogger that they feel has quoted a bit too liberally. The tools to free themselves from the clutches of the free-loading  blogosphere are readily available; why then, have news organizations not used them? The simple answer: “free-loading bloggers” are not the cause of the death of the newspaper.

The mistake that Posner and others make is to assume that linking and paraphrasing redirects revenue from newspapers. There has never been data to support such an assumption. In fact, the nature of linking suggests the very opposite. One has to look no further than the overwhelming success of Google search for proof: Sergey Brin and Larry Page built Google on the assumption that the more a page was linked to, the greater the relevance of that page. Academics and lawyers should be intimately aware of this phenomenon; the more a paper or case is cited, the more important that reference becomes. A requirement for consent to link to a website’s copyrighted content would be just as backward as needing to ask for permission to cite an academic paper.

Posner characterizes online media as “free” and print media as “paid” content:

News, as well the other information found in newspapers, is available online for nothing, including at the websites of the newspapers themselves, who thus are giving away content. The fact that online viewing is rising as print circulation is falling indicates a shift of consumers from the paid to the free medium.

This is an egregious misconception of the economics of news. Delivery and printing costs far outstrip paltry subscription fees. Newspapers and magazines take a huge loss on every physical issue that they mail out. These costs must then be recuperated through advertising revenue. Consumers “pay” for news with their eyeballs – by viewing the advertisements embedded in these papers. The move of readership from physical papers to online websites is not a transition from “paid” to “free” – it is only a transition from print advertising to digital advertising.

The cost of online delivery is minuscule compared to the cost of physical delivery. If online, per-eyeball, ad rates were equal to print ad rates then newspapers should be gaining more revenue per-online visitor than offline subscriber. (This doesn’t even factor in the family factor: A family of four subscribes to a newspaper and all four read it; the newspaper only gains revenue based on a single circulation. If the family reads the news online, then the website has gained revenue from four sets of eyeballs). Marketers already find online advertising to be highly attractive; it offers better access to analytics, is far more targeted, and offers models that are directly tied to ad performance. Newspapers should be embracing the transition to online news as a chance to ditch expensive and inefficient print infrastructure while also making marketers (the people paying the bills) happy.

Newspapers are failing for a simple reason; they have not adapted their business model to the modern age. Yes, it is true that online advertising rates are lower than their corresponding print rates.  Yes, there is greater competition online for advertising dollars.  However, these are purely business issues. Newspapers, blinded by their own hubris, didn’t take the internet seriously. They let Craiglist and Ebay eviscerate traditional classifieds sales. They failed to package their products in a way that would attract significant online advertising revenue. Now, when the writing is on the wall, old media becomes increasingly desperate in their bid for survival.

Utilizing copyright law to save print media would have disastrous consequences and, if effective, would only serve to preserve an horribly inefficient industry. It is baffling that Posner, a scholar of the Chicago school of economics, would advocate such a grotesque solution. This is a foreboding sign that William Patry was correct in writing:

Copyright law has abandoned its reason for being: to encourage learning and the creation of new works. Instead, its principal functions now are to preserve existing failed business models, to suppress new business models and technologies, and to obtain, if possible, enormous windfall profits from activity that not only causes no harm, but which is beneficial to copyright owners.


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August 19th, 2009 at 8:18 am

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Gawronski v. Amazon: Kindle Class-Action Lawsuit

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Amazon KindleWhen Amazon controversially deleted copies of George Orwell’s Animal Farm and 1984 from its Kindles back in July, the ironic parallels between fact and fiction sent the Internet collectively scrambling to brush up on its literary quips. Not a bad thing, at least from the view of librarians and English teachers. And at the end of it all, the Internet seemed to have won out: Amazon vowed to never carry out such a recall again.

But life doesn’t tie up as neatly as a novel. Individual acts of rebellion inevitably failed against Orwellian fictional dictatorships, but Orwell’s worlds also lacked the class-action lawsuit. One such suit has already been filed against Amazon, alleging Amazon’s actions violated its terms of service and state unfair competition laws, and constituted fraud under 18 U.S.C. § 1030 (the Computer Fraud and Abuse Act), trespass to chattels, breach of contract. Putting aside its rather humorous facts–the main class representative, a Michigan high school student, alleges that the deletion of his electronic copy of 1984 rendered useless his class notes, as they were linked directly to the ebook—this lawsuit has the potential to reach far beyond ensuring that Amazon never repeats such a mass deletion.

