Friday, March 29, 2013

Penn IP symposium: Cindy Cohn of EFF

Keynote Address Cindy Cohn, Legal Director & General Counsel, Electronic Frontier Foundation

None of this is new. People have always made up new rules for favorite games.  People have always told new stories with their favorite characters, including playing Star Trek in the backyard. People have always tinkered with their physical stuff. But tech often takes small latent problems and makes them big and real in the law. 

Relevance of personal stories: tech has created opportunities for deep and profound relationships and experiences. 

Jessica Litman’s Digital Copyright (link to PDF) demonstrates the stakeholder politics of copyright law. Look at DMCA to see how deals were cut. Despite small involvement of NGOs, vast numbers at the table and the power was on behalf of content industry lobbies, and that’s the law we have today.  In 1998, copyright didn’t matter to ordinary people nearly as much, but now, as Clay Shirky says, here comes everybody. We can all use and manipulate these technologies. The law hasn’t changed; thickets of contracts and business models built around old versions of the §106 rights. Law is built on the idea that copying is hard, distribution is hard, and creating derivative works is hard; none of that is true any more and never will be again. These are features, not bugs, in our technologies.

Licensing as a threat: you could formerly take the pieces of Monopoly and make up your own game; now licensing tries to take that freedom away. Copyright owners think they’re being magnanimous in allowing uses that before would have not gone challenged but are now visible.

Anticircumvention: another addition to the arsenal; everything is banned unless it is allowed in a teeny exception, but none of the statutory exceptions have been useful to anyone.  And 1201 means that even if you’re making fair use, your acts can be lawful if you needed to circumvent to make that fair use.  Triennial rulemaking: another exemption that allows teeny holes that have to be renewed every 3 years, but not available for tools.  Among other things: Sony released a PS that could do a lot of things, then changed its mind and decided to lock it down; 1201 can be used against those who try to keep its functionality.  15 years of unintended consequences.

512: good for intermediaries, not as good for individuals given the ability to take down speech immediately, without due process—a prior restraint on speech. For national security, you have to go to court; for copyright, you send a notice to a private party and it goes down.  Content industry isn’t satisfied w/that—wants intermediaries to implement censorship/6 strikes.

Tech is still winning. There’s more innovation now than ever before; more music being made and shared than ever before. Believes same will be true for video etc. People are making their way through the thicket of law—or ignoring it—and continuing to be creative.

EFF: digital civil liberties group. Mission: make sure constitutional rights stay intact when you go online; protect fair use and other rights.

Will we let contract rewrite copyright law from what Congress passed (as bad as that was)?  SOPA/PIPA aren’t going away.  We need to create space for open wireless (no need for password)—better than smartphones, connected everywhere. This is within our grasp; the problems are contractual and legal, not technical.

Q: you sound optimistic; isn’t the past a very pessimistic story? Lessig gave up until Congress is reformed.  And now we hear arguments that we have to change our law to satisfy international requirements.  Likes fighting the good fight, but what’s the reason for optimism? What’s the tactic that works?

A: Congress’s brokenness affects all of us, including in internet regulation.  Optimism: SOPA/PIPA—we’d been told this was a done deal, back when it was called COICA. We were able to rally enough support to turn things around.  Little victories before, but that was the most high profile, resulting in a sense in DC that they ought to listen a little more to us.  Also, if you look around, we may not be winning the law, but we’re winning the tech. People are making fanvids, modding their games, using their 3D printers.  Wants to fight for the legality of creativity, but that’s been unleashed.  So what’s winning?  If winning is more music now than when Napster was introduced, we’re winning.  TPMs on CDs have been dropped. We’re a small player, but people are getting access. My job is to make that better and safer.

Q: does EFF have a position on counterfeiting as a $600 billion industry?

A: doesn’t have a position on the numbers.  We have expertise on digital technologies, not fake purses offline.  Traditional counterfeiting is as outside our scope as physical trespass is, though we care about “digital trespass” claims.

Q: TM?

A: TM’s been on our radar as something we need to start paying attention to; we’re now involved in a couple of cancellations at the PTO. TM is better and worse than copyright.  Noncommercial = clearer for TM.  But there isn’t a safe harbor for intermediaries, so with gamers and Urban Homesteader cases, Reddit and Facebook took pages down.

Q: why is “more stuff” winning?

A: in copyright, the Constitution says we have a statutory monopoly to incentivize creation. If government’s going to get involved and create monopolies, we shouldn’t discriminate.  (I always invoke Sturgeon’s Law: 90% of everything is crap, and the corollary is that you don’t get the good stuff without the bad because it’s impossible to pick winners in advance through broad legal rights. We remember Shakespeare, but he came out of a whole culture of playwrights who are mostly, and likely justly, forgotten.)

Q: SOPA 2?

A: Not clear what’s coming. Register of Copyrights suggested that we need a new copyright law. There is a lot of concern on the part of some people that she’s planted the seeds of something that would be SOPA v.2. The key is not to allow censorship of the internet based on IP claims. If you’re accused of harassment by phone, the phone company isn’t empowered to deny you phone service. The role of the tech creator is not to be the police.

Q: Copyright small claims court?

A: Not sure.  Worries about claims of infringement—enforcement cost is high, and that governs copyright owner overreach; makes sure they go after things that are really hurting them (or sometimes that are annoying them). We don’t have moral rights in the US.  A small claims court could end up overenforcing copyright.  In any event, a precondition would have to be to get rid of statutory damages, requiring proof of damage, and also to get rid of injunctive relief.  Might be willing to make that trade.

Penn Symposium: 3D printing

Series 3: 3D Printing

William Cass, Partner, Cantor Colburn LLP

Tech invented decades ago to allow rapid prototyping without making molds; why is it interesting now?   Body part printing!  Cheaper parts!

ASTM committee has a goal of creating uniform standards nationally & internationally—if you print out an airplane part, you want it to be strong and stable—our standards are geared towards subtractive manufacturing, not additive manufacturing (3D printing).  Suddenly can avoid offshoring; can make small items right here without making lots of molds.  Disruptive given the ease of copying. 

680 patent applications filed for additive manufacturing over the last 10 years; 200 classifications; new art unit being established at the PTO; 3000 issued patents.

Design patent: often overlooked, but can also lead to TM protection if distinctiveness is acquired over time.

Counterfeit goods: risks to health and safety if airplane parts are made badly.  Va. Tech: embedding nanoparticles in fabrication so you can use X-ray or ultrasound sensor to get a signature and avoid counterfeits.

Michael Weinberg, Vice President, Public Knowledge

What do we wish someone had done in 1995 that would’ve made our lives easier in copyright fights today, that we can do for 3D printing that will help out people 15 years from now?  What does it mean when everyone suddenly has access to the ability to replicate and create things as never before?

Universe of things protectable by copyright made recently are essentially all copyrighted; universe of things made recently that in theory could be protected by patent aren’t or won’t be. Remix culture is limited by the need to consider copyright/fair use. The physical world frees you from having to do that calculation.  Example: the free universal construction kit, pieces that allow you to join Lego and K’nex and Lincoln Logs. We’re going to see more and more cases at the border of patent/copyright.  People may claim copyright over digital files to claw useful articles into the scope of copyright. Doesn’t have to happen—merger is an issue—but there will be a conversation as more people get access to 3D printing.

