A year and a half ago, we noted how nice it was to see Twitter's rather laissez-faire attitude towards trademarks, where it seemed to have no problem with third parties making use of Twitter-related terms in their own names -- such as TwitPic, Stocktwits, Tweetdeck and many others. So, at first I was a bit surprised to see a report claiming that Twitter might be cracking down on those who use such names. The truth, however, actually demonstrates how many companies should respond to many trademarked situations.

First off, it's worth pointing out, as people always do, that one of the oddities of trademark law is the idea that a trademark holder has to prevent others from using the mark without permission, or they run the risk of losing the mark. That leads to lots of nasty cease and desist letters from lawyers, and people defending them claiming they "have to" do this. But that is not so at all. First off, they only have to do that for cases where there is a likelihood of confusion, so they can certainly leave many other cases alone. But, more importantly, there's another option out there, which very few trademark holders embrace: they can just give a free license out.

The story about Twitter is really just that the company has filed for a trademark on TWEET, which is perfectly reasonable. Just because you're getting a trademark, it doesn't mean you're going to stop others from doing things (and, the TechCrunch post seems confused by a different trademark on Tweet -- but trademarks are specific to areas of use, so it's possible to have multiple trademarks on the same term in totally different areas of use). And, in fact, Twitter made a statement pointing out that it does, in fact, freely license its marks:

"We freely license "Tweet" for ecosystem partners who are using it correctly as part of accessing the Twitter API. That said, "Tweet" means something specific and we aim to protect that meaning. More on this can be found here: http://support.twitter.com/forums/26257/entries/77641."

This seems like not just a perfectly reasonable trademark policy, but a smart one for encouraging others to help promote you and feel comfortable working with you as a partner. It's really surprising how quickly most other companies go for the legal nastygram, rather than "freely license" trademarks in cases where the use is clearly promoting the brand.Permalink | Comments | Email This Story

Ah, the fun never stops with the still ambiguous world of publicity rights, a relatively recent, but growing field of "intellectual property" that has all sorts of problems. THREsq points us to a legal analysis of whether or not California Governor Arnold Schwarzenegger would have a publicity rights claim over the character "Thor," found in Starcraft II. It's hard to argue that the character isn't based on Ahhh-nold, as it has his accent and repeats (sometimes paraphrased) famous Arnold lines from various movies:



In some ways, this is not all that different than the recent complaint from Michael Jackson's estate over the "zombie" Michael Jackson found in the game Plants vs. Zombies. Of course, to make this even more interesting, Schwarzenegger is still leading the legal fight against violent video games in California, so it seems even more amusing that his "voice" appears in a new video game.

That said, there's no indication that Schwarzenegger is actually upset by this -- and he apparently has not complained about other attempts to mimic his voice, such as with the Simpson's character McBane. So, at this point, the post above appears to be idle speculation on how a publicity rights claim might play out. However, it seems like a sad commentary on the state of publicity rights law that it's even worth considering whether such a creative choice by the gamemakers might break the law.Permalink | Comments | Email This Story

Major League Baseball is notorious for it's incredibly over aggressive enforcement of copyright and trademark laws, often well-beyond what is reasonable. Reader Mark alerts us to MLB's latest move, which is to demand that a flugtag team from Philadelphia remove the head of the Philly Fanatic that it put on their flugtag for one of Red Bull's regular Flugtag competitions. MLB's defense, I'm sure, is that it has to enforce the trademark and make sure no one else is using it without a license. But that's just silly. First of all, there's only a trademark offense when it's a use in commerce, and a silly competition based on trying to launch homemade, human-powered flying machines that cannot fly, is not quite a use in commerce. But, more to the point, these are fans of the team trying to promote the team and promote their fandom. And MLB is shutting them down. That's not particularly fan friendly. And so, instead of the Philly Phanatic on a Flugtag, it'll be decapitated by a silly trademark claim.Permalink | Comments | Email This Story

Just after a court ruling saying that YouTube did not have to rush and takedown videos covered by German collection society GEMA, but warning that YouTube could very well lose during a full trial, it appears that a German court has ordered YouTube to pay up, because some users uploaded videos of singer Sarah Brightman without permission. Google had argued that it can't be held responsible for making sure the content users upload is not infringing, and pointed out that it even asks users to confirm that they have the rights to upload the works they're uploading. However, the court claimed that such a requirement doesn't absolve YouTube from liability.

The company is going to appeal, but I'm trying to figure out how this makes any sense at all. How can Google possibly know upfront whether or not a user has permission to upload content? It makes absolutely no sense.

Of course, the timing on this is quite good for me. I'm hopping a flight to Germany this weekend, to attend the A2N conference where (among other sessions), I'll be having an on-stage talk with Patrick Walker, from YouTube -- where I'll at least be certain to ask about this.Permalink | Comments | Email This Story

Well, well, well. A few years back, we noted that Eminem's publisher was upset about the royalty cut they were getting from sales on iTunes, and they eventually sued both Apple and Universal Music over this (though, I'm still confused why Apple is involved). The issue is a contractual one: as is standard in lots of recording industry deals, musicians make very little money from each album sold. However, when their music is "licensed" for other things -- such as a commercial, movie or video game, they make a much larger percentage. The reasoning, of course, is that there are a lot more "costs" that go into making and selling a CD, which the label is taking on.

But here's where it gets tricky: what is a sale via iTunes? Is that a "sale" like a CD (meaning a small percentage royalty)? Or is it a "license" like for a movie (meaning a much bigger royalty)? Conceptually, you can make a reasonable argument for either side. After all, from the consumers' perspective, it's very much like buying a CD. But... from a technological perspective, it's really a lot more like licensing, since you don't have the same production, physical goods, shipping and distribution costs. A jury originally sided with Universal Music, saying that it's really just like a CD sale, and thus, the lower royalties should apply.

