Archive for October 2011

The “Trickle Down Theory” of Music Streaming Revenue: Is Legal Intervention Necessary for Artist Payout?

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How much do streaming services pay artists?  The question has been asked with increasing frequency of online services from Spotify to Rhapsody and even iTunes, yet is often met by disparate - and thus unenlightening - figures, or naïveté.  Illustrating this latter occurrence with nothing but the best intentions, Rhapsody president Jon Irwin stated in an op-ed for Billboard last week that the company has paid out "hundreds of millions" to rights holders since 2001, and that he "trust[s] that this royalty revenue is flowing to artists." The accuracy of Irwin's statement - and the validity of this "trickle down" theory of streaming royalties - may quickly be called into doubt upon the realization that streaming services such as Spotify and Rhapsody are only contractually obligated to pay whoever owns the music, and not necessarily the artists themselves.  For this reason, Glenn Peoples of Billboard posits that this post's initial inquiry misses the target.  Streaming services need only concern themselves with making sure the appropriate rights holders are paid, and given the ubiquitous inequities in bargaining power between most artists and their labels, it is far more likely for a label to own the underlying copyrights to the master recordings than the artist.  When this is the case, then what Spotify and similar services must pay to the artist is entirely between the artist and his or her label, and artist recording agreements vary widely from deal to deal. While there is nothing inherently illegal about such an agreement (such is the practice in the music industry), the position of labels as intermediaries between streaming services and artists makes it difficult to obtain any sort of transparency regarding the actual royalties streamed down from the services to the artists.  Due to increasing worries about the amounts being paid out by subscription services - and to whom - recent discussions have ignored the steadfast existence of the industry's financial hierarchy.  Perhaps that is a good thing, incentivizing an artist or manager who is unsatisfied with the amount of streaming royalties received to directly approach the label or distributor responsible for negotiating the deal with the streaming service.  Or perhaps we need better laws and business models in place to protect uneducated artists and those with particularly weak bargaining power from having to negotiate those rates independently (and probably unsuccessfully). Coldplay's recent refusal to license its newly released album, Mylo Xyloto, to any on-demand streaming service speaks to the concern that platforms like Spotify may not provide a financial benefit to the actual artists.  Evidence that the free model of Spotify and other similar streaming services may be diverting potential customers away from paid download services like iTunes makes Coldplay's decision to withhold content even more enlightening.  Perhaps larger artists like Coldplay risk losing more income from streaming services than do smaller artists, who would not experience the same volume of paid downloads.  In fact, an impressive 40% of Coldplay's early Mylo Xyloto sales came from paid downloads.  To put it simply, there is no way Spotify royalty income will ever come close to the amount a big act like Coldplay could make by selling albums and downloads.  A study conducted last year reveals that in order for an artist to earn the federal monthly minimum wage of $1,160, their fans must stream a staggering 4,053,100 plays per month (versus "only" 12,399 digital downloads per month). The disparity between per-stream payouts and those for actual digital downloads raises the question: is legal intervention necessary to protect artists from manipulative labels pocketing their streaming royalties?  Placing the burden of finding a solution to this nearly impossible dilemma  on streaming services unfairly attacks companies trying to run legitimate business operations that simply lack the expertise to tackle this issue, not to mention that most services are private companies with no obligation to report sensitive financial details to the public.  Could artist and continuing legal education seminars effectively help artists and managers better negotiate terms in their recording and publishing agreements and take full advantage of revenue streams from constantly evolving technologies?  Should we ask our legislators to draft more effective anti-piracy laws and/or increase the statutory royalty rate?  Anti-piracy laws alone will not directly solve the problem, however, since many former P2P downloaders may instead turn to free streaming.  The solution will require an ongoing and candid dialogue between artists, labels, distributors, and legislatures alike.