Q: trade dress also an issue?

Cass: that’s a big issue with Lego.  Acquired distinctiveness.  (Isn’t there a functionality issue?)

Weinberg: functionality for interoperability, with the universal connectors.  Because design patents and trade dress are so specific, and because digital files are easy to manipulate, if you don’t care about making an exact copy you can easily get outside the bounds of patent/trade dress—those will be interesting fights.

Cass: yes, but the industry will continue to file design patents on every single part you can think of, then claim market distinctiveness after the patent expired. 

Q: how can laypeople deal with the complexity of the technologies?

Cass: judges have suggested specialized courts; you need tech degree to prosecute a patent, then we send the disputes to lay juries.  Europe: tribunals of experts. At a certain point the demand may return for specialized courts. On the other hand, medical malpractice can be complicated, as can DNA analysis.

Q: speak to third party liability?  Kickstarter’s been sued.

Weinberg: we don’t yet have an answer.

Cass: industries solve this problem with insurance, but that’s complicated especially when you have parts going around the world and you may need int’l insurance. Products liability insurance is useful, because even if there isn’t ultimate coverage you may have lawyers from the insurance company to defend you. But IP coverage may come into it.

Weinberg: and less sophisticated companies may also be in trouble.

Penn symposium: fan fiction

Series 2: Fan Fiction

Heidi Tandy, Legal Committee, Organization forTransformative Works

Fan creativity is as old as storytelling.  Distribution is a lot wider these days, though.  If you want a live singalong of Once More with Feeling you may need to inquire about rights.  Threadless T-shirts with fannish themes.  Legal concepts of transformativeness have broadened over the past 15 years, but there’s still a lot of confusion and paranoia—in part because fanworks are created by 12-year-olds and 90-year-olds with different levels of knowledge.  Showed a video of various creations (my personal favorite: Rick Rolls Hostess-style snacks, tagline “Never Gonna Give Them Up”).  Fan fiction, fan art, memes, fan video, music (filk, wizard rock, etc.).  Five for Fighting’s “Superman” is a commercial example.  “Rockingjay”—music based on Hunger Games themes.  Ease of creation and sharing takes you outside your own garage.  Videos with a million views for Harry Potter fan musicals.

Has worked in fandom for many years, working with websites and individual fans about the limits and potentials of online fandom.  Many changes in levels of risk. Interactions between fans and corporations who’ve developed methods that don’t involve wholesale deletion of entire sites. Copyright not just as a tool of suppression, but as a regime with robust fair use.  Connection to the culturally fraught status of fandom.

Fan art has sometimes been taken by owners of underlying work; have either purchased or licensed it—BBC has done this.  (Japanese doujinshi has a similar history.) Still some friction between fans and owners.  Diana Gabaldon, whose Highlander started, she admitted, as Doctor Who fan fiction, decided that fan fiction was like seducing someone else’s husband.  But she doesn’t have the right to stop criticism and commentary; other authors are more understanding of fandom’s culture of creativity/love.  SE Hinton, author of Outsiders, and one person who worked on Supernatural discussed writing “fan fiction” for Supernatural—directly from the creative team.  Clark Gregg, from the Avengers, retweets fan art; something that wouldn’t have happened 7 years ago—fear of looking.

Most of the time, IP isn’t owned by the creators, though.  Veronica Mars: Rob Thomas had to get permission from Warner to continue working on the story he began.

Last topic: Universal sued porn company for a porn version of 50 Shades of Grey, and the company defended with the argument that the works were public domain. So Universal’s counsel essentially ended up defending the validity/copyrightability of fanworks, or at least of works based on fanworks.  What a change from 2003!

Dale Nelson, Vice President & Senior IP Counsel, Warner Bros. Entertainment, Inc.

Corporate perspective isn’t always heard at these events.  Occasional undercurrent that corporations are against fans is not the case—don’t want to alienate our consumers.  Tolerance, acceptance, attempt to strike the right balance.  Opinions are personal, not necessarily to be attributed to Warner Bros.

WB is both a creator and a user of copyrighted works.  We do clearance all the time to determine fair use/permissions.  We also work to protect against infringement.  We have a First Amendment right to use certain things in our own creations and don’t want to unbalance things.  With fans, we take a position sometimes of tolerating what we think would still be found infringing because we can coexist.

How do you determine which is which?  We look at copyright, TM, right of publicity, First Amendment, common sense, watchdogs—like the Chilling Effects Clearinghouse, EFF—that keep tabs on big content owners and whether they’re overreaching.  Fair use: we think about the four factors, case by case.  Fans sometimes misunderstand legal parameters—think parodies are always fair use.

What we didn’t seek permission for?  Clip from movie featuring Marilyn Monroe, interposing drawing created by Bob Kane, in relation to a Batman movie release.  Kane had a relationship with Monroe and used her as a model for Vicki Vale.  Got a phone call from Monroe’s estate’s lawyers and we had a conversation about the right of publicity/copyright infringement. We felt it was a fair use.

Illustration from a book from 1880; was asked to clear it. Couldn’t identify illustrator.  Given the date, we concluded that it was probably in the public domain worldwide. Even though there might be a few territories with the term, we’d take that risk.

Still from Sex & the City, with Mr. Big in his apartment—received a claim based on the book on the bookshelf to illustrate who he was.

Merchandising of pawns, bishops etc. in connection with Inception—cleared that as in the public domain.

Perfect Storm: claim under right of publicity statute. We prevailed after a lot of litigation.

Things other people didn’t seek permission for: art by a British artist using Looney Tunes characters, but with added commentary about desensitization to violence—what would it really look like if Bugs shot Daffy, she thought they’d have a good fair use defense.  Dozens of Harry Potter companion books—Harry Potter and Christianity, Harry Potter and Judaism, What if Harry Potter Ran General Motors? As long as there’s no likelihood of confusion.

However, documentary about Elvis Presley w/over 300 clips from our movies, sometimes with entire performances, was not ok.

Mere drawing of Bugs Bunny: not a fair use or parody. We review a lot of apps.

Fan activity is fans having fun. Are they legitimate, are they acting from love? Or do they see fan activity as a loophole—make a fan film to showcase talent without having read Harry Potter?  It’s not fans commercializing the property. We have exclusive rights; commercialization/merchandising in particular will draw our attention.  But we tolerate a lot, including fan films, websites (the Leaky Cauldron, popular HP site); Dallas fan site; Lord of the Rings fan site; Quiddich players.

Harry Potter Lexicon: we drew the line at the commercial publication of the Lexicon, as compared to the encyclopedia found at his website. Proposed cover was like the covers in the UK of the books. Copied entire songs and spells.  Entries were too detailed.

There was a strong fair use defense in terms of social utility; at the end of the day the judge decided that it wasn’t a fair use, but raised issues about a different Lexicon qualifying; a close case in some ways.  We tolerate/encourage some fan activity, but there are limits.

Moderator: Rebecca Tushnet, Professor, Georgetown University Law Center

Q: Commercialization: but the companion books are commercial—how do you think about that?

