The problem, however, comes when you have a new abundance where once there was scarcity. And that’s because anywhere there’s a scarcity, someone has built a business model based on that very scarcity. But that is a business model issue. Years ago, most economies rejected the idea of mercantilism, where governments would purposely build up monopolies and artificial scarcities, because of the realization that, in the long run, everyone was better off with a competitive market. The guy who had the sugar monopoly may have hated it — but everyone else was much, much better off.

And, so, we go back to knowledge and information. Unlike most other resources, knowledge is not just abundant… it is infinite. As Thomas Jefferson once famously wrote:

If nature has made any one thing less susceptible than all others of exclusive property, it is the action of the thinking power called an idea, which an individual may exclusively possess as long as he keeps it to himself; but the moment it is divulged, it forces itself into the possession of every one, and the receiver cannot dispossess himself of it. Its peculiar character, too, is that no one possesses the less, because every other possesses the whole of it. He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me.

That ideas should freely spread from one to another over the globe, for the moral and mutual instruction of man, and improvement of his condition, seems to have been peculiarly and benevolently designed by nature, when she made them, like fire, expansible over all space, without lessening their density in any point, and like the air in which we breathe, move, and have our physical being, incapable of confinement or exclusive appropriation. Inventions then cannot, in nature, be a subject of property.

And yet… we still default to thinking that this amazing resource should be locked up. Because it’s often easier to see how the guy who owns the sugar monopoly benefits, than to think through the more complicated market in which there are competing sugar providers, each trying to offer a better product, under which consumers benefit at a massive scale, markets grow and opportunity blossoms. It’s easier to just focus on the fact that it makes life more difficult for the one monopolist.

And often, it seems that we run into this same issue when it comes to intellectual property law. Brent Ahsley recently wrote an interesting post, in which he talks about how something he created way back in 2002, one of the first DHTML-based embeddable chat windows — has become a mainstream piece of technology, but one over which Ahsley has no control, nor profits from. But, unlike the typical analysis, Ahsley realizes that the world is much better off this way:

I occasionally find myself talking with someone about facebook chat or google chat and I’ll say “I sorta invented that” and point them to my Feb 2002 blog entry where I built and released to the wild what was one of the earliest embeddable DHTML chat windows, using my also free and open what-was-not-yet-called-Ajax library I released in 2000, about 5 years before many people came along and pushed the state of the art much further down the road.

Invariably I am told that I should be rich and that all those sites and people “stole” my ideas. I disagree and say that these were all perfectly obvious inventions to me and all the others who came after me and that it was my duty to the net to feed my work back into it such that folks could stand on my shoulders as I had stood on those of others.

That is how the net works – or at least it used to. It still does in open development circles but the content and patent industries are fighting hard to brainwash everyone that knowledge is inherently owned.

And this, as Ahsley recognizes, is a problem. The world of monopolists is focused on protecting the monopoly. But if Ashley, for example, had patented aspects of his AJAX library, or his embeddable chat, would the world be a better place? It’s likely that such chat features would not be as common. It’s likely that such chat offerings (which are now everywhere) would not be as powerful or as useful. It’s likely that the world would be a worse place. Ahsley, personally, might be a little wealthier — perhaps someone would pay him to license the functionality, or perhaps he’d successfully sue someone. But the world would be more limited and there would be less to go on.

This, then, is the problem that many of us face in looking at and trying to understand the nature of economics, growth, innovation and progress when looking at the world of monopoly protections. It’s easy to see the sugar monopolist, and see how taking down those monopolies might make his job harder (even if it creates a big market with more opportunity to make more money). But to recognize that bigger picture, as Ashley does, is difficult.

Ashley tries to put it all in perspective:

Anything that is knowable is a part of the universe of truth that has no owner and no bounds. The invention or discovery of anything results in the exposure of one or more hitherto undocumented universal truths to the collected human record.

The true and original purpose of copyright and patents is to create a temporary legal fiction which acts in many respects like ownership, conferring upon an individual person rights to control the use and dissemination of morsels of universal truth which they had the luck and/or tenacity to first identify, so they can be recompensed for their contribution to the universe’s growing stockpile of exposed truth for the benefit of all humanity.