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October 30th, 2011 at 8:44 pm

House Introduces Stop Online Piracy Act

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Yesterday the House of Representatives introduced its version of the Protect IP Act, known as the “Stop Online Piracy Act” (“SOPA”). The Senate previously placed a hold on the Protect IP Act over worries that it violated the First Amendment, after commentators from tech industry leaders to law professors decried the proposed law as unconstitutional censorship. The new bill goes even farther, raising new concerns about censorship online. Title I of SOPA, dubbed the E-PARASITE Act, allows the Attorney General to request an injunction against a “foreign infringing site.” After the injunction is granted and the order is served, ISPs would have to take measures to prevent access to the target site by their subscribers within five days of service. Search engines would have to take measures to prevent the target site from being linked. Payment network providers would have to prevent transactions from going through where one of the parties involved is the target site, and online ad services would have to stop providing ads to the target site. The ISPs, search engines, and others who would be affected by this act may intervene in the initial action, or they can file a motion to modify, suspend, or vacate the order after it has been granted. SOPA also allows private actors who are authorized to represent IP holders to send a notification to payment network providers and ad services requiring them to stop providing service to any website alleged to be dedicated to the theft of U.S. property under § 104(a)(1) of the act. It requires these companies to designate agents to receive notifications, and to provide the notification to the targeted sites. Only after the payment network provider or ad service has provided notification, if the website owner believes that they do not meet the definition of a website dedicated to the theft of US property they can send a counter-notification to the same agent. This counter-notification allows the company to continue to provide service to the website. If they do that, the original private actor may then file for an injunction against the website. If enacted, this law would also give immunity to ISPs and payment network providers that take action on their own to prevent access to allegedly infringing website. All of these provisions put in the hands of a few costly measures to take down websites or prevent meaningful access to them, while at most having to meet the requirements of a motion for injunctive relief. The bill would also make it a crime to stream copyrighted content. It would make Internet censorship part of US law and is far too heavy a measure for the problem it aims to combat, namely online piracy. Content owners should be able to protect their property from infringement, but their rights should be weighed against the value of a freer Internet. This bill is in its early stages yet, having only just been introduced to the House Judiciary Committee. Its sibling bill in the Senate didn't make it very far yet, but it will be worth watching to see how SOPA fares. Read the bill in its entirety here.

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October 28th, 2011 at 2:51 pm

The Policy of Gene Patenting – Are the Courts the Appropriate Venue for this Debate?

