The article suggests that the strategy of talking to law professors, as opposed to tech experts (or, possibly, average students) will not result in anything useful:

“I don’t understand why, if they truly wanted to engage consumers, they would approach law professors, especially those at the most elite schools,” Mr. Goldman wrote in an e-mail interview. “There are at least a half-dozen ways that Paramount could get better marketplace feedback than eliciting the perspectives of law students, which reinforces why I think they intended to do more talking than listening.”

The strategy suggests to me that Paramount seeks to find new ways to bend the law to their favor: Publishers as well as movie studios have all taken to similar reactions to the public’s fervent resistance against any laws that would control or restrict the presentation or use of media, citing even the slightest new law or regulation as a violation of fair use and basic freedoms; the media moguls, having decided the public is unrealistic and unreasonable in their demands, have turned unilaterally to the government to protect their property.

However, government laws have proven so far ineffective in exerting any real control or providing protection against media piracy, prompting the moguls to seek new and inventive ideas that will work within the system… therefore, the consulting with the fresh young minds of future lawmakers and their teachers.

It’s truly a shame that both sides of the media consumption market continue to fight each other, instead of working together to find a mutually-equitable “trust, with verification” position that will eventually result in a marketplace that makes sense… hopefully, before the Sun goes nova or the Moon falls out of orbit, rendering the issue moot.

A fundamental legal question involved in construing a contract is what the parties intended at the time the contract was made. The intent must be manifest in some form in the written agreement. A secret intent by one party that the word tomato also includes avocado won’t bring avocados into the contract.

The classic formulation is that there must be a “meeting of the minds” of the contracting parties or else there isn’t a contract or the contract is limited to only those subjects for which the minds met.

A big problem HC has with its case is even showing an intent by both parties to include what we recognize as ebooks today into the 1971 contract in the absence of any language that points to an ebook.

Passive Guy points out that later contracts still have the same problem. Some try to future-proof themselves by adding a “whether now known or hereafter discovered” clause, but the problem PG finds is that implies a meeting of the minds about something neither party knew anything about at the time they signed the contract.

And even though the Julie one wasn’t, a lot of these contracts were drafted after e-books or similar information-retrieval systems were known to exist. One such system, Lexis, was very big in the legal world in the mid to late 1970s, finding its way into law schools in the 1980s and eventually every lawyer’s office—the same lawyers who wrote contracts for the publishing industry. Yet none of the publishing contracts from this era bother to mention it or anything like it.

Absent any contractual mention of ebooks or electronic books or a reasonably detailed description of an ebook reading and distribution system resembling one the lawyers knew intimately, the only reasonable conclusion is there was no intent to include ebooks in publishing agreements of that era.

Just sayin’

I look forward to finding out how the Julie case unfolds. It will be interesting to see if the judge’s preliminary ruling bears any resemblance to that from the RosettaBooks case so long ago—and whether HC similarly drops the case if it appears not to be going its way. I suppose we’ll just have to wait and see.

"We are grateful for the judge’s decision in our favor," said John Ossenmacher, ReDigi’s CEO, said in a statement. The company added that "ReDigi is breaking down the barriers that have kept consumers from enjoying their intrinsic and lawful ownership rights to their digital purchases."

Of course, this is only a preliminary ruling that ReDigi can keep doing its thing until the outcome of the trial. It doesn’t necessarily mean the company will come out on top. Still, it’s an interesting start to what will probably be an especially interesting legal challenge with profound implications for all forms of digital media, including e-books. I can hardly wait until the trial itself starts.

The position of the anti-SOPA activists is antithetical to the principle of protection — for authors, that is — mandated in the Constitution of the United States. Our nation’s founders recognized that furthering the rights of creators is in the national interest, to “promote the progress of science and useful arts” by “securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.” Over the centuries, copyright protection has been codified in an expanding body of federal law in an attempt to implement the protection outlined in the Constitution.

I can’t believe she wrote that with a straight face, given the history of copyright in Congress over the last few decades. What kind of “progress of science and useful arts” is being promoted by giving dead people a few more decades of copyright protection? What kind of “limited times” is it if Congress simply re-extends the copyright every time Mickey Mouse approaches the public domain? Of course, I suppose it’s to be expected from the author of a book called Protecting Your Musical Copyrights (now in its second edition).

As to her main point, I’ve seen a number of authors speaking out against SOPA. John Scalzi, for example, says he strongly supports the right of copyright owners to be able to control and defend their copyrights, in both on-line and off-line venues.