The legal expansion to include corporate personhood and subsequent term extensions tending towards permanence of the legal assignment of ownership equivalence amounts to the expropriation and destruction of large parts of humanity’s natural knowledge resources.

It’s not too much different from bulldozing the rainforest.

At some point, it needs to be recognized that the purpose of these laws has been twisted and twisted and twisted to the point that they are broken. They’re not acting as a reward for those who discover key elements of knowledge in exchange for sharing them. They’ve become tolls in and of themselves for the sole purpose of enriching the monopolist. And that takes us right back to mercantilism.

If we were able to reject industrial mercantilism as the wrong economic approach 250 years or so ago, at some point we’re going to reach the age where we can reject intellectual mercantilism as well.

Permalink | Comments | Email This Story

The specific lawsuit involved a Bengals cheerleader/school teacher, who wasn’t happy with the pictures of her posted to the website… along with the comments made about her (such as suggesting she had slept with the entire football team.) As we noted at the time, if this content is user generated — it’s a clear situation where the case should be dismissed over Section 230′s safe harbors (which put the liability on the actual content creator, rather than the middlemen third parties). In this case, the claims that might reach the level of defamation clearly came from the user, not the site owner. Previous rulings in other districts have even made it clear that sites that merely pass along content created by someone else — even if it involves a moderator “choosing” what gets displayed — does not change the basic protections. So this case should have been a slam dunk.

Instead… it appears that the judge has gone in the other direction, creating really convoluted arguments to claim that Section 230 does not apply. As Eric Goldman explains, there are serious problems with this ruling:

The court’s discussion is short, yet it’s surprisingly scattered. Pages 8-10 run through a gamut of gripes about thedirty’s practices and statements, but the judge doesn’t articulate the relevance of these facts (other than providing evidence of the judge’s animus towards thedirty). Because the judge does a poor job connecting the facts to his adopted legal standard, we aren’t sure exactly what thedirty did to foreclose the 230 immunity

The ruling, which is attached below really is that bizarre. The judge twists and turns himself into contortions to try to come up with a reason to say that TheDirty.com is liable for comments made on the site. The simplest explanation, as Eric noted, is that the judge just didn’t like the kind of site that TheDirty.com is (and from a quick glance, remains). The key to the judge’s ruling is trying to apply the infamous Roomates.com case. The problem, however, is that the case doesn’t fit well. Roommates.com lost not because the site encouraged some actions against the law, but because its menu choices were a part of the content creation, and those menu choices, themselves, directly violated the Fair Housing Act.

It’s a huge stretch to go from there to claiming that a site where mean things are celebrated is no longer protected via Section 230′s safe harbors. But that’s what the judge did.

And, in part, it gets really scary for me, personally, because the judge declares — multiple times — that the use of the word “dirt” in a domain name means that you are encouraging defamation:

First, the name of the site in and of itself encourages the posting only of
“dirt,” that is material which is potentially defamatory or an invasion of the
subject’s privacy.

Of course, there’s absolutely nothing in Section 230 that suggests that if a judge doesn’t like your name — or falsely assumes that any website with the word “dirt” in the name is up to no good — he can ignore Section 230′s important protections. Like Eric suggested, it would be good if there’s an appeal here, because it seems to go against pretty much any other Section 230 rulings. Not liking a site is simply not a reason to ignore those important safe harbors…

And, just to summarize, here are the basics. The site, TheDirty.com posted a user submission, with a one-sentence comment on it. That submission included a cheerleader/teacher, who didn’t like her photos being widely available. Somewhere along the way the legal shenanigans began. Remember, the contents of the post itself may be defamatory — but that, alone, should not make the site liable. It could very well make the original submitter liable, but the cheerleader doesn’t seem to want to go that route of actually suing those who did the bad thing. So, instead, the site now faces a lot of liability… because a judge thinks that having “dirt” in your domain name must mean that you’re seeking out something bad.

For reasons beyond just the standard defenses of Section 230, this is pretty bizarre and slightly terrifying. I certainly don’t encourage the submission of defamatory information. But because I have “dirt” in my domain name, does that mean I should be worried too?