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Last week, following the denial of its petition for a panel rehearing, the ACLU announced that it will seek to bring the much-debated Myriad Genetics case before the Supreme Court.  Among other things, the case involves the patentability of isolated DNA – pieces of natural human DNA that have been chemically cleaved from the chromosome.  Myriad Genetics holds patents over two isolated DNA genes, BRCA1 and BRCA2, which are linked to susceptibility to breast cancer and may be used for clinical screening.  According to Myriad, women with mutations in these genes have an 82% risk of developing breast cancer, compared to about a 10% chance in the general population. The history of the Myriad Genetics case has been tumultuous.  The U.S. District Court for the Southern District of New York unsettled the biotech industry when it ruled that isolated DNA was not patent eligible under 35 U.S.C. § 101.  This decision went against the long-standing tradition of the U.S. Patent and Trademark Office, as well as the Supreme Court’s history of interpreting § 101 broadly.  However, although the statute is broad, it does have certain established limitations.  The one at issue here is the restriction on patenting “products of nature” unless they are “markedly different” from naturally occurring ones. See Diamond v. Chakrabarty, 447 U.S. 303 (1980).  In a 2-1 decision in July, the U.S. Court of Appeals for the Federal Circuit reversed the district court’s ruling, restoring the status quo by finding isolated DNA patent eligible under § 101.  The court based its decision on the finding that isolated DNA is “markedly different” from DNA occurring in nature because the act of cleaving it from the chromosome gives it a new chemical composition.  The court also stressed the importance of deferring to Congress regarding potential changes in the scope of patentable material. While the waters may currently seem calm, there is a good chance that this case will move forward, and a Supreme Court decision could have an historical impact on the future of biotechnology.  First, the decision itself is not beyond critique.  The dissent makes a strong case against patenting isolated DNA.  It compares the extraction of natural DNA to plucking a leaf from a tree or isolating the element lithium, since lithium only occurs in nature as part of chemical compounds.  Judge Bryson argues that isolated DNA is no different from naturally-occurring DNA except for the chemical changes that necessarily result from its extraction.  Consequently, he finds unconvincing the majority’s argument that isolated DNA is “markedly different” from natural DNA based solely on this minor chemical difference. Secondly, the Myriad case exposed a tension within the government.  Although the ACLU brought the case against Myriad Genetics and the U.S. Patent Office, the Department of Justice actually submitted an amicus brief in support of the plaintiffs.  This uncertainly on the federal level suggests that the Supreme Court may hear the case and perhaps even restore the lower court’s ruling.  If the case goes forward, it will be interesting to see whether the Court rules narrowly or decides to expound more broadly on the patentability of other biotech products. The Myriad case has received a lot of attention because of its policy implications.  On the one hand, the plaintiffs argue that the patents stifle patient access to clinical tests and suppress related DNA research.  They also raise ethical issues regarding the “ownership of what some view as our common heritage.” Ass’n for Molecular Pathology v. U.S. Patent and Trademark Office, 702 F. Supp. 2d 181 (2010).   Strong policy arguments exist on the biotech side as well, since companies rely on their patents when developing new products. Do patents on isolated DNA restrict patient access to care any more than patents on new medications? Although clinical screening based on genetic code is an emerging field of medicine, access to affordable health care is far from a new debate.  There are also some who say that patents are preferable to their alternatives.  If a company is unable to rely on a patent for exclusive rights to a newly discovered gene or product, it will be forced to rely on trade secrets to keep its discovery private.  Thus, it is argued that patents actually encourage the free exchange of information and thereby incite other parties to conduct related research. Many also fear the repercussions from a decision finding isolated DNA patent ineligible.  Would this restrain a growing biotech industry during a time when the last thing we want to do is stifle the job market?  What would happen to those who already hold DNA patents and rely on these patents for their work?  Would a Supreme Court decision reverberate beyond isolated DNA and prevent patents relating to stem cells and proteins? With all of these worries and uncertainties at stake, it seems that maybe the U.S. Court of Appeals for the Federal Circuit was right in deferring to Congress. For even if the majority’s “markedly different” holding is weak, isn’t the concurrence correct in finding that “the judiciary is ill-suited to determine whether the claims at issue pro­mote or inhibit science”?

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October 23rd, 2011 at 10:22 pm

Is a Computer Better Than You at Negotiating?: The Use and Usefulness of Online Dispute Resolution