Most of the initial complaints against Amazon’s deletion focused on how Amazon had violated consumer expectations regarding what happens to a book after it’s been sold. Without the cooperation of the buyer, publishers normally cannot recover physical copies of books once sold, no matter what the reason for the recall. Amazon’s deletion, however, highlighted the fact that this practical limitation doesn’t exist with an ebook. Some commentators have pointed out that this technological advance allows for stronger enforcement of copyright protections. Amazon did not have the legal right to sell those ebook copies of 1984 and Animal Farm, so they were committing copyright infringement by offering them to Kindle users. Since the sales were illegal, first-sale doctrine would not have protected their unwitting customers from copyright infringement charges. Deletion is different from what would be done if the book copy had been made of paper, but perhaps changing technology should also change expectations regarding methods of law enforcement.

On the other hand, others including the parties in the class-action suit assert that Amazon violated its own terms of use with the deletion. Amazon has taken pains to emphasize that its Kindle is just updating the traditional book for the Computer Age, not changing the mode of how books work. Ebook buyers were told that just as with a physical book, once they bought an ebook, it was theirs for life. If that isn’t true and Amazon is going to take advantage of an ebook’s unique capabilities, then it should have made that clear to its customers.

And as if copyright and contractual issues weren’t enough, the lawsuit’s complaint also expressly asks the court to declare that Amazon has no legal right to delete ebooks once they’re sold, since Amazon couldn’t very well order people to give up physical books they’ve purchased. More than a kind of equality declaration for ebooks and physical books, such a ruling could potentially hamper any content provider’s ability to distribute material online without incurring liability if that content is later removed. It would have grave implications for the efforts of companies such as Google to encourage cloud computing and other technologies where data is stored on the servers, and under the control, of third-parties who then allow users to access that data remotely.

Until now, the book industry has been spared the contentious litigation that technological advances have brought to the movie and recording industries, largely because ebooks have not done well as a commercial product. But just as ebooks seem to be finally taking off, so have the legal questions surrounding them. The Kindle is no longer a mere geek trophy gadget, but has come of age as a focal point of legal, technological and social debate.

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August 8th, 2009 at 7:00 pm

Employee Privacy Challenged

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In an opinion earlier this week, the California Supreme Court held that an employee’s right to privacy in the workplace is not boundless.  An article on law.com lays out the reasoning behind the court’s decision.

It should be noted that this decision is limited in scope.  The court is not saying that in all cases employers can spy on their employees, and made a point of expressing its reluctance to encourage such practices.  But in cases of “legitimate business concerns” and where the surveillance is “narrowly tailored in place, time and scope,” some types of spying are allowable.

This ruling shouldn’t be seen as moving the bar too far in favor of employers infringing on employees’ privacy rights.  The employees in question in this case were never actually filmed (the equipment was set up to try to catch an after-hours user of one employee’s computer who was viewing child pornography).  Hillsides Children’s Center, the employer in question, is the home to many abused children, so it is even more understandable that the center would go to great lengths to stop someone from viewing child pornography on its computer equipment.

It will be interesting to see if employers in California and other states around the county will actually be encouraged to push the envelope of surveillance following this ruling.

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August 7th, 2009 at 11:03 am

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Jackson Browne v. John McCain: Copyright Lawsuit Settled, Case Dismissed

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The lawsuit between rock artist Jackson Browne and Senator John McCain and the Republican Party was recently settled, and ordered dismissed on August 4, 2009, almost a year after the suit was filed by Browne.

Browne filed a lawsuit against McCain, the Republican National Committee, and the Ohio Republican Party over the unauthorized usage of Browne’s signature song “Running on Empty” in a commercial criticizing the energy policy of then-Democratic Presidential candidate Barack Obama.  The commercial, which aired on television and YouTube.com, featured parts of the sound recording of “Running on Empty” throughout.