Nelson: sometimes we don’t get into whether it’s fair use; we say if you don’t merchandise it then we won’t act, which is often their intention anyway.

Tandy: but if a site is earning money for domain registrations or fees through Amazon referrals, Warner will generally tolerate that too.

Nelson: some fan activities/sites do involve costs, and if it couldn’t run ads/raise a little money it wouldn’t exist.

For Tandy: how do you think about conventions, recouping money?

Tandy: first Harry Potter Orlando event, planning Spring 2002.  Paramount raided a Star Trek convention & shut down the dealer floor, shutting down the stills that bit part actors were signing based on infringement claims.  Terrifying! We were careful to create a way to have a con where the money was going to things like pizza. 

Q: There are some things fans and corporate owners can agree on.  Explore them: should there be a right of publicity?  (Nelson: only for false celebrity endorsements.)  Small claims? Tandy: no, that will get 13-year-olds in trouble. Nelson: Maybe; we’d likely be defendants more often than plaintiffs, though maybe that’s ok for things like photographers’ claims as long as there’s no injunctive relief available.

Q: how many of these rules are transparent to fans in advance? Do you give guidance to fans?

Tandy: there’s not much guidance out there; paranoia can suppress development of one’s own creativity.  Lexicon case: Court said some of the use was fair use and gave a lot of guidance about the parameters for nonfiction; fiction is different.

Nelson: We used to have guidelines when it was more about costume parties.  Difficulty is need to be flexible because every day brings something new. We don’t want outdated/misinterpreted rules.  Fans have generally understood our parameters. People sometimes complain about fair use being hard to understand, but the results work well because of its flexibility.

Q: what’s legitimate: can you really judge who’s a legitimate fan?  If you look at the Very Potter Musical with people who are doing it to showcase their musical talents, does that really change the analysis?  What if they run ads alongside the musical?  Why are those significant factors?  Is it fairness? It doesn’t seem like either would affect WB’s ability to capitalize on their own markets.

Tandy: some things are just used to get attention.

Nelson: doesn’t mean looking into a fan’s soul, but fannishness helps us to decide whether we’ll object—having fun w/the property instead of posing as fan activity for commercial intentions.  It usually is very clear what a fan is doing.

Tandy: pushing the lines is important: we were originally told we couldn’t have costume contests, and that’s dropped away.

Q: has the corporation made the fans contractors?  Looking for things to give WB first dibs?

Nelson: can’t think of examples where we’ve had people looking for talent.  But there are success stories of fans who’ve turned their activities into something pro.

Q: is there any chance of a union or guild for prosumers?

Tandy: a number of fans sometimes are concerned about using real names—worry about problems getting jobs, etc. That’s mostly gone in entertainment-oriented professions, but teachers have to worry about it.  OTW—not a guild, but an outlet and a way station.

Penn symposium: gaming

Penn Symposium Series 1: Game Development & Modification

Jon Festinger, Professor, Center for Digital Media, University of British Columbia

History with Grand Prix—fell in love with a game that wasn’t successful but that had a passionate fandom and built a multiplayer version, changed the art.  Community was creative, sometimes crazy—300-page threads on the accuracy of a race track and mini-mods to ensure the signs’ accuracy along the entire racetrack.

Think about education as modding: building on and citing the work of others.  The common law is also modding: building on the work of others.  Series of precedents where people have tried to argue that their submissions to courts should be protected—that their argument should be protected against copying.  That copying by a law library should be infringement.  Canadian courts: user rights prevail.

Two notions of creativity: the first is deeply built into our society—uniquely personal, special, undiscovered country, wilderness, discover yourself by going where no one has gone.  Bible: “Let us make man in our image, after our likeness” G-d said—creativity as very personal (but notice it’s also very much copying!).  The second: everything is a remix, not uniquely personal. Carl Sagan: “If you wish to make an apple pie from scratch, you must first invent the universe.”

Idea/expression dichotomy.

However, we don’t actually accept each other’s creativity and abilities, or at least not that easily.  Everyone here thinks they’re creative, and that’s true.  Because that’s at the heart of being human. But honestly, you have a hard time acknowledging the creativity of your neighbor, which is also human.  Just shouldn’t build legal principles around that.

Does the law allow modding?  He thinks the case law doesn’t bar fair use.  iRacing v. Robinson, (Mass. 2007); Blizzard v. BnetD case is the most difficult.  The advocate for Blizzard there said that the case didn’t involve new creation—since they were just making the game playable on another server. 

What should be done? Raise thresholds for IP protection, allowing for more reuse?  Follow Canadian SCt and broaden user rights.  His particular favorite: imagine if Sony v. Universal didn’t exist and everything digital was seen as a form of tool-enabled time-shifting—context-shifting in the digital age.  Right to create/mod as a creative/expressive right rather than as an IP right/protection.  A right to create, rather than a right in the output.

Mark Methenitis, Corporate Counsel, MetroPCS

Copyright was designed in an analog, high copy costs environment; infinite replicability with no loss of quality didn’t exist before digital.  Storage and distribution were the next dominoes to fall.  True double-edged sword for both producers and consumers—lots more content, but high lure of piracy.

Another problem: first sale.  Software not subject to first sale in Autodesk case.  Will Kirtsaeng be any help?  (Probably not.)  Barriers to entry are at an all time low—ease of distribution and ease of creating a professional quality product are at an all time high, but so is ease of infringement. Statutory damages remain unchanged and perhaps need to be revisited.

What is a prosumer—consumer who is a producer—to do?  Work within content usage rules; Microsoft did these with Red v. Blue, and others followed. Open ended noncommercial license with some restrictions. Not perfect, but better than a C&D. Reality: few commercial content creators will loosen reins on rights to derivative commercial works.  It’s an opportunity for exposure, but not for a flat licensing fee to create derivative works for sale.

Reform: source code is independently copyrightable from the end work. This makes sense in music, where one sheet of music may result in 3 different performances by 3 different performers. By contrast, source code will be the same no matter who compiles it. Software copyright needs some level of protection, but maybe a shortened term for people using, say, Mario Bros. to create something new and different.

Copyrighted works no longer exist in isolation: TM and copyright are intertwined especially in games, movies, and TV. The franchise/derivative work are the key rather than individual works. Term extension is also increasing the risks. There are no differences between the registered marks and the copyrighted works—so you’re still at risk using Mickey Mouse if he ever enters the public domain.  (Dastar would be your defense, I’d think.)

He suggests some sort of hybrid: copymark, requiring some sort of fame but also subject to abandonment.  Solves term extension issues for stuff that isn’t presently in use.  (This seems like a bad idea to me, especially if courts continue to be aggressive in applying Dastar.)

It’s not just Mickey—many things are 25 years old and have lots of cultural meaning—Mario, Simpsons, Star Wars, James Bond, the Simpsons, Batman/Superman.  Time will tell what else moves in that direction—video games, Harry Potter, Toy Story.

Moderator: Greg Lastowka, Professor, Rutgers School of Law

Is there something special about videogames lending themselves to user-generated content?

Festinger: thinks so, because there is no game without the gamer.  (Seems to me also true of movies—if a screener shows in a forest and there’s no one around to hear …?)