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My first semester of law school, our torts professor explained to the class that we were training for a career in which we would essentially become nothing more than very expensive transaction costs. I’m pretty sure her intention with this comment was to cut short a circuitous and unproductive discussion that had developed about the cheapest-cost-avoider and economic efficiency. I think she just wanted to move onto the next case. But the comment has stuck with me. I was reminded of it again recently when I came across a Wall Street Journal article entitled: “At GE, Robo-Lawyers: Oil-and-Gas Unit Tests Online Resolution to Control Costs.” The article considers a software system called CyberSettle that allows parties to submit settlement bids into a double-blind program. If the bids come within a certain range in any of the rounds, the case settles for that amount. If the bids fail to match up in any round, the dispute gets bumped to online mediation. A facilitator uses the uploaded documents from each party to work out a compromise, without revealing the other party’s numbers. The settlement rate for CyberSettle clients is 65%. CyberSettle is not a new service. The company’s patents date back to 1998 and some of its biggest clients have been using it in some capacity for many years. The service is used not only by General Electric, but also Wal-Mart and several other corporations and insurance companies. Until recently, New York City used it as well. Additionally, CyberSettle enjoys a strategic partnership with the American Arbitration Association, which allows customers to begin settlement talks using the CyberSettle platform and then, if that fails to resolve the dispute, the parties can seamlessly transition to traditional AAA services. The appeal of an online dispute resolution (ODR) program such as CyberSettle is clear. It is an opportunity to limit the expensive transaction costs that come with using counsel to settle a dispute. Where the claim is small, attorney’s fees can otherwise easily out price the amount at issue. Criticism of ODR is concentrated on the challenges of removing the human element from the settlement process. Some claimants will want the cathartic experience of airing grievances in addition to monetary compensation. Other claimants, especially larger and more sophisticated corporations, would rather engage their own counsel than use a website. Additionally, at least one big former client of CyberSettle found that the system was not cost-effective. This year New York City stopped using the software for small personal-injury and property-damage claims, with a purported projected savings of $600,000 annually. Comptroller John Liu found that the same work could be done in house with claims adjusters who negotiated by phone. (It should be noted, however, that these numbers appear to be politically charged and controversial, seeing as the previous Comptroller claimed that use of CyberSettle saved the city $33.4 million from 2004 through 2008.) Regardless, there is a warranted debate about the usefulness of the program. While ODR may not be right for every kind of dispute, it does appear to fit a particular segment of legal fights very well. The way GE is currently using the service is for small claims with suppliers. GE Oil and Gas only uses Cybersettle for claims under €50,000, for what the company calls “micro-disputes,” and only in Italy. This GE unit now writes an ODR requirement into contracts with many of their Italian industrial suppliers. ODR works well for this category of claims because these disputes are less likely to have the same emotional attachment as personal injury claims and often involve smaller companies with less sophisticated legal counsel. In these situations it serves both the bigger corporation and the smaller supplier well to use an automated system with less transaction costs, at least as a first attempt at settlement. Indeed, the International Centre for Dispute Resolution launched a program in September suggesting that ODR is a particularly good way of dealing with supplier and manufacturer disputes. In an economic atmosphere that encourages companies to cut costs wherever possible, it makes eminent sense that executives would look to expensive legal fees as an area worth addressing. But how far will ODR expand? Should ODR be limited to certain kinds of disputes? What do you think?

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October 12th, 2011 at 12:11 pm

Spotify Lawsuit Demonstrates Weaknesses of Patent Law System

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In July 2011 a new on demand music-streaming service, Spotify, launched in the United States. However, within two weeks of its U.S. launch it was hit with a lawsuit. The complaint was not filed, as many had expected, by a record label company, but instead by the below-the-radar mobile media company PacketVideo for patent infringement. Spotify allows users unlimited access to create playlists and stream music from almost all major record artists for a small monthly fee. There is also a free service that plays at a slightly lower bitrate and contains an occasional advertisement, though far less often than rival Pandora Radio. The application is available for Macs, PC's, and smartphones, allowing users access to a wide range of music at any time and any where. The service had been widely used in Europe since its debut in 2008 but legal issues with securing licensing rights and complying with the Digital Millenium Copyright Act  slowed down its entrance into the U.S. market. The company sees itself as an alternative to music piracy and will not make an artist's music available unless it has secured the rights via a signed release from the copyright owner, most often the record label. Since Spotify had insulated itself from lawsuits from the record industry, the PacketVideo lawsuit came as a surprise to outside spectators. PacketVideo, a company that produces software for wireless multimedia devices, approached Spotify in May about the infringement of two different intellectual property patents regarding music streaming that are required to support Spotify's cloud-based system. The patent is vague enough that if the suit is upheld, many other music streaming services could be forced to pay for the rights to continue operating. After the failure to negotiate an out-of-court settlement PacketVideo sued for an injunction and reparation of damages. Spotify released an official statement that it will fight the claim: "In just under three years, Spotify has become more popular than any other music service of its kind. This success is, in large part, due to our own highly innovative, proprietary hybrid technology that incorporates peer-to-peer technology. The result is what we humbly believe to be a better music experience-lightning fast, dead simple and really social. PacketVideo is claiming that by distributing music over the Internet, Spotify (and by inference, any other similar digital music service) has infringed one of the patents that has previously been acquired by PacketVideo. Spotify is strongly contesting PacketVideo's claim." It is unclear why the company chose to sue Spotify since Pandora and Grooveshark, two more established music streaming sites with more cash available, are also infringing on the patent. The PacketVideo lawsuit demonstrates an ongoing issue in patent law surrounding the ease with which companies can acquire patents. The U.S. patent office, which is backlogged with patent applications, often awards patents without much scrutiny, which can result in overly broad protection of an invention. This has been exacerbated in the world of software and internet-based inventions. In the ongoing fight for U.S. patent reform big tech companies like Google, Research in Motion, and Intel, are fighting for new laws that would reduce the amount of patent litigation. These companies claim that the risk of facing expensive patent litigation can stifle innovation. Because it is so unclear what certain patents cover, mergers and acquisitions to form blocs are becoming more popular to get a bigger hold of the patent markets and as a way for smaller companies to protect their ideas. PacketVideo did not originally own the patent but acquired the patent when it bought Basel, a small Swiss-based tech company, back in 2007. It is unclear what the patent protects and having to litigate over the scope of the patent will likely be an expensive fight with broad implications. Spotify, Pandora, Grooveshark, and any other music streaming service will be forced to pay for the license. While, at this point, those companies may be able to afford this fee, start up streaming companies will have more difficulty financing their initial endeavors. The PacketVideo lawsuit demonstrates the rising importance of having the funds to defend and acquire patents in the tech industry. Unless patent law can be modified, smaller technology companies and inventors may not be able to afford to keep inventing.  