However, the 9th circuit appeals court has just ruled the opposite way, saying that the contract is "unambiguous" that iTunes sales count as a license, for which the higher royalties apply:



This could have a major impact on how much Universal has to pay out to musicians for iTunes sales. Of course, Universal Music is downplaying the ruling, saying that it's unique to Eminem's contract, and that the company plans to fight the ruling. However, Universal Music (and others, potentially) may be in bigger trouble than they care to admit over this ruling. There are other, similar cases underway as well. While I'm sure its more recent contracts are quite specific on this point, for large segments of the back catalog, Universal could be looking at actually having to pay out significantly more in royalties. Of course that assumes they have accurate records somewhere -- which certainly is no given.Permalink | Comments | Email This Story

Eric Goldman points us to the news that CBS sent a DMCA takedown to Scribd after the reality TV site RealityBlurred.com uploaded a copy of the contract castmembers sign before being able to go on the show Survivor, as well as a copy of the "rulebook" they receive. CBS apparently claimed that both of these were covered by copyright. Thankfully, RealityBlurred filed a counternotice, claiming fair use due to its use for reporting and commentary -- leading to a scary two week period where CBS would have to sue if it wanted to keep the document offline. However, the two weeks passed and CBS did not respond to notification from Scribd, meaning that the Survivor Contract and the Survivor Rulebook are back online. And, of course, in true Streisand Effect tradition, this attempt at taking down this info has only served to generate even greater interest in what's in the contract and the rulebook. As an aside, while I can see the copyright claim on the rulebook, I think CBS might have more trouble getting a court to recognize copyright on a contract that contains little creative work.Permalink | Comments | Email This Story

While there had been earlier reports of how some reporters for Rupert Murdoch's News of the World had spied on members of the royal family by listening to their voicemails, new reports suggest this activity was endemic, impacted hundreds -- and that Scotland Yard failed to let many who were victims of such spying know about it (and even focused their investigation on just one reporter, rather than looking into whether or not it was a widespread practice, as it apparently was).

Although Coulson has long insisted he knew nothing about the illegal activity, sources who worked at the tabloid told the Times Coulson not only knew about it, he actively encouraged it. A dozen former reporters said the hacking was so pervasive at News of the World that everyone knew about it. "The office cat knew," one longtime reporter said.

This is the kind of "reporting" that needs to be protected?Permalink | Comments | Email This Story

We've pointed out recently that porn producers seem to be rapidly jumping on the mass automated "pre-settlement" bandwagon, and it seems that's only increasing. More and more porn producers are filing mass lawsuits, demanding people accused of sharing all sorts of porn pay up or go to court. One of the latest targeted is the porn "classic," Debbie Does Dallas, for which 113 John Does have now been sued. Apparently, the lawyer involved is the same one who filed a bunch of these types of lawsuits a few months ago, Evan Stone. So apparently he's joined the ranks of lawyers who are pitching this kind of "service." Over in the UK, various politicians have been condemning these kinds of lawsuits, even calling them a scam. With thousands of these lawsuits being filed in the US now, will any US politician speak up and do something about this clear abuse of copyright law?Permalink | Comments | Email This Story

Well, it took a while, but US Copyright Group (really DC law firm Dunlap, Grubb & Weaver) have finally gotten around to getting subpoenas out to ISPs in the Hurt Locker lawsuit. While that lawsuit was filed months ago, the subpoenas just went out, in part, because of the fight in another of USCG's lawsuits over certain aspects of the threat letters. That ended with a requirement for USCG to work with groups like the EFF to come up with more informative threat letters. The results don't look all that more reasonable, but it does note that those accused have the right to try to fight the subpoena, and removes the misleading threat of a $150,000 penalty hanging over their heads. Of course, being just slightly more honest has its cost. The pre-settlement fee demanded has been increased from $2,500 to $2,900 this time around.

Separately, in Greg Sandoval's article, he talks to Cindy Cohn from the EFF who notes that they're hearing from a lot more people on the receiving end of USCG lawsuits who have no idea what it's all about and aren't BitTorrent users at all. That happened with the RIAA lawsuits as well, but apparently at a much lower rate. This certainly calls into serious question the techniques that USCG is using to identify file sharers and to make sure they're not suing innocent people. Of course, when you look at the economics of it all, to USCG it really doesn't matter. When it makes mistakes, the actual likelihood of getting in trouble for it times the likely cost of such a mistake is so low as to make the incentive such that there's little reason to care about false positives. Yet, on the flip side, the cost of defending yourself against a bogus threat from USCG is certainly going to be more than $2,900 in almost every case. As Cohn notes:

"When it comes to copyright," Cohn said "the law is set up so that truth, whether someone actually violated the law or not, takes a back seat to financial considerations."

And, really, that's what's so nefarious about this whole process. The incentives are totally screwed up. USCG has no incentive to weed out the false positives, and the innocent folks threatened have powerful economic incentives to just pay up. It's still not "extortion," in that USCG can claim to have a legitimate legal basis for the demands, but it certainly comes damn close in practice.Permalink | Comments | Email This Story

This should hardly come as a surprise, but as the French "three strikes" agency Hadopi tries to push forward, it's facing some serious resistance from French ISPs, who might out-and-out ignore the law's requirements in a boycott against the plan. The main issue, of course, is that they feel that the law puts too big an expense on them, without adequate compensation for the work. Basically, the government is asking them to be under-paid police for the entertainment industry. The ISPs are asking for greater compensation to play that role, and if they don't get it, are apparently willing to fight the overall law in court. It seems that, after years of fighting to get the law passed, the French government still might not be over the final hurdle to kicking people off the internet for file sharing.Permalink | Comments | Email This Story

We've discussed some interesting things happening down in Brazil when it comes to copyright. First, we've looked a few times at how the super popular technobrega music industry has thrived by embracing giving away music and using that to build up fame and business models based on selling scarcities -- such as live shows. But, perhaps more interesting has been the ongoing proposals for new copyright laws in Brazil. For example, there was the decision to buck the trend in many places and not have a notice and takedown provision like the DMCA, but only have content get taken down with a court order -- a position that shows significantly more respect for free speech rights. Separately, one recently proposed draft amazingly included penalties for hindering fair use or the public domain.