Methenitis: Interactivity: consumer is doing something creative in playing the game, and it’s become easier to share that over time. You can’t create your own film in response.  (Really?)

We will never get to the utopia of total freedom, but we can find a middle ground that is more palatable to everyone with some nudging.

Festinger: It’s not just a balancing act.  Even the user rights that you might have can be wiped out with no recourse under BnetD by an end user license agreement/terms of service. Notion in Europe/Canada of moral rights, not commercially based but which follows abuses and misuses of creativity and deals with it that way—he’d like to see that used for gamers.

Lastowka: a moral right to access?

Festinger: yes, and also a moral right to block—an artist sold some ducks to the Eaton Center, which put little Santa caps on the duck mobile, and the artist successfully sued. He has less objection to saying “that’s not what my art is for” than to saying “you’re making money and that’s wrong.”

Methenitis: not the US tack.  Batman movie included an image of a sculpture attached to a building; author lost his infringement/moral rights claim.

Lastowka: some companies do offer broad licenses for noncommercial creativity. If the market supports this, why not make that a default rule?  Why not commercial?

Festinger: TwitchTV: walkthroughs of games showing all the game elements; money is being made.  His instinct is that noncommerciality is a good line for default. Game companies often don’t want to shut down the fans.  Microsoft Flight Simulator: allowed mods to be commercialized; industry evolved around modding MFS.  Microsoft shut it down; the modding community reorganized around the remaining.

Methenitis: the ones that seem to get by with commercialization are ones doing more than showing the game—criticism or commentary is required, unless a news organization with a preexisting relationship with the game companies is reporting on the game.  Microsoft moved towards noncommercial/commercial divide with Red v. Blue.

Q: should modders have rights against commercialization if they don’t want that?

Festinger: Duke Nukem case: yes, they should.

Methenitis: credit is important; the question is how the game/mod was released, under what license?

Q for Methenitis: why is your idea a good one?

Methenitis: because being in the public domain doesn’t mean you’re free to use it, because of trademark.  For users, there is the ability to make high quality stuff, and there is a potential for confusion/tying the company to the new creation—dilution, tarnishment that harms the brand—what if it’s obscene?  Could be hard to disprove connection to someone else’s work.  (If only there weren’t dilution exceptions for expressive works.)  Would need a defined fair use regime that would also have to be a copyright/trademark hybrid.

Lastowka: Minecraft has tons of mods.  Is that a sign of the future?

Methenitis: hard to tell. Note that, like Lego, you could create infringing content with Minecraft.

Festinger: does think Minecraft is part of a shift about how to think about gaming.  The amount of content from the original developer v. amount of content out there really favors right to mod.  Minecraft has changed how he teaches law—provides a territory in an environment that students can build things in.

Starting now: Penn IP symposium

6th Annual Penn Intellectual Property Group Symposium

Creation Nation: IP and the Rise of Prosumerism

Thursday, March 28, 2013

Recommended reading: Private Copyright Reform

Kristelia A. GarcĂ­a, Private Copyright Reform


The copyright statutes governing sound recordings and musical compositions allow private parties to negotiate around the respective compulsory licenses and to instead establish private royalty rates that are frequently adopted, either formally through the Copyright Royalty Board or rate court’s rate setting  procedures, or informally through evolving industry norms.  This phenomenon, herein termed “private copyright reform,” raises two immediate concerns: First, it presents distributional justice concerns insofar as it allows for reduction, and even elimination, of statutorily mandated royalties owed to songwriters, recording artists, musicians and vocalists.  Second, when presented without full term disclosure, these privately determined rates can lead to the adoption of inaccurate “market” royalty rates.  Private copyright reform also challenges traditional intellectual property doctrine; specifically, it questions the efficiency of compulsory licenses and collective rights organizations, while also raising questions of fairness around the ability of private parties to make law. While resolution of these doctrinal questions is outside the scope of this Article, the recent proliferation of private copyright reform suggests they are ripe for reconsideration.

If you’re interested in copyright policy and the relationship of law to practice, read this article.  I’d like to see Garcia spend more time discussing adverse selection—the way in which opt-out and departure by strong members of collective rights organizations (CROs) can cause the remaining participants to be lower-quality, thus setting off a downwards spiral that may have negative welfare consequences overall despite the benefits to early-departers.  Is there reason to consider mandatory CROs, not unknown to copyright law around the world, as a response?

Wednesday, March 27, 2013

Talking about the DMCA

I'll be doing a Google hangout today on the DMCA at 3 pm EST, sponsored by the Daily Dot and the National Alliance for Media Arts and Culture.  To interact, use the Twitter hashtags #InterActs #DMCA, or direct questions to @InterActsOnline. Submit comments on Google Plus or on YouTube.

Here's the speaker info:
  • Moderator David Cooper Moore is a documentary filmmaker and board member for the National Association for Media Literacy Education. He also works with the Center for Media and Information Literacy at Temple University. In 2009, he was a director/producer for the short 3 Fair Use Case Studies for the Media Education Lab, where he is a program director. As a documentary filmmaker, David has created videos and curricula for the PBS Elections 2008 curriculum, Access, Analyze, Act: a Blueprint for 21st Century Civic Engagement, and the Center for Social Media’s Best Practices in Fair Use for Media Literacy Education.

  • Sina Khanifar is a serial entrepreneur whose first company, started while he was studying at Oxford in England, offered a service to unlock Motorola phones. He was subsequently sent a cease and desist letter by Motorola claiming that he was in violation of Section 1201 of the DMCA. After working with Jennifer Granick at Stanford to respond to those letters, he's been actively following the conversation around some of the problems with the DMCA, and recently started a We the People petition regarding unlocking that garnered a response from the White House. He is now leading a coalition of technology organizations including Reddit, Mozilla, and O'Reilly at, asking for Congress to reassess the anti-circumvention provisions of the DMCA.

  • Art Neill is the founder of New Media Rights, which provides pro bono legal resources and assistance regarding intellectual property, licensing, and other legal issues that arise with new technologies and media, along with a free media studio. Neill also practices public interest law in the areas of internet, intellectual property, and communications law, and is an adjunct professor of law at California Western School of Law teaching Internet & Social Media Law.

  • Tisha Turk is associate professor of English at the University of Minnesota at Morris, where she teaches courses on writing, gender studies, and fandom. She has written about fan videos both in academic journals and for the In Media Res Media Commons Project. She has been making vids for over ten years. She was part of the Organization for Transformative Works team that successfully testified before the Library of Congress in 2009 and 2012 in favor of lifting DMCA restrictions for fan videos and remix video.

Monday, March 25, 2013

Trade dress protected in combination; not all elements protected

It's A 10, Inc. v. Beauty Elite Group, Inc., 2013 WL 1136426 (S.D. Fla.)