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October 9th, 2011 at 6:02 pm

Posted in Commentary

Golan v. Holder: Copyright & the 1st Amendment

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Last Wednesday the Supreme Court heard oral arguments concerning Golan v. Holder, potentially one of the most influential copyright cases in United States history. This case centers around whether Congress has the power to restore copyright protection to works whose protection has expired and are in the public domain. In 1994, Congress enacted the Uruguay Round Agreements Act (URAA) to implement the Uruguay Round General Agreement on Tariffs and Trade (GATT) that included the "copyright restoration" provision. This provision restores the copyright protections of many foreign works, nearly 50,000 in number that were previously in the public domain. Among those works removed from the public domain were Sergei Prokofiev's "Peter and the Wolf," the British films of Alfred Hitchcock, and stories by H.G. Wells. The named petitioner in this case is Lawrence Golan, a professor and conductor at the University of Denver. Petitioner Golan has two main arguments: (1) Congress is prohibited from taking works out of the public domain by the Progress Clause of the United States Constitution, Article I, § 8, cl. 8. ; and (2) the "copyright restoration" provision, § 514, of the URAA violates the First Amendment of the United States Constitution. The URAA adversely affects many interests. Artists hoping to create derivative works based on one of these foreign pieces are out of luck. The costs of using a copyrighted work are prohibitive to many individuals wishing to give their own artistic twist to these masterpieces. Furthermore, works that have ALREADY been produced based on one of these works have been saddled with unanticipated fees, destroying their financial viability. Film-making is another industry that will be adversely affected if the public domain is subject to restriction and uncertainty by granting Congress this power of restoration. So, what does this have to do with technology or telecommunications?? While the URAA is concerned only with certain foreign works, the Supreme Court is addressing a broader question--whether works with expired copyrights can have these rights restored by congressional legislation. This broader question has the potential to shake up digital content sharing with significant impact on the public. If Congress has the power to restore copyrights to works, that could lead to uncertainty as to what will happen to the public domain. Digital technologies enable new ways to appropriate works in the public domain to create, share and use them. However, movies and music productions that were once thought to be in the public domain and appropriate for sharing on the internet for use by the public will be at jeopardy. Users will be reluctant to share works that were once thought to have passed into the public domain, for fear that Congress might restore copyright protections and allow the copyright holders to seek redress. Discouraging provision of works that are in the public domain online for public consumption will greatly diminish the access to such works. Reluctance to utilize these works could have adverse consequences on technological innovation and creative development, unjustifiably capping the potential for artistic creation and sharing that these tools inspire. Furthermore, digital content sharers will have to constantly monitor which works Congress has chosen to restore copyright protection to for fear of leaving such works online. This could place a considerable financial burden on publishers of digital content and might discourage them from publishing any material from the public domain whatsoever. Individual innovation and enjoyment of these works will thus be adversely affected by reluctance to digitally share works that are in the public domain. If the Supreme Court rules in favor of the government in this case, then the public domain will cease to exist as we have come to know it. Innovation will be stymied and digital sharing of these works will cease to exist. What are your thoughts?