Permalink | Comments | Email This Story

However, at security to get into the Capitol, I was told I could not bring the canteen in, even though it was empty. I asked if there was any reason for this. I was told I just couldn’t bring it in. I asked if there was any place I could “leave” it, and I was told to go outside and there were dumpsters to the right. I even asked if someone could hold it for me, since it would just be an hour or so. No luck. Dumpsters, outside to the right. The canteen isn’t anything special, but I do like it. According to the price tag still on the bottom, it cost $11 when my wife bought it for me. I can buy another canteen, but really, there’s a bit of a principle thing to all of this. If the canteen itself is dangerous, then, putting it in a dumpster outside isn’t going to change that.

I went outside and there were some police there, so I asked them if there was anything I could do. They also pointed me to the dumpsters. I asked if I might be able to get it back, and they said, “if you don’t mind climbing in… and if the garbage isn’t picked up by then.” And so, an hour and a half later, after the press briefing was done, I (wearing a suit), climbed into the dumpster at the Capitol to pick up my water canteen, so I could take it with me back home. Again, it certainly wouldn’t have been the end of the world if I’d lost it. But I’m at a loss as to what this little bit of security theater accomplished. Either the canteen is dangerous, or it’s not. If it’s dangerous, I shouldn’t be able to leave it right next to the Capitol… and I shouldn’t then be able to go retrieve it. If it’s not dangerous (and, um, it’s not), then the whole thing is a complete joke. Oh, and I shouldn’t forget the other punchline: I saw at least two people in the press briefing with their own (brought from home) water canteens.

Somehow, none of this makes me feel any safer.

Permalink | Comments | Email This Story

Permalink | Comments | Email This Story

The really stunning part of the article, however, is that when McCullagh asks the Hawaiian state Senator who introduced the Senate version about the background of the bill, it becomes clear that the politician in question doesn’t appear to know what’s in the bill, nor understand the implications of her own bill. Instead, it comes out she introduced it as a favor to another politician who had a “personal experience” this is intended to deal with:

Democrat Jill Tokuda, the Hawaii Senate’s majority whip, who introduced a companion bill, S.B. 2530, in the Senate, told CNET that her legislation was intended to address concerns raised by Rep. Kymberly Pine, the first Republican elected to her Oahu district since statehood and the House minority floor leader.

“I was asked to introduce the Senate companions on these Internet security related bills by Representative Kymberly Marcos Pine after her own personal experience in this area,” Tokuda said. “I would defer to her on the origins of these bills as she has done the research and outreach, and been the main champion of this effort.”

What happened with Pine? Apparently a “disgruntled web designer” had created a website about Pine that calls her a crook and says she owes him money. It sounds like a typical “I don’t like this person” website. There are lots of them out there, and they can be obnoxious… but that’s no reason to completely destroy everyone’s privacy online. Pine also claims that her email was hacked, though it’s not clear if that was related.

I’m sure it’s no fun to be the subject of someone saying mean things about you online. Or to have your email hacked. Those things suck. But to then rush out to pass massive data retention laws that take away people’s privacy seems like a massive overreaction.

Thankfully, with enough public backlash, Pine is apparently backing down somewhat, admitting that the bill probably went too far. It’s great that she’s realizing this now… but shouldn’t politicians be expected to understand these kinds of things before they try to regulate?

Permalink | Comments | Email This Story

So a bunch of folks are scratching their heads over a highly questionable UMG takedown of a song by a Florida-based rap duo, After the Smoke (who are not signed to Universal). The details are a bit complex, and to understand what appears to have happened, you first have to go back a bit. It seems that After the Smoke recorded an instrumental “beat” which they then shopped around to various artists to potentially rap/sing over. This is pretty common, and if someone likes the beat, they’ll buy it. In this case, they offered the beat to Yelawolf, who they had opened for. Yelawolf claimed to like it, and apparently did record over it… but about the same time got signed to Universal Music and nothing happened with the track (and the beat was never paid for). However, about a month ago, the Yelawolf track over the ATS beat got leaked — leading ATS to get upset about the lack of credit (and, one assumes, payment).

Some of the folks who participated in the Yelawolf track apologized and went public with a statement about how this track was not intended to be released and how leaks suck and how ATS definitely deserves credit. That statement also noted that ATS had (after not finding a buyer) recorded their own version of a song over the beat. And, indeed, soon after, ATS released their own official version…. but then UMG took it down. As far as I can tell, UMG apparently decided that because its act — Yelawolf — had recorded over this beat (despite not licensing it), it must own it… and because of that blocked ATS’s song — which was completely their own. It seems likely that UMG simply used the Yelawolf track with YouTube’s ContentID to block any tracks with the same music — but things got screwy when it turned out that neither UMG nor Yelawolf had actually licensed the beat.