Plaintiff sued defendants for trademark infringement and related claims, alleging infringement of its “It’s a 10 Miracle Leave-In Product” by BEG’s use of similar font, colors, and design on its “10–PL+US Miracle Leave–In Treatment.”  The court described the similarities:


Both bottles are purple with a magenta cap, and with magenta and white text and accents. The bottles are roughly the same height, and both use the phrases “Miracle Leave–In” to describe their product. Both bottles place the '10' approximately three-quarters of the way up the front of the bottle. The '10's' are nearly the same size, and they are both oriented horizontally across the respective labels. The back label of Defendants' product is also similar to the back label of Plaintiff's product. At the top of Plaintiff's back label, it states that “It's a 10 does 10 things instantly.”It then numbers and lists those ten features. At the top of Defendants' back label, it states that “Miracle Leave-in Treatment is a Salon Inspired formula that instantly” does fourteen things. It then numbers and lists those features, using the same white text and purple background as is found on Plaintiff's label.

Plaintiff’s CEO affirmed that she’d received “several inquiries” from customers about BEG’s product.  However, BEG agreed to withdraw the accused product and repackage it, changing the color, eliminating “miracle,” and emphasizing its brands “SoSilk” and “BioPlus” with a reconfigured label.  The new bottle is white with a pink label, uses “10 PL+US” vertically in the middle of the bottle; and uses a different font. The back label no longer contains the word “instantly,” nor does it number and list the product's features.  However, the old label design was apparently still available in stores because distributors had residual supplies.  Plaintiff sought to enjoin the new and the old bottles, the new because of the use of the number 10.

The court found likely confusion with respect to the old trade dress, but not the new.  “It’s a 10” was suggestive as applied to a beauty product; “Miracle Leave–In Treatment” might not be protectable alone, but was  when used in conjunction with “It's a 10.”  The similarity of the marks weighed “decisively” in favor of an injunction against the old product.  The word marks were “strikingly similar” and their placement on the bottles, colors, and fonts “would likely make it difficult for consumers to distinguish between the two products.”  Also, intent favored plaintiff because the very similarity made copying “clear,” so BEG didn’t fulfill its duty to avoid confusion with a senior mark.

As for irreparable harm, likely confusion itself threatens irreparable harm.  Voluntary cessation wasn’t enough to avoid an injunction, especially since the product with the old label was still on sale after BEG promised to stop selling it. And of course the balance of harms favored plaintiff, given its interest in the mark and BEG’s voluntary cessation.

The new label was a different story.  Similarity weighed strongly against a preliminary injunction: the bottles were different shapes (now relevant!) and colors, using different fonts and putting “10” in a different place on the bottle. BEG’s label prominently displayed its own house marks.  There was no evidence that the products were sold in the same stores or advertised in the same media—not important before, but important now given the dissimilarity. “Given BEG's willingness to alter its design, there is no longer any evidence that BEG is intentionally trying to copy Plaintiff's marks and trade dress.”  There was no evidence of confusion over the new label.  Only the strength of plaintiff’s mark favored an injunction, and that wasn’t enough.

Plaintiff argued that, given past confusion, the only way to protect its interests was to bar BEG from using “Miracle” or “10.”  The court disagreed.  Plaintiff’s Miracle trademarks don’t “necessarily preclude competitors from otherwise incorporating the word into their products.”  Indeed, other companies already use the word in hair-care product names; plus, BEG removed Miracle from its new label and was enjoined from using the old label, so there was no need to grant a broad injunction against the use of “Miracle.”

Nor did plaintiff show a protectable interest in “10.”  BEG identified 111 hair products using 10 in their names, and “TEN” is registered to a third party.  “Given the widespread use of '10' in the industry, the Court concludes that Plaintiff does not have a protectable legal interest in '10.'”

The court also denied other requested injunctive relief, such as an accounting of sales—this was an improper substitute for discovery.

The court’s injunction specified that it was enjoining the specific combination of elements, not necessarily each element individually:

[T]he enjoined label contains the following elements: it is purple with a magenta cap, and magenta and white text and accents; displays the phrase “miracle leave-in”; prominently places the number '10' approximately three-quarters the way up the bottle; on the back label it claims that its product “instantly” does fourteen things, and then those features are numbered and listed.

While it’s unclear how many of the elements BEG could use without violating the injunction, it is a useful point to make that a trade dress in a combination of features might well leave competitors free to use many of those features, as long as they don’t use the others.

40-year delay by FDA weighs against primary jurisdiction doctrine

In re Colgate-Palmolive Softsoap Antibacterial Hand Soap Marketing and Sales Practices Litigation, 2013 WL 1124081 (D.N.H.), 2013 DNH 038

Plaintiffs sued Colgate over Softsoap Antibacterial soap, alleging state law false advertising claims.  Colgate argued that the primary jurisdiction doctrine should justify dismissal or a stay; the court disagreed.

The active ingredient in Softsoap Antibacterial is triclosan, whose safety and effectiveness in hand soaps the FDA has been studying since the 1970s. In 1994, the FDA announced that it lacked sufficient evidence to determine whether triclosan was safe and effective for consumer hand soaps. Its review is ongoing. 

Plaintiffs alleged that many scientific studies over the past 15 years raised doubts about triclosan, including evidence that its use can produce resistant bacteria, that it’s a member of a class of chemicals suspected of causing cancer in humans, and that triclosan hand soaps are no more effective at killing bacteria than regular soap and water. Thus, plaintiffs alleged, Colgate falsely or misleadingly implied that antibacterial triclosan soaps were more effective than non-triclosan liquid soaps or regular soap and water; falsely/misleadingly claimed to have clinical proof of its claims; etc.  Colgate stopped making consumer products containing triclosan, so plaintiffs voluntarily abandoned their requests for injunctive relief, but still pursued other remedies.

The primary jurisdiction doctrine applies when a claim requires the resolution of issues which have been placed within the special competence of an administrative body, even if the courts have concurrent jurisdiction.  This helps promote national uniformity in the interpretation and application of a federal regulatory regime, and it allows courts to use agencies’ expertise in deciding technical factual questions.  Thus, a court may suspend the judicial process in order to allow an agency to give its views.  The First Circuit considers (1) whether an important issue in the case lies “at the heart of an administrative agency's task”; (2) whether the issue requires the agency's technical expertise; and (3) whether, “though perhaps not determinative, the agency determination would materially aid the court.” These three factors “must be balanced against the potential for delay inherent in the decision to refer an issue to an administrative agency.”

On the first factor: triclosan hand soaps were already over-the-counter in 1972, when the FDA announced the monograph process, by which it would identify conditions under which drugs would be considered safe, effective, and not misbranded. It was grandfathered in, and the FDA still hasn’t completed its review.  It issued a proposed monograph on topical antimicrobial products in 1974, finding that there was insufficient data on safety and effectiveness for triclosan in daily, at-home hand washing. In 1978, it issued its first tentative final monograph covering triclosan products. In 1991, it reopened the record and issued an amended tentative final monograph, proposing barring, among other things, triclosan in consumer hand soaps, one year after the final monograph’s publication. In 2003, it reopened the record again.  In 2005, a representative of DHHS stated that the “FDA was not aware of any evidence that antibacterial washes were superior to plain soap and water for reducing transmission of or preventing infection for consumers.” In 2009, the FDA announced that it would reissue the tentative final monograph in multiple segments separately covering topical antimicrobial drug products intended for use by consumers, health care professionals, and food handlers separately. It has been unable to provide “a detailed timeline for completion of this process,” but claims to be “working diligently to publish the proposed rule.” It’s not clear whether the final monograph will ban the use of triclosan in consumer hand soaps or limit its use; it will establish labeling requirements, and would be subject to challenge in court.