It's almost as if folks in Brazil have actually noticed how poorly set up most of the rest of the world's copyright laws are.

Last month, Brazil allowed public comment submissions on copyright, and apparently at the last minute, a large group of artists groups and consumer rights groups put together a proposal to "end" the "war on copying" (found via IP Watch). Basically, the plan has a few parts, but the big one is the idea of legalizing non-commercial file sharing in exchange for a broadband levy of 3 Reais -- or about $1.74 US. That's certainly a hell of a lot cheaper than most proposals out there.

That said... while I appreciate getting rid of "the war on copying," I do think there are some serious problems with a proposal like this. Copyright levies tend to have serious unintended consequences. They create large bureaucracies, where money collection and distribution is not always done fairly. In fact, they often tend to favor bigger name artists over smaller artists, and just having the bureaucracy creates overhead that goes to the bureaucracy, rather than the artists. On top of that, it takes away incentive for consumers to support artists directly through other creative business models, because they feel that they "already paid," via the levy. So, as it stands, I don't think this is a great solution, but it's at least a hell of a lot better than copyright law most other places -- and it's great to see a focus on actually getting past the old "copy wars."Permalink | Comments | Email This Story

We recently wrote about comic book writer Mark Waid's supposedly controversial keynote speech at the Harvey Awards, where he talked about copyright, the public domain and learning to embrace file sharing. Beyond the general controversy, a lot of people apparently misinterpreted his talk to be anti-copyright and anti-making money (we get that a lot around here too). So he's now posted a written out version of his talk that seeks to clarify many of his points (thanks to Robert Ring for sending this in). It's a great read, and hits on many of the points that we normally talk about here. Specifically, copyright is supposed to benefit the public and that file sharing isn't going away, so you're better off embracing it and using it to your advantage, rather than whining about it. Nice to see more people recognizing this. It also has a great line:

culture is more important than copyright

I'm trying to understand anyone who would disagree with this statement, but so often we hear people say that they have to defend their copyrights "on principle," even if not defending them is better for culture. But the key point of his article is that fearing file sharing and attacking it doesn't help. It doesn't stop it from happening and it provides no real advantage to those doing the attacking. So he suggests it's time to figure out ways to turn it into an opportunity:

Like it or not, downloading is here. Torrents and filesharing are here. That's not going away. I'm not here to attack it or defend it--I'm not going to change anyone's mind either way, and everyone in America at this point has anecdotal evidence "proving" how it hurts or helps the medium--but I am here to say it isn't going away--and fear of it, fear of filesharing, fear of illegal downloading, fear of how the internet changes publishing in the 21st century, that's a legitimate fear, because we're all worried about putting food on the table and leaving a legacy for our children, but we're using our energy on something we can't stop, because filesharing is not going away.
And I'll tell you why. It's not because people "like stealing." It's because the greatest societal change in the last five years is that we are entering an era of sharing. Twitter and YouTube and Facebook--they're all about sharing. Sharing links, sharing photographs, sending some video of some cat doing something stupid--that's the era we're entering. And whether or not you're sharing things that technically aren't yours to share, whether or not you're angry because you see this as a "generation of entitlement," that's not the issue--the issue is, it's happening, and the internet's ability to reward sharing has reignited this concept that the public domain has cultural value. And I understand if you are morally outraged about it and you believe to your core that an entire generation is criminal and they're taking food off your table, I respect that.

But moral outrage is often how we deal with fear. It's a false sense of empowerment in the face of fear.

Great stuff. Definitely go read the whole thing. He also mentions that he's got some plans in place for how he's going to embrace things like BitTorrent and run some interesting experiments. He points out that they're experiments, and there's no guarantee they'll work, but he wants to step forward and at least try to embrace it. This is great to hear, and I look forward to seeing what kind of experiments he runs.Permalink | Comments | Email This Story

Questionable drug patents that put lives at risk are finally starting to get more scrutiny. The Public Patent Foundation (better known as PUBPAT) is now challenging the validity of eight patents held by Abbott Labs around the HIV/AIDS drug ritonavir (branded Norvir). As PUBPAT noes, there's plenty of prior art that should have prevented these patents from ever being granted. The patents in question are 5,541,206, 5,635,523, 5,648,497, 5,674,882, 6,037,157, 6,703,403, 7,148,359, and 7,364,752. PUBPAT also notes that Abbott has faced controversy over its monopoly pricing in the past, such as when it raised the price of the drug from $1.71 per day to $8.57 per day. Having a monopoly lets you do that sort of thing...Permalink | Comments | Email This Story

Earlier this year, we noted that scammers were copying the mass automated pre-settlement copyright infringement notices of law firms like ACS:Law and US Copyright Group, in order to get people to install malware on their computers. It appears that sort of effort is only expanding. With French President Sarkozy getting his wish for a three strikes law in France, the bureaucracy set up to deal with the resulting mess, Hadopi, is now trying to warn people around France that scammers have started sending out fake notices, pretending to be from Hadopi, demanding money for copyright infringement. Unfortunately, it's yet another unintended consequence of bad legislation.Permalink | Comments | Email This Story

We've seen plenty of stories of review or ranking sites that get sued by people upset about their reviews, but one such site that seems to get extra special attention is Avvo -- and that's because it's a ranking and review site for lawyers. Soon after the site was launched a few years back, it was sued -- leading a judge to dismiss the suit, pointing out that rankings are opinions and opinions are protected by that old First Amendment thing. However, it appears another lawyer is suing the site, claiming libel among other things.

Avvo hit back in a blog post highlighting some history that the lawyer in question, Joe Davis, probably doesn't want to generate any more attention (such as being "twice convicted and spent eight days in the pokey") and suggesting that it's the desire to hide this info that is the real reason behind the lawsuit.