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October 9th, 2011 at 5:58 pm

Posted in Cases,Commentary

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What Does Sale of Borders Intellectual Property to Barnes & Noble Mean?

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According to Bloomberg Businessweek, Borders has gained final court approval for its $13.9 million intellectual property sale to former competitor Barnes & Noble. Borders was once the second-largest bookstore chain after Barnes & Noble. So after being the first to pioneer the concept of a megastore, why did they fail? Quite simply, lack of technological curiosity killed the cat. With digital sales of books and music on the rise, and CD and DVD sales falling, Borders chose not to invest resources in developing digital sales. Instead, they outsourced digital operation to Amazon, while concentrating on improving brick and mortar stores. Apparently, customers were not as enamored with the bookstore experience as Borders thought. Convenience and prices trumped cozy chairs and coffee, and many customers would instead use Borders to read a book excerpt, then go home and buy it on the cheap from Amazon. Then came e-readers. While Barnes & Noble produced the Nook as an answer to Amazon's Kindle, Borders was struggling with insolvency, and unable to keep up with the changing marketplace and filed for Chapter 11 Bankruptcy last spring. So what does this mean for Borders intellectual property? Barnes & Noble now hold the key to their trademarks, which includes Waldenbooks and Brentano. A quick visit to the Borders website reveals that Barnes & Noble is using the Borders name and e-commerce website, while proclaiming that Barnes & Noble will fulfill all orders. Upon research, Barnes & Noble lacks a physical presence in several large cities including San Francisco. It's possible that they could use the Borders name to expand, but the future is still uncertain. The biggest controversy surrounds the sale of approximately 48 million customers' information. Many Borders customers had signed on to an earlier agreement that their data would not be shared without their approval. The bankruptcy judge refused to approve the deal without giving the prior customers an opt-out option and Barnes & Noble fought it every step of the way. On one hand, coming from an advertising background, I know that receiving a gargantuan list of people who are already known to buy books is an invaluable tool for Barnes & Noble's marketing team. But with the now required opt-out option, one has to wonder if the information was worth the $13.9 million that was paid. It equals roughly $0.28 paid per customer, which is a steal in the marketing world. However, if a significant portion of customers opt-out to be included in Barnes & Noble's e-mail list, that per customer number could go a lot higher. The main issue is that the information could be sold without permission in the first place. For the average internet consumer, buying goods online doesn't mean reading the fine print. I myself click accept without ever reading what I'm accepting. As a law student I should know better, but in today's world it's just not feasible to read a list that has a size 8 font, and goes on for 10 pages. Most companies say that they will never sell your information to a third-party, including Borders. So what do you do when it happens anyways? Internet and privacy are areas of law that are still in infancy. It seems that this case is bringing to light how little control we actually have over our personal information once we transmit it to a company. The U.S. Federal Trade Commission submitted concerns to the court, as have 25 attorney generals. With more and more personal information being store by e-commerce companies, this controversy can only get bigger. How far can the sales of private consumer information go? How do you feel about your personal information being bought and sold?      