The court concluded that the task in this case would be backward-looking and historical—were Colgate’s claims misleading and unsubstantiated when made?  How would a reasonable consumer have understood those claims? By contrast, the monograph process is forward-looking and wouldn’t involve factual conclusions about Colgate’s past conduct, not its substantiation or what Colgate knew or should have known. Thus, the present case didn’t turn on factual disputes that lie at the heart of the FDA's regulatory authority.

As for the need for agency expertise, “the central issues that will have to be answered to resolve plaintiffs' damage claims do not require the expertise of the FDA.” Again, historical fact determinations about substantiation were well within judicial competence, and the FDA doesn’t have technical expertise “related to questions of fraud and deceit. Courts, by contrast, routinely determine whether past conduct or statements were false or misleading.”  In addition, when marketing claims relate to comparative safety or efficacy, the FTC generally takes the lead.  “Since both federal courts and the FTC are competent to decide whether labeling and advertising statements were false or misleading, the FDA's special expertise is not required to resolve these issues.”

Nor would an FDA decision materially aid the court in resolving the case. Colgate argued that the allegedly forthcoming monograph could provide “some data that might be useful to one side or the other.” That’s not enough.

On the other side, “[a]ny minimal value that an FDA ruling might have on the resolution of this case is greatly outweighed by the harm that the plaintiffs will suffer if the action is delayed, potentially for several years, until the FDA makes a determination.”  Forty years after the FDA began investigating triclosan products, the agency has made several runs at the question, missing “multiple self-imposed deadlines …, most recently in February 2013.”  Even after a tentative final monograph issues, 14 more months at minimum will pass before the final monograph, which could still be appealed and stayed.  This long, unavoidable delay weighed strongly against applying the primary jurisdiction doctrine.

Small number of consumer complaints insufficient to shake substantiation

In re Bayer Healthcare LLC and Merial Ltd. Flea Control Products Marketing and Sales Practices Litigation, 2013 WL 1150089 (N.D. Ohio)

Defendants moved for summary judgment on plaintiffs’ false advertising claims based on statements about defendants’ tick/flea killer products for pets.  The question was whether their advertising claims were adequately supported; they submitted as substantiation recent studies published in peer-reviewed journals. Thus, the court concluded, the only meaningful evidence of falsity would be evidence calling into question the validity of these studies, not complaints that the products didn’t work for each and every pet.  However, a large volume of consumer complaints relative to sales would call the studies into question and put defendants on notice that the studies were flawed: if “a significant percentage of customers reported that their pets had bites on their bodies in places other than where Defendants' products were applied, Defendants would no longer be reasonable in relying upon the studies validating their claims of topical dispersion over the bodies of pets.” 

Merial’s evidence was that .046% of customers complained about its products.  Plaintiffs argued that only one out of 25 dissatisfied customers would actually complain.  Even assuming this was true, the percentage would only rise to 1.15%.  Complaints about Bayer products were fewer.  Plaintiffs argued that there was some evidence that the products went into the animals’ blood, but that didn’t matter: it was irrelevant to whether defendants had reliable studies to back up their claims that the product dispersed over animals’ skin, and defendants didn’t make any claims about whether the product entered the blood. Thus, plaintiffs failed to show that defendants lacked a good faith basis for their ads claiming topical dispersion.

Supreme Court takes on consumer protection and preemption

Deepak Gupta writes in Scotusblog on an argument before the Supreme Court about whether a federal law designed to deregulate transportation applies to a consumer protection claim with very sympathetic facts.

lost communities

I recently came across mention of an experiment whose failure might be of interest to theorists seeking to understand distributed/community-based production: eBay Community Court, which was supposed to enable randomly selected eBay members to serve as a jury and vote on whether negative member feedback was unfair; a successful challenge would result in the removal of the feedback.  It apparently exists/existed in India but was never rolled out anywhere else, despite eBay’s promises; complaints about the Indian version are easy enough to find online.  The promises in this 2010 article by Colin Rule & Chittu Nagarajan offer an example of roads not taken.  Colin Rule still wants to resolve disputes online, but won’t explain what went wrong at eBay.  And this corporate secrecy makes many of the things we say about “the internet” and peer production difficult to prove/generalize about.

Friday, March 22, 2013

Ed Felten on the new freedom to tinker

Felten's post is worth reading in full.  Among other things, those who want the freedom to tinker should oppose the new servitudes, including licenses and the DMCA.  I would add that tinkerers come in all flavors; the fans I work with are tinkerers, both with technology (fans as zine publishers, video editors, etc. have always been user-innovators) and with texts.  So to Felten's list I'd add media fans: "[T]hose who support different aspects of the freedom to tinker need to recognize themselves as allies. If you’re motivated by phone unlocking, or if you’re passionate about preserving white-hat research, or if you’re trying to protect the legality of a legitimate but disruptive product, what you’re really fighting for is the freedom to tinker. Even if you disagree about other political issues, you can be allies on this issue."

Wednesday, March 20, 2013

The Onion does advertising law

I've learned from painful experience to clarify: The Onion is a satirical publication.  (Not that it's necessarily a mistake to assume that American law is hard to believe.)  Its latest offering: FDA Relaxes Definition of Smoothie.  Meanwhile, milk producers are petitioning the FDA to be allowed to add artificial sweeteners and call the results "milk," the same way that milk sweetened with sugar can be, so that kids will drink more artificially sweetened milk.  And that's true.

Dot-com disclosures: an update from the FTC and NAD

ABA Private Advertising Litigation/Consumer Protection/Privacy & Information Security/Corporate Counseling/Media & Technology Committees (again, kudos to PAL etc. for arranging a useful program)

Social Media Series: Dot.Com Disclosures: What Your Regulators Want in Mobile World 

Randal Shaheen, Venable LLP

Michael Ostheimer, Federal Trade Commission (usual disclosures/disclaimers, no pun intended)

Here to talk about the updating of of Dot-com Disclosures.  Don’t address disclosures required by state law (sweepstakes), CFPB, FDA.  Revision makes explicit some things merely implied before. If a disclosure is necessary to make an ad nondeceptive, and effective disclosure isn’t possible, then the ad has to be modified or not run. The guidance is not a safe harbor.

Clear & conspicuous.  Putting the disclosure as close as possible to the claim it qualifies.  If scrolling is necessary to see the disclosure, the disclosure should be unavoidable—consumer shouldn’t be able to proceed without viewing it. Unless a site defaults to mobile-optimized, disclosures must be clear & conspicuous regardless of device, which means you have to modify your main page if people will be accessing it from their mobile devices.  If consumers need to pinch and zoom, look at what they’ll see when getting the main info—might miss a disclosure on the left or right.  If the disclosure was next to the info on zoom, they wouldn’t miss it.

Well-labeled links can be ok if they communicate the nature of their info can be ok—“disclaimer” or even “important limitations” are not going to do the job. Consumers shouldn’t have to read through a page or go through several pages; links are inappropriate for core parts of the claim, such as certain cost and safety claims.  Disclosures necessary to prevent deception should never be relegated to terms of use. Can be used if the disclosures are complicated, detailed, and need to be repeated several times.  So if a plan’s pricing varies, a disclosure “service plan required” plus a link “get plan prices” can be effective.