SOPA/PIPA aren’t the way to do this. These proposed laws are poorly constructed, overly broad and frankly thoughtless, the equivalent of dealing with burglars in someone’s home by carpetbombing every house on the street. You might stop the burglar, but the collateral damage makes it a hollow victory. The collateral damage here would be the hamstringing of the Internet, and trampling rights of speech and expression. That these proposed laws have been debated by a number of US Representatives and Senators who seemed proud of their ignorance of how the Internet works (and at least initially didn’t want to hear from technical experts) made it that much worse.

For bonus points, Scalzi has been the President of the Science Fiction & Fantasy Writers’ Association (SFWA) for two years now—and the SFWA has been dogmatic enough on the issue of copyright protection to have issued a mistakenly broad DMCA takedown notice a few years ago. (Though in the blog post Scalzi is careful to note he is speaking only for himself, nonetheless if his views were not in line with a majority of the authors in the association it is doubtful he would have been elected twice so far.)

And here’s Scottish author Charlie Stross’s opinion. While he’s not an American citizen, he nonetheless has plenty of books under copyright in the US as well as the UK, and would thus stand to “benefit” from US copyright protection laws:

If this was an American blog, it would be going dark for 24 hours tomorrow in sympathy with the strike against the Stop Online Piracy Act currently before Congress — which might more accurately be named the Rent-Seeking Plutocrats Enabling Act.

And it’s not just authors, either. Editors Patrick and Teresa Nielsen Hayden also spoke out against the act (even though their employer supported it).

Finally, I want to note that Teresa and I feel a particularly urgent need to make our opposition to this legislation completely clear, because among its publicly-listed supporters is Macmillan US, the publishing conglomerate of which Tor Books is a part. Intentionally or not, in a very real sense our employer is trying to destroy our web site. As Cory Doctorow points out, the Hollywood studios and Big Six publishing companies are behaving in a manner precisely described by the legal term “depraved indifference.”

And those are just the ones I know off the top of my head. I’m sure if I felt like spending a few minutes with Google I could turn up plenty more. Maybe those voices didn’t get heard by “the mainstream media” but they did speak out.

Getting back to the original article, Alter concludes:

Whether or not SOPA is the most effective means of curbing piracy in the online arena is a matter that should be thoroughly examined. However, the SOPA debate should not be commandeered as a vehicle for furthering the position of those who seek to write authors out of the copyright law and the Constitution.

Say what? I don’t recall seeing any evidence that the majority of the opposition to SOPA came from people who “seek to write authors out”. It came from average users of the Internet, who were convinced enough of how terrible SOPA was that they were moved to contact their congressmen. Sure, it was in part instigated by sites like Google and Wikipedia, but given how the law was written it’s hard to deny they had a legitimate concern.

And that “whether or not” sentence is pure weasel words—a way of pretending to give ground while not actually arguing the matter. The authors and editors I quoted above are the very people Alter is claiming to speak for, and they think it’s a bad idea.

Google brings up the Cablevision case that legalized remote-operated DVRs, and the Sony v. Universal case that legalized VCRs and explicitly called “time-shifting” fair use, But the really interesting part is this argument:

The final principle concerns the interplay between two provisions of the Copyright Act which, by their plain language, are limited to material objects: the distribution right, Section 106(3), and the first sale doctrine, Section 109.  Both provisions deal with copies and phonorecords, which are material objects in which copyrighted works are fixed.  The present motion argues that the first sale doctrine—which permits the owner of a lawfully-made copy or phonorecord to sell it without needing the copyright owner’s permission—cannot apply to this case because no material objects change hands.  But it also argues that ReDigi infringes Capitol’s exclusive right to “distribute copies or phonorecords,” despite its admission that no material objects are distributed.  Either both provisions apply, and ReDigi’s service may be protected by the first sale doctrine, or neither applies, and ReDigi’s service does not infringe the distribution right.  Google takes no position on which outcome is correct but urges the Court to reject an internally inconsistent argument that would weaken the statutory restrictions on the distribution right.

(So much for taking no sides. That sure sounds like “Heads ReDigi wins, tails EMI loses” to me.)

Nonetheless, Google asks that the court deny EMI’s request for a preliminary injunction and proceed to consider the matter fully on the merits.