The FCC v. ISPs: Net Neutrality and the Battle for Internet Freedom

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In December 2010, the FCC announced its new 'net neutrality' rules, in efforts to promote "freedom and openness" of the Internet and to prevent service providers from limiting which Internet sites and services their customers can access and controlling access speed.  Proponents view this as a noble effort to maintain Internet values, but critics believe the FCC is overstepping its boundaries and that such limitations will cause broadband investment to suffer.  Verizon Communications and MetroPCS Communications filed suit against the FCC in early 2011, alleging the agency had overstepped its regulatory power.  Their complaints were speedily dismissed, not on merits, but because the two had brought suit too quickly, before the new rules had even been published in the Federal Register. The new rules are now officially published, and Verizon is again challenging the FCC's authority in regulating Internet traffic.  The telecommunications giant is bringing this suit (like the previous one) in the D.C. Circuit -- the same court that held in April 2010 that the FCC could not prohibit Comcast from slowing access to certain Interest sites, likely in hopes that the court will similarly limit the agency's authority this time around.  The ruling called into question the Commission's regulatory power over Internet services and prompted analyst predictions that the FCC or Congress would adopt new rules to clearly define the agency's power, and it looks like they were right. Published in the Federal Register on September 23, The Commission's new rules codify three protection principles: "First, transparency:  fixed and mobile broadband providers must disclose the network management practices, performance characteristics, and commercial terms of their broadband services.  Second, no blocking:  fixed broadband providers may not block lawful content, applications, services, or non-harmful devices; mobile broadband providers may not block lawful websites, or block applications that compete with their voice or video telephony services.  Third, no unreasonable discrimination:  fixed broadband providers may not unreasonably discriminate in transmitting lawful network traffic." While the rules aim to provide equal access to Internet sites and services, they also establish different standards for wired (such as Comcast) and wireless (such as AT&T) service providers, giving a little more flexibility to the latter to limit access (due to the challenges of managing data traffic on the more easily overwhelmed wireless networks).  The next lawsuit comes in here -- Free Press, a media advocacy organization, has filed a lawsuit against the FCC claiming the wired and wireless distinction is nothing more than arbitrary.  There is much criticism for the rules in general, not only for the wired/wireless distinction, but there are also accusations that the FCC has only provided vague policy still full of loopholes. Congress itself isn't entirely on board either.  Back in April, the House voted to repeal the rules, questioning the need to further regulate the Internet and highlighting fears that limitations on broadband systems would discourage investors.  Without Senate support however, the rules are still on track to go into effect on November 20. The biggest question and concern, however, is how these new rules will effect the consumer and the Internet landscape for future innovators of Internet sites and services.  It's pretty to clear to see how prohibition on access limitation is a plus for the average web browser.  But regulation could come at a price for everyone.  Problems faced by services providers are legitimate from a business model perspective, and could ultimately negatively affect the consumer if there is no leeway in controlling access.  Given the volume of data transfer and finite capacity of broadband systems, some connection is going to slow down somewhere for someone, providing more ground for usage-based pricing models and tiered-access packages. Can the regulators and providers keep speeds up and prices down? There is much to be seen as the rules become effective and the lawsuits roll in.

United States v. Antoine Jones: GPS Tracking, Privacy Expectations, and Public Places