Space constraints are no excuse.  Example of tweets: “sponsored” is ok; when a disclosure doesn’t fit, a clickthrough may be allowed if the teaser doesn’t ID the advertised product, or when the advertised product is only sold through the advertiser’s website, so that the consumer must click through and receive the disclosure to learn more/take action.  If you can’t make that work, don’t make the claim in a tweet.  Don’t assume consumers will see and associate multiple tweets. Two tweets even a minute or two apart could be separated by dozens of other tweets. Disclosure needs to be within the tweet.

Iconography: if a significant minority of consumers don’t understand an icon or symbol used as disclosure, that’s not adequate. Empirical evidence could demonstrate effectiveness. Using the symbol as a hyperlink to more information about its meaning is not sufficient.

Disclosures need to work—that probably means no Flash and no pop-ups, since those are often blocked by devices/browsers.  Prominence: relative size matters. If they’re too small to read on a mobile device, then they’re not clear & conspicuous. Graphics can draw attention to a disclosure, but they can also distract.

Sometimes disclosures aren’t enough. Negative option programs: enrolled in recipe-of-month club with purchase of dutch oven. Even relatively prominent disclosure could be missed because that’s not their primary focus. One way to increase likelihood that they’ve read & understood is to require consumers to choose between non-preselected options, early in decision process, for example before adding an item to a shopping cart.

Laura Brett, National Advertising Division

NAD looks to FTC guidelines and follows same principles: disclosures should be clear & conspicuous.  Proximity is important.  Example from TV ads: disclosures are ineffective if they’re in small type against a moving background and disclose important information necessary to make the main claim nondeceptive.  Hyperlinked disclosures aren’t sufficient if they contain information the consumer needs—a deceptive initial approach can’t be protected with later disclosure of material information.

Gillette Company Venus & Olay Razor #5547: Can material information be provided through a disclosure?  Razors can be drying to the skin, and advertiser here claimed “helps replenish skin’s moisture”—substantiation was that it was less drying than previous moisture. That evidence was true, but the statement indicated that the razor would actually help, not just be less ad. Recommendation: discontinue claim and be clear: less drying than previous razor.  Disclosure isn’t enough given the terms of the claim.

Shaheen: Guides and NAD talk variously about “same screen,” no scrolling, or near relevant information—as close to the claim as possible.  For marketer trying to get eye appeal, but stay out of trouble, what is the advice?

Brett: depends on context of claim.

Ostheimer: if you need the disclosure to avoid deception, then it needs to be clear and close.  (If the disclosure is there for other reasons, more distance is acceptable.)  If complicated, clearly labeled.

Q: are we looking at disclosures tied to specific claims or clarifying specific offers?

Ostheimer: not sure about difference. If the offer would be deceptive without a disclosure, need close proximity. Explanatory information, then proximity isn’t as important.  If “a free month of vegetables” offer converts to paid after a month, then you have to disclose the conversion to pay. If you offer a Groupon for a free dinner and don’t disclose significant limits on redemption times, then you have a problem.

Q: will you evaluate adequacy by looking at how the disclosure might look on a larger screen?

Ostheimer: we’ll look at the small screen if it would be viewed on a small screen.  (Followup: the fact that it’s bigger on a big screen doesn’t suggest it’s inadequate on a mobile device.)

Brett: NAD hasn’t reviewed a challenge just based on a mobile device, but we’d look to FTC guidelines and we’d consider the small screen too; remembering that not all terms and conditions would need to be displayed at once, but some will.

Q: is #ad required on a tweet?

Ostheimer: we aren’t requiring particular language. It’s safe to say #ad at the beginning puts consumers on notice, but not saying that other disclosures are insufficient for sure—it depends on what works in real life.

Discussion of technological feasibility of requiring consumers to read before proceeding (have to scroll through disclosure in order to click forward) or responsive design that recognizes the type of device and ensures that the disclosure is next to the claim.

Q: what about free with asterisk—is it sufficient to be close to the claim?

Brett: NAD has reviewed “free” advertising promotions.  That’s the kind of disclosure that could appear in a hyperlink if the link contains information about the contents: the link could say “detailed information about shipping charges” if there are shipping charges for the free merchandise. Or you could put it close to the claim.  Indicate the nature of the conditions on the claim where the “free” claim is being made.

Q: promotion on a company’s FB page—should a Wall post create material terms of the offer, or would a hyperlink to the company’s webpage with the necessary disclosures suffice?

Ostheimer: is there a claim in the Wall post that would be deceptive w/o disclosure?  If so, better to disclose in Wall post. But if the only way to take advantage of the offer is to click on the FB post, then that’s less problematic, though there’s still a risk.

Making a disclosure unavoidable makes it more likely that it’s clear & conspicuous; avoidable disclosure might be clear & conspicuous, but it’s just less likely. Having a disclosure next to the “submit” button makes it more likely to be clear & conspicuous.

Doesn’t have to be the same size as the claim. On mobile, one key issue is relative font size. The bigger the better, but there’s no minimum or standard.

Brett: note that if the disclosure is distracting/can’t be read because of color etc., then it won’t work even if it’s in large font.

Q: what should you look for in ad review?

Ostheimer: atty should be able to “walk through” a mockup of how the ad/order process will work; make sure you see how the disclosure works on different devices.

Shaheen: are we going to have to start calling negative options positive options, or is there still room for negative options with well-crafted disclosures?

Ostheimer: there’s room—there’s always been a requirement for consumer understanding. If there’s upsell for a product/service unrelated to the main offer, even a relatively prominent disclosure might be missed/inadequate. Radio buttons and yes/no might not work, but that depends on what you’re selling.  For some categories, the FTC gets more complaints about unauthorized continuity plans than any other kind of complaints. Many companies could be doing a much better job of disclosure.

Brett: responds to Q about what kinds of information would need to be in close proximity for an event, program, contest, free item—generally the kinds of things that need to be disclosed are conditions that people would have to pay for to participate in; material limits on who can participate/may be eligible.  Those matters make the promotion itself misleading w/o that info.

Another Q: for celebrities, what constitutes a paid ad? If a celebrity receives free supplies, is that paid?

Ostheimer: our endorsement guides suggest that yes, that requires disclosure.

Q: suppose you have an online magazine w/editorial features, getting a commission for sales of products featured in editorial. Under the endorsement guides, do you have to disclose the commission? And how would you best do that if the magazine is full of such examples?  Is there a less cumbersome way to do it than after every mention?

Ostheimer: is there an endorsement going on?  If the magazine is saying something positive about the product, or just mentioning them in the course of a story?  If positive, and if they’re compensated for clickthroughs, that would be a material connection, and the question is whether consumers would know/expect that; if they don’t understand that already, then a disclosure is needed.  How to do it?  It could be disclosed in the text of any individual article about a specific product; the closer it is to the claim, the better. Revised guides have a blog endorsement example; if there are many opportunities to click away and avoid the disclaimer, that’s a problem. One solution: put it at the top of every page: we benefit from the sales of the reviewed products. Probably other creative ways. Interstitials?  If someone doesn’t click on the link, they won’t get the disclosure but could still get a favorable impression and buy later, biased by the failure to disclose the material connections.