So, how does Davis try to get around the whole "opinion/free speech" thing? Well, he tries to find some factual errors in his profile -- such as the page claiming that he practices "100% employment/labor law," which is apparently not the case. That said, it's difficult to see how such an error amounts to libel. Also, apparently Avvo has the wrong address, which Davis suggests is a "misrepresentation." He also claims that Avvo's "failure to take into account" Davis' Board Certification (which is mentioned over and over and over and over again in the complaint as if that, alone, conquers all) is a "misrepresentation" as well.

From there, Davis suggests that various fluctuations he saw in his ratings over a period of a few days "obviously occurred based solely" on his "level of participation" on the site, rather than "what is in the public record." Davis also gets upset that his profile points people to other, competing lawyers, and claims that Google forbids a similar practice. Unfortunately, I believe Davis is simply wrong on this point:

Google's AdWords' policies prohibit AdWords users from doing the very same thing that Avvo.com does--that is, to hijack a competitor's name as a key search word to trigger the appearance of a competitor's ad next to the competitor's search results.

But Google actually does allow that and has fought an awful lot of lawsuits that it's usually won, saying that such a practice is perfectly legal. In fact, Google just recently changed its European policy to have it match the US policy in allowing greater use of trademarked terms in AdWords.

There's also a suggestion that by using Davis' photo from his own website, Avvo may have violated copyright and local Florida statutes on using images of lawyers. The full complaint is a bit rambling, and at times rather informal, which makes for some fun reading, but seems like the sort of thing that a judge might not appreciate:


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For many years, we've discussed how the Bayh-Dole Act, which created incentives for universities to patent the (often federally-funded) research results of professors, has been a dismal failure. The failure is based on the same faulty reason for why people think that patent system itself increases innovation -- even in the face of an awful lot of evidence to the contrary. The mistake is in thinking that the key incentives for research is to extract the greatest dollar value in return, and that the key to commercialization is licensing. Neither is true. In academic settings, research is driven by a variety of factors, many of which have little relation to commercial incentives. Second, the key to commercialization tends to be market need, not licensing opportunity.

But, because of this, tons of universities thought they were going to be rich and set up "tech transfer" offices to help license this new found wealth of patents. Reality hasn't been kind. With a small number of exceptions (the big famous universities like Stanford and MIT), nearly every one of these tech transfer offices have lost money for the universities that set them up. In part, this is often because tech transfer offices like to overvalue the patent, and completely undervalue the actual execution necessary. But, more importantly, the research that comes out in this manner often just doesn't have that much commercial potential -- and a big reason for that may actually be the patents themselves.

By locking up the technology with patents, it's decreased incentives for sharing ideas, which is where real growth and real innovation comes from. The end result is -- entirely contrary to the predictions of Bayh-Dole supporters -- that the law has decreased the output of researchers and decreased the value of that output. In other words, it's done the exact opposite of what it's promised -- and yet we still don't hear any talk of repealing such a dangerous law.

There's now some new research on trying to patent and commercialize university research, this time coming out of Canada, and it, too, has found that there's very little evidence of benefit from patenting and trying to license university research. Effectively, it found that the costs and benefits almost even out.

The latest report is based on survey data from 2008 which finds that the total IP income (primarily from licencing) at reporting Canadian universities was $53.2 million. The cost of generating this income? The reporting institutions employed 321 full-time employees in IP management for a cost of $51.1 million. In other words, after these direct costs, the total surplus for all Canadian universities was $2.1 million. The average income per university from IP was only $425,000. Patent applications and patents issued were actually down in the reporting institutions and there were less than two-dozen spin-off companies reported by the universities.

So, it's another bit of research suggesting this effort to patent university research has not done what it promised to do. So why do politicians still support such laws, when the empirical evidence has long shown that it does not do what those very same politicians promised?Permalink | Comments | Email This Story

We recently wrote about Newsweek's coverage of Austin Heap and Haystack, a program he supposedly wrote to help Iranian internet users avoid being spied on by the Iranian government. Some of our commenters questioned the overall legitimacy of the story. It has a very too-perfect Hollywood sort of feel to it -- and some pointed out the fact that no one seems to be able to actually look at Haystack. It sounds like a lot more folks are skeptical of the claims around Haystack as well. Glyn Moody points us to a post by Evgeny Morozov that rips apart the total secrecy around Haystack, to suggest the whole setup is pretty hard to believe.

I like Hollywood as much as the next guy -- and yet something just doesn't feel right about Haystack. What really bothers me is that one cannot download and examine their software; as far as the Internet is concerned, Haystack doesn't exist. In fact, Heap says that it is only distributed to trusted contacts inside Iran; putting it online would create a situation where the government could easily get hold of it as well and then reverse-engineer it or ban it or find a way to track its users.

So, in essence, the outside public - including Iranians -- are asked to believe that a) Haystack software exists b) Haystack software works c) Haystack software rocks d) the Iranian government doesn't yet have a copy of it, nor do they know that Haystack rocks & works. (And who could fault them for not reading Newsweek? I certainly can't). For someone with my Eastern European sensibilities, that's a lot of stuff to believe in. Even Santa -- we call him Ded Moroz -- appears more plausible in comparison.

He goes on to note that, at the very least, this security by obscurity actually could be quite dangerous for Iranians actually using this program, since it may be giving them a very false sense of security:

To me, it seems like a no-brainer: if you want to distribute technology that may endanger lives, make sure that the technology is secure. The only good way that I know of to make sure that it's secure is to let outsiders test it.

Indeed. In retrospect, the Newsweek version of this story had too many holes that should have acted as red flags.Permalink | Comments | Email This Story

A bunch of folks have sent over the story of how Microsoft recently patented its method of shutting down Windows (7,788,474), which plenty of people are mocking for all sorts of reasons. Reader Prashanth points out the fact that the patent actually helps demonstrate why Microsoft's shut down process is so slow. The whole thing just highlights how companies these days file for completely ridiculous patents just to pad their patent portfolio, and potentially to block others from doing pretty obvious things.Permalink | Comments | Email This Story

With the Las Vegas Review Journal continuing to massively abuse copyright law with its Righthaven lawsuits, the absolute best source for covering the story has been the competing Las Vegas Sun -- leading some to claim that its coverage was to spite its local competitor. However, the Sun put together a good editorial explaining why the story is so newsworthy. Now, Sherman Frederick, the publisher of the LVRJ has hit back with an editorial slamming the Sun and insisting that the Righthaven strategy is the right one.

