Oh, there goes the wacky lawyers at the MPAA again. Last week we noted that a key fight may be shaping up concerning the contours of Section 512(f) of the DMCA -- the clause that is supposed to allow people to fight back against bogus DMCA takedowns. The details of the fight itself are pretty silly -- basically two angry bloggers fighting with each other -- but the underlying legal issue is of critical importance. As we've noted, to date, 512(f) has been rendered almost entirely toothless, such that tons of completely bogus DMCA notices are filed all the time, stifling free speech. Here was a case that might actually allow a 512(f) win, and provide some further basis for future responses to abusive DMCA takedowns. Is it really any surprise that the MPAA suddenly took notice of the case after the EFF filed an amicus brief? The MPAA had to step in and argue why it should be allowed to continued to file millions of DMCA takedowns without having to be that careful about bogus takedowns, because actually having to make sure a work is infringing would be too much work. So, the MPAA basically says, "we should be allowed to stifle free speech with no consequence because OMG PIRACY@!@!!" Yes, that's a paraphrase, but that's the crux of the MPAA's argument. The MPAA respectfully submits that such an interpretation of § 512(f) is wrong and threatens to cause significant harms that Congress could not possibly have intended. The MPAA's interest in this matter is not academic. The MPAA and its members confront the piracy of their works by Internet actors on a massive global scale. One of the only means that the MPAA and its members have to ensure that Internet services that carry, host, or link to such content take steps not to facilitate such rampant piracy is through the DMCA's notice-and-takedown provisions. The rule that Plaintiff and Amici advocate, if carried to its logical conclusion, would impose significant and unwarranted burdens on copyright owners like the MPAA and its members who unfortunately must send literally millions of takedown notices every year to combat the mass infringement of their works on the Internet. That's both wrong and ridiculous. It's not an "unwarranted burden" to ask DMCA filers to actually check to make sure a file is infringing. It's the whole freaking point. What's really going on here is that the MPAA is finally realizing that its now-common practice of hiring companies like DtecNet to send automated takedowns might run afoul of 512(f) because the computer programs aren't taking into account things like fair use. So, the basic point that the MPAA is making is silly and wrong. They're also flat out wrong on the law. The issue here, once again, is that the MPAA insists that fair use is only an "affirmative defense," and thus it has no reason to consider it before filing a DMCA takedown. Fair use is an affirmative defense. It excuses conduct that otherwise is actionable as infringement, as the Supreme Court, the First Circuit, and numerous other courts and the Copyright Act’s legislative history have made clear. But that is not what the law actually says. It does not say that it "excuses conduct that otherwise is actionable as infringement." Section 107 of the Copyright Act says: ... the fair use of a copyrighted work, including such use by reproduction in copies or phonorecords or by any other means specified by that section, for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright. This is important. The law does not say that this it is an infringement, but "excused." It says it is not an infringement. If it's not an infringement, then it means that the use is authorized. And that's the key to the whole issue here, because 512(f) says you can be liable for damages if you misrepresent "that material or activity is infringing." Infringing. Again, fair use is not infringing. So if it is a clear case of fair use (and we agree that not all cases of fair use are clear), then not considering fair use whereby one would recognize that the use is authorized, and still filing the DMCA takedown, would be a misrepresentation that the work is infringing. This isn't just me making this up. It's what the court said in the Stephanie Lenz case as well: Here, the Court concludes that the plain meaning of “authorized by law” is unambiguous. An activity or behavior “authorized by law” is one permitted by law or not contrary to law. Though Congress did not expressly mention the fair use doctrine in the DMCA, the Copyright Act provides explicitly that “the fair use of a copyrighted work . . . is not an infringement of copyright.” 17 U.S.C. § 107. Even if Universal is correct that fair use only excuses infringement, the fact remains that fair use is a lawful use of a copyright. Accordingly, in order for a copyright owner to proceed under the DMCA with “a good faith belief that use of the material in the manner complained of is not authorized by the copyright owner, its agent, or the law,” the owner must evaluate whether the material makes fair use of the copyright. 17 U.S.C. § 512(c)(3)(A)(v). An allegation that a copyright owner acted in bad faith by issuing a takedown notice without proper consideration of the fair use doctrine thus is sufficient to state a misrepresentation claim pursuant to Section 512(f) of the DMCA. Such an interpretation of the DMCA furthers both the purposes of the DMCA itself and copyright law in general. In enacting the DMCA, Congress noted that the “provisions in the bill balance the need for rapid response to potential infringement with the end-users [sic] legitimate interests in not having material removed without recourse.” The MPAA's desired interpretation of 512(f) is basically an attempt to reject the Lenz ruling entirely... and, more importantly, to make sure that almost no case could ever qualify for 512(f) damages. Which is exactly what they want: to be able to brush off all of the bogus DMCA notices they send without ever having to fear reprisal for stifling someone's speech. I guess this is one more to add to the pile of evidence showing how absolutely ridiculous it is when the MPAA pretends it's a defender of fair use. A defender of fair use wouldn't support an interpretation of 512(f) that basically allows for DMCA takedowns on clearly fair use situations. And yet that's exactly what the MPAA is arguing for here.Permalink | Comments | Email This Story
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We recently had an article about how intellectual property makes people pretend to be stupid, by forcing us to pretend that digital works act in the same way as physical products do, even though we know that they don't. This seems silly, but it goes beyond just copyright. There's been a lot of hubbub recently concerning 3D printed guns. While there's been some discussions about them in the past, it went into overdrive last week when the first fully 3D-printed gun was unveiled. The plans were uploaded online and... over 100,000 people downloaded them. And then the US government freaked out, as the State Department argued that the company that put the files online may have violated export control laws. The government says it wants to review the files for compliance with arms export control laws known as the International Traffic in Arms Regulations, or ITAR. By uploading the weapons files to the Internet and allowing them to be downloaded abroad, the letter implies Wilson’s high-tech gun group may have violated those export controls. “Until the Department provides Defense Distributed with final [commodity jurisdiction] determinations, Defense Distributed should treat the above technical data as ITAR-controlled,” reads the letter, referring to a list of ten CAD files hosted on Defcad that include the 3D-printable gun, silencers, sights and other pieces. “This means that all data should be removed from public access immediately. Defense Distributed should review the remainder of the data made public on its website to determine whether any other data may be similarly controlled and proceed according to ITAR requirements.” Remember, this file has already been downloaded over 100,000 times. It's not going to be removed from public access. That's reality. But the laws that demand we pretend to be stupid include pretending that something like this is stoppable, when plenty of sites are still making them available. As Rick Falkvinge notes, the whole idea of pretending you can delete these files from existence and keep it under control suggests a very confused US government. Not only is the concept impossible, but even stepping in like that has only drawn much more attention to the files. Falkvinge points out that this highlights how the US government is "unfit to set and shape Internet policy, due to their simply not understanding of what the internet is and how it works." Of course, that hasn't stopped them before. I recognize that a 3D printable gun freaks some people out. But just because some people are freaked out, it doesn't mean we should deny reality and pretend it's possible to disappear these plans when it's clearly not. I don't know about you, but I prefer a government that deals in reality, rather than one that chooses to act stupid on purpose.Permalink | Comments | Email This Story
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Prenda: the gift that keeps on giving. Late last week there was some movement in the ongoing fight directly involving Alan Cooper and Prenda. If you don't recall, Alan Cooper -- who was a caretaker for one of John Steele's homes -- claimed that Steele put Alan Cooper's name and signature on various documents, such as those suggesting that he was the person behind shell companies AF Holdings and Ingenuity 13 (two of the shell companies that Judge Otis Wright found were actually controlled by Prenda's principles, including John Steele, Paul Hansmeier and Paul Duffy). Prenda tried to handwave this issue away, but also refused to answer any basic questions about it. In response, Cooper sued both Steele and Prenda (remember this, it'll come up again). In response, Prenda as a company, and Paul Duffy and John Steele as individuals, all sued Cooper (and his lawyer and anonymous internet commenters) for defamation in state courts in Illinois and Florida. Steele dropped the Florida suit (we believe due to a pretty big procedurial screwup), and the two cases in Illinois were removed to federal court. About this time, Steele called Cooper and left voicemails that are clearly bullying/intimidation attempts. It is, of course, a big legal no-no to directly contact someone (rather than their lawyer) who is suing you while litigation is ongoing, but Steele tried to get around this in the voicemail by claiming the call was not about Cooper's lawsuit against Steele (where Cooper was represented), but Steele's lawsuit against Cooper. Since he was also suing Cooper's lawyer, he knew that the same lawyer was unlikely to be able to defend Cooper in the same case, and in fact some filings in the case suggest that this point was made to his lawyer. Among the voicemails was this one: Alan, this is John Steele again. You have not responded or contacted me regarding litigation you're involved in. I know you've been served with a third lawsuit. And there are more coming. Don't worry about that. Well, obviously, if I don't hear from you, I'm going to start filing for certain default motions and start getting relief that way. I can assure you that just ignoring legal matters, it's not going to go away. I can guarantee you, I'm not going away. So I highly recommend you at least, you know, follow the rules.... otherwise your life is going to get really complicated. Cooper and his lawyer, Paul Godfread, then filed counterclaims in the two remaining defamation cases (one from Prenda and one from Paul Duffy who supposedly runs Prenda). Then Paul Hansmeier (named as one of the Prenda principles by Judge Wright), now representing Paul Duffy and Prenda, argued that the defamation case should never have been removed to federal court from state court, because his own law firm in Minnesota was added as a plaintiff in an amended complaint and you can't get "diversity" needed to remove from state to federal court if two opposing parties are in the same state. As we noted at the time, it seemed like adding Hansmeier's Alpha Law firm was a complete sham, because nothing in the amended complaint involved any defamatory statements towards Alpha Law firm. Phew. So that catches you up to last week. A few interesting things then took place last week. First, on Monday, in the original case that Cooper had filed against Prenda and John Steele in Minnesota, Godfread asked the court for a default judgment because Prenda/John Steele had never replied. Note that Steels has been insisting that Cooper's claims are bogus and that this would all come out in court. If that were true, you'd think that he would have bothered to respond to the damn lawsuit. Also ironic: note above how Steele claimed he would go after Cooper for default. Godfread also points out that Steele and Prenda clearly knew about the case because of the lawsuits they had filed in response. So, they ask the court for a default ruling... and ask for the $4,641,000 that they estimate Steele and Prenda made via lawsuits using Alan Cooper's name. That very same day, Prenda and Steele finally filed a response (as found by John Henry). The response is basically "we deny everything possible." Of course, as pointed out by Z.Y.U., Minnesota Law (MN R. Civ. P. 12.01) requires an answer within 20 days after service, and we're way, way outside of that. Leaving that particular case aside for the moment, and jumping back to the Defamation case that Duffy and Prenda had filed back against Cooper and Godfread (where they amusingly and ridiculously claim that lawsuit over identity fraud was "completely unrelated"), Cooper and Godfread have hit back at Prenda's weak attempt to move it back to state court. They're both represented by Erin Russell and Jason Sweet -- two lawyers who have been fighting the good fight against Prenda for a while now. When Hansmeier first filed that attempt, we noted that Prenda's history of being less than forthcoming in its filing made me wonder if it was being somewhat misleading with that filing -- and I would reserve judgment until the inevitable reply was filed. And, yes, it suggests less than full honesty from Hansmeier. First, it makes a strong case (as I had suggested) that Hansmeier's firm, Alpha Law Firm, was added for no other reason than to try to keep the case in state court and out of federal court. But, even more importantly, it points out that Prenda apparently mislead the court in getting the amended complaint filed. That's because to amend the complaint, Prenda would first need to ask the court for leave to amend, which it did not. Even worse, the lawyer representing Prenda, Kevin Hoerner, apparently convinced the court clerk that there was no need to take that important step because (he claimed) the defendants (Cooper and Godfread) had not yet been served. Except (1) they had and (2) Prenda knew they had because John Steele called Godfread hours after they had been served (and days before this "amended" complaint was filed) and left the following voicemail: “Mr. Godfrey. This is John Steele calling. I understand that you just got served. So, I do need to know if you