Either way, in another report, ATS filed a complaint with YouTube… and was told, too bad, and that UMG owned the track. Eventually, as the story started spreading, someone at UMG realized the mistake and backed down.

But, in the short term, this really does (yet again) highlight one of the many problems of an aggressive takedown system. UMG clearly screwed up here and shut down an independent act’s own song — which, honestly, one of its own acts had infringed on the copyright for. This is really quite an amazing form of copyright abuse when you think about it: UMG artist fails to license beat on a song that is leaked… and then UMG claims copyright over the official song over the same beat. That’s definitely adding insult to injury — or, perhaps, adding injunction to infringement. While it appears that cooler heads prevailed and got this worked out eventually, it seems pretty crazy that any artist should have to deal with some giant industry conglomerate completely shutting down their own works based on bogus copyright claims.

Permalink | Comments | Email This Story

[O]ne manufacturer and distributor of karaoke discs [KTS] has just taken Sony/ATV Music Publishing to California federal court to get a declaration that it doesn’t owe $1.28 billion for 6,715 acts of alleged infringement. The plaintiff not only wants to limit its liability, but also is seeking to punish the music publisher for unfair trade practices.

Sure, karaoke is lucrative, but $1.28 billion? From one manufacturer? And how about those damages — $190,618 per violation? How does Sony get to this number? By going back to the well over and over and over and over. And they’re not the only ones in line.

The use of the original music as the background score requires a license over the master recording. The use of the song composition requires a mechanical license too. When songs are performed in public, that requires payment to a PRO like ASCAP or BMI. When the music is matched to video images, it requires a synchronisation license. And if the lyrics are being republished, that might require an additional fee too.

Standard operating procedure for karaoke manufacturers is to hire their own lineup to play the hits, thus dodging higher royalty fees by paying a mechanical license for the cover versions. Obviously, this makes financial sense considering the sheer number of tunes required to run a karaoke business, not to mention the fact that it’s frequently multiple mechanical licenses. You’d think Sony would be wary of shutting down a steady income stream. But a good thing can always become a better thing with the addition of lawyers and improbable maths, amiright? Not so fast, say KTS (also via lawyers):

In KTS’ lawsuit two weeks ago, the company alleges that Sony is committing copyright misuse by attempting to collect multiple damage awards on a single work from the upstream producers, the downstream users (bars and restaurants), and KTS, the packager/distributor. KTS believes this alleged bullying “scheme” is unlawful.

In its lawsuit, KTS says that Sony/ATV has long since known about its operation, and rather than take reasonable steps to stop such products at the source, the defendant has: “instead committed copyright misuse by seeking to secure multiple license fees for the same allegedly infringed work by suing each link on the distribution chain, by demanding license fees for licensed goods and by attempting to obtain more than one statutory damage award for the continuing infringement (i.e., down stream distributions of the infringing work) of a SINGLE WORK.”

This declaration only succeeded in irritating the music giant, which like many major labels finds itself easily angered in this “post-Napster” environment. Sony wants both damages and an injunction against KTS. KTS wants Sony to be realistic and to honor licenses paid by distributors instead of shoving all of its hands into KTS’ wallet over and over again.

KTS wants a declaration that Sony is only eligible for one statutory award per work, which would trim the nearly $1.3 billion that Sony allegedly says it is due, but perhaps just as importantly, the karaoke manufacturer is bringing a bold copyright misuse claim that seeks to punish the publisher for trying to “recover multiple times for the same allegedly infringing conduct at rates greater than if the claims had been asserted against the manufacturers.”

We’ll see how this shakes out, but I have a feeling that Sony may be willing to slaughter one of its few remaining cash cows (you know, where people are still paying for music — music not even performed by the original artists) on the altar of infringement, rather than settle for lower mechanical license fees. When all you have is sales declines, everything looks like a lawsuit.