The causes of action listed in Browne’s complaint, filed in U.S. District Court in California, included copyright infringement, trademark infringement, and violation of the California common law right of publicity.  The defendants’ motion to dismiss, relied, amongst other things, on a fair use defense against Browne’s copyright claims and a political speech exemption against the trademark claim.  The motion to dismiss was ultimately denied.

The lawsuit brought to light the clash between intellectual property rights and fair use as well as the First Amendment in the context of political speech, as political campaigns turn more and more to popular culture references in the media to reach out to voters.  McCain was also opposed by artists for his campaign’s use of popular music from the Foo Fighters, Heart, and John Mellencamp.  Even Obama ran into trouble during his campaign, when soul legend Sam Moore (of “Soul Man” fame) asked Obama to stop using one of his songs.

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August 7th, 2009 at 11:02 am

Twitter Sued for Patent Infringement

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Twitter has been the subject of controversy as of late, primarily regarding the content of “tweets,” Twitter’s user-sent messages.  Some of this controversy has turned into legal action.  While the highest-profile controversies involve celebrities, such as the one involving the recently-settled lawsuit regarding a Twitter impostor of Major League Baseball manager Tony LaRussa, even non-celebrities have filed Twitter-related lawsuits, such as in the Chicago, Illinois lawsuit involving a corporate landlord taking offense to a tenant’s allegedly libelous “tweets” regarding her “moldy” apartment.

Thus, it may not have been much of a surprise that the wildly popular micro-blogging service itself was hit with a patent lawsuit.

On August 4, 2009, a Texas technology company filed a lawsuit against Twitter for patent infringement.  In its complaint, plaintiff TechRadium alleges that Twitter infringes on TechRadium’s patented IRIS mass notification system technology.  While attorney George Borkowski commented in Wired “Twitter is likely to claim that the [TechRadium] patents should be voided because what has been patented is too generic,”  we will be waiting to see what consequences the lawsuit will have on the digital media world.

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August 7th, 2009 at 11:02 am

Tweaking the Regulatory Compliance Defense

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Last year, Professor Catherine Sharkey wrote that preemption is the “is the fiercest battle in products liability litigation today.” Catherine M. Sharkey, Products Liability Preemption: An Institutional Approach,76 Geo. Wash. L. Rev. 449, 450 (2008) . Earlier this year, the Supreme Court stepped in and changed, or possibly ended entirely, that debate. In Wyeth, the Supreme Court rejected the drug maker’s claim that it would impossible for its drug Phergan to comply with the FDA’s warning label requirements and the implicit requirements of state failure to warn laws. See Wyeth v. Levine, 129 S. Ct. 1187, 1198 (2009) (“But absent clear evidence that the FDA would not have approved a change to Phergan’s label, we will not conclude that it was impossible for Wyeth to comply with both federal and state requirements. Wyeth has offered no such evidence.”).

With future preemption claims likely to fail, drug makers and their allies may turn once again to state law to protect themselves against liability and allegedly frivolous lawsuits. Michigan is the model example because it is the only state that provides that compliance with FDA regulations is a complete defense to state tort suits. In Michigan, “a product that is a drug is not defective or unreasonably dangerous, and the manufacturer or seller is not liable, if the drug was approved for safety and efficacy by the United States food and drug administration . . . .” Mich. Comp. Laws § 600.2946(5) (2008). This statute, though, is under attack. An attempt to repeal the provision has passed the Democratic-controlled state house but stalled in the Republican-controlled state senate, and gridlock appears likely to continue. Rather than accepting either side’s all or nothing approach, my note, When and How to Defer to the FDA: Learning from Michigan’s Regulatory Compliance Defense, advocates a middle of the road approach. Drugs that comply with the FDA’s regulations should still have a defense against liability, but a back-up in the form of state attorney general-lead litigation should be there to provide deterrence in situations where the FDA has failed to act and to provide compensation to legitimate victims. Hopefully legislators in Michigan, and other states considering a regulatory compliance defense, will read this paper.

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August 6th, 2009 at 9:51 am

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