are going to be representing Mr. Cooper in this suit as well. Obviously there is a conflict of interest that I can see but obviously I’m going to have to defer that decision about whether you are going to represent your co-defendant to you. Uhm and I leave the question as to the other suits that are coming your way in the next few days, I’ll just wait until you actually get served before I bringing those up, but at least on this issue, this suit, I do need to know if I may contact Mr. Cooper directly or if I will be working through you. All right. Thank you.” That's the call I mentioned earlier in which Steele was making sure that Godfread wouldn't represent Cooper in this particular case, which Steele seems to think made it okay for him to reach out directly to Cooper. So, Prenda knew that the defendants had been served, and told the court they had not in order to file an amended complaint, where the amendment appears to be solely to add a sham plaintiff in the same state as Cooper and Godfread to block them from removing it to federal court. Oh, and did we mention that Hansmeier's filing to move the case back to state court was filed well past the deadline to make such a filing? As I said, Prenda is the gift that just keeps giving. In another filing, Russell and Sweet, representing Cooper and Godfread, also hit back at Prenda's attempt to dismiss their counterclaims. Here, the most interesting part is more evidence being filed that Steele pretended to be Cooper. In particular, they file a document from GoDaddy, showing what is clearly John Steele (it's using his email) registering various domains while claiming to be Alan Cooper. Just last week Steele demanded to see evidence that he faked Cooper's name. Well, there it is. That same document also shows that the domain was originally filed with Prenda's address in Chicago, but then was moved to what appears to be John Steele's sister's house in Phoenix. Oh, and also customer service records that show that John controlled the account. And, just for good measure, there are a couple more filings showing that John Steele (and sometimes Paul Hansmeier) bought the various domain names used by Prenda Law (despite claiming that they had nothing to do with the firm) and that Steele continued to control that account (he called for customer service a few times) for quite some time, again contrary to Steele's public statements. I fully expect to see Steele continue to tapdance around this, and maybe give a few more interviews to the press where he doesn't really answer the questions, but it would seem that reality has an unfortunate habit of eventually coming out. Given all of this, it would look like Cooper has a pretty strong change of winning his initial lawsuit against Prenda and Steele (though I doubt the $4 million is going to show up) and Prenda and Paul Duffy's nuisance defamation lawsuit in response is probably in trouble as well. Oh, one more fun tidbit in the filings. I'd mentioned above the absolutely ridiculous statement in the lawsuits against Cooper and Godfread, that Cooper's lawsuit against Prenda was a totally "unrelated matter." Yet, the filing notes that not all of Prenda's lawyers were told not to admit the connection. They point out that in the infamous case in Georgia, where Prenda's local counsel Jacque Nazaire has tried to get the court to ignore Judge Wright's finding of fact because California recognizes gay marriage, Nazaire also flat out admits that the cases are connected. Sweet and Russell suggest: "Apparently, Atty. Nazaire did not receive Plaintiff’s memo to lie to the Court on this issue." Ouch. Oh, and there's a lot here, but extra credit goes to whoever finds where Russell and Sweet did a slightly subtle homage to Judge Wright's famous ruling.Permalink | Comments | Email This Story
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This one is fairly incredible. Bloomberg LP's main business is selling ridiculously expensive terminals to Wall Street/financial folks for tracking market information. While I understood why they were able to succeed early on, I've been shocked that the internet hasn't seriously disrupted their business over the past decade or so. However, the company also has a pretty big journalism business as well (even owning Business Week, which it bought for pennies a few years ago). Now it's coming out that the journalists at Bloomberg had all sorts of access to how customers use the terminals. Until recently, all Bloomberg employees could access information about when and how terminals were used by any customer. But after complaints by Goldman Sachs and JP Morgan, Bloomberg says its 2,000 or so journalists no longer have access to that information, though other staff still do. Bloomberg has more than 15,000 employees. The banks were concerned that Bloomberg News was keeping tabs on terminal usage in order to aid its reporting. JP Morgan specifically cited coverage of the bank’s disastrous derivatives trading, known as the “London Whale,” which Bloomberg was the first to reveal. Incredibly, the reporters also had access to "help" transcripts of any customer and could call them at will, which apparently some of them did for fun. Several former Bloomberg employees say colleagues would look up chat transcripts of famous customers, like Alan Greenspan, for amusement on slow workdays. The transcripts were typically mundane and hardly incriminating, but who wouldn’t enjoy watching a former US Treasury secretary struggle to use a computer? And, in theory, the substance of someone’s query to customer service could reveal specific information that he’s interested in, tipping off a reporter to a story. These are the kinds of things that small companies sometimes screw up with poor controls over information. But a massive company like Bloomberg -- especially when it deals with critical financial information -- you would think would have much tighter controls on information. I'd be curious if this violates whatever privacy policies Bloomberg has with its customers. At the very least, it should make Bloomberg customers pretty damn skeptical of continuing to use their terminals. Seems like a huge opportunity for competitors with better controls to step in.Permalink | Comments | Email This Story
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Hello Techdirt! I'm Dennis Yang. I was one of the original folks that helped Mike get Techdirt started way back when. Now, I'm working on something a little bit different called Bureau of Trade, which, despite its official-sounding name, has actually nothing to do with anything remotely governmental. That said, it's been a long, long while since I've posted anything on Techdirt, so when Mike asked me to do a Favorites post, I leapt at the opportunity. This week started off with nicely with Tim Cushing's post about Time/CNN's oft-tweeted poll about Americans being less willing to sacrifice civil liberties to combat terrorism. In light of recent events, it's nice to see that more Americans are not willing to trade their civil liberties for the appearance of security. Google Glass has clearly reached the public consciousness, with SNL doing a parody of it this week. So, as to be expected with any new (scary) technology, fears of its misuse start to surface, as evidenced by Mike's post about the White House petition to ban Google Glass. The petition's supporters are asking for Google Glass to be banned until "clear limitations are placed to prevent indecent public surveillance." Thankfully, the petition has only garnered 34 signatures thus far. I was quite concerned about this week's news about the senate's approval of an online shopping sales tax. That said, having it approved by the senate was a great reason to re-read Mike's earlier post about the concerns of the "Marketplace Fairness Act." I certainly laughed quietly to myself when Timothy Geigner found Disney specifically wanted to trademark the term Dia De Los Muertos for use on fruit snacks. Disney has long kept their lawyers quite busy with IP cases, and this was no exception. In the post about EA no longer officially licensing guns in its games came my favorite Techdirt oneliner of the week: "EA may find gun makers willing to test the legal waters and attempt to pry EA's unlicensed guns from its cold, injunctioned fingers." And finally, I was very happy to see that Mike posted about Zach Braff's Kickstarter project. There have been numerous posts deriding Braff's use of the platform to raise money for his film, and as a proud supporter of the project, I appreciated this post greatly. Sure, if people don't like Braff's project, then they don't have to support it. But to call it a misuse or exploitation of his fame/talent/whatever is ridiculous. I will happily be attending the special screening of the movie (just for supporters) when it comes out. And, that's it for this week -- thanks to the Techdirt team for writing a great flight of posts this week.Permalink | Comments | Email This Story
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I've joked before about how Kickstarter seems to have a new type of wallet launched every other day or so, but it also seems to be trying to offer a reinvention for the other thing most people keep in their pockets: their keys. Here are three projects involving rethinking your keyring. First up is the Keyprop, a simple kickstand for your smartphone, that is shaped like a key and fits on your keyring. My current phone is an HTC Evo, which has a built in kickstand, and it's amazing how frequently I use it. I'd been dreading the eventual new phone without a kickstand, but there are a bunch of products on the market to make it easy to add a kickstand to your phone, including the keyprop -- which is a bit unique in that it uses the fact that you regularly carry your keys with you to its advantage. The design itself is fairly clever as well, as it uses either the headphone jack or the power port as the place where the keyprop hooks on, and then lets you use your other keys to help position the angle. The one downside: if you're using the headphone jack, you wouldn't be able to use the stand and your headphones at the same time. The price feels a little on the high side for what it is -- and it kind of feels like the kind of thing that someone could make for themselves with a nice 3D printer. But still, the general idea is pretty cool. There are about three weeks left in the project, and it's only raised a little over a third of its goal, so it's probably right on the bubble of whether or not it will be able to hit its goal. In fact, Kicktraq's prediction is that it will just squeak by. Next up we've got the Smartkey, which really does aim to reinvent the keychain by making it act more like a pocketknife. You connect your keys to the various posts on either side and can fold them in. Your keys then fit nicely together, with no more jingling or poking and whatnot. If you carry a lot of keys it seems like it could be pretty handy, though not sure it would be that helpful with bulky car keys -- and these days, that's really the only key I carry around. While it might not be what I need, clearly over 2,000 people feel otherwise. The project shot way, way, way, way past its goal of $6,000 and will probably wrack up at least a couple of hundred thousand by the time the project ends. Okay, how about we take a step back from all of this futuristic high tech stuff, and get back to basics. What kind of keychain would you want during the zombie apocalypse? Probably something like El Jefe -- the Boss of Keychains. It seems like a no nonsense keychain that will hook to your belt buckle and has a bottle opener but that's nothing special. Lots of stuff has that. This one also has a ferrocerium rod built in, with a "fire scraper" so that you can start a fire very quickly. As they note, survivalists have pointed out that when society collapses and you need to survive, the most important skill will be able to set a fire. This keychain makes it easy. Can you say that about your keychain? Oh yeah, it also has a knife sharpener, because if you're in need of instant fire, you're probably also carrying around a knife, and you probably want it sharp. My favorite part, though, is that they compare this to a smartphone and call this a "smart keychain." I'm not sure they're really quite analogous, but they've got a fun video: Not much time left to get in on this. It's already more than 3x its initial goal of $5,000, so El Jeffe is definitely getting funded. If you want one (or its smaller brother El Nino, with no belt loop hook) apparently now's your chance. And, if you get one, and civilization collapses, let me know, because I'll be sure to hang out with you, since my own fire starting skills are minimal. Okay, now that we've solved your keychain needs, have a good weekend.Permalink | Comments | Email This Story
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Okay, we know that the Court of Appeals for the Federal Circuit (CAFC) has quite the reputation for mucking up rulings concerning patents over the years. In fact, there's a strong argument to be made that CAFC is a key reason that our patent system is so screwed up today. So, leave it to CAFC to issue one of the most bizarre and useless rulings ever concerning software patents. The specific case is CLS Bank v. Alice Corp, and we had noted this was a chance for CAFC to actually fix the software patents problem, though the oral hearings suggested a very conflicted court, and that's certainly what came out in the ruling. Or, rather, I should say: rulings. The document is 135 pages... but the only part that actually matters is one single paragraph that was issued "per curiam" (i.e., by the whole court, but without anyone being named): Upon consideration en banc, a majority of the court affirms the district court’s holding that the asserted method and computer-readable media claims are not directed to eligible subject matter under 35 U.S.C. § 101. An equally divided court affirms the district court’s holding that the asserted system claims are not directed to eligible subject matter under that statute. Basically, a majority of the court agreed with the district court that the "invention" in the patent in question -- about using a computer to basically do "shadow transactions" to net out a deal to make sure that all funds are available -- was patent ineligible subject matter. This is what the district court had found, saying that it was just an "abstract idea." The original CAFC appeal had overturned that, saying that it was patentable subject matter. This was a rehearing "en banc" with 10 CAFC judges. Notice that 10 is an even number. Meaning, you could have a split court. Or, you could have a court in total disarray, which is what came out here. Even though they (mostly) agreed that the specific claims here are not eligible for a patent, the court disagreed on why or how or what color the sky is, basically. There are seven (count 'em) different opinions issued in the document, none of them meaning anything, because none of them -- other than that one paragraph above, have more than the majority in agreement. Even where they agree, they disagree, and make something of a mockery of the whole system. Dennis Crouch at Patently-O summarizes it thusly: All of the judges recognized that the test for patent eligibility under section 101 should be “a