It reminds me of something my friends are prone to say when a football game suddenly goes from boringly one-sided to a close contest: “It looks like we’ve got a ball game.” The ReDigi case looks like it has the potential to go from a fairly one-sided and obvious copyright infringement lawsuit to a serious consideration of digital rights that could set some important precedents for the future of property rights in all electronic media, including e-books.

In their joint report, the plaintiff — that would be Penske, owner of Deadline — said it was considering whether to augment its legal complaint with a new claim for “hot news misappropriation,” some of which “occurred as recently as the week of the filing of this Report.” In other words, Penske says the Hollywood Reporter was lifting its stories even as the year’s Oscar nominations were being chewed over.

The hot news doctrine has been getting a lot of play over the last couple of years, as the digital nature of the Internet makes it a lot easier for news sites to rewrite facts from other news sites’ stories. Generally speaking, facts cannot be copyrighted, only the expression of them. I couldn’t copyright the fact that Obama was elected President, for example, but I could copyright the exact words I used to talk about his election. Someone else would be perfectly free to read my report, digest the facts, and rewrite them in his own words. (In fact, that’s a lot of what I do for my TeleRead blogging, and what a lot of tech bloggers do in general. If courts were to enforce the hot news doctrine, it could significantly change the whole e-news-reading landscape!)

But the hot news doctrine was evolved as an exception during World War I to protect a news agency that made a significant investment in frontline reporting from getting scooped by competitors who intercepted its reports. The nature of journalism has changed significantly since then, however. And last year, an appeals court ruled in favor of a news rewriter, voiding an injunction that prevented it from republishing facts from a financial company’s news feed until two hours after their release.

It’s unclear how or whether Deadline.com and the Hollywood Reporter’s case differs from that one, but it would seem that relying on the hot news doctrine might be a risky venture. I suppose we’ll find out in fifteen months.

The plagiarist is a Kuwaiti national who used the pseudonym “Luke Ethan”. Luke explains that he had gotten a lead on an Internet marketing forum to a private black-hat forum (with a $500 entrance fee), where he paid $100 for what he was told was a collection of material with permission to reformat and resell as e-books. One of those works was an incestuous short story, “I Remember Mother”, by David H. Springer, that someone had reformatted into “My Step Mom Loves Me”. (The change from mother to step mom came about because Amazon doesn’t permit works featuring actual incest to be sold on it store.)

Springer complained to Amazon, and got back a notice from Amazon saying that its plagiarizer had made about $560 from it, and if he felt he was entitled to compensation, he should take it up with that person. For his part, Luke says he was entirely unaware the material had been plagiarized. (Though given the dodgy nature of how he acquired it, not to mention that Amazon’s policies also disallow reformatted duplicate material even when it comes with legitimate permission, it’s hard to feel too sorry for him.)

Nevertheless, Warrior Forum continues to be awash in copyright infringement come-ons. "If you go to the warriorforum and ask around, there are hundreds of people offering to sell you books with publishing rights," Luke says. Check out this ad, posted in its special offers group, for "The Kindle Secret: Want to Create Kindle Books in 15 Minutes or less?" The person behind it hawks a guide for $17 that explains how he’s "dominating" one "hidden Kindle niche." He claims to be "outsourcing books" for "$20 a pop (can you get a whole Kindle book created for $20?) and selling them on the Kindle for $2.99 each," promising that his books "require no marketing and still sell like crazy," with each title earning between $40 and $300 a month. "I don’t write a thing," he brags. He just creates the covers, uploads the content then moves on to the next book. "This is completely scalable. Want to go big? Create 100 books for $2,000 and you’ll have major passive income set up for you in just a couple of weeks."

It is unclear whether Amazon is legally obligated to pay “I Remember Mother”’s original author anything, even though it received 40% of the revenues (about $380) from their sale. The Kindle Direct Publishing Agreement includes a provision stating that Amazon will pay victims of piracy “the Royalties due in connection with any sales of the Digital Book through the Program, and will remove the Digital Book from future sale through the Program, as your sole and exclusive remedy.” (Which makes it a bit odd that Amazon told Springer that if he wanted any money from “My Step Mom Loves Me”, he’d need to take it up with Luke Ethan.) But if Amazon were to be sued, it could undoubtedly tie up the litigant in court for years.

Penenberg notes that this is probably a major reason behind Amazon and other tech companies’ vocal opposition to SOPA and PIPA:

If made into law both could have armed copyright holders with weapons to do battle with websites that host infringing material. In theory, without the hassle of attaining a court order, a single complainant might have been able to force credit card companies to suspend Amazon’s financial transactions, Google and Bing to erase it from search results, and DNS providers to cloak the site so users couldn’t easily find it. One slip up and the impact on a site like Amazon could be devastating. 

