IPcentral Weblog: June 2005 Archives

June 2005 Archives

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06.30.2005

It's a Great Time to be an Entrepreneur . . .

says Bnoopy, because "it’s never been cheaper to be one." Specifics follow.

Infectious Greed adds:

Granted, you still need good ideas -- and maybe even better ideas if the financial barriers to entrepreneurship have fallen -- but people still haven't wrapped their head around how much less expensive it is to start a Web 2.0 company than it was to start a Web 1.0 outfit.

There is a bit of irony here, though. One reason Bnoopy cites is that development software is now free. And he has just been invited to join the board of EFF, which is really not very big on protecting IP. So once you start your venture on the cheap it is not clear exactly how you will monetize your work, since at every turn EFF will be supporting those who want to lift it.

Whether innovation is cheap or dear, if it produces no revenue stream, it ain't gonna happen.

posted by James DeLong @ 10:28 AM |

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Look for the Silver (and Gold) Lining

The ink was not dry on the Grokster opinion before the Electronic Frontier Foundation had an alarmist fund-raising appeal out (the email is timed at 07:34 p.m. on Monday): "torrent of new litigation"; "innovators . . . scared"; "fewer choices in the marketplace"; "Hollywood's seal of approval".

Maybe PFF should do one: "academic abstractionists attack consumer sovereignty"; "creators' rights in jeopardy"; "renewed effort to socialize intellectual property"; and, most important, "send check".

posted by James DeLong @ 10:14 AM | Internet: P2P, Search Engines...

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Brazil

James Pinkerton discusses Brazil's recent move to appropriate patents:

To an outside observer, it's apparent that the Brazilians clearly want to have it all three ways: being needy when it suits them, being export-y as they are able, being greedy when they think they can get away with it -- and if that last stance hurts the U.S. economy, too bad. It's a little complicated, and a little bewildering. And yet Uncle Sam's answer to the "Brazil Bewilderment" will help determine America's own wealth, and health, in the 21st Century.

He quotes the WSJ on the broader context:

Mary Anastasia O'Grady wrote, "The possible compulsory licensing of AIDS drugs is only part of Brazil's wider assault on intellectual property rights. While China and India are promising to firm up protections and sucking in capital investment, Brazil seems bent on joining the likes of Cuba, Iran and Venezuela.

Continue reading Brazil . . .

posted by James DeLong @ 7:18 AM | International

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06.29.2005

Do As I Say . . .

Re Patrick's comment on the WaPo story on Grokster: next time you ride the DC subway, notice the used newspaper receptacles, which are carefully designed to make it impossible to extract a newspaper for re-reading.

They were donated to Metro by the Washington Post Company, which seems to have a pretty good grasp of property rights when its own interests are involved.

Indeed, this goes beyond the WaPo's rights, because it deliberately frustrates the first sale doctrine, which gives an initial purchaser of a physical object containing IP the right to pass that object on to others.

Where is the EFF when you really need it?

posted by James DeLong @ 2:21 PM | Internet: P2P, Search Engines...

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Soothsaying

As Yogi Berra (or it might have been Neils Bohr) said: "Prediction is very difficult, especially if its about the future." Nonetheless, I will make a prediction about the course of future litigation under Grokster.

The tech industry is upset about the Court's willingness to accept failure to install filtering technology as evidence of an intent to induce infringent -- tech had hoped to avoid any such affirmative obligation.

But, as is often the case in Supreme Court opinions, what the text taketh away the footnote giveth back; so, here, footnote 12 says: "Of course, in the absence of other evidence of intent, a court would be unable to find contributory infringement liability merely based on a failure to take affirmative steps to prevent infringement, if the device otherwise was capable of substantial non-infringing uses. Such a holding would tread too close to the Sony safe harbor."

This is a reasonable caution. An affirmative obligation to filter would be very tricky to enforce. But here is how the filtering issue is likely to play out.

Content commpanies and tech innovators are devoting great efforts to development of DRM content-protection measures. Content companies are also engaged in black arts of self-protection, such as spoofing (example: a P2P files is labelled as the latest Foo Fighters song, but actually contains a lecture by RIAA head Mitch Bainwol on the evils of piracy), or flooding uploading sites.

These protective measures are no problem for legitmate download services, but of course they can interfere greatly with the pirate services. Their weakness has been that they beatable, and the P2P software purveyors/services have taken steps to neutralize them.

But, under the Grokster opinion, such efforts to defeat protection -- anti-filtering, so to speak -- are going to be regarded, quite properly, as very bright line proof of intent to induce infringement.

It might not be clear how far a tech company must go in affirmatively protecting content, but it is crystal clear that taking action to defeat protection is a no-no.