consistent, cohesive, and accessible approach” that provides “guidance and predictability for patent applicants and examiners, litigants, and the courts.” However, the judges hotly disagree as to the pathway that will lead to that result. That's kind of funny (or ridiculously distressing) when you think about it. The court is saying we need a clear and consistent approach to figuring out what is patentable, and the court feels that it needs to give very clear guidance to everyone about it... and then goes on to absolutely disagree on every key point within that. The end result is that while they agree we need consistent, cohesive and accessible guidance, they fail to offer any, and actually do the opposite, providing a huge mess. Five of the judges did make a fairly interesting ruling, which would greatly limit software patents. It notes that: ... simply appending generic computer functionality to lend speed or efficiency to the performance of an otherwise abstract concept does not meaningfully limit claim scope for purposes of patent eligibility.... At its most basic, a computer is just a calculator capable of performing mental steps faster than a human could. Unless the claims require a computer to perform operations that are not merely accelerated calculations, a computer does not itself confer patent eligibility. In short, the requirement for computer participation in these claims fails to supply an “inventive concept” that represents a nontrivial, nonconventional human contribution or materially narrows the claims relative to the abstract idea they embrace. Basically, just adding "on a computer" shouldn't make a general idea patentable. That's good. If only they could have found a sixth judge to support it. Instead, you get the following table of contents: Opinion for the court filed PER CURIAM. Concurring opinion filed by LOURIE, Circuit Judge, in which DYK, PROST, REYNA, and WALLACH, Circuit Judges, join. Concurring-in-part and dissenting-in-part opinion filed by RADER, Chief Judge, LINN, MOORE, and O’MALLEY, Circuit Judges, as to all but part VI of that opinion. RADER, Chief Judge, and MOORE, Circuit Judge, as to part VI of that opinion. Dissenting-in-part opinion filed by MOORE, Circuit Judge, in which RADER, Chief Judge, and LINN and O’MALLEY, Circuit Judges, join. Concurring-in-part and dissenting-in-part opinion filed by NEWMAN, Circuit Judge. Dissenting opinion filed by LINN and O’MALLEY, Circuit Judges. Additional reflections filed by RADER, Chief Judge. And, basically, all of this means nothing. It doesn't help to wipe out or clarify software patents at all. It doesn't really help anyone. It probably doesn't make anyone on any side of this issue happy. It just leads to more confusion. However, as Julie Samuels at the EFF notes, hopefully this will help make it clear to the Supreme Court that it finally needs to issue a clear ruling on software patents, after completely punting the last time it had a chance.Permalink | Comments | Email This Story
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Two years ago, we wrote about the case dubbed Rakofsky v. the Internet. The details are too numerous to go into, so I suggest reading that post, but the very short summary is that Joseph Rakofsky, a recent graduate of Touro law school, somehow got himself onto a case defending someone accused of murder. The case was not going well, with the judge asking the defendant a few times if he was happy with Rakofsky's representation. After a supposed "communications breakdown" the defendant let the judge know he was no longer comfortable with Rakofsky -- and the judge declared a mistrial. As part of that, the judge also clearly expressed his belief that Rakofsky was not qualified to be in the position he was in: I was astonished that someone would purport to represent someone in a felony murder case who had never tried a case before and that local counsel, Mr. Grigsby, was complicit in this. It appeared to the Court that there were. . . defense theories out there, but [Rakofsky had] the inability to execute those theories. It was apparent to the Court that there was ... not a good grasp of legal principles and legal procedure of what was admissible and what was not admissible that inured, I think, to the detriment of Mr. Deaner." Also of concern was that an investigator hired by Rakofsky in the case had revealed to the court an email from Rakofsky in which Rakofsky told him: I) Please trick Leigh (old lady) into admitting: a) she told the 2 lawyers that she did not see the shooting and b) she told 2 lawyers she did not provide the Government any information about [the] shooting. Rakofsky later refused to approve a voucher for that investigator's payment, leading the investigator to claim to the court that he was "terminated and uncompensated... based on his refusal to follow an e-mail request from Mr. Rakofsky ...instructing him to try to 'trick' a witness into changing her testimony." After all of this, Rakofsky, oddly, appeared to celebrate the ruling in a post on his Facebook account, suggesting he was happy with the results. That posting resulted in more mockery in online circles. Again, all of this was reported widely, including here at Techdirt. However, what we mainly reported on was the fact that after lots of people talked about this and mocked Rakofsky (with some questioning the claims on his website), Rakofsky appeared to sue nearly everyone who wrote about him and the case -- including a whole bunch of bloggers, but also the Washington Post (who did the initial report) and the American Bar Association (no joke) whose blog wrote about the story as well. At the time, we said the story would be an interesting one to follow. That was two years ago. Six months after that, Rakofsky filed an insanely long amended complaint which, among many other things, attempted to add us to the lawsuit with a bunch of claims (including some that were factually untrue). Of course, once again hinting at Rakofsky's experience level and proficiency with the court systems, the motion to file that amended complaint later had to be withdrawn, because he filed it while a stay was in place barring him from such a filing. It took a while, but the case finally progressed -- and we have yet to be officially added to the lawsuit, something I certainly hope remains the case because suing us for reporting factually on what happened, while also providing some statements of opinion, is generally not going to end well. And indeed, so far, Rakofsky's case is not going well. In a ruling on Friday, the Supreme Court of the State of NY basically shot down every single one of Rakofsky's claims, and granted the motions to dismiss of various defendants. The court very carefully details the factual background and then explains why the motions to dismiss are being granted. The court rejects Rakofsky's motion to file a second amended complaint based on a failure to state a claim: granting plaintiffs' motion to amend would be futile since the allegations set forth in the proposed Second Amended Complaint are not sufficient to state a cause of action; as will be discussed below in defendants' motions to dismiss. dismiss. First, the court rejects the jurisdictional argument. Not surprisingly, the non-NY bloggers pointed out that a NY state court did not have jurisdiction over them, and the court was not convinced by various arguments by Rakofsky to the contrary: It is quite clear that defendants" herein who operated legal blogs or posted comments' on those blogs residing out of the country in Canada, or even in the United States ranging from Washington, D.C. and Florida in the east, to Texas and California in the west, had virtually no purposeful activity or minimum contacts with this state. There was certainly no purposeful activities in this state which were substantially related to the alleged defamatory statements as defendants neither wrote the alleged defamatory statements in this state nor did they direct them to our state alone. The statements were posted on the internet with potential world-wide accessibility. This Court rejects plaintiffs' primary argument in opposition that defendants received "commercial benefits" from the hyper-links contained in their websites to invoke long-arm jurisdiction. This connection to New York, if any, is too attenuated to exercise personal jurisdiction over the out-of state defendants. Plainly stated, there are insufficient contacts with this state to "hale" into court multiple defendants living thousands of miles away in other states which would "chill" their right to free speech. Good, clean ruling on that one. Moving on to the defamation claims. Again, Rakofsky runs into trouble. The court rules that the reporting on both the "trick" email and the mistrial may not have been exactly worded, but was close enough. On the email: While the precise words are not exactly identical, they are similar enough to convey a fair report of the Rakofsky e-mail and the Bean motion that were inextricably intertwined with the judicial proceedings before Judge Jackson in the Deaner case. Even though the "trick" e-mail, the Bean motion and Judge Jackson's comments do not portray Rakofsky in a positive light, and Rakofsky may wish to disavow or interpret them in a different way, the defendants were permitted to publicly disseminate them as a report of a judicial proceeding. On the mistrial question: You can not look at Judge Jackson's comments in isolation, but in context considering all of his comments and Rakofsky's trial performance. The clear import of Judge Jackson's rulings was to excuse Rakofsky due to his lack of competence and inexperience to defend Deaner in a murder trial. It is acknowledged that the Deaner murder trial was Rakofsky's first trial in a foreign jurisdiction and with which he was totally unfamiliar, and Judge Jackson was vigilant in protecting Deaner's right to effective assistance of counsel. Significantly, the reported fact that Judge Jackson declared a mistrial in the Deaner case was not defamatory because even Rakofsky initially celebrated the mistrial as a positive development in his career. In other words, defendants' report that a mistrial occurred does not constitute defamation. Instead, the reported statements that Rakofsky was allegedly not competent, inexperienced and unethical are the operative words which may give rise to defamation, except that said content was privileged under the Civil Right Law § 74, That last bit, Civil Rights Law § 74, says that you can't sue someone for libel "for the publication of a fair and true report of any judicial proceeding." Basically, the defamation claims fail because what people reported was more or less accurate. The court goes on to give more reasons why Rakofsky's claims fail, including the fact that some defendants are protected by a "republication" exception to defamation law and that they were expressing opinions rather than statements of fact in many cases. It also rejects the idea that there was "intentional infliction of emotional distress" as Rakofsky claimed, or intentional interference with a contract. Rakofsky also, quite amazingly, tried to use NY's publicity rights (sometimes called privacy rights) law, basically arguing that people weren't allowed to use his name/likeness without his permission. That failed pretty spectacularly too: This statute has been narrow construed to meet its limited objective to prohibit commercial appropriation of a person's name and likeness.... These sections also do not apply to reports of "newsworthy events or matters of public interest" otherwise known as the newsworthy exception.... To foster freedom of expression, the meaning of "newsworthiness" has been broadly construed to permit a wide and liberal interpretation.... In this case, it is abundantly clear that coverage of a murder trial in the Deaner case comes within the broadly construed newsworthy exception as a report of a newsworthy event or a matter of public concern. Thus, plaintiffs' fourth cause of action fails to state a claim for a violation... The court also rejected Rakofsky request for sanctions on Marc Randazza, a lawyer who many of you are familiar with given his frequent appearance in stories on this blog. Randazza was representing many of the bloggers that Rakofsky sued, and Rakofsky apparently didn't like the way Randazza treated him, leading to a request for sanctions. The court rejected that too, noting that "Randazza's conduct was acceptable to practice law in this state, and impliedly not sanctionable." On the flip side, the court did refuse to sanction Rakofsky, basically arguing that, viewed generously, some of the people reporting on the original case "did not fairly report Judge Jackson's comments." The court also notes that, since Rakofsky withdrew a claim of negligence against defendants he "partially acted in good faith." We shall see what happens next, though Randazza certainly expects Rakofsky to appeal, and given Rakofsky's two-plus year aggressive pursuit of this case, I think it's likely that, indeed, there will be an appeal, though I find it unlikely that the results of any appeal will turn out any better for Rakofsky.Permalink | Comments | Email This Story
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By now we should all be aware that in many arenas the United States and China are engaged in a giant political pissing match. Everyone by now is also aware of how afraid the Chinese government is of their citizens getting their hands on any information or news that the government hasn't scrubbed more clean than someone with OCD after exiting a sewer. Between porn, those terrifying monks in Tibet, and the infamous Great Firewall, it's all on lock down in what will ultimately be a failed attempt to stifle political criticism from the masses. I say it will ultimately fail because even when China's government does release something that has been scrubbed, it has the potential to become a flashpoint for blowback. And that's exactly what happened recently when state-run media used a Daily Show clip in which Jon Stewart bashes the US government to play "poke the American bear." CCTV recently used a Jon Stewart clip to lay into the U.S. over the Guantanamo Bay political stalemate. As SCMP [South China Morning Post] points out, state television's attempt to poke fun at the U.S. with Stewart backfired online in China, with people saying that CCTV was being hypocritical and missing the irony. That irony, of course, is that the Chinese state-run media, whose stated role is to serve the Communist party's interests, attempted to demonize America with a clip that brilliantly showed that our media is free to critique our own government. This is something that wouldn't have been permitted in China, a fact not lost on the online community there. "There are so many problems happening domestically that you choose not to broadcast every day, but instead choose to smell the farts of other countries," one Chinese commenter wrote in video's comment section. "This is our country's mainstream media... They just want to divert our attention to problems [of other countries] away from poisonous ginger, tainted milk, gutter oil and undrinkable tap water," quipped another. Now, there are many reasons why oppressive censorship of information just isn't going to work any longer, and perhaps it never really did, but this example of scrubbed information having the exact opposite effect on China's people is a wonderful reason for hope. It's been said that on a long enough time table, everybody's chances for survival goes to zero. I'd make the same argument for oppressive regimes. Eventually, the Chinese people will get tired of being treated like babies, and it looks like censorship fails even when you do it "right." Permalink | Comments | Email This Story