Without those bills, Amazon is in the clear over plagiarized material as long as it makes a “good-faith effort” to remove it when it’s told about it. And it doesn’t have to pay plagiarized authors like Springer a cent.

It’s not terribly surprising to learn that there is a very active underbelly of the Internet devoted to selling digital snake oil like private label rights and plagiarized material for “instant” Kindle publication. It’s the tragedy of the commons—any time something could be abused for a quick profit, there will be those who will try to profit, directly or indirectly, from abusing it.

It would be nice if there were a way for plagiarized authors to get their own back from Amazon. It is doubtful Springer could ever recover anything from a citizen of Kuwait. But it would probably take a carefully-balanced law without the potential for abuse inherent in SOPA and PIPA, and it remains to be seen if the content industries are capable of or even interested in producing such a thing.

Next week, a German appeals court in Düsseldorf will decide whether to lift an injunction Apple was granted against Galaxy Tab sales in Germany. Meanwhile, the Düsseldorf Regional Court will be ruling on an Apple motion for an injunction against the Galaxy Tab 10.1N, which has been modified to work around Apple’s claims.

Will Samsung end up prevailing on the strength of the prior art it has gathered? I would hope so. There are only so many ways to make a tablet, and it would be ridiculous if Apple were permitted to act as a gatekeeper over any potential competitors.

(Found via CNet.)

The complaint details how Hachette Livre CEO Arnaud Nourry first met with an Amazon executive in December 2009 and asked Amazon to raise its e-book prices by $2 or $3—showing that publishers had already been discussing how to fix e-book prices among themselves. Subsequently, these publishers all approached Amazon to say they were going to start windowing their titles—a risky move none of them would have tried unless they knew that their competitors were going to do so also.

Then the publishers found their biggest price-fixing ally: Apple, who was notably reluctant to compete with 800-lb e-book gorilla Amazon on its own terms.

According to the complaint, Apple’s desire to enter the e-book market on more favorable business terms aligned with the Agency 5’s goal of raising e-book prices, and a plan was set in motion in January 2010 with the announcement of the launch of the iPad. Simultaneous with the iPad announcement, the Agency 5 said they were switching from the wholesale model of selling e-books to the agency model. Given that Amazon controlled most of the e-book market at that point while Apple was just entering the field, the complaint says that no individual publisher would have risked angering its largest e-book customer unless they knew other publishers were prepared to follow suit. 

Essentially, the suit alleges that no single publisher would have done the things the Agency 5 did if it were not certain the others would do the same thing.

I look forward to seeing the outcome of this lawsuit. I have my doubts that it will unseat agency pricing, but it should at least be a heck of a fight.

(Found via The Bookseller.)

Righthaven.com will provide shared and dedicated server hosting services to clients who expect just a little more backbone from their provider. Well, actually a lot more backbone.

We call it "spineful hosting" and not only do we think it is a "great idea"™ but as nearly fanatical advocates for the freedom of expression we are pretty sure it is also "the right thing to do."™ Then again, we are prone to agree with ourselves quite often.

This “spineful hosting” idea certainly explains the site’s “no jellyfish” logo.

The site’s FAQ page makes it clear that that new Righthaven will not be hosting flat-out illegal activities such as torrent or other piracy sites, but rather “expression that has traditionally been subjected to frivolous legal threats based on its content.”

We are simply not in this to host actually infringing material. We’re here to be a spineful host and, as a result, to devote the necessary expertise and resources to separate legitimate infringement claims from meritless, frivolous, and malicious claims calculated to suppress free expression. Whatever the short term gains, plating "fast and loose" in this field is simply not worth it in the long run.

The site will also be engaging the legal services of Marc Randazza, who has also been the most active defense attorney fighting the old Righthaven’s machinations.

What with the threat of SOPA and PIPA on the horizon, and plenty of corporate interests ready to abuse the DMCA’s takedown provision, this idea of international “spineful hosting” seems like one whose time has come. It will be interesting to see how well it all works out.

(Found via BoingBoing.)

It’s shaping up to be a pretty interesting case, and if it makes it to the Supreme Court it could set some important precedents concerning how digital content (including e-books) is permitted to be used and sold. I expect ReDigi to lose the first round, however, given that lower-level courts tend to be more conservative in how they apply the law, leaving it up to appellate courts to make the really tough decisions.