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In a little under two months, the United States Supreme Court will be hearing oral arguments in United States v. Antoine Jones, regarding the government’s ability to perform warrantless GPS tracking of a criminal suspect's vehicle. Although the case addresses only a narrow segment of Fourth Amendment jurisprudence, the Supreme Court’s holding may potentially have a broad impact on future conflicts between technological advances in police investigative techniques and societal expectations of informational privacy. The Supreme Court has previously held that no reasonable expectation of privacy exists in information exposed to public view, including a person’s driving route on public roads. See United States v. Knotts, 460 U.S. 276, 281 (1983) (“[A] person traveling in an automobile on public thoroughfares has no reasonable expectation of privacy in his movements from one place to another.”). In its reversal of Antoine Jones’ conviction, however, the D.C. Circuit calls that rule into question. The court noted that a “search” may be implicated in public places where a person “does not expect anyone to monitor and retain a record of every time he drives his car” and where the government engages in “dragnet-type law enforcement practices.” United States v. Maynard, 615 F. 3d 544, 563 (D.C. Cir. 2010). It will be interesting to see how the Supreme Court responds to the D.C. Circuit's take on privacy interests in public places, and what effect its ruling will have on other government investigative techniques. As the Department of Justice repeatedly suggested in its briefs before the D.C. Circuit and now before the Supreme Court, this case not only challenges warrantless GPS tracking, but furthermore, potentially implicates a broader array of law enforcement investigation methods that collect discrete pieces of public information over an extended period of time without a warrant. One such law enforcement system potentially susceptible is New York’s Anti-Terror Camera Network. New York City currently has around 2,000 cameras tracking a population of approximately 8.2 million people. Already arguably one of the most extensive video surveillance systems in the country, the number of cameras is supposed to increase to approximately 3,000 units by 2013. As NYPD Commissioner Ray Kelly noted in his 60 Minutes interview broadcasted earlier this week, “it is nearly impossible now to walk a block in lower Manhattan without being on television.” Set for Tuesday, November 8, 2011, the arguments in U.S. v. Antoine Jones and the Court’s subsequent decision will undoubtedly be closely monitored by privacy rights interest groups, government officials, and public defenders alike. Until then, to learn a little more about the background behind the case, a short summary of the facts and legal issues are provided below. If you prefer to perform a more thorough read of the case materials, skip the brief and scroll straight to the case timeline embedded with links to PDFs of the relevant case briefs and court decisions.

Case Summary

Factual Background:

In 2004, law enforcement officials began an investigation of Antoine Jones, a night club owner suspected of drug trafficking. After obtaining information from several visual surveillance sources that Jones might be involved in the transport and storage of illegal drugs, agents installed a GPS tracking device to a Jeep Grand Cherokee which he and his family used. The agents did not have a warrant for the GPS device. (Actually, the agents had secured a warrant for the GPS device, but failed to meet the warrant’s time and location limitations. The warrant was valid for 10 days and allowed the agents to install the device within the District of Columbia. The agents, however, installed the device 11 days after the warrant was issued in a Maryland public parking lot.) Over the course of a month, investigators monitored the data transmitted by the GPS which provided the vehicle’s location and vicinity in relation to a suspected drug stash house. With this tracking information and other evidence from visual surveillance, agents subsequently obtained arrest warrants and recovered a substantial amount of cocaine and other drug paraphernalia. Procedural Background: With the evidence obtained from the GPS tracking device, a jury in the  D.C. federal district court convicted Antoine Jones for conspiracy to distribute illegal drugs. The court of appeals reversed the conviction finding that the warrantless GPS tracking constituted an unreasonable search under the Fourth Amendment.  The Department of Justice subsequently filed a petition for a writ of certiorari to the United States Supreme Court. On June 27, 2011, the Supreme Court granted the government’s petition. Oral arguments are set for November 8, 2011. Questions Presented: (1)    “Whether the warrantless use of a tracking device on [Antoine Jones’] vehicle to monitor its movement on public streets violated the Fourth Amendment? (2)    Whether the government violated [Antoine Jones’] Fourth Amendment rights by installing the GPS tracking device on his vehicle without a valid warrant and without his consent?”

Case Timeline:

August 6, 2010 – The D.C. Circuit Court of Appeals reverses the conviction of Antoine Jones and holds that warrantless GPS tracking constitutes an unreasonable search under the Fourth Amendment. April 15, 2011 – The DOJ files a petition for a writ of certiorari. May 16, 2011 - Amici Curiae, Gun Owners of Amercia, Inc., et al., file an amicus brief. June 7, 2011 – Antoine Jones files a brief in opposition to the DOJ’s petition for certiorari. June 9, 2011 – DOJ files a reply brief to Jones’ opposition. June 27, 2011 – U.S. Supreme Court grants Petition for Writ of Certiorari. (see page 3 of order) August 11, 2011 – The DOJ files a brief. August 18, 2001 – Amicus Curiae, Center on the Administration of Criminal Law, files an amicus brief. September 26, 2011 – Antoine Jones files a brief.  

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October 1st, 2011 at 8:21 pm

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