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It's actually somewhat difficult to avoid eating insects accidentally. Bugs (or bug parts) get into our food supply all the time, and it's not really a bad thing (unless you're a strict vegan). Some folks, though, want more insects in their food, and not just fried grasshoppers or exotic scorpions. Insect protein could be a more sustainable food source, and arguably, our distant primate relatives eat far more insects than meat from other animals like we do. Here are just a few interesting links on insects in our food. For over 20 years, candy lollipops with entrapped insects have been on the market. How many licks does it take to get to the insect at the center of a Hotlix lollipop? [url] The Starbucks Strawberry Frappuccino was once made rosy red, not with an artificial color (like Red #40), but from natural colors derived from grinding up the dried bodies of cochineal bugs The bug-based coloring was safe to eat (as long as you weren't allergic to those bugs), but Starbucks had to switch to a vegetable-based dye because people were either grossed out or vegan. [url] Some European researchers are trying to make insects more palatable for people, and a popular Dutch restaurant called Specktakel tries to incorporate an insect into at least one item on its daily menu. Insects are a good source of protein, and it is far less energy intensive to raise bugs than beef. [url] If you'd like to read more awesome and interesting stuff, check out this unrelated (but not entirely random!) Techdirt post via StumbleUpon.Permalink | Comments | Email This Story
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We've seen plenty of lawsuits involving people upset about Yelp reviews, but here's a fairly extreme case. Apparently, a DC-area carpet cleaning service named Hadeed Carpet Cleaning, which is somewhat infamous in the area for its "pervasive advertising" and direct mail coupons promising a $99 cleaning special, does not have the greatest reputation on Yelp. The key issue: apparently that $99 deal is often not honored. Also, there are multiple reviews of people getting a quote, dropping off a carpet, and then being told later if they want the carpet back they have to pay much more -- with various excuses being offered as to why they're charging more than the quote. Hadeed then decided to sue seven anonymous reviewers for defamation. Here's the oddity: Hadeed does not appear to be suing them over the contents of the bad review. In fact, the company doesn't seem to dispute the various complaints about its pricing practices. Rather, it argues that it could not match these seven reviewers to actual customers within its database, and therefore, the reviewers are defaming them by misrepresenting that they were ever Hadeed customers. Hadeed appears to suggest that they reviews were really written by a competitor. As we've discussed, many courts have adopted the so-called Dendrite rules for identifying anonymous speakers. The rules require giving the anonymous users a chance to respond and (more importantly) require the plaintiff to present enough evidence to prove there's an actual case. However, the court in Virginia chose to not apply any such rules, but rather allowed a subpoena to Yelp ordering it to identify the posters. Yelp has refused, and the court ordered compliance, which Yelp again refused, leading to the court saying Yelp was in contempt. Public Citizen has now filed a brief on behalf of Yelp with the appeals court, arguing both that the Virginia court had no jurisdiction over Yelp, a California company, and that Yelp was correct to ignore the order since the First Amendment (which protects anonymous speech) requires much more proof before an anonymous speaker can be revealed. When pervasive advertisements from a local merchant feature prices that seem to be just too good to be true, they may, in fact, not be the price that the average consumer will pay. Dozens of consumers who have used pseudonyms to post about their experiences with appellee Hadeed Carpet Cleaning, Inc. (“Hadeed”) on the popular website www.yelp.com, maintained by appellant Yelp Inc. (“Yelp”), report that Hadeed routinely fails to honor the advertised discount prices. Hadeed’s responses to several consumers on Yelp suggest that it recognizes the problem; yet its complaint for defamation singles out the authors of seven reviews posted on Yelp that say the same thing as the other online detractors of Hadeed and its sister business, Hadeed Oriental Rug Cleaning. Based on that allegation, Hadeed invoked the court’s subpoena power to strip its pseudonymous critics of their First Amendment right to speak anonymously. The main question on this appeal—an issue of first impression at the appellate level in Virginia—is whether the trial court applied the proper legal standard in overriding the anonymous speakers’ First Amendment rights. Courts elsewhere have recognized that, given the valuable role played by the First Amendment right to speak anonymously in encouraging ordinary people to express themselves fully, it is necessary to balance that right against a plaintiff’s right to seek redress for wrongful speech by adopting a standard requiring a plaintiff to do more than articulate a good faith belief that the speech “maybe tortious.” Before stripping the defendant of a First Amendment right, these courts take an early look at the merits of the plaintiff’s claim to determine whether a valid claim has been alleged and whether there is a prima facie evidentiary basis for that claim. In this appeal, Yelp urges Virginia to adopt the same approach, and to remand this case to give Hadeed an opportunity to pursue its subpoena by meeting the proper standard. In the meantime, though, we have yet another case of a company suing over Yelp reviews -- which just makes me wonder how they ever expect to get more customers. Any company that sues over online reviews someone makes is clearly a company not worth doing business with, since they might, potentially, sue you over any bad review you write online about them.Permalink | Comments | Email This Story
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Cross-posted from I suppose that’s a rhetorical question. When you live in a nation that’s been reduced to an army of mindless reality-TV-watching drones, it’s not exactly surprising that the average citizen is more inclined to trust a television judge than a jurist who’s been appointed to the highest court in the land. We care more about the matching camouflage wedding couture Honey Boo Boo’s parents, Mama June and Sugar Bear, wore when they tied the knot this past weekend than the next round of controversial decisions that will be soon be handed down by the Supreme Court. We care more about the Kimye baby bump than the very existence of the Supreme Court, much less the names of the justices sitting on its esteemed bench. No one who’s been paying any attention is taken aback by the fact that Americans care more about the people they see on television on a daily basis than names they once read in a textbook. That’s why the results of the latest Reader’s Digest Trust Poll as to this country’s judges are expected, and sad, and not at all surprising…. Before we start discussing the names of the judges who ranked the highest in the trust poll, we’ll break down the magazine’s methodology for you. Reader’s Digest rounded up the names of 200 “opinion shapers, leaders and headline makers” across 15 professions and showed the list to more than 1,000 Americans, who then ranked each name based on how trustworthy they thought they were. Here, trustworthiness was defined as “integrity and character, exceptional talent, drive to personal excellence, internal moral compass, message, honesty and leadership.” All that being said, famous actors — Tom Hanks, Sandra Bullock, and Denzel Washington — were the most trusted people in America. Our own president was in the bottom half of the list, behind people like Tim Tebow and Adam Sandler. Again, this isn’t at all surprising, because we bring these people into our homes on DVD and pay exorbitant fees to see them in theaters while we eat our overpriced popcorn. So when it comes to American’s most trusted judges, it’s no surprise that we all love Judge Judy. She was #28 on the Reader’s Digest list. She’s snarky and laypeople love it when she lays down the law in little sound bytes that actually make sense. Plus, her show is only half an hour long, which is about the amount of time it would take for the average citizen with an Adderall prescription to put aside the Supreme Court’s 193-page Obamacare opinion before deciding to use it to papercut their eyeballs. But how do the Supreme Court justices stack up against our nation’s preeminent television jurist? No. 36: Ruth Bader Ginsburg No. 43: Stephen Breyer No. 44: John Roberts No. 49: Anthony Kennedy No. 53: Sonia Sotomayor No. 62: Elena Kagan No. 60: Samuel Alito No. 66: Antonin Scalia No. 88: Clarence Thomas So again, I’m going to implore the Supreme Court to start televising its arguments — or better yet, give them all their own television shows, reality or otherwise. Seriously, give us a reason to watch C-SPAN. Perhaps if something like “Keeping Up With Klarence” existed, the only black member of our country’s high court wouldn’t have been beaten out by Judge Joe Brown, who was ranked as the 39th most trustworthy person according to the Reader’s Digest poll. How about a talk show with Sonia Sotomayor? “It’s Her Beloved World (And We’re Just Living in It)” — she could be the next Oprah! You want a comedy? “Kagan and Scalia: The Really Odd Couple”. If you’re into shows about buying other people’s expensive old things, you can watch “Antiques Roadshow with Ruth Bader Ginsburg,” where she’d star as a host and as an antique. If you want a late night talk show, you could watch “The John Roberts Show,” with Sam Alito standing in as the witty sidekick. Last, but not least, for some action, why not watch “I Survived” with Stephen Breyer? His calamities could fill out an entire season. Just think about the ratings, network execs. Please help make American less… stupid. Reader’s Digest Trust Poll: The 100 Most Trusted People in America [Reader's Digest] Reader’s Digest Trust Poll: Here’s What Shocked Us the Most [Reader's Digest] Justice Ginsburg is close behind Judge Judy on most trusted list [ABA Journal] More stories from Above The Law The High Price of the Federal Bench It’s Her Beloved World, And We’re Just Living In It: Justice Sotomayor Speaks on Free Speech You Stay Classy, Mississippi Supreme Court Justice Mike Randolph Permalink | Comments | Email This Story
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As I've said, John Steele reminds me of some folks I've met who think they're smarter than everyone else and have outsmarted the whole system. They tend to believe they can talk their way out of anything. And while he pled the Fifth (or, had his lawyer say he was going to) when he had a chance to talk in court, he sure has been talking a lot since then to the press. The latest is a long interview done with Joe Mullin at Ars Technica, where Steele, once again, seems to think he can talk his way out of anything. There's so much ridiculousness in there. Let's hit just a few of the high points, but then go read the full interview to find your own favorite moments. He talks about "battle-stations"? That tells you something about where this judge is coming from. In the same sentence he talks about attorneys having "moral turpitude," he uses Star Trek terms to describe it? It's really beneath the dignity of the court. John Steele is talking about something that's "beneath the dignity of the court"? Really? Anyone who has followed his efforts would laugh at that line considering everything he's done that's way beneath the dignity of the court, which is why he's now in the position he's in with Judge Wright's ruling. As for the needs of the many outweighing the needs of the few [a Star Trek quote at the top of Judge Wright's order]—that's not [how the legal system works]. If the needs of the few didn't matter, black people wouldn't vote in most Southern states. Yeah, that's right, Steele, align your situation with American slavery. Your situation is so analogous to slaves picking cotton in the South. Judge Wright is just trying to keep you down, huh? The deposition that [former partner] Paul Hansmeier gave wasn't even certified. It shouldn't have even been allowed to be used. There are hundreds of problems with this order in my view. Note that he doesn't claim that Hansmeier didn't say everything that was said, which really helped show how screwed up the whole situation was. Just that it wasn't certified... tap dance, tap dance. I—and others involved—have been in front of hundreds of judges. This is the first judge that has ever sanctioned anybody involved with Steele Hansmeier, Prenda Law, or whatever. Sanctioned, yes. But plenty of other judges have called out these practices as highly questionable for years. Sanctions are an extreme step, but plenty of judges have clearly questioned Steele's practices. And, other judges have claimed that he was involved in fraud on the court. It's just that they're still investigating. I think the judge knows we're going to appeal. He wrote that the sanctions were designed to cost just less than [an effective appeal]. Look, you may hate me and the litigation that's gone on in the past, but most people have to be a little nervous when a judge puts out a number and says that. Uh, the whole point of that was to highlight the nature of Prenda's trolling scheme. To turn that around and suggest that that's a problem is hilarious. Steele seems to think that everyone in the world is a complete moron and he's the only one with functioning brain cells. Steele: Not until I received an order to show cause. I've spoken to some of the other people [involved], and they're in a similar situation. I didn't know about this until February of this year. Until March I hadn't read a single pleading in this case. I, quite frankly, had never been involved in any case in California. If there was evidence I was involved and [Prenda Law lawyer] Paul Duffy was involved in more than just the somewhat supervisory role of Brett Gibbs, then that evidence would have come out. Ars: Brett Gibbs testified at the March hearing that you and Hansmeier were "senior partners" at Prenda Law. He says you were supervising. Were you? Steele: No. Absolutely not. Where's the evidence that we supervised Brett Gibbs? Where are the e-mails? Ars: Gibbs testified that you were in control of these entities. You ran them. You initiated cases, you settled cases. Steele: Where are the documents showing that I own any of these entities? I've never even heard of a couple of them. This exchange is amazing on so many levels. Let me summarize it: "I knew nothing! There's no evidence I knew