Permalink | Comments | Email This Story

The Hollywood Reporter’s version of the postmortem is a good read, even though it covers much the same ground as many other such recaps. Still, it’s worth reading to get a good feel for Hollywood’s view of the world. But the really stunning part is the quote from Michael O’Leary, the MPAA’s number two guy, who makes what may be the most tone-deaf statement we’ve seen to date in this fight:

The MPAA’s O’Leary concedes that the industry was out-manned and outgunned in cyberspace. He says the MPAA “is [undergoing] a process of education, a process of getting a much, much greater presence in the online environment. This was a fight on a platform we’re not at this point comfortable with, and we were going up against an opponent that controls that platform.”

Yes, even when he tries to say that they’re trying to learn about that confounded internet thingy, he sounds ridiculous and dismissive. But the real point is his inadvertent admission within that statement: the MPAA (and the rest of “old” Hollywood) simply “is not comfortable with” the internet. And that’s really what SOPA and PIPA were about. Rather than trying to understand this new platform, and learn from the many entertainers who do get the internet, they did what the MPAA does and simply tried to regulate that which they don’t understand and fear.

Furthermore, even more ridiculous is the end of that sentence: “an opponent that controls that platform.” As the article makes clear, he means Google. Which shows that he still doesn’t get it. First, Google didn’t lead the protests. It came late to the game, after the grassroots had already taken off with this stuff and run with it. But, more to the point, contrary to what O’Leary and the MPAA seem to believe: Google does not control the internet. No one does.

This, of course, explains why the MPAA wants to “negotiate” with Google these days. But that’s not going to work. The folks on the internet don’t want a backroom deal, whether it’s negotiated by Google or someone else. Either way, this suggests that the MPAA is desperately in need of new leadership. They need leaders who don’t try to regulate that which they admit they don’t understand. They need leaders who aren’t so clueless as to think that Google controls the internet (or that Google is somehow “the enemy”). And, really, most important, they need leaders who recognize and understand that the internet is their future too — and any leadership needs to not fear the internet, but understand it and learn to embrace it. Unfortunately, it doesn’t seem likely that the MPAA is going to find such leadership any time soon.

Permalink | Comments | Email This Story

Gingrich: “You are asking a conservative about the economic interests of Hollywood? I am weighing it and thinking fondly of the many left wing people that I am so eager to protect. On the other hand, you have so many people that are technologically advanced such as Google and You Tube and Facebook that say this is totally going to mess up the Internet. The bill in its current form is written really badly and leads to a range of censorship that is totally unacceptable. I believe in freedom and think that we have a patent office, copyright law and if a company believes it has generally been infringed upon it has the right to sue. But the idea that we have the government start preemptively start censoring the Internet and corporations’ economic interest is exactly the wrong thing to do.”

Romney: “The law as written is far too expansive, far too intrusive and far too threatening of freedom of speech and information carried across the Internet. It would have a depressing impact on one of the fastest growing industries in America. I care deeply about intellectual content going across the Internet and if we can find a way to very narrowly go after those people who are pirating especially those offshore. But a very broad law that gives the government the power to start saying who can pass what to whom, I say no and I am standing for freedom.”

Paul: “I am one of the first Republicans to oppose this law and so glad that sentiment has mellowed up here as Republicans have been on the wrong side of this issue and this is a good example on why its good to have someone who can look at civil liberties … freedom and the constitution bring people together.”

Santorum: “I do not support this law and believe it goes too far. But I will not agree with everyone that there isn’t something that should be done to protect the intellectual content of people. The internet is not a free zone where anyone can do anything they want to do and trample the rights of other people. Particularly when we are talking about entities off shore. The idea that the government has no role to protect the intellectual property of this company, that’s not right. The idea that anything goes on the Internet? Who has that idea. Property rights should be respected.”

Santorum’s answer is the weakest, obviously — and isn’t too surprising. Just recently he made a statement that was about how online activity should be regulated.

But, really the most interesting part of what happened was not the candidates answering the question, but the audience’s response. When John King asked the question and gave a brief explanation of SOPA/PIPA… he also mentioned that CNN’s parent company, Time Warner, supported the bill… and the crowd booed loudly. When the candidates — particularly Gingrich and Paul — made their claims, the crowd cheered loudly.

The people who are still brushing off the whole protest as “an internet thing” or (even more ridiculous) “a Google thing,” still don’t seem to realize. Pretty much the entire public has turned against these kinds of bills.

Permalink | Comments | Email This Story