The real problem is that Megaupload’s employees regularly emailed each other to discuss how wicked they were—and the company kept email logs that the feds could—and did—subpoena, providing more than enough rope to hang them most effectively.

In short, there are about three dozen ways in which Megaupload could have structured their site and their business to be able to successfully argue that the primary uses of it were non-infringing, and therefore they should be covered under the "capable of substantial noninfringing uses" guideline set forth in A&M Records Inc vs Napster Inc and the safe-harbor provisions of OCILLA and the DMCA. At each decision point that could have led to such a defense, they appear to have deliberately, willfully, and gleefully taken the opposite route. And then written emails about it. And saved them. For a long time.

I do not see this case ending well for them.

In related news, Megaupload has dropped Universal Music from the list of defendants in its lawsuit over the Megaupload song takedown. It seems to be focusing on suing Google now for not providing assurance Youtube videos would be retained. And Hong Kong Customs has frozen $39 million of Megaupload assets.

Meanwhile, Gizmodo reports that file sharing and storage service FileSonic has apparently seen the writing on the wall—it just removed the “sharing” part of its service, changing itself into a service that can be used only for retrieving files that you have uploaded personally. The article also notes that file service Uploaded.to has also closed down, at least for US users.

It’s a little worrying what might happen if a service like Dropbox followed suit. Apart from the many other legitimate things its users do with it, one of those is the ability to create an on-line e-book library with Calibre that can then be accessed anywhere from apps like Stanza or IbisReader simply by plugging a public URL into the app. No public URL ability would mean that those apps wouldn’t be able to access the library anymore.

Of course, it still remains to be seen whether the DoJ will take similar actions against other file sharing services. It’s hard to imagine that any of them could have been quite as dumb as Megaupload—and if they had been, I expect they’re busy remedying the matter now.

There’s a profound temptation to throw a Wizard of Oz-style celebration (“Ding dong…” etc.) and pat ourselves on the back for a job well done. However, this legislation is much like the vampires in Terry Pratchett’s Discworld series: an inconvenient shaft of sunlight can turn them to dust, but it just takes a single drop of blood to bring them back to life again as good as new.

On The Guardian, Dan Gillmor points out:

The key words above are "for the time being". Hollywood and its censor-the-internet allies are never going to stop pushing for what I’m convinced they really want: a way to bring technology under control. Although they claim otherwise, Sopa and Pipa would – among many other negative impacts – essentially require innovators in digital media to get permission from the copyright cartel before launching new products and services that might challenge, even tangentially, the interests of the Big Copyright industry.

And Marco Ament, creator of Instapaper, puts his finger on the thing that worries me: sooner or later, the Internet will grow tired of protesting, and Hollywood, with its infinite patience, will manage to slip its venomous legislation into effect.

Ament suggests that, since the MPAA so clearly seem to hate us, and spend the money we give them to try to force these laws into being, we should stop supporting them with our money.

Even if we don’t watch their movies in a theater or buy their plastic discs of hostility, we’re still supporting them. If we watch their movies on Netflix or other flat-rate streaming or rental services, the service effectively pays them on our behalf next time they negotiate the rights or buy another disc. And if we pirate their movies, we’re contributing to the statistics that help them convince Congress that these destructive laws are necessary.

Of course, the problem with this argument is that if enough people do stop consuming their media to make a different, Hollywood will just use that as support for the argument that “piracy” is costing them money.

Although this type of legislation is being pushed by Hollywood, it could profoundly affect all creative sites or sites that discuss them, including this one. And opposing it doesn’t mean we support piracy! But there need to be better-balanced solutions that will allow prosecution of genuine bad actors while not giving movie, music, or publishing conglomerates yet another bludgeon they can use to smack down anyone who says (or innovates) something they don’t like.

The indictment charges that the "Mega conspiracy" has for more than five years operated websites that willfully distributed pirated movies, often before their theatrical release, and other illegal copies of copyrighted works, earning the company over $175 million in illegal profits through advertising revenue. Megaupload is also charged with money laundering by paying uploaders through an "uploader reward program," and paying other companies to host the pirated content.

Another Ars piece goes into a lot more detail on the charges and supporting evidence the DoJ brings to its case. The DoJ holds that the DMCA’s safe harbor provisions do not apply to Megaupload because the company’s employees were fully aware that they were illