The only changes to the injunction by the panel were a modification of the effective date of the injunction, from the original 60 days (stayed during appeal) to 5 months from the original issue date of the injunction.  This was because the panel determined that the district court erred in setting a time frame of 60 days, when the only evidence concerning time to remove the infringing XML functions from Word was “at least” 5 months.  As Microsoft has said, it initiated steps in August to remove the infringing feature, so the change in the effective date of the injunction should have little practical impact.

In regard to the damages, most significant is the $200 million damages for royalties.  The panel even admitted that, “Given the opportunity to review the sufficiency of the evidence, we could have considered whether the $ 200 million damages award was “grossly excessive or monstrous” in light of Word’s retail price and the licensing fees Microsoft paid for other patents.”  The opinion makes it sound as if the panel, if able to review sufficiency, would have significantly reduced the royalty damages.  This is because the baseline royalty rate used by i4i’s expert witness to calculate damages was $98, when certain Word products could sell for as low as $97.  On a sufficiency review, it seems entirely possible that the baseline royalty used was grossly excessive and monstrous, since it could be greater than the entire selling price of a single copy of Word.  Further, Microsoft told the court the typical license it paid to use a patent was in the $1 – $5 million range, something completely out of line with the i4i calculations of $200 million.  But the panel stated it was unable to review the sufficiency of the evidence, as Microsoft had failed to file a pre-verdict judgment as a matter of law motion, restraining the panel’s review to the standard of a clear showing of excessiveness.  The panel even seemed to question Microsoft’s failure to file a pre-verdict JMOL motion as to the sufficiency of the evidence for the damages, stating, “Had Microsoft filed a pre-verdict JMOL, it is true that the outcome might have been different” because then the panel could decide “whether there was a sufficient evidentiary basis for the jury’s damages award.”  Given the panel’s statements, Microsoft might have blown its chance to have the damages significantly reduced on appeal by deciding not to file a JMOL motion for sufficiency of the evidence as to damages.

It also seems as if i4i’s decision to file in Texas has paid off, after gaining some measure of approval from the panel of the Court of Appeals for the Federal Circuit.  I don’t know if I would go so far as to call the panel’s opinion “a complete and utter vindication of the judgment,” given the statements of the panel regarding the royalty calculation and the limited level of review available for the findings of the jury, but it does give some credence to the inability of an appeal to alter the jury verdict.  While Microsoft’s loss on appeal may not make the district court’s decision completely right, it may well signal the verdict’s irreversibility.  The Federal Circuit may well refuse a request for a full hearing, as the decision clearly sets out the limits of appellate review in this case.

The size of the verdict against Microsoft makes you wonder why they didn’t just license the patent from i4i back in 2000, when Microsoft was aware of i4i’s presence in the market, or even at the start of litigation in 2007.  At this point, there appear to be very few reasons for i4i to consider talking with Microsoft about licenses or settlement, as i4i looks to have a winning case and a firm hold on nearly $300 million from Microsoft.

Fairey, who was then represented by Anthony Falzone, Executive Director of Stanford Law School’s Fair Use Project, claimed that his use of the photograph came under the “fair use” exception and thus permission was not required. Fair use hasn’t often been applied to photographs, so the issue seemed likely to become a fascinating test case, especially after Fairey filed for declaratory judgment against the AP in February 2009 seeking a determination that his use came under the doctrine of fair use.

The case was further complicated by the claims of the original photographer, Mannie Garcia, who was working under contract for the AP when he took the photograph; Garcia claimed that the copyright for the photo belonged to him, not to the AP. Garcia’s latest position in the legal skirmish is as a defendant, counterclaim plaintiff, and cross-claim plaintiff/defendant.

At the time, it seemed that Fairey had a chance of winning. Fair use disputes are resolved by a four-factor test; the four factors are:

1. the purpose and character of the use
2. the nature of the copyrighted work
3. the amount and substantiality of the portion taken, and
4. the effect of the use upon the potential market.

The first factor relates to the use of the original material; by cropping, colorizing, and reorienting Obama’s posture from the original photograph, as Fairey claimed he’d done, it’s probable that a court would have deemed Fairey’s use sufficiently transformative to satisfy that factor.

The second factor concerns the distinction between fiction and fact; since Fairey copied from something factual (a photograph from a news event) rather than something fictional (for example, a novel), it’s possible that he would have succeeded on this factor as well, since only fictional works can be copyrighted. However, the Supreme Court ruled in Feist Publications, Inc. v. Rural Telephone Service, Co., 499 U.S. 340 (1991), that only a “spark” of originality was required in order for something to come under copyright protection, it seems probable that the original photograph would have been protected by copyright. Fairey would thus have faced a tougher battle on the second factor compared to the first.

The third factor presents one of the most interesting elements of the case. The less someone uses of the original work, the better case they have for fair use. For example, if a musician copies only a few seconds from six minute song into a remix, she’ll have a stronger basis for fair use than if she uses five minutes. Since Fairey supposedly cropped out George Clooney from the original photograph, he had a fairly good position on this factor. As the LA Times noted, how often does George Clooney get cropped out of a photograph? The fourth and final factor also seemed to weigh in Fairey’s favor. Fairey’s poster did not impede the AP from selling the rights to the original photograph to newspapers and other media outlets, especially given that the photograph was over two years old by the time Fairey began selling prints of it.

Last month, the entire case took on a dramatic twist when it came to light that Fairey had lied about which photograph he’d used for the HOPE poster. Instead of using a photo of Clooney and Obama, Fairey admitted that he had used the photograph that the AP had always claimed he’d used (a closeup of Obama) and that he had deleted images and submitted false ones in connection with the lawsuit. As a result, Falzone and the Fair Use Project declared their intention to withdraw from the case, as they couldn’t ethically represent Fairey after his lies came to light. Falzone noted that he still believed in the merits of Fairey’s case; the AP, however, countered that Fairey’s admission undermined his fair use argument and that they would block the withdrawal of Falzone and the Fair Use Project. The Fair Use Project’s proposed replacements are Geoffrey Stewart, a partner at Jones Day, and William Fisher and John Palfrey of Harvard’s Berkman Center for Law and Society.

Crucially, Fairey’s admission impedes his claims under the third factor of fair use, as he did not modify the original photograph as much as he claimed and took a larger proportion of the original work. Still, Falzone’s support of Fairey’s claims even after exiting the case doesn’t seem naive; it’s conceivable that a court could still find fair use. But as many have noted, it’s hard to seek a defense that uses the word “fair” when you’ve lied about the case. The case is still going forward, but Fairey’s position is far weaker than it was a few weeks ago, though the LA Times ran an editorial this week that supports Fairey’s claims on the merits. But what could have been a fascinating test case for the status of fair use in copyright law has been muddled as a result of Fairey’s deception, and it remains unclear what this could mean for other artists working in similar ways.

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.

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.

New Zealand copyright protesters

New Zealand’s government announced this week that their proposed “three strikes”/”graduated response” copyright law would not go into effect, and would be rewritten from the ground up.The law, which would have required ISPs to cut off internet access to users who had been accused of copyright infringement three or more times, had already been delayed from its initial effective date in February after stalled implementation negotiations and public protests caused lawmakers some concern.

Of particular note to those interested in U.S. copyright issues, Google submitted comments arguing that Internet disconnection is a disproportionate response to unproven allegations of copyright infringement. New Zealand recording industry groups had argued that the evidence of infringement they provide to ISPs is highly reliable, but Google’s comments cite to a 2006 report (summary here) that showed up to 30% of takedown notices Google received “presented an obvious question for a court”, and over half of requests to remove links appeared to be from businesses targeting competitors. Obviously, many of the takedown requests that Google fields are not from official industry groups, but given that U.S.  industry group representatives have likened innocent infringers to dolphins inevitably caught in fishing drift-nets, New Zealand ISPs and consumers had good reason to be concerned.

Image credit – “Dare not write, dare not speak, dare not feel” CC by-nc Fertala

Image this is podcasting by Thomas Kamann. Used under a Creative Commons BY 2.0 license.

Internet radio broadcasters were given renewed hope of long-term stability when President Bush signed the Webcaster Settlement Act in October. The Act allows webcasters and record labels to continue negotiating for a reduced performance royalty rate while Congress is in recess, as it extends the deadline for a new deal to February 15, 2009. The issue stems from a March, 2007 decision by the Copyright Royalty Board (CRB), which would force webcasters to pay for each song streamed to each user at a retroactive rate as follows:

2006: $0.0008 per song, per listener
2007: $.0011
2008: $.0014
2009: $.0018
2010: $.0019

SoundExchange, the organization that represents artists and record labels, favors higher performance royalties because it believes that musicians deserve their fair share of Internet radio profits. The Digital Media Association (DiMA), a trade organization that represents a number of prominent webcasters including AOL Radio and Yahoo! Music, believes that the decision of the Copyright Royalty Board would bring about the end of Internet radio by forcing webcasters to pay outrageously high performance royalties at rates that they simply could not afford.

The Radio and Internet Newsletter (RAIN) calculates that, assuming the average Internet broadcasting station plays 16 songs per hour, a webcaster would have a royalty obligation of 1.28 cents per listener hour in 2006 (which would skyrocket almost three-fold by 2010). These royalties would only cover use of the sound recording, and webcasters also have to pay an additional fee to holders of copyrights in the composition. Using the CRB’s proposed royalty structure, it would be nearly impossible for an Internet radio station to remain profitable, and most, if not all webcasters would be forced out of business. Tim Westergren, the head of Pandora (one of the nation’s most popular Web radio services), believes that its royalty fees for this year could represent 70% of its projected $25 million dollar revenue. According to David Oxendide, a lawyer representing many smaller webcasters, CRB’s royalty structure would be a fatal blow to small and medium sized stations whose royalties would be between 100% and 300% of annual revenues.

Traditional radio broadcasters, like those represented by the National Association of Broadcasters (NAB), have seen web-based radio as a serious threat to their dominance. They lobbied against the Webcaster Settlement Act. However, they retracted their aggressive opposition to the Act when the negotiating deadline was extended to February 15; the extension will allow the NAB to negotiate its own performance royalty structure with SoundExchange. Today, terrestrial radio broadcasters pay licensing fees only, but SoundExchange is working to change that.

What does all this mean for Internet radio? Well, even SoundExchange acknowledges that the royalties in CRB’s model might be unworkably high. Nonetheless, SoundExchange officials complain that Internet radio stations have done too little to turn a profit from streaming music on the web. Webcasters counter by arguing that advertisers have yet to embrace Internet radio which makes it nearly impossible to get investment funding.

Although the music is industry is in shambles and record labels are desperate for new sources of revenue (i.e. performance royalties from online radio stations), perhaps biting the hand that feeds is not the right approach. A thriving source of online music is essential for the survival of the music industry. Surely record companies would prefer that new music be spread via web-based radio rather than on illegal file sharing networks? Introducing performance royalties into both the digital and terrestrial radio schemes makes sense; why should radio stations be required to compensate the songwriter, but not the performer or record label for use of copyrighted material? However, the Recording Industry Association of America, SoundExchange, and DiMA should negotiate a performance royalty rate that benefits all parties by ensuring that Internet radio lives on. The impossible-to-interpret “willing buyer, willing seller” model utilized by the CRB is not a transparent approach. The Webcaster Settlement Act, which allows the parties to negotiate further, is a step in the right direction.

Stem Cell Petri Dish
by Hilary Libka.

Individual US states have been setting their own policies regarding human embryonic stem (hES) cell research – due to both the increased application of private and state money to hES cell research, and the federal government’s failure to change or expand its regulations and funding for this controversial science. While the majority of states restrict research on embryos, at least twelve states have now implemented public funding schemes for some type of stem cell research, and eight states permit or even channel funds specifically to hES cell research.¹ The states have organized funding through bond sales, the Tobacco Master Settlement Agreement, executive expenditures, and legislative appropriations.² Depending on the state and award, the funds are either directed toward particular research projects or infrastructure development at public and private institutions as well as non-profit and for-profit organizations.³

Public funding of stem cell research presents policy controversies that extend far beyond the science. Each state that participates must develop oversight for its investment and consider the potential outcomes of accelerating the market. One imminent issue that must be resolved is how the state should benefit from any intellectual property (IP) that may result from the funding.

The federal Bayh-Dole Act is one model states could look to for managing IP. The Act gives US universities, small businesses, and non-profit organizations the right to inventions developed through research funded by the federal government.⁴ The government keeps a nonexclusive license to the invention (among several other rights), but no royalties are collected.⁵ The biotech industry is pushing for this model at the state level.⁶ On the other end of the spectrum, consumer advocates argue for a public ownership model, where the state would retain the rights to any patents resulting from public funding.⁷ As a state that has been struggling with IP agreements, California is an important starting place to understand the complexities of benefit sharing in the realm of stem cell research funding.

Case Study: California

In November 2004, California became the largest source of funding for stem cell research in the world when voters passed Proposition 71 (a.k.a. the California Stem Cell Research and Cures Bond Act).⁸ The petition-driven initiative authorized the state to sell $3 billion in general obligation bond funds to be disbursed to in-state researchers over ten years.⁹ Up to $350 million may be paid out annually, and the funding is guaranteed by the state, which pays the principal and interest costs with bond sales for the first five years of the program, then with state income taxes and sales tax.¹⁰ Proposition 71 was incorporated as a politically-insulated state constitutional amendment: modifications are only possible with an unlikely 70% legislative majority and the governor’s signature.¹¹ High expectations are attached to the initiative, which was sold to voters on two points: (1) “Cures for California” and (2) economic benefits, such as IP revenues, reduced health care costs (state welfare programs and government employee benefits), and additional research activity (more jobs and taxable income).¹²
Proposition 71 established the California Institute for Regenerative Medicine (CIRM), a state oversight agency, to disburse funds to research organizations.¹³ CIRM is also charged with regulating state-funded stem cell research activities.¹⁴ This includes:

[E]stablish[ing] standards that require that all grants and loan awards be subject to intellectual property agreements that balance the opportunity of the State of California to benefit from the patents, royalties, and licenses that result from basic research, therapy development, and clinical trials with the need to assure that essential medical research is not unreasonably hindered by the intellectual property agreements.¹⁵

Although this provision stresses that California should benefit from resulting technologies, it fails to specify how the benefit sharing should take place. The generality is especially striking given the tendency of the legislation to delineate CIRM elements narrowly (sometimes too narrowly, as with the composition of the governing board and working groups, none of which included any legal experts).¹⁶ Initial uncertainty and qualms about transparency and accountability have slowed the process of developing IP standards.
Early lawsuits tried to overturn Proposition 71 by claiming CIRM was unconstitutional; complaints focused on CIRM’s validity as a public agency and its members’ affiliations with patient advocacy groups, biotech companies, and research institutions.¹⁷ A $150 million loan to CIRM from the governor kept the program afloat while the initial legal issues were resolved,¹⁸ but these “built-in conflicts of interest” continue to plague operations. Both pro- and anti-hES cell research advocates have raised ethical concerns, and in 2008, the state Controller audited CIRM’s grant approval process.¹⁹

Most recently and against steep odds, the state legislature successfully passed Senate Bill 1565, which called for a study of the governance structure of the program by the independent Milton Marks “Little Hoover” Commission on California State Government Organization and Economy.²⁰ SB 1565 also would have forced a ceiling on the price of drugs resulting from CIRM-funded research and required a plan from funded organizations that would make the drugs accessible to uninsured Californians.²¹ Although Governor Schwarzenegger vetoed the bill because of its restrictions on CIRM’s authority to adopt IP standards, the oversight commission has announced it will still proceed with its investigation.²²

In March 2008, after two years of research and debate, the CIRM governing board finally approved IP standards for the funding program.²³ Like the Bayh-Dole model, nonprofit organizations receiving public funds may retain their patents and must share net revenues with individual inventors.²⁴ But unlike the Bayh-Dole model, after a threshold amount of revenues and in proportion to CIRM’s support, the organization must pay 25% of its share to the state’s General Fund; the rest may only be used to support scientific research or education.²⁵ Meanwhile, for-profit organizations also keep their patents, but the state gets 25% of royalties on licenses after a threshold amount as well as a fraction (2-5% unless a blockbuster drug, which generates more than $250 million of revenue annually) of the revenues from any products commercialized by the organizations.²⁶ Furthermore, for-profit organizations must sell products at low prices to California’s discount prescription drug program.²⁷

And yet, even with these new explicit standards, the uncertainty persists. CIRM’s agenda for its latest IP meeting included, "Consideration of draft amendments to consolidate non-profit and for-profit intellectual property regulations and begin formal process of adoption."²⁸ CIRM has also been considering additional in-state discounts, and Californians, especially the state legislature, will continue considering CIRM. Although the state has been successful in attracting biotechnology,²⁹ “[CIRM] is still an unknown quantity, and that spooks the biotech industry.”³⁰ Several company executives and investors have been echoing the concerns of one general counsel: “We will take CIRM money last. We don’t want to be in a position where, years from now, we are actually forced to sell [our products] in California at a loss.”³¹

Moving Forward

The sheer dollar value of California’s funding continues to attract the stem cell industry despite uncertainty regarding public access requirements and other forms of benefit sharing. What about states thinking of or already implementing smaller stem cell research funds? Can they afford to promise a program that will “pay for itself,” followed by years of figuring out how to “pay back the taxpayers”?³²

IP revenues and restrictions are great selling points to taxpayers but terrible incentives for industry. The program is useless if it fails to attract participants. When it comes to access issues, which consumers should receive a discount? If beneficiaries of government programs and the uninsured are covered for new medical treatments, is that fair to the insured taxpayer whose insurance may not cover the treatment and whose rates will probably go up regardless of coverage? By what time do you have to start paying taxes in California to get the benefit of a new drug—before development, before clinical trials? Do you have to pay taxes to the state or even be a California resident? Medical tourism may benefit the state, but being the capital of social welfare probably will not.

As more states consider implementing public funds for stem cell research, the benefit sharing issues are going to be critical for collecting and maintaining public and industry confidence. Maybe the question California made a mistake in postponing when it passed Proposition 71 was not how, but whether the state should force benefit sharing at all. State stem cell research funding programs still have much to offer in terms of economic advantages and future medical breakthroughs, even if the state does not directly share in IP revenues. States should attempt to quantify and communicate expected revenues. Because funding states cannot foresee research outcomes (both treatments and revenues), it’s not an accurate measure to ask taxpayers how much they would pay to eliminate spinal cord injuries, cancer, or one of many other suggested targets. However, some taxpayers are interested in taking a shot at these cures, and it’s possible that the total value of the research to taxpayers may be much greater than any state’s investment.

It may be time to quit that nasty BitTorrent habit. On October 13th, President Bush signed into law the PRO-IP Act (Prioritizing Resources and Organization for Intellectual Property Act of 2008), which greatly increases the power of the federal government to protect copyright and trademark owners.
Some of the big changes coming down the pipe:

1. A court can take away your computer if you download illegally – §102 of the Act specifies that during a civil action, a Court may order the impoundment of all copyrighted material and the means by which the material can be reproduced, as well as all documentation regarding the creation, sale, or receipt of these materials.
2. Counterfeiters could pay up to $2 million in damages – §103 raises the range of statutory damages available considerably, with the new maximum fine being $2 million, doubling the current $1 million max.
3. Harsher criminal penalties for infringement – §205 punishes infringers with jail time (up to life) if someone is seriously injured or dies as a result of the trafficking of counterfeit goods or services.
4. There will be an “IP Czar” – §301 creates the position of an Intellectual Property Enforcement Coordinator (appointed by the President and confirmed by the Senate), who will be in charge of an interagency intellectual property enforcement committee and will help facilitate coordination between agencies.

The law originated in the House last December (introduced by Rep. John Conyers (D-MI)), and passed in the House by a very large margin in May. A similar bill was introduced in the Senate by Senator Patrick Leahy (D-VT), and passed in the Senate unanimously and the House by a large margin (90.3% by both Democrats and Republicans). While many criticize the PRO-IP Act as harsh, the version that Bush signed has actually been toned down considerably, as previous proposals included much higher statutory damages, creation of a new federal agency, and giving authority to the DOJ to sue on behalf of copyright holders.

Image Pirate Mona by Kim P. Used under a Creative Commons BY-NC-SA 2.0 license.

As expected, the RIAA and MPAA are quite pleased with the new law. The National Association of Manufacturers is happy too, and President John Engler calls the PRO-IP Act “a shining example of a bicameral, bipartisan effort to advance legislation to protect our consumers, jobs and businesses from intellectual-property piracy and counterfeiting.” Copyright infringement and counterfeiting are serious problems, and this Act represents a major step by the government in protecting IP owners. The RIAA and MPAA have been particularly concerned about P2P networks for several years, and if this Act is strongly enforced, it will give owners more tools for suing infringers and provide more federal oversight. In a tough economy like this, the Act can serve to bolster U.S. businesses, which lose $200-$250 billion and 750,000 jobs annually due to infringement and counterfeiting (or maybe not).

Not everyone is happy about the PRO-IP Act. Public interest groups like the Electronic Frontier Foundation and Public Knowledge criticize that the Act “amplifies copyright without protecting innovators or technology users” and “adds more imbalance to a copyright law that favors large media companies.” These groups are worried that the Act is unnecessary, will curtail legitimate fair use, and impose fines and seizures that are much too severe. Even the DOJ expressed its concern about the creation of an “IP Czar” and felt that such an enforcer would undermine the DOJ’s independence.

It is hard to say at this point what will become of the PRO-IP Act. Obviously a lot will depend on who is to become the first “IP Czar”, which will likely be decided by the next president. Obama’s campaign plan already included the creation of a “Chief Technology Officer”. This Business Week article speculates that possible candidates for the position include Vint Cerf, Steve Ballmer, Jeffrey Bezos, Ed Felten, while the Wall Street Journal shows that some believe Google Chief Executive Eric Schmidt wants the job. One factor that may influence the decision is Obama’s recent battle against major copyright holder NBC, which took down a popular YouTube video mocking a McCain victory. His official stance is that there is a “need to update and reform our copyright and patent systems to promote civic discourse, innovation and investment, while ensuring that intellectual property owners are fairly treated.” John McCain also seems to have a personal sympathy for fair use of copyright materials, as evidenced by this letter from his campaign to YouTube, which bemoans the “overreaching copyright claims” that have “silenc[ed] political speech” and wants to give campaigns special treatment. Ironically, the letter is dated October 13, 2008, the same day that Bush signed the Act. McCain also openly “supports efforts to crack down on piracy, both on the Internet and off.” While it seems like Obama may be more friendly to reform, keep in mind that it was Democrats who initiated the bills in both the House and the Senate. Obama will likely present a more “fair use”-friendly “IP Czar”, but the real question may be if he or she can get past the Senate.

Last week, a court in the Netherlands criminalized the theft of”virtual goods.” (Dutch news report.) According to a ruling handed down by a Dutch court, two teenagers, aged 14 and 15, were found guilty of theft after physically coercing a 13-year-old boy into transferring virtual money, a virtual amulet, and a virtual mask to their accounts in the online fantasy adventure game, RuneScape. Though the court only dealt with the theft issue and not the more obvious assault, it plainly and forcefully held that “[t]hese virtual goods are considered goods under Dutch law, so this is theft.”

Despite both the clarity of this ruling and the apparent intellectual property and monetary value that can be derived from games with their own currency and property, game-based virtual theft claims have had a rather uncertain history. For instance, Second Life, one of the Internet’s largest virtual realities, has seen both the wrongful “taking” of in-game land and a lawsuit between users for copying the design of objects sold in Second Life’s marketplace in the past year alone.

In the US, Minnesota police refused to recognize $4,000 of virtual currency stolen in Final Fantasy as a crime, explaining that because virtual items “are devoid of monetary value,” no crime had actually been committed. Perhaps even more significantly, the MMORPG, EVE Online, saw a large-scale banking scheme that defrauded a number of users. The stolen money was estimated to be worth as much as $170,000 in the real-world marketplace, and the scam even got the attention of some in the legal community who likened it to “actionable real-world fraud”.

Virtual goods like these, including game-based currencies, may not only have real economic value, but online communities like Facebook, Live Journal, and even Dogster have begun to create sentimental, communicative, and self-expressive value in virtual gifts that members can send to each other. These businesses, as well as games like Second Life and Gaia, are in some cases making tens of millions of dollars in revenue by selling virtual goods to personalize virtual avatars, land, and the like, and at least South Korea has even begun taxing these virtual property transactions.

Ultimately, as long as virtual goods inside of video games can be converted into real economic value, online thefts like the one seen in the Netherlands will continue or even increase “as ‘criminals’ may think the court systems and the police are not educated in online gaming, or the law as it pertains to in-game items and cash.” As one Dutch columnist argued even before this recent virtual theft, “[a]s long as the original owner loses something of value (such as virtual items) due to the act of another individual who gains possession over the item, it should . . . be qualified as theft, no matter whether the locus delicti is in the physical or the virtual world.”

The McCain campaign’s visual themes (i.e. the Optimum typeface, his simple star logo) have drawn positive comments for the strength and military experience they convey. But many commentators agree that the Obama “O” logo is a radical political innovation: “probably the only political campaign logo to have a visual theme in it”, “[a] true logo, one that is recognizable apart from the candidate’s name” and “the first sophisticated corporate-style identity to emerge from presidential politics”, “signals by design that Obama has a different message”, “perhaps one of the few conceptual logos in the history of presidential elections”, “[c]learly not the old standards of years past.”A few have pointed out that the Bush 2004 campaign’s “W” logo was similarly identifiable, but it did not convey the same level of conceptual information.

The “O” logo has been criticized as derivative of other logos, (although the same criticism has been leveled with similar plausibility at the McCain logo.) For any number of possible reasons (its innovation, its visual impact, its simplicity, basic political demographics) the “O” logo has become a favorite new theme of makers, hackers, crafters and other habitues of the DIY/maker/remix culture. (In an attempt to keep this post politically neutral, I searched extensively for McCain remixes. The closest match I found were these commercially available McCain logo cookies.) Despite plausible copyright and trademark claims to the art and product-identifying use of the logo, unauthorized reinterpretations have rapidly proliferated.

(For all of the following examples, click the thumbnail to see the image in its original context.)

It’s popular in food (particularly cookies):

CC-licensed by-nc-sa
	CC-licensed by-nc-sa	CC-licensed by-nc

Knitters and other textile and fabric crafters have also interpreted the logo:

	CC-licensed by-nc-nd

Several artisans have made their own “O” products:

CC-licensed by-nc-nd

Finally, a few of the reinterpreted “O” logos defy categorization. They include:

The Penn State S-Zone is transformed into the O-Zone: CC-licensed by

A bicycle wheel is transformed into a glowing “O”:

A pregnant supporter displays her own “O” logo:

Additionally, the logo seems clearly a motivating factor for the Barack O-Lanterns of non-campaign-affiliated Yes We Carve and other Obama O’Lanterns.

It is interesting to note all the different claims people are making as to “ownership” of their logo-derivatives. A number of images are Creative Commons licensed, but with varying levels of control asserted (from the very loose “attribution” license, to the more restrictive “attribution-noncommercial-noderivatives” license.) Several of the images on Flickr also display the traditional “all rights reserved” language, but since this is the Flickr default, it doesn’t necessarily mean a great deal. The creators of both the necklace and the earrings have their derivative images for sale on craft website Etsy – almost certainly a commercial use, although the necklace maker claims to be donating to the Obama campaign with every sale.

In the midst of an intense political campaign, the Obama camp’s interests may, in many ways, be opposite from those of most trademark and copyright owners. It is in the campaign’s interest for the mark to be distributed widely. Although using the language of trademarks – the Obama website refers to the “‘O’ Logomark” – this distinctive image does not appear to have been registered with the PTO (a TESS search for “obama” yielded 38 results, none of which appeared to be for this image.) In fact, they make the image freely downloadable in a variety of formats from the campaign website.

Given the limited utility of the mark once the election is over, there is little incentive for the campaign to police others’ uses of the mark, be they positive or negative. Without anyone having directly dedicated the “O” mark to the public domain, it appears to have become de facto public property.