And this is not a bad place to strike balance.

posted by James DeLong @ 11:30 AM | Internet: P2P, Search Engines...

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BitTorrent & Grokster

Law prof Mark Schultz ponders the impact of the decision on BitTorrent, which is now the techology of choice for file-sharing. His conclusion:

In sum, Bram Cohen and the original BitTorrent (as a technology) look pretty safe post-Grokster. BitTorrent's unique history and the existence of the etree community are great protection.

Continue reading BitTorrent & Grokster . . .

posted by James DeLong @ 11:00 AM | Internet: P2P, Search Engines...

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Grokster on TechCentralStation

My take on Grokster was on TechCentralStation yesterday.

posted by James DeLong @ 10:53 AM |

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06.28.2005

A New Euphemism for Theft

Does The Washington Post have any editors? Jonathan Krim in a front-page, above-the-fold, before-the-jump stretch of the English language, writes the following about the Grokster decision:

The decision hands movie and recording studios a sharper legal weapon in their campaign to try to shut down file-sharing systems that enable hundreds of millions of consumers around the world to bypass retail outlets by electronically swapping music, videos and software programs.

As a consumer, I'm tired of having to pay for the things I consume. I think the next time I'd like a new car, I'm going to "bypass" my local car dealership and take the first hot car I see (that slick Chrysler Crossfire that parks near me in my parking garage looks pretty good). And maybe the next time I want to read the Post, I'll "bypass" a news stand and just liberate it from my neighbor's porch.

posted by Patrick Ross @ 11:16 AM | Internet: P2P, Search Engines...

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06.27.2005

Grokster Out! What's Up with Justice Breyer?

So Grokster is out, and really the Court did the only thing that it could logically have done. The Ninth Circuit's interpretation of Sony let a tech provider make a mockery of copyright in reality, while sheltering under merely possible or plausible noninfringing uses of that tech as a general matter. The Court makes it clear--we aren't putting P2P on trial here--just one specific application of it, under one set of circumstances. And, as I read the opinion, the tech might still be used widely for infringment, but still be sheltered from liability if there is no evidence that the provider intended to encourage such uses. So Grokster will need to ... get a new business model (where have I heard that before?).

But what about Justice Breyer's concurrence? It is eloquent, yet, I think, ultimately wrong. Here's why:

Continue reading Grokster Out! What's Up with Justice Breyer? . . .

posted by Solveig Singleton @ 12:48 PM | Internet: P2P, Search Engines...

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First Take on Grokster

The Court issued three opinions.

By 9-0, through Souter, it said that the issue is whether Grokster intentionally induced copyright infringement. In deciding this, a trial court should look at all the usual indicia by which intent is assessed, plus the facts that Grokster:

(1) Demonstrated a desire to fill the market left empty by the demise of Napster;

(2) Did not attempt to develop filtering tools or other mechanisms to discourage infringement;

(3) Adopted a business model that depended on infrigement; "this evidence alone would not justify an inference of unlawful intent, but viewed in the context of the entire record its import is clear."

On this view of the case, Sony, over which so much briefing ink and angst were spilled, is irrelevant. It did not concern a charge of deliberate inducement of liability.

Separate concurrences by Ginsburg and Breyer then exchanged fire over what Sony would mean if it were relevant.

Breyer, joined by Stevens and O'Connor, takes the hard line tech view that -- absent a demonstration of intent to affirmatively encourage infringement -- if a product is "capable of substantial or commercially significant noninfringing use," its purveyor cannot be held liable. Note also that coupling this view with the Court's note that business model evidence alone would not justify a finding of intentional inducement would give the tech industry a pretty good safe harbor.

Ginsburg, joined by Rehnquist and Kennedy, says "not so fast" on that interpretation of Sony. If the case comes back up, then we will have to think about it (but don't think you get that slider past me, Breyer!).

Souter, Thomas, and Scalia are crouched in the dugout, letting the Sony exchange go over their heads.

So the tech industry can be happy that Sony, whatever it means, still means it, and that at least three justices think it means much indeed.

But items (2) and (3) in the Court's opinion are very big deals. Neither the tech industry nor the communications providers wanted the Court to come anywhere near idea of an obligation to filter, or the idea of business models. The inclusion of these in the inquiry is a major plus for the content industries.

On the whole, it is an amazingly clear, and good, set of opinions, solving the immediate issue and teeing up the future issues for future consideration.

posted by James DeLong @ 12:19 PM | Internet: P2P, Search Engines...

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06.27.2005

Ethics & Grokster

posted by James DeLong @ 8:10 AM | Markets: Business, Investment & Innovation

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06.24.2005

Waiting for Grokster

posted by Solveig Singleton @ 6:16 PM | Internet: P2P, Search Engines...

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