Reminder: the guidance documents here are not themselves binding--§5 and our rules are binding; these are documents to help you comply with them.

The DMCA is worse than you think

My colleague Blake Reid in Slate on some of the problems, with special attention to accessibility.
[E]-books often include DRM technology that prevents people who are blind or visually impaired from running e-books that they have lawfully purchased through a text-to-speech converter that reads the books aloud. Similarly, Internet-distributed video and DVD and Blu-ray discs include DRM features that prevent researchers from developing advanced closed captioning and video description technologies that make movies and television shows accessible. (For example, some Internet-delivered videos don't include closed captions at all, and subtitles on DVD and Blu-ray discs can be incomplete, riddled with errors, or so badly formatted that they can't be read.) Bypassing this DRM technology is often trivial from a technical perspective. But the DMCA makes it illegal—even if the person bypassing DRM is doing so for a noninfringing use like making it accessible to people with disabilities.... Requiring nonprofit disability groups to ask permission from the government every three years and navigate a complex legal minefield to implement urgently needed accessibility technology is not compatible with progressive, conservative, or libertarian values; the goal of equal access for people with disabilities; or common sense. Even the librarian admitted in 2010 that the DMCA exemption process “is at best ill-suited to address the larger challenges of access.”

Chinese copy culture

From Yu Hua, China in Ten Words:
With the rapid growth of the copycat industry there is now a dizzying variety of knockoff phone brands. One has recently appeared in the stores under the mantle of Harvard University. Claiming to be manufactured by “Harvard Communications,” the brand presents President Obama as its spokesman and sports a beaming Obama on its advertisements. His smile, seen everywhere these days, has to count as the most famous— and the most powerful— smile in the world, but now it’s been hijacked and made to appear in promotions for Chinese copycat cell phones. “This is my Blackberry,” Obama tells us with a grin, “the Blockberry Whirlwind 9500!”
See also his editorial, Stealing Books for the Poor.


I don't have much to say about Kirtsaeng, but I was struck by this passage from Justice Ginsburg's dissent, addressing the effect of her preferred result on the display right:
Limiting §109(c) to U. S.-made works, however, does not bar art museums from lawfully displaying works made in other countries. Museums can, of course, seek the copyright owner’s permission to display a work. Furthermore, the sale of a work of art to a U. S. museum may carry with it an implied license to publicly display the work. See 2 Patry §5:131, at 5–280 (“[C]ourts have noted the potential availability of an implied nonexclusive licens[e] when the circumstances . . . demonstrate that the parties intended that the work would be used for a specific purpose.”). Displaying a work of art as part of a museum exhibition might also qualify as a “fair use” under 17 U. S. C. §107. Cf. Bouchat v. Baltimore Ravens Ltd. Partnership, 619 F. 3d 301, 313–316 (CA4 2010) (display of copyrighted logo in museum-like exhibition constituted “fair use”).
Finally, Justice Ginsburg has met a limit on copyright she likes! Well, maybe. At least possibly, if the museums can’t get permission (of course if permission is denied, the implied license seems … unlikely, unless permission is implied as a matter of law). If museum display is fair use, is bookseller display? What about display by an individual? If public display of an imported work lawfully made under some other country’s law triggers the display right, then could finding fair use in the average museum situation--where the display right is likely most significant--satisfy the three-step test under TRIPS? I end up doubtful that Justice Ginsburg would actually be sympathetic to a fair use claim if a foreign author objected to public display—indeed, allowing control over public display would then be granting extremely strong moral rights of divulgation/withdrawal to foreign works, though not domestic ones.

Tuesday, March 19, 2013

Wisconsin court construes consumer protection acts broadly

MBS-Certified Public Accountants, LLC v. Wisconsin Bell Inc., --- N.W.2d ----, 2013 WL 238550 (Wis.App.), 2013 WI App 14

MBS initially lost its argument that the voluntary payment doctrine precluded its phone cramming claims against defendants. The state supreme court reversed and remanded because application of the voluntary payment doctrine would undermine the core purposes of the anti-cramming statute and remanded.  On remand, the court of appeals reinstated MBS’s various claims, including its general consumer protection law claim.

MBS alleged that defendants violated Wisconsin law by billing MBS in a false, misleading, or deceptive manner; by omitting information necessary to ensure that statements in the phone bills were not false, deceptive or misleading; and by billing MBS for services that it did not affirmatively order, and that were not required by law.  One of the relevant sections of the law, titled “Advertising and sales representations” bars any false, misleading or deceptive statement with regard to telecommunications services.  MBS stated a claim under this section because stating on a phone bill that a customer owes money for services the customer did not authorize is false. The law wasn’t limited to telecom providers who deal directly with customers, so if one defendant’s statements to Wisconsin Bell were false and that ended up harming MBS, there was a cause of action.  Defendants argued that bills weren’t “advertisements” or “sales representations,” but the title of a statutory section only matters if there’s ambiguity and the language actually used covered everything.  Similarly, the claim for violation of Wisconsin’s law against negative option billing or negative enrollment in telecom services survived. 

The trial court also dismissed the general state-law false advertising claim on the grounds that misleading bills weren’t advertisements or sales promotions. However, the court of appeals pointed out that the language of the statute is “extremely broad”:

No person . . . shall make, publish, disseminate, circulate, or place before the public, or cause, directly or indirectly, to be made, published, disseminated, circulated, or placed before the public, in this state, in a newspaper, magazine or other publication, or in the form of a book, notice, handbill, poster, bill, circular, pamphlet, letter, sign, placard, card, label, or over any radio or television station, or in any other way similar or dissimilar to the foregoing, an advertisement, announcement, statement or representation of any kind to the public . . . , which advertisement, announcement, statement or representation contains any assertion, representation or statement of fact which is untrue, deceptive or misleading.

The plain language of the law showed that statements could be actionable even in bills or other documents not traditionally considered ads.  Indeed, the statute lists “bill” as an example. (NB: I suspect this was another traditional/obsolete meaning of "bill." From the OED, “A written or printed advertisement to be passed from hand to hand (hence also called hand-bill), or posted up or displayed in some prominent place; a poster, a placard.” This doesn’t mean I disagree with the outcome.)  The law included documents “similar or dissimilar ” to the enumerated items, so long as they contain misrepresentations. Thus, phone bills that induced MBS to pay for services it did not authorize were among the prohibited misleading representations.

Defendants argued that MBS wasn’t the “public” because of its contractual relationship with Wisconsin Bell, but the crux of the lawsuit was that there was no contract in place with the defendants for the billed services at issue.  “[C]harges were billed to a party who had never agreed to pay for them in the hope of tricking that party into assuming a payment obligation.”  That was within the intended ambit of the law.  Nor did the voluntary payment doctrine bar the claims, since the doctrine was “at odds with the manifest purpose of the statute,” which was to bar a broad range of false statements and misrepresentations without requiring proof of common-law fraud.

The state-law little RICO claim also survived.