anything!" "Um, there's direct testimony from the person who knows you were involved." "Where is the evidence on something entirely different?!" Nice one, Steele. Steele really likes this "where is the evidence?" line to respond to actual testimony against him. He uses it multiple times, including about Alan Cooper's signature, where again, he chooses his words carefully: I'm well aware Mr. Cooper said he never signed those documents. He said it was a forgery—those were words the court used. I'm very comfortable with the facts, and everything in my possession leads me to believe that Mr. Cooper's involvement with AF Holdings was different than what he led the court to believe. It will ultimately come down to a "he said, they said." Nobody I'm aware of, including myself, has ever forged Alan Cooper's signature. That is a pretty outrageous claim. And for the love of God, where is the evidence [of forgery]? If someone had found something, it would be on the front page of Ars Technica and half a dozen other sites within minutes. There's no way any of that evidence could exist. Because it's not true. Notice that he's speaking very specifically about the forgery aspect, and not about the misrepresentation part of it. Hmm... Also, Steele doesn't seem to understand that testimony is evidence. So, yes, there is evidence. It's called the testimony in the court by Alan Cooper. And then we find out what Steele is now claiming his real role is in all of this: I work part-time with Livewire Holdings, one of the entities that Lutz owns. My role is on the business side. I acquire other adult content companies and deal with expanding the holding company. The main goal is to handle a lot of content and websites and to be involved in the adult space. For that, I'm paid a flat fee. I won't say how much, but it's a modest flat sum. Right. And that's why you showed up in court in some of these cases and Gibbs said you gave him specific directions on the legal issues. Because you're in "business development." Steele: I think they've done a few cases. I'm not involved with that litigation. I don't file anything. You know, what pirates oftentimes don't get is that this is not a huge moneymaker. I know from past experience at Steele Hansmeier that over half the clients we got never made any money off suing pirates. Ars: Well, how much money have you made? Last year a Forbes reporter suggested you could have collected $15 million in settlements, and you responded by saying the actual figure was "more than a few million." Have you made millions of dollars suing people? Steele: I wish I had. At the time my wife made some joke wanting to know where I hid the other $14.5 million. There are a lot of costs associated with litigation. Again note how he tries to answer a different question. He already told Forbes the $15 million number was too high. Mullin is asking him about the "more than a few million" he already told another publication was the correct amount. And he responds by talking about the $15 million. This is not how you honestly answer questions. It's how you (very weakly) try to avoid responding to questions that you don't want to answer. Ars: If you and Paul Hansmeier don't run AF Holdings, why would Hansmeier be the person who was sent to be deposed about AF Holdings? Steele: I believe he went out as a favor. They needed a corporate representative, and he was authorized to provide that, for AF Holdings, for Mr. Lutz. You want to have a strong corporate representative to get up and deal with Mr. Pietz for seven hours. There's not a whole lot of people in a typical adult content company that can answer a lot of the questions that were asked. Heh. No one goes to be a corporate representative in a big legal dispute "as a favor." And nice gratuitous attempt to attack Pietz thrown in for fun. Also, I wonder which of the questions "not a lot of people in a typical adult content company can answer" he is talking about. What about the one of who actually owns the company you represent? That one? Ars: And so what is Paul Hansmeier up to? I called him to talk about the order, and he referred me to you. Steele: I believe he deals with some class action type of litigation. He also helps me when I'm looking for acquisitions, he's got experience in that area. So he works essentially part-time for Livewire. It's on a project basis. Funny stuff. Of course, Hansmeier has been called out for very questionable class action objections which appear to involve objecting at the last minute to try to upset a settlement that's about to go through and then seeking cash to go away. In fact, there's a letter where Hansmeier directly promises to go away for $30,000. Anyway, as mentioned there's even more in there that we didn't get to. I hope Steele keeps talking though. I imagine bits and pieces of his various statements are likely to show up in various court cases going forward as well.Permalink | Comments | Email This Story
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jupiterkansas writes in to let us know that the band Twisted Sister has had its lawyers threaten and bully a Kansas coffee shop into changing its name from "Twisted Sisters." For what it's worth, the coffee shop owner says the name has absolutely nothing to do with the band: The origin of the two names – Twisted Sister and Twisted Sisters – are vastly different as you might guess. Russell says the name for her store is a reference to a family label given to the sisters by their late brother back in the 1960s. He also used to call Nancy the “blond tornado” so Twisted Sisters and the logo, which looks like a tornado sketch are rooted in family and our Kansas location. Twisted Sister the band, we assume, has a different origin. In looking at the actual letter sent, it appears that the lawyer for the band is specifically objecting to the web URL the coffee shop has set up (it's odd that the reporter leaves out this point). Still, in looking over the details, it seems pretty clear that the band and its lawyer are abusing trademark law here. It is true that Twisted Sister has a trademark (1098366) issued in 1978, but that trademark only covers: "ENTERTAINMENT SERVICES RENDERED BY A VOCAL AND INSTRUMENTAL GROUP." As the band's lawyer must know, trademarks are issued in particular categories, and having a mark in a single category does not mean you have control over those words. While the letter also points out that they have successfully convinced other businesses to change their name, that still doesn't make the claim valid. The likelihood of confusion here is nil. No one is going to this coffee shop thinking it's run by the band or has any association with the band. Furthermore, the lawyer's suggestion that this would qualify as "dilution" also seems ridiculous. We're no fans of the dilution theory of trademark law (which seems to go against the very basis of trademark law), to be sure, but even if you accept it as valid, it is difficult to see how there's a valid dilution claim here. Yes, the band's mark is famous, but how the hell would they show that a random coffee shop in Kansas "dilutes" their brand in any meaningful way? Furthermore, even if the band has bullied other stores into changing their names, it does not mean they're the only "Twisted Sister" out there. In fact, they're not even the only Twisted Sister with trademarks. In looking through filings, I found legitimate approved trademarks for... Twisted Sister the board game (85857824), Twisted Sisters boutique clothing offering (3216315) and Twisted Sisters Our Business Is Dyeing offering colored yarns (3027439). All of those are live trademarks that appear to have nothing to do with the band. It seems like if the owner of the coffee shop, Sandi Russell, wanted to turn around and scream back at the band "we're not gonna take it; no, we ain't gonna take it; we're not gonna take it, any more..." she might be able to find a lawyer more than willing to make that argument. Unfortunately, from the sound of the article, it appears that Russell is caving in to the bullying and looking to change the shop's name.Permalink | Comments | Email This Story
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Not this again. Back in 2011, we first discussed why it was silly that some people got upset that someone rich and famous would use Kickstarter, as if the platform was only allowed for unknown artists. That was about Colin Hanks, the son of Tom Hanks, financing a documentary via the site. Since that time, the argument has popped up a few more times, including when Amanda Palmer used the site, when Bjork tried to use the site and when the Veronica Mars movie was funded via the site. Most recently, it's been aimed at quirky actor/filmmaker Zach Braff for his Kickstarter project, called Wish I Was Here. Braff set a goal of $2 million, which was raised very quickly. And that's when some people got angry. Just as before. But it's a small group of people. There are at least 36,000 people (i.e., those who have funded the project so far) who did not get angry. Why? Because they like Braff and want to support him. I'm curious if the people who are attacking Braff for using Kickstarter ever have watched one of his TV shows or seen a movie he was in. Because, in that case, they'd be paying the same sort of thing... but most of that money would be going to a giant corporation, rather than to the actor himself. So what are they complaining about? In a (slightly over-defensive) interview video, Braff points out that he's always been about connecting and engaging with his fans, and this is just one more way to do that. Frankly, he's more defensive in that video than he needs to be. He's got nothing to be defensive about. He notes, accurately, that he's long been known as someone who engages deeply via social media, especially Twitter and Reddit where Braff has been active for years. He also talks about his own obsession with Kickstarter, and how great it was to get the various updates on projects he'd funded, and how he hoped his fans would enjoy getting updates about the movie making process. And, yes, he's backed a bunch of projects himself, including the Aaron Swartz documentary. For the life of me, I can't see a single logical argument for why people are upset about this, other than (a) they don't like Braff or (b) they're jealous of him. Neither seems like a particularly compelling reason for why Braff, or any famous person, shouldn't use the platform. The two most common arguments seem to be "he's rich and should fund it himself." But that's stupid. First off, he's probably not quite as rich as you think, and second he's made it clear over and over again that the budget is much higher than the amount he's raising and he's putting in an "ass-ton" (his quote) of his own money as well. Also, if you think that, don't fund him. No sweat off your back. For his fans who like him and want to support him, so what? The second argument is that this means he gets the money instead of some struggling filmmaker. However, as he himself has pointed out, the data suggests something entirely different: I have something every detractor doesn’t have: the analytics. Most of the backers of my film aren’t people on Kickstarter who had $10 and were deciding where to give it, and then gave it to me instead of someone else. They came to Kickstarter because of me, because of this project. They wouldn’t have been there otherwise. In fact, a lot of people who didn't know about Kickstarter came and wound up giving money to a lot of other projects too. So for people to say, 'That’s ... up; you’re stealing money from documentaries' is just not a sensible argument. All he's doing is the same thing we've been arguing for years is the business model of the future: connecting with fans and giving them a reason to buy. Braff has done exactly that, and has built up a huge and loyal following who are really excited about this project. As we pointed out when Amanda Palmer raised $1.2 million on Kickstarter or when Louis CK made over $1 million by selling direct off his site, the fans who are buying in aren't disturbed by how much money is being made. For the most part, they seem thrilled to be a part of something amazing. I think that's the key thing that the detractors simply don't understand. This is about two key things: being part of an experience and a community. It's not about "a movie," but about much more than that. And, even specifically around "the movie," people should be supporting what Braff is doing, because funding it this way means that it's going to be Braff's vision for the movie, rather than a giant Hollywood studio. A few months back, Jonathan Taplin, a filmmaker and defender of the old system, told me during a debate that no real filmmaker would ever use Kickstarter. At the 40 minute mark, he goes on a condescending rant saying sarcastically that "major filmmakers" could never possibly use Kickstarter because "the average" film only raised $10,000. But the average is meaningless for something like this. Furthermore, he goes on and on about (his friend) Martin Scorcese getting to do a movie he wants, and how that would never work via Kickstarter. But we're seeing over and over again the exact opposite. When a star with a big following uses something like Kickstarter, it gives them more ability to make the movie they want without outside interference. Now we're seeing, quite clearly, that "major filmmakers" can use Kickstarter to do interesting things, and somehow, I get the feeling that it's the same sort of people who insisted they couldn't possibly make it in the first place who are now complaining that they are...Permalink | Comments | Email This Story
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On Tuesday, as rumors were spreading about YouTube's plans to launch a paywall we reminded folks that Google had actually tried this twice before and no one paid. On Thursday, the folks at HuffPost Live had me join a video panel discussing this. What we didn't realize was at the very moment we were talking about it, YouTube had officially launched the program. You can see the discussion below, where I play the role of the lone dissenter who argues that this is a dumb idea: What annoys me about this is that everyone else was making the same silly arguments that were debunked over and over again on the newspaper side -- that paywalls lead to a higher quality product and more investment into the content. That's not true if no one pays. It's a pretty simple equation: if you, say, get 10 subscribers for $2/month, that's $20/month. That's not that much money. If you can make more than that in advertising, then you're better off advertising. Yet, time and time again in the video above you see people claim that it's somehow automatic that putting up a paywall will mean "more money" and "the end of free content" or "profits so that more investment can be happy in video." All of that makes a huge assumption: that enough people will actually subscribe. Yet there's simply no basis for it, and yet people kept claiming it over and over again as if it had to be true. But we know it's not necessarily true, because we've already seen Google try exactly the same thing. Hell, let's take a look at the original Google Video, launched about six years ago, with a similar subscription offering: And now let's look at the new YouTube pay channels: It's basically the same thing, though, I'd argue that the original Google Video had even more brand name content. In 2010, when Google tried the exact same thing with YouTube, over the course of 10 days, they only got $10,000. I'm not against experimenting. And I'm not against models where people pay -- I think things like Netflix and Spotify and the like are really interesting business models. But, those work because of different factors: mainly a combination of convenience and a ton of content all together. People are paying for those because of the completeness of the offering. Here, people are being asked to spend between $1 and $10 per month for a single channel of content. It may work for a few specialized shows: Game of Thrones? Yeah, sure. But not many others. This idea that people paying directly is the only "real" business model is just silly. The guy who did a video comment during the panel discussion who seemed to argue that this was necessary because it's "capitalism" doesn't understand economics. A bad business model is a bad business model.Permalink | Comments | Email This Story
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Anurag Ghosh is a blogger who would like to have some infringing posts removed from the web. See if you can spot the point when Ghosh's irony detector malfunctions. Copyright claim #0: My article, “How to Play Nintendo DS Games on Android”, is infringed by the text excerpted on the site, beginning with the text: “Did you know that your Android device can play NDS games? With the help of an emulator (yes there is a free, open-source DS emulator out there on Google Play), you can play games like Phoenix Wright, Dragon Quest IX and Touch Detective on your phone.” Original work URL(s): http://anurag2008.hubpages.com/hub/How-to-Play-Nintendo-DS-Games-on-Android To paraphrase: "Yeah, it looks like some people have infringed my post about infringing, so if you could do me a solid and take those out, that would be great. Ghosh's post, titled "How to Play Nintendo Games on your Android," does exactly what it says on the tin, pointing readers toward a free, open-source emulator, providing instructions on installing an NDS BIOS and directing readers towards Google to search for .nds ROMs. Ghosh has thoughtfully included the following "warning" on his post. Downloading ROMs and BIOS files is illegal. I don’t support piracy and this guide is only for entertainment purpose. Reader discretion is advised. The discussion about whether emulation = infringement can wait for another day, but I'm very definitely sure Nintendo considers emulation of current gen hardware/software to be infringing. In fact, Nintendo seems to get a bit irate about it when "questioned" about it, according to its extensive FAQ on emulation. How Does Nintendo Feel About the Emergence of Video Game Emulators? The introduction of emulators created to play illegally copied Nintendo software represents the greatest threat to date to the intellectual property rights of video game developers. As is the case with any business or industry, when its products become available for free, the revenue stream supporting that industry is threatened. Such emulators have the potential to significantly damage a worldwide entertainment software industry which generates over $15 billion annually, and tens of thousands of jobs. How Come Nintendo Does Not Take Steps Towards Legitimizing Nintendo Emulators? Emulators developed to play illegally copied Nintendo software promote piracy. That's like asking why doesn't Nintendo legitimize piracy. It doesn't make any business sense. It's that simple and not open to debate. Wow. Testy. Ghosh knows it, too. Hence the disclaimer. Now, Ghosh may have a legitimate claim that his post is being scraped (or reposted) without his consent, but complaining about infringers infringing your post about infringement is more than a little like sending an official notice informing Google that listed kettles are black and infringing on your original pot's blackness. Perhaps the offending scrapers could just put up a little "warning" stating they copied Ghosh's post for "entertainment purposes only." It certainly entertained me. Permalink | Comments | Email This Story
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You may remember that, back in January, we wrote about a blog fight between two women with very different views on childbirth, which then descended into a ridiculous copyright fight. I won't rehash all of the details, but the short version was that as a part of this fight, Gina Crosley-Corcoran posted a photo of herself giving the middle finger, and in posting it she told her rival, Dr. Amy Tuteur, it was "something you can take back to your blog and obsess over." Tuteur reposted the photo to her own blog, along with a blog post about Crosley-Corcoran. Crosley-Corcoran then yelled copyright infringement, at which point Tuteur's husband (a lawyer) explained to Crosley-Corcoran's lawyer what fair use meant (and also what an implied license is). And then... DMCA takedown notices started flying, leading Tuteur to change her web host twice. Furthermore, Crosley-Corcoran bragged about using the DMCA takedowns to silence Tuteur and get her blog taken down -- and (according to Tuteur's lawyer) Crosley-Corcoran's own lawyer admitted that she had no legitimate copyright claim. As we noted in our post, if there ever were a case to explore the punishment for violating the DMCA, this seemed like a good one. The key to this, of course, is 512(f) of the DMCA, which says that if you make a material misrepresentation in a DMCA takedown, you can be liable for damages, including costs and attorney's fees. However, at the same time, we noted why it's almost impossible to get someone punished for a bogus DMCA takedown. Still... the evidence on this case seemed so extreme, with Crosley-Corcoran more or less telling the world that she was abusing the DMCA specifically to silence Tuteur, we thought it actually had a chance. But then, a month ago, the judge in the district court in Massachusetts made a bizarre ruling rejecting the 512(f) claim in such a way that suggested no 512(f) claim would likely ever survive. It was bizarre in a few different ways. As Eric Goldman noted in his discussion of the ruling, the court was only supposed to be looking at a separate issue, involving the jurisdiction of the court over the case, but simply chose to go ahead and effectively rule on the key parts of the case, even though neither party had briefed the key issues. Among other things, the court focuses just on the first DMCA notice, and not the subsequent ones or the blatant statements of plans to keep using the DMCA to keep Tuteur's entire blog offline. Goldman calls it "the most bizarre Article III analysis I've seen" because even though the court says that Tuteur has a plausible fair use and implied license claim, that doesn't matter, because the court argues that the DMCA filer doesn't need to pay attention to that: there is no requirement in the DMCA that a notice-giver inform the service provider of an infringer's possible affirmative defenses, only that she affirm her good faith belief (as appears to be the case here) that the copyrighted material is being used without her (or her agent's) permission That's not actually what the law says. And it's not actually what other courts that have ruled on this issue have said. At the very least, the court recognizing that no briefs had been filed on the subject, gave Tuteur 21 days to respond. She did so with a long and detailed filing that reminds the court that this isn't about just that one DMCA filing, but a lot more. And, also, highlighting (a) that the DMCA isn't limited to just cases where things are posted without permission and (b) the other cases have said that a filer needs to take fair use into account. As her filing notes: If fair use and license can be ignored when filing a DMCA takedown notice, persons like the Defendant (and, indeed, far more powerful organizations), would have a safe haven to freely muzzle their critics by literally chasing them off the Internet. A victim – who did nothing unlawful and whose acts were authorized by the Copyright Act – would be left without recourse and without a voice On the same day, the EFF along with Harvard's Digital Media Law Project also filed an amicus brief explaining why the court is simply wrong about the DMCA abuse clause. After listing out four different cases that came to a different conclusion than the judge in this case, it notes: The DMCA requires the copyright owner issuing a takedown notice to affirm that she has a “good faith belief that use of the material in the manner complained of is not authorized by the copyright owner, its agent, or the law.” 17 U.S.C. § 512(c)(3)(A)(v) (emphasis added). “The fair use of a copyrighted work . . . is not an infringement of copyright,” 17 U.S.C. § 107. An allegation that a copyright owner issued a takedown notice knowing that the use in question was in fact authorized by law, and/or that she had not formed a good faith belief to the contrary is, therefore, sufficient to state a claim under Section 512(f). This is the fundamental mistake that the court made. The DMCA doesn't say that you can only be punished if the person didn't have permission -- but if the use is not authorized by the law. And, the law clearly states that fair use is not infringement. Thus, fair use is authorized use even if it doesn't involve permission. Crosley-Corcoran's lawyers apparently were not at all pleased to see the EFF and the DMLP jump in on this case, and proceeded to quickly oppose the entire brief, arguing that it shouldn't be allowed in the case. The reasoning? Apparently, that Tuteur has good enough lawyers already and doesn't need any support from the likes of the EFF or Harvard: It is rare – perhaps sadly so – that one has both the opportunity and a reason to praise the litigation skills of opposing counsel. This, then, is something of a unique opportunity. Attorney Beck, a former partner with the national law firm Foley & Lardner LLP, and Attorney Riden, a former senior counsel to Foley & Lardner, have, collectively, almost 40 years of sophisticated litigation experience. Among his many accolades, Attorney Beck is AV rated by Martindale-Hubbell, a Chambers recognized attorney, a Massachusetts Super Lawyer, a Top 100 New England attorney, and a nationally recognized authority on trade secret and non-competition law. Attorney Riden is a Massachusetts Super Lawyer, a recipient of the Best Lawyers designation, a frequently quoted legal authority, and a former appellate law clerk. They are, in short, eminently qualified to represent the interests of Plaintiff in this action and to fully brief the issues raised by this Court’s Order of April 10, 2013, requiring them to show cause why the present action should not be dismissed. This being the case, the addition of two more legal Goliaths will do little to advance this Court’s understanding of the issues raised (which do not seem to be so complex as to cry out for the assistance of non-parties), and instead will only needlessly multiply the costs of an already overly-costly litigation. For the reasons stated herein, Defendant Gina Crosley-Corcoran respectfully requests that the non-party requests for leave to file an amicus brief be denied There is a legitimate argument to be made that, especially at the district court level, if an outside party filing an amicus curiae brief that is only repeating the same arguments as a party in the case, that it is not appropriate. However, it does seem that the EFF/DMLP briefing does raise a few different key points than Tuteur's brief, which focuses much more on the specifics of her situation, while the amici brief covers much more generally the policy issues behind section 512(f) and more of the legal history there. It seems that, especially given the court's apparent misreading of the law in its initial order, that it makes sense to include the brief. Finally, on Thursday, Crosley-Corcoran filed her response to Tuteur's argument, in which she claims (of course) that "the court had it right the first time." Except, the law is pretty clear and this filing has it wrong. I don't really see how anyone can argue that. From there, they make two key arguments. The first is that, despite the fact that Tuteur ended up having to switch hosts twice, that neither switch actually involved a host taking down the content in question, and thus she cannot claim any damage from the DMCA takedown notices, bogus or not. Specifically, the filing argues that Tuteur chose to move from the first host, BlueHost, after she sent a counternotice and after BlueHost had said it would take no action (though, this is after BlueHost had warned her earlier that if she didn't remove the content, it could close down her account). It then says that the move away from the second host, DaringHost, was because the site was getting too much traffic, and the owner of DaringHost, supplied a deposition stating that he had explained this to Tuteur. This absolutely does weaken Tuteur's 512(f) claim, because it certainly decreases the damages caused by the takedown notices. But it still does ignore the two key points pushing back on this: Crosley-Corcoran's lawyer admitting that there was no legitimate copyright claim and Crosley-Corcoran herself bragging publicly about using the DMCA to silence Tuteur. Separately, the filing goes back to the same point that we've discussed before about why it's so difficult to win a 512(f) case: the use of the "subjective bad faith" standard. Of course, one would think that Crosley-Corcoran's own statements would pass that bar. However, the filing insists that her lawyers took fair use into account, and simply decided that Tuteur's use didn't qualify (which seems to go against what Tuteur claims Crosley-Corcoran's lawyers told her). Crosley-Corcoran's filing conveniently ignores all of that and says, basically, "of course we considered fair use and rejected it" so the 512(f) claim is dead. If that's allowed, then that effectively makes 512(f) a useless law, because all anyone has to say is they considered it before sending a bogus DMCA takedown and they can get away with it. That's clearly not what Congress intended with the law, otherwise why include it at all? Either way, this case is shaping up to be a key one to watch in determining whether or not there are any teeth at all (even little ones) associated with 512(f) in providing a tool for those who have been attacked with bogus DMCA filings.Permalink | Comments | Email This Story
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When NYPD Chief Ray Kelly said "privacy was off the table" following the Boston bombing, we all knew this was a one-way "exchange." It was always going to be average citizens losing out on their privacy. The NYPD would remain unaffected and continue to operate the way it has for years: behind the thin thick blue line of opacity. Salon's CJ Ciaramella takes a detailed look at the NYPD's track record on Freedom of Information requests. The results are unsurprising. The public entities that demand the most from their constituents are often the most reluctant to give anything back. The city’s Public Advocate Bill de Blasio, who is running for mayor, recently released a report asserting that a third of all Freedom of Information records requests to the police department were ignored. The numbers are no surprise to journalists who cover the department, such as Leonard Levitt, a veteran cops reporter who now writes at NYPD Confidential. “All I can tell you is that the NYPD does whatever it wants to regarding FOI requests,” Levitt said. “Which means they never turn anything over, at least not to me. The only time they did respond was after I got the NY Civil Liberties Union involved.” Levitt's case isn't unique. Others have run into the same officious stonewalling and found it often takes a lawsuit (or the threat of one) to shake anything loose. All Levitt was looking for was Ray Kelly's daily calendar. The department cited "security reasons" when rejecting his request. By this logic, protecting Ray Kelly is more important than protecting the President of the United States, whose calendar is public. What isn't rejected outright is simply ignored. Those making the requests are left to decide whether the requested information is worth the time and expense of a lawsuit. The NYCLU has found itself in court time and time again in attempts to pry info loose from the NYPD's grip. Ciaramella had his own experience with the NYPD's FOI recalcitrance when he sought access to gun discharge reports that might shed some light on the "hail of gunfire" unleashed by the NYPD in the course of bringing down the Empire State Building shooter. Back in October 2012, this reporter submitted a public records request for the discharge reports filed by NYPD officers over the previous year. I filed the public records request on Oct. 1. And then waited. On Jan. 11, I received this response: In regard to your request, for all weapons discharge reports filled [sic] by officers between January 1, 2012 and September 26, 2012, I must deny access to these records on the basis of Public Officers Law section 87 (2)(g) and 87 (2)(e) as such records/information, if disclosed would reveal criminal investigative techniques or procedures, and or are intra-agency materials. Furthermore, these records are also exempt from disclosure as these records on the basis of Public Officers Law section 87 (2)(e) and Public Officers Law 87 (2)(a) in that such records consist of personell records of a Police Officer and are therefore exempt from disclosure under the provisions of Civil Rights Law section 50-a. Now, stop and consider this for a second. The NYPD said the public interest of how, when and why its officers use deadly force against the citizens it’s sworn to protect is outweighed by the need to protect the privacy of those same officers. Not only that, the public interest was outweighed by the need to protect its investigative techniques. This is par for the course and not unique to the NYPD. Police forces all over the nation (and the word, for that matter) are notorious for protecting their own. This insular attitude tends to result in the sort of ridiculous arguments detailed above. Protecting officers from public scrutiny always outweighs the public interest because it's the "home team" making the call. But this reflexive "cops-first" rejection of Ciaramella's request was particularly brash, seeing as it completely contradicted a previous judicial ruling. A New York judge ruled two years ago — in response to a NYCLU lawsuit, naturally — that discharge reports are subject to disclosure, do not violate officers’ privacy and do not compromise the department’s investigative techniques. The NYPD at least tried a different tack with Ciaramella's next discharge report request, denying it because it was insufficiently descriptive of the files requested -- even though it was nearly identical to the previous filing. This is a systemic problem. FOI requests are ignored, rejected or put on the back burner until someone gets a lawyer involved. If any answer arrives, it's usually months or years down the road and, in many cases, redacted to the point of uselessness. New York's FOI problem goes all the way to the top. Bloomberg's office has spent significant amounts of time and money battling FOI requests as well. ProPublica's Sergio Hernandez spent nearly two years trying to obtain emails related to the 2010 appointment of Cathie Black as School Chancellor. (Black was a controversial pick who stepped into the position with no relevant experience after her predecessor suddenly resigned his post.) When the emails were finally released last week, after a two-year legal battle, they revealed a desperate public relations campaign in which city officials tried to rally support from prominent women — including Oprah Winfrey, Gloria Steinem, Caroline Kennedy, and Bette Midler — to champion Black's appointment. (I'll admit: never in a million years did I expect my work to result in stories containing the sentence, "Ms. Winfrey couldn't be reached for comment.") In the end, the emails were amusing, slightly enlightening, but largely innocuous. Hernandez points out that much has been made about the last-minute attempt to persuade female celebrities to show their support for the new chancellor, but much less ink has been spilled questioning why the city fought this request for so long, racking up a total of 180 staff hours and costs of over $25,000. In the very limited defense of the NYPD, all FOI requests are funneled through a single office. This inefficient design can partially be blamed for the extensive delays. But it doesn't excuse the general attitude that citizens need to be an open book while those in charge continue to operate in near opacity. And the inequity keeps getting worse, according to Robert Freeman, executive director of the NY State Commission on Open Government. “I’ve been here since 1974,” Freeman said. “The track record of the police department, particularly in the last decade, indicates in so many instances a failure to give effect to the spirit and letter of the freedom of information law." “I look back at various mayoral administrations, and my feeling is that there was more of an intent to comply with the law in the era of Mayor [Ed] Koch than there has been since,” Freeman continued. “My sense has been that the downward slope began in Giuliani’s administration.” There's little hope of any immediate change. Entities like the two discussed are naturally resistant to transparency and sudden movement. The fact that the NYPD and Mayor Bloomberg have formed a mutual admiration society over the years indicates that it will remain "business as usual" until a mayor willing to stand up to the police department (and stand up for his constituents) is elected. The last two office holders have been more than happy to indulge the PD's excesses, all the while further isolating themselves from the demands of transparency laws and the people they're supposed to be serving. Permalink | Comments | Email This Story
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There's been some hand-wringing in the past about online services like Wikipedia and WebMD and how patients and families use them to do self-diagnosis. Much of this seemed to be drummed up media attention, since you have to imagine the vast majority of medical patients are intelligent enough to listen to the advice of their doctors, Chicago Bulls players notwithstanding. Every once in a while, however, you'll get a story of someone who decided to trust information found online over medical personnel, typically regarding minor medical issues. Even more rarely, you find a real treasure in the form of someone lacking so much in common sense that you have to wonder how they manage to get out of bed in the morning. For example, I'm not yet a parent, but I'm pretty sure that if my child suffered from lead poisoning caused by someone wielding a freaking pistol, my first reaction would be to take my child to the hospital. Not so if you're this mother in Texas, apparently, since she decided to hop on the old interwebz to see what WebMD advised for gunshot wounds. Despite the shooting taking place around 6:30 PM on Tuesday, it wasn't until 2 AM on Wednesday that the boy's mother finally brought him to Mainland Medical Center for treatment. She had apparently spent the previous hours looking up "gunshot wound" on WebMD. And that brings to mind the two obvious questions. First, why isn't there an entry for "gunshot wound" on WebMD that simply reads, "Go to the damned hospital, you moron!"? And second, exactly how much searching is required on WebMD before you come to that conclusion anyway? One hour? Two? Three? This mother-of-the-year candidate has to account for seven and a half hours! One assumes she spent at least four of those looking for the "any" key on her computer, right? Fortunately, investigators are now saying they may charge the mother with a felony being-stupid or some such thing. Here's hoping they get that child out of her house and into a safer environment, like the tiger pit at their nearest zoo.Permalink | Comments | Email This Story
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Given the current climate surrounding guns, violent video games and all points where the two intersect, it's not surprising that a large developer like EA would attempt to distance itself from gun manufacturers. No, EA isn't going to stop making video games with real-life weapons in them. It's going to continue business as usual in that respect. What it is going to do is stop licensing the weapons. [A]t least one game maker, the second largest by revenue in the United States, is publicly distancing itself from the gun industry, even as it finds ways to keep the branded guns in the games. Electronic Arts says it is severing its licensing ties to gun manufacturers - and simultaneously asserting that it has the right, and the intention, to continue to feature branded guns without a license. A rep for EA says this decision has nothing to do with the NRA's immediate willingness to lay the blame for the Newtown shooting at the feet of violent video games. But that's a rather tough sell, especially considering the hard line EA is pursuing. Gun licensing for games has never been particularly lucrative for gun manufacturers, at least not in terms of licensing fees. Most agreements were felt to be mutually beneficial: game developers were able to craft authentic weapons and gun manufacturers received free advertising and the best kind of product placement -- right in the virtual hands of potential customers. Now, it seems the relationship has become mutually toxic. "It gives publicity to the particular brand of gun being used in the video game," said Brad J. Bushman, a professor at Ohio State University who has studied video game violence. "On the other hand, it's linking that gun with violent and aggressive behavior." Bushman's studies on video games and violent media have frequently resulted in dubious conclusions (to put it kindly), but if anyone's going to take him seriously, it's the NRA and gun manufacturers. What once looked like an ideal match now puts gun manufacturers' implicit endorsement of violent video games in a very unfavorable light. EA may be able to help them out with this. It's not going to give up using real world weapons in its games -- it's just going to stop asking permission. "We're telling a story and we have a point of view," EA's President of Labels Frank Gibeau, who leads product development of EA's biggest franchises, said in an interview. "A book doesn't pay for saying the word 'Colt,' for example." Put another way, EA is asserting a constitutional free speech right to use trademarks without permission in its ever-more-realistic games. EA is going to rely on fair use and it should have a fairly strong case. More promising is the fact that gun makers haven't been very litigious in the past. According to Reuters, a gun manufacturer has yet to sue a game developer over lack of proper licensing. However, the recently introduced friction between these two industries makes EA's new "license-free" stance a bit more combative that it would be otherwise. This approach almost appears to be EA throwing down the gauntlet and daring embattled gun manufacturers to wander back out into the public eye. There's no way gunmakers will look any better pursuing licensing fees or suing for breach of contract, and EA knows this. Once again, I'm not buying EA's "no harm, no foul" statement in reference to the NRA's recent attempt to toss video games under the bus. EA may have the upper hand at the moment, but Reuters mentions a pending lawsuit that could spell trouble in the future. Aircraft maker Bell Helicopter, a unit of Textron Inc, has argued that Electronic Arts' depiction of its helicopters in "Battlefield" was beyond fair use and amounted to a trademark infringement. EA preemptively went to court, suing Bell Helicopter to settle the issue. Should Bell prevail, EA may find gun makers willing to test the legal waters and attempt to pry EA's unlicensed guns from its cold, injunctioned fingers. Permalink | Comments | Email This Story
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A few months ago, we wrote about Steven Brill's amazing article in Time Magazine about hospital billing. As we noted at the time, the story confirmed what many people believed: that healthcare is a giant economic scam, and it's often the hospitals (not necessarily the insurance companies) who are driving the massive increases in costs. A big part of the scam is the fact that hospitals don't reveal their price list -- known as the "chargemaster." It's all a giant secret. There's no such thing as comparison shopping. There's simply no data anywhere. Well, that may be changing. The US government just released data on what various hospitals charge for various things, along with how much Medicare actually pays in return. This has quickly resulted in people noticing massive differences in pricing for the same treatment in different hospitals (including, at times, hospitals very close to one another). This release definitely provides some significant data about just how massively hospitals are overcharging for things, even if most patients never pay the listed fees. Still, it's not quite enough. Brill has responded to the release by noting that while this is a big deal and can be quite helpful in highlighting how broken the system really is (and hopefully will lead to a lot more reporting on the subject), it could go much further: The feds need to publish chargemaster and Medicare pricing for the most frequent outpatient procedures and diagnostic tests at clinics—two huge profit venues in the medical world. But an even bigger step toward transparency would be collecting data that Medicare doesn’t have: exactly what insurance companies pay to the various hospitals, testing clinics and other providers for various treatments and services. After all, as the hospitals themselves concede in downplaying their chargemasters, these insurance prices are the ones that affect most patients. And that is one price list where there is close to zero transparency. While hospitals and insurance providers clearly will not want to give up that information, Bill points out that patients do find out this information, so perhaps we should crowdsource the data: So even if insurance companies don't want to participate, Brill writes, states could crowdsource price information from patients: ...state pricing centers could gather the information from patients who volunteer, in exchange for a promise that their names won't be used, to submit their Explanations of Benefits. After all, a hospital or insurance company can't claim a patient can be prohibited from talking about or making public his or her own bill. For a market to work in any effective manner, pricing information must be clear. It's not that way at all in healthcare, and it needs to get that way fast if we're ever to get healthcare pricing under control.Permalink | Comments | Email This Story
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A couple of weeks ago, we wrote about the growing importance of investor-state dispute resolution in so-called free trade agreements (FTAs). One of the most troubling aspects is how potentially it can be used to undo the hard-won gains for important areas like access to medicines. The US law professor Brook K. Baker, whose work we discussed last year, has written an excellent exploration of this under-appreciated risk. After an introduction running through the recent wins in the field of access to medicines -- a topic that we've covered extensively here on Techdirt -- he explains how big pharma could employ investor-state dispute resolution to thwart these and similar moves to protect health: Using loose and imprecise standards addressing "minimum standards of treatment," "indirect expropriation," and "national treatment," multinational pharmaceuticals might claim that denying patents, granting oppositions, revoking patents, issuing compulsory licenses, and registering generics while referencing clinical data or doing so before patent expiration all violate their legitimate expectations for profit. Although the "minimum standards of treatment" clause [used to justify recourse to investor-state dispute resolution] was originally designed to prevent grossly abusive and discriminatory courtroom adjudications totally outside the bounds of normative due process, it has morphed to decisions with a much more lenient standard that rewards investors even when they have been given a full panoply of due process safeguards. The expropriation standard, originally adopted to deter nationalization of businesses and seizures of real property has similarly morphed to prevent indirect expropriations, what we call regulatory takings in the U.S., where changes in government regulations -- many designed to protect public health, environment, and other legitimate public interests -- are challenged as having diluted the investor's expectations of profit. Finally, the national treatment standard, though originally adopted to ensure that foreign investors are treated equivalently to domestic investors, is also morphing in new directions. As this makes clear, what started out as a series of measures for a few special cases in order to protect Western companies in countries with weak legal systems and a high risk of tangible investments being expropriated by the state, has been twisted to an entirely different use: enabling deep-pocketed multinationals to circumvent any kind of legislation they don't like, even in countries with fair and independent judiciaries. Baker concludes by offering some advice for nations involved in FTA negotiations with clauses that that call for investor-state dispute resolution to be put in place: India and other trade negotiators should heed the entreaties of trade, IP, and health activists who are warning against the inclusion of an Investment Clause in the EU-India FTA, the Trans-Pacific Partnership Agreement, and in the many other trade agreements that are underway or soon-to-be initiated. Preferably, investment chapters will be rejected in their entirety, as they are becoming a corporate sword of Damocles that hangs over the head of rich and poor governments alike. At the very least, IP should be totally defined out of "investments" and no investor claims whatsoever should be available for alleged frustration of IP-based expectations. IP right holders already have multiple forms of enforcement including private lawsuits, border seizures, criminal prosecution, and state-state dispute resolution. Enough is enough. Expanded and unbound investment rights for Big Pharma under the cover of underscrutinized investment chapters is a grave threat -- a threat with deadly consequences to millions of patients who rely on governments' rights to regulate IPRs and to use any and all TRIPS-compliant flexibilities to ensure affordable access to medicines for all. Worrying, few are even aware that the investor-state dispute resolution option exists, let alone its unprecedented power to circumvent government policy and override judicial decisions. That makes it all-too easy for negotiators to agree to its inclusion in trade agreements as an apparently minor concession that can be used as a bargaining chip to obtain measures they care more about. Let's hope that Baker's excellent contribution to the debate will alert people to this crucial area, and encourage others to speak up about the very real danger investor-state dispute resolution represents to a wide range of public interest issues. Follow me @glynmoody on Twitter or identi.ca, and on Google+ Permalink | Comments | Email This Story
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Cross-posted from A simple model of banking regulation and, like, counter-regulation goes something like this: Regulators are conservative and dumb, and want to safeguard banks from bad risks even at the cost of preventing good risks, Bankers are aggressive and smart, and want to take lots of good risks even at the cost of taking some bad risks, and Sometimes bankers can find people to put up with their shit and sometimes they can’t. “Put up with their shit” is meant in the broadest sense – Can banks defeat Dodd-Frank? Brown-Vitter? Is Lloyd Blankfein a hero or a villain? Jamie Dimon? Etc. – but one particularly interesting question is, if you’re trying to do trades that evade or bend or optimize or whatever regulation, will someone do those trades with you? You could write a history of recent finance with the answer to that question: in 2007 you could chuck all of your mortgage risk off-balance sheet via securitizations, in 2008 you … could not, and in 2013 if you’re looking for someone to provide regulatory capital relief all you have to do is call a Regulatory Capital Relief Fund. Six years peak-to-peak, same as the S&P. You could probably use words like “bubble” in characterizing that cycle but I prefer the approach taken in this new NBER paper by Guillermo Ordoñez of Penn (free version here), both because it mathematically formalizes that basic model of regulation and counter-regulation in an interesting way, and because it is congenially cynical. As he puts it, “banks can always find ways around regulation when self-regulation becomes feasible, and it is indeed efficient for them to do so.” Bankers, of course, always think that it would be efficient for them to find ways around regulation. They only do so when they can find someone to trade with them. The gist of the formalization is that banks can invest in “safe,” regulator-approved assets; in “superior risky” assets, which have a higher return than the safe assets for the same risk but which are not blessed by regulators1; or in “inferior risky” assets which have a higher upside but more risk than risky assets and are mainly a way for banks to implement moral hazard. Good banks want to invest optimally and care about the future, bad banks don’t care about the future and sort of maximize moral hazard. How they invest depends on economic fundamentals: if things are good then they invest optimally because there’s no need to take excessive risks; if things are terrible then they want to take excessive risks.2 Banks are constrained by two things. One is reputation: investors will trust a bank with a good reputation – that is, an observed history of taking good risks – and will fund it using unregulated shadow banking. The other is economic fundamentals, which investors can observe too: if fundamentals are bad and everyone knows banks will take excessive risks, then everyone demands the safety of deposit insurance (and regulation): Why do investors agree on participating in shadow banking if they understand that banks are trying to avoid regulation that provides a safety net against excessive risk-taking? A potential answer is that indeed regulation and capital requirements are useless. However, if this were true, why would investors run from shadow to traditional banking when they become concerned about the quality of collateral? I argue that reputation concerns lie at the heart of both the growth and the fragility of shadow banking. Shadow banking spurs as long as outside investors believe that capital requirements are not critical to guarantee the quality of banks’ assets, since reputation concerns self-discipline banks’ behavior. When bad news about the future arise, reputation concerns collapse because reputation becomes less valuable, and investors stop believing in the self-discipline of banks, moving their funds to a less efficient, but safer, traditional banking. Like I said I find this paper very congenial but that’s in part because I feel like some people won’t. It rests in part on the assumption that bankers can observe superior-versus-inferior risky assets, and that regulators can’t. This is pretty intuitive – bankers are paid (more!) to make optimal investing decisions, regulators are paid (less!) to prevent risky investing decisions – and perhaps empirically supported – but, y’know, bankers are wrong sometimes too. Also fun is Ordoñez’s proposal for a solution that steers between the dangers of unregulated banking and the inefficiency of blunt-instrument regulation: Another, ideal but unfeasible solution, is to just give a high subsidy to all banks, regardless of their reputation φ, conditional on their repayment of the loans [i.e. conditional on their not defaulting] …. This naturally increases the cost of default for all banks and then allows for more self-regulation. This solution has the same effects as an exogenous increase of μ [i.e. expected economic conditions], but how does one finance these widely available subsidies? Hahaha that’s “the best way to make banks safer is to give them such huge subsidies that surviving and getting the subsidies is more appealing than taking the risk of failing and losing the subsidies.” That seems … politically challenging,3 and so Ordoñez has some other proposals.4 I don’t know, I stopped there. Today’s bank lobbying – against increased regulation, higher capital requirements, and reduced too-big-to-fail subsidies – seems pretty uninspiring after that, doesn’t it? The real challenge would be convincing regulators that what’s needed are bigger and better subsidies for banks. I’m sure somebody’s working on that. Sustainable Shadow Banking [NBER, ungated February version] 1. This is the condition “bankers are smarter than regulators.” 2. That is: For all fundamentals [below some minimum threshold] banks take excessive risk, even if … reputation suffers a lot from taking risks. Intuitively, future prospects are so poor that reputation concerns are irrelevant. Similarly, for all fundamentals [above some maximum threshold] banks invest optimally, even if … reputation does not improve from investing optimally. Here, future prospects are so good that firms are afraid of defaulting and getting a zero continuation value. 3. Though also, like, true? Cf. Gary Gorton on how banks historically accepted regulation in exchange for a “franchise value” coming from their monopoly on banking activity, and how shadow banking erodes that franchise value, as in this summary: The second insight of Gorton’s on which this paper builds is the importance of statutory franchise value for the business model viability of at least some kinds of regulated financial entities. Where competition from unregulated entities is permitted, whether explicitly or de facto, capital and other requirements imposed on regulated firms may shrink margins enough to make them unattractive to investors. The result, as in the past, will be some combination of regulatory arbitrage, assumption of higher risk in permitted activities, and exit from the industry. Each of these outcomes at least potentially undermines the original motivation for the regulation. 4. Viz. to have bad-reputation banks pay for the subsidy (since they can’t shadow-bank anyway) and give it to the good-reputation banks (who do shadow-bank), which I don’t really understand (how does the regulator measure reputation?) but whatever that’s a minor quibble. Other posts from Dealbreaker: Banks Not Especially Eager To Start Handing Out Mortgages To People With Credit Scores In The Low 400s Yet Ringleader Of Insider-Trading “Fight Club” Didn’t Want Any Sarcastic Comments With His Inside Information Expert: You Can Only Fire As Many Employees As You Have, And If You Do, You Will Have To Hire Others Permalink | Comments | Email This Story
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Technology aimed at education could really benefit an incredible number of students by making classes and learning (potentially) a more pleasant and efficient experience. Computers can't replace a really good human teacher, but they can make it easier for good human teachers to reach a vast audience of students. Massively open online courses (MOOCs) promise to change how education works, but there are some technological tools that might be missing. It's pretty straightforward to test students on math problems in an automated way, but grading essays is a much more daunting problem. There have been some calls for automated grading software from various organizations (like the Hewlett Foundation). But at the same time, the National Council of Teachers of English argues that computers simply can't grade essays. Here are just a few more links on this debate over the use of algorithms over English professors (or grad students). EdX, the non-profit started by Harvard and MIT, is releasing some software to automagically grade human-written essays. Some see this software as just another tool for educators to use for more immediate feedback to students, while others are worried that these algorithms will be used incorrectly and lead to disastrous educational policies and outcomes. [url] There are studies that show algorithms are statistically comparable to humans when it comes to ranking essays on a 5 point scale. There are things machines can do better and things humans do better -- just make sure you know the differences and automated essay grading can be done productively in the right context. [url] Automated essay readers can grade 16,000 essays in 20 seconds. The Educational Testing Service is testing out automation, so students may soon be facing algorithmic grading for their college entrance exams. [url] Grading a few sentences can be harder than it might look. Professional (human) teachers are obviously better at interpreting the insights and ideas behind the words a student writes, but computers scale much better and never tire of horrible spelling mistakes or misplaced modifiers.... [url] If you'd like to read more awesome and interesting stuff, check out this unrelated (but not entirely random!) Techdirt post via StumbleUpon.Permalink | Comments | Email This Story
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