I'd link to the story, but since the LVRJ has made it clear it doesn't like links, I figured it's best not to do so.

Also, I would normally quote Frederick's article to debunk it -- a clear case of fair use -- but since the LVRJ has made it clear it doesn't want anyone quoting its articles (despite the fact it still has 19 separate "share" buttons on each article), I won't bother. Instead, I'll just make some general statements about Frederick's column.

First, Frederick suggests that there are only two options for dealing with people copying your words online: you sue or you go out of business. He predicts that the competing paper, The Sun, is going to go out of business because it's not suing others. I will note, of course, that he doesn't point out the slight conflict of interest in the fact that he helped fund Righthaven, and thus has incentives to try to get other newspapers to make the same mistake he's making. But, of course, there are plenty of other options, such as putting in place a smarter business model. The idea that the cat blogger in Boston is taking any revenue away from the LVRJ is beyond laughable. No one reads the story on the cat blog post and says "gee, now I don't have to go to the LVRJ ever again."

Frederick also claims that getting others to link to you and to promote your site doesn't help you at all (which is partly why we're not). However, this suggests he's unfamiliar with the concept of "Google," and the fact that it ranks your site's relevance, in part, to how many others link to you and who those others are. But, his bigger problem is that he thinks people are saying that if you let others link to you the money will just roll in. But no one's saying that. They're saying that links in combination with a smarter business model help raise your profile and create lots of opportunities to make more money. Unfortunately, it looks like Frederick is taking the lazy short cut, which is pissing off all sorts of people, and serious hurting his brand.

While he claims that since the lawsuits began they haven't seen any loss of traffic to their website, that's a meaningless stat at this point. First off, it's still quite early. Second, the idea isn't just that the lawsuits directly would lead to a loss of traffic, but the inevitable chain of events following such lawsuits. It's as if Frederick can only think a single step ahead. He must be a hell of a chess player.

From there, he claims that even if he was losing revenue from these lawsuits it would be worth it, because protecting the writing is more important than revenue. Really. That's a paraphrase rather than an exact quote, because I don't want Righthaven to sue me, but it's basically what he says. The reason for that? He insists that it's the writing in the newspaper that is the key value. That's only partially true of course and sort of besides the point. These sites that he's suing are not competing with the LVRJ, so pretending that a random site posting a single story somewhere (with credit and a link back) is somehow damaging the LVRJ is simply wrong.

But, more importantly, he's overvaluing the content and undervaluing the community. He's never been in the business of selling content. He's always been in the business of selling the attention of his readers to advertisers. Forgetting that would be a big mistake. He claims that it's the quality and (artificial) scarcity of the content that drives readership, and that's partially true, but it only goes part of the way to explaining the business. It suggests that he's done little, if anything, to make that content more valuable and useful for that community. In fact, he's doing the opposite, by suing those who try to do something with the content. In the long run, that seems quite likely to backfire.Permalink | Comments | Email This Story

Earlier this year, we had a long blog post about the sudden rush in patent marking lawsuits. You can read all the details there, but the quickish summary is that patent law says that you cannot falsely claim patent protection on something -- and goods that have expired patents, but still claim patent protection, fall into that category of "false marking." The law allows people to sue for $500 in cases of false marking, but a court ruling last December shook things up quite a bit, by saying that the $500 applied per product rather than (as many had assumed for years) per product line. That meant that in the famous case of Solo's plastic cup lids found on coffee cups around the world, suddenly it faced the potential not of a $500 liability but potentially a $10 trillion liability. Now, no court in the world would grant such an award, but it certainly increased the potential liability and caused lots of companies to start scrambling to get rid of any mention of expired patents on their products. And... at the same time, it led to a bunch of patent lawyers rushing around their local stores looking for just about any consumer product marked with an expired patent. Approximately 350 such lawsuits have been filed since the December ruling.

Now it appears another shoe has dropped. One of the reasons why these patent lawyers (and a few others) went around searching for products is that the law is pretty clear that:

"Any person may sue for the penalty, in which event one-half shall go to the person suing and the other to the use of the United States."

Yes. Basically, the law is setup such that, in the service of the US government, which doesn't want falsely marked goods, anyone who discovers such a false marking can so, so long as they split the proceeds 50/50 with the US government. But then... a District Court in NY put a halt to that, when a guy named Raymond Stauffer sued famed clothing retailer Brooks Brothers for selling bow ties with patents that expired decades ago. The District Court tossed out the case, agreeing with Brooks Brothers that Stauffer had no standing to bring the lawsuit. This put a bunch of those 350 other lawsuits on hold to determine if "any person" really meant "any person."

Well, open the floodgates, because the appeals court has said that any person does, in fact, mean any person, and thus Stauffer has standing to bring the lawsuit:



Now, I'll admit that I'm a bit torn about this whole situation. It's no secret that I'm not a fan of the patent system as it stands today, and how it's widely used to give monopoly privileges where none should exist. So, I definitely like the fact that there's a system in place to easily go after those who falsely claim a monopoly privilege where none exists (any longer). If you're still claiming a monopoly on something where that patent has expired, it could scare off competition and innovation building on that product -- and that's bad for innovation. So, in general, I'm inclined to support efforts that ward off false marking.

That said, it seems clear that the sudden goldrush mentality of patent attorneys suing all sorts of companies for false marking is a pure moneygrab, where there's little evidence of any real harm at times. It just seems like a way to tie up the courts in hopes of a golden lottery ticket (shared with the feds). That doesn't seem efficient or useful -- and actually has some unfortunate similarities to basic patent trolling.

Perhaps this sorts itself out, however. With the rush of cases, companies are scrambling to review all their product packaging and to remove expired patent markings as quickly as possible. After that initial scramble, the number of these lawsuits should drop pretty quickly. On top of that, the current version of the patent reform bill (which seems to get worse every time we hear about -- but may have already stalled out in Congress again) also would try to cut back on such false marking lawsuits. But, in the meantime, with this new ruling, expect a bunch more of these lawsuits to be filed.Permalink | Comments | Email This Story

A few weeks ago, we ran a webinar about "using free as a part of your business." One of the speakers was Phil Libin, from Evernote, who gave a very detailed presentation (you can view the whole thing here) about how Evernote has turned "freemium" into a success story. I found his points fascinating, in part because I've actually never been a huge fan of the "freemium" model for software -- where you get some basic features for free and then to use more, you have to pay. I don't talk about "freemium" very often, because I'm not convinced it's a strategy that works in most cases. It can obviously work in some specific cases, as Evernote has discovered, but it can be tricky to apply elsewhere.

There are a few reasons for this. First of all, the basic concept of "freemium," involves some rather arbitrary choices. You provide "x amount" of storage/users/projects/features/etc. for free, and you hope that people will pay for increased storage/users/projects/features/etc. But where do you make the cut off? That's quite tricky to figure out, because there's no fundamental reason for the cutoff points. When we talk about using free in a business model, we generally focus on freeing infinite goods and selling the scarce goods, but "freemium" offerings for web services don't tend to make any such distinction. The "free" versions are basically given away as marketing in the hopes that people will upgrade.

But in many cases, that doesn't work for a few key reasons: first, you now have incentives to make the "free" offering worse. That's never a good thing. In the effort to get people to sign up for the premium version, you have bad incentives. You don't want to make the free version "too good" as then people won't feel the need to upgrade. I find that to be a bad incentive structure in many cases. On top of that, there's a part of this that's a "give it away and pray," type strategy. Yes, you're offering more features, but figuring out that right mix of what's free and what's paid is really incredibly tricky, and you simply have to learn to accept, as Libin has done, that the vast majority of people using your app are just there for the free version. For Evernote, one of the keys to making it work is that the app itself becomes more and more useful, the more you use it. That leads to greater conversions over time. That's honestly rare for most apps which have a more or less steady-state usefulness.

The problem is that while the "free" version is supposed to act as "marketing" for the paid version, it's often wildly mis-targeted. Many people use the free version solely because it's free, and have no interest in signing up for the paid version at all. So that's not the right target market. If you're going to charge for something, you need to give people a real reason to buy, which often is offering something entirely different that is enhanced by something free, rather than limiting something free.

Unfortunately, however, the whole concept of "freemium" (including the catchy term) has received so much attention that many startups now jump right in with a cookie-cutter "freemium" offering -- and now they're learning why that's a mistake. Ross Pruden alerts us to a really interesting article from an entrepreneur who went the cookie-cutter freemium route, and eventually backed away from it and saw his revenue shoot upwards. He then explores a few other companies that have gone through similar evolutions, and saw the exact same thing happen.

This isn't surprising, given the problems described above about "freemium." Unfortunately, however, the author of that blog post, Ruben Gamez, jumps to the wrong conclusion that "free plans don't work." That's taking it a bit far. Freemium type plans can work in some cases, and "free" by itself can work wonders, if done right. But that tends to involve using free to enhance the value of something else, rather than using it as a sampling.Permalink | Comments | Email This Story

At a public hearing of the Financial Crisis Inquiry Commission -- the group put together to investigate the Wall Street implosion of 2008 -- former Lehman Brothers' CEO, Dick Fuld, wants everyone to know that Lehman was not at fault in its failure. No, it turns out the problem was all of you. You didn't believe strongly enough in Lehman, and then the government didn't bail him out because of it. As the crew at Planet Money notes:

In fact, in 1,680 words of prepared testimony, Fuld devotes exactly 15 words to what Lehman did wrong. And those 15 words are immediately followed by an explanation of why Lehman's errors didn't contribute to the bankruptcy:
In retrospect, there is no question we made some poorly timed business decisions and investments, but we addressed those mistakes and got ourselves back to a strong equity position ... There is nothing about this profile that would indicate a bankrupt company.


Of course, part of his reasoning is that the government did proceed to bail out most of the other big Wall Street firms. However, just because the government decided to save those other guys, it doesn't mean that all of Wall Street didn't make some serious mistakes in creating their own downfall. In fact, a recent report from Planet Money and Pro Publica, that came out just last week, showed how ridiculous levels of self-dealing among banks not only prolonged the mess, but actually made the eventual impact much, much worse. Basically the banks created fake demand for the very worst parts of the mortgage-backed securities they were trying to sell, in order to keep on selling.Permalink | Comments | Email This Story

This is hardly a surprise given previous reports and previous actions of the USTR, but it does highlight the blatantly false claims from the USTR that it is being as transparent as possible when it comes to ACTA negotiations. The Obama administration has repeatedly told different groups in the administration to be as transparent as possible, but apparently the USTR simply doesn't care. It puts out content free statements claiming that it's "committed to improving transparency," but when it comes time to release the latest draft of the document, it's not released officially at all... and reports are now coming out to say that this is due to US demands to keep it secret. Transparency? Not around the USTR, apparently. They've been using transparency as a negotiating ploy, and when they don't get what they want, they refuse to let the document be released. Of course, in being so childish, all the US has really done is draw more scrutiny, and pretty much guarantee that a draft (including the markup that the one and only official release left out) get leaked.Permalink | Comments | Email This Story

Michael Scott points us to a story of a woman who not only drove from Maryland to California to go to Facebook's offices to complain about having her account banned, but (when that didn't get the account reinstated) then she sued the site for the ban. Facebook says she was banned for harassing others. The woman, Karen Beth Young, says she was just promoting causes she was interested in, and, in doing so, friending lots of people (about 4,000 by the time the account was closed). She claims the ban violated her constitutional rights... and the Americans with Disabilities Act.



The constitutional claim is almost certainly a non-starter. As a company, Facebook certainly has the right to ban pretty much anyone it wants to ban. The ADA claim also seems like it won't go very far, but as Eric Goldman notes, with so much ADA litigation, there's always a chance that "a court could have sympathy for the plaintiff." In this case, she's claiming that she has a bipolar disorder, and Facebook "does not provide reasonable accommodations to individuals with disabilities," like her. But that implies the problem was with her mental health issues, rather than her actions on the site. This seems like yet another case of someone saying that if they don't like something it must be against the law... even when that's not the case at all.Permalink | Comments | Email This Story

It's really incredible to watch music industry folks shoot themselves in the foot over and over again with a simple inability to understand that promotions can lead to more sales, and that you don't need to get paid for every promotional effort. We've seen some in the industry gleefully admit that they'd rather have $1 today than $100 tomorrow. But this sort of thinking seems to pervade so much of the music industry at times that it's really quite stunning.

The latest comes from rumors that Apple was going to double song sample lengths in iTunes from 30-seconds to 60-seconds. There's apparently plenty of good reasons for this, as research has shown that 60-second samples lead to more purchases.

And yet, despite the rumors, you'll notice that Steve Jobs did not announce the expected doubling of samples. Why? Apparently Apple had the approval of all four of the major record labels... but he forgot to go groveling and beg for permission from the other side of the coin: the music publishers. Apparently, various music publishers read the rumors of the doubling and were quite upset that Apple hadn't asked for their permission, and even started lawyering up to sue, in case Apple announced such a plan without first getting permission from various music publishers.

And people say we're exaggerating when we show just how ridiculous music licensing is. This isn't about copyright or revenue or anything. This is just childish foot-stomping by a group that demands that everyone ask permission before helping them make more money. Stunning.Permalink | Comments | Email This Story

Copycense points us to yet another story about another person in another industry whining about not getting enough monopoly privileges from the government. This time, believe it or not, it's bartenders wanting to protect mixed drink recipes. Seriously. Unfortunately, the writeup at the Atlantic, by food writer Chantal Martineau seems to get an awful lot of points about intellectual property totally mixed up. The article slips back and forth between trademark law and copyright law (which are extremely different) and then has this whopper:

The publication of a recipe can be legally protected, but the "expression of an idea," as the lawyers in the seminar explained, cannot. It's the reason musicians can't be sued for covering another band's song in a live show.

So many things wrong in two short sentences. First of all, no, the publication of a recipe cannot be protected. Straight from the US Copyright Office: "Mere listings of ingredients as in recipes, formulas, compounds, or prescriptions are not subject to copyright protection." That said, if there is "substantial literary expression" in, say, the description of how to prepare the recipe that part (and that part alone) could be covered by copyright, but that should have little impact on bartenders making similar mixed rinks. Also, copyright is, in fact, supposed to protect the expression, contrary to the statement above. This is the whole basis of the idea-expression dichotomy, which Martineau seems to get backwards. As for why musicians can't be sued for covering another band's song in a live show, that's got nothing to do with the difference between an expression and an idea, and everything to do with performance rights licenses from venues to PROs like ASCAP and BMI that (in theory) are supposed to cover the copyright (yes, there is one) on the composition.

As for the meat of the actual article, there's a lot that's very troubling in there, though Martineau doesn't seem to challenge any of the claims made (given the confusion on the topic, perhaps that's why). It starts off with a story about a trademark violation, when a new Manhattan lounge called Painkiller was threatened with a cease-and-desist from the distillery Pusser's, who had apparently trademarked a drink called Painkiller back in 1989. But the only issue there is the name (which is trademarked), not the recipe. So it's odd that this is used as a lead in to a discussion about copyright.

The actual story focuses around an apparently angry bartender, Eben Freeman, who seems to be upset that he doesn't get enough credit for inventing certain drinks:

After the seminar, I spoke to Freeman, who admitted he came up with the idea for the talk after becoming fed up with other bartenders and establishments taking credit for and profiting from his recipes and techniques. (Fat washing, for example, the process by which a spirit can be infused with, say, bacon, was pioneered in part by Freeman, yet is often attributed to others.) "Someone needs to get sued ... to set a precedent," he told me.

"In no other creative business can you so easily identify money attached to your creative property," Freeman went on. "There is an implied commerce to our intellectual property. Yet we have less protection than anyone else."

Of course, Freeman is exaggerating the claim that bartenders "have less protection than anyone else." He has just as many protections, it's just that you can't copyright a recipe. If it's true that he really did come up with a novel and non-obvious process for "fat washing" (I really don't want to know), then he could have applied for a patent on it, but in an article confused about trademarks and copyright law, no one even mentions patents. Perhaps Freeman should have done some research first.

From there the article goes off on a totally random tangent about how big liquor companies have been hiring young bartenders to become "brand ambassadors" where they're expected to come up with a signature drink using the specific brands in question. But, the accusation is, these bartenders "don't have the experience" to do so, and instead just copy someone else's recipe and tweak it. Of course, that's not illegal. At all. And it's not a problem. It's how innovation happens. You build on the ideas of others, and you tweak it to try to make it better. There's nothing wrong with that at all. In fact, it should be celebrated. In fact, we've seen how the very same lack of copyright protection over recipes has helped food and restaurant trends grow and spread in valuable ways. Instead, this just seems like a complaint about someone who doesn't like young bartenders and the way they work. But that's not an intellectual property issue.

Over at the Washington Post, Ezra Klein does a nice job pointing out that, just as with fashion copyright, there's no evidence for a need for a "drink copyright,":

As is always the case with granting individuals legalized monopolies over intellectual property, we should start by asking whether consumers are suffering because bartenders don't have enough financial incentive to innovate interesting new drinks. Given that the past few years have seen an incredible explosion in creative mixology, that's a hard case to make. The status quo seems perfectly good at encouraging innovation -- so much so that the drinks have gotten increasingly comical.

And it's not just that there's no evidence that consumers are being harmed by the current arrangement. There's clear evidence that they're benefiting from it. I live in Washington. But a lot of really good cocktails are thought up in San Francisco. Happily, I can drink a lot of those cocktails, as the most successful recipes quickly proliferate.

But, of course, the reason that Freeman's complaint and Martineau's article don't ask those rather basic questions, is that it appears both don't realize that intellectual property is supposed to be about incentives, rather than protectionism and making sure that some guy who created something "gets his proper credit." Freeman's complaint comes off more as someone who just doesn't feel he's received enough recognition for his work as a grumpy old bartender. But that's got absolutely nothing to do with intellectual property law -- patents, trademarks or copyrights -- and should have no bearing on whether or not he likes young bartenders coming up with derivative drinks.Permalink | Comments | Email This Story

We've pointed out in the past that if you're "buying" ebooks on devices like the Kindle or the iPad, it's important to remember that you're not really "buying" the books, and you don't really own them. We're seeing that once again with a story on Consumerist about a woman who was locked out of the ebooks on her Kindle for a month:

A month ago I bought a kindle and was really excited to use it on vacation. I bought a few books and when I was done, I bought another. Then they froze my account, so I called in and logged a case.

Within 48 hours I got a call back, saying it was an error on their side and they'd unfreeze it for me, but I'd just need to re-order the book. I thought no problem, thanks for the help. So I bought the book a second time and it automatically freezes me out again. I call in and log another case, but get no phone call back as promised from an account specialist.

This apparently has gone on for four weeks, involving approximately 20 phone calls and emails... and still no solution from Amazon. Anyone know of any case where the same thing happened with a physical book?Permalink | Comments | Email This Story

When I first start talking about this whole CwF+RtB thing, I tended to focus more on the "RtB -- Reason to Buy" part of it, because I naturally assumed that was the big problem. After all, the big thing we kept hearing was how creative folks weren't able to make money any more. However, the more I've been discussing this with people, the more I realize that many, many folks out there have serious problems with the first part, the "connecting with fans," part. I recently got an email from an artist who seemed upset, saying that he was giving out all of his music for free, but fans weren't interested. Similarly, I recently got into a discussion in the comments with someone from a newspaper who insisted that I was wrong in saying news organizations need to better enable their community. His argument was that newspapers put up comments, just like we have at Techdirt, so they're doing the exact same thing as we are.

Both of these appear to be cases of cargo cult copying, where someone tries to copy just the superficial outwardly obvious aspects of what others are doing, without taking the time to understand (1) the deeper underlying reasons why they work for some or (2) recognizing how that might (or might not) apply to what you're doing yourself. Connecting with fans isn't about "oh just give away content for free," or "oh, put up some comment forms." It's about actually figuring out what your community wants, interacting with them, and giving them what they want. It's about actually participating in some manner.

I was thinking about all of this as I read an interesting blog post by Marcus Taylor, where he explains the process by which he became a fan of the singer Jason Mraz, who had that catchy hit single last summer that many of you probably heard. But just hearing a catchy hit song being played over and over again isn't enough to make someone a true fan. Taylor points out that it went way beyond that, and took him not just listening to much more of Mraz's music via various online offerings, but then coming across some interviews with Mraz, where his personality shines through. Taylor points out that it took some time, but he finally realized that he didn't just like Mraz's music, but he liked Mraz -- and that made the jump possible. From there he comes up with a short list of "ways to make fans fall in love with you":

Be yourself -- Most people despise a fake personality and can smell it a mile off, be your self and people will appreciate that.
Be transparent -- don't hide the fact that you're a small local band if that's what you are -- if you're honest and likeable then your fans will be more inclined to help you get to the next step.
Be professional but not too serious -- After all, life's too short for being too serious and worrying about everything, have fun but remain professional.
Leave breadcrumbs everywhere -- better yet, leave breadcrumbs that show off the points above and give your fans a good reason to love you. Remember not all fans react to the same mediums as strongly so keep producing images, videos, and text content to bait them.

Obviously, this doesn't apply for everyone, and there is no "magic formula" for figuring out the best way to connect with fans, but it's certainly about doing a lot more than tossing out some free content and a comment form and wondering why fans aren't rushing to you. You actually need to be a part of that process, and actually let your personality come through. Being human really counts for something, and it's a point that's ignored all too often.

Along those lines, this upcoming Tuesday, at the a2n conference in Berlin, I'll be leading a brainstorming session generating ideas for musicians to better connect with their fans.Permalink | Comments | Email This Story

A few years back, we discussed whether or not it was appropriate for judges to cite Wikipedia, noting that some were against the idea. Now, Slashdot points us to a case over in the Philippines, where the Filipino government has lost a recent lawsuit, in large part due to relying on Wikipedia to counter claims, rather than bringing in an expert witness.

However, what's odd, is that the judge in the case seems upset about the use of Wikipedia itself, with no specific attempt to determine if the citation was accurate or credible. It appears that the government was really using Wikipedia to call up the infamous psychologists' bible DSM-IV, in order to explore whether or not one of the participants in the case had a real personality disorder. While citing Wikipedia might not be the wisest of decisions, it still seems a bit harsh to dismiss it entirely because of the source, without any effort to determine if the content itself was legitimate.Permalink | Comments | Email This Story

With law operations like ACS:Law in the UK and US Copyright Group in the US sending out thousands upon thousands of "pre-settlement" (i.e., "pay us or we'll sue you") letters for those it accuses of copyright infringement, based on extremely flimsy evidence, it's inevitable that plenty of innocent people will get swept up in the legal threats. At least one law firm in the UK is looking for those who were falsely accused to file a harassment charge on their behalf. This seems like a stretch. Even if it does seem like harassment, my guess is that no court would likely find that such legal threats were harassment, as the lawyers bringing the suits would make the case that it was just an "honest mistake." Of course, if you tried to use that in response to a threat letter for sharing a file online, I doubt these law firms would simply let you walk away...Permalink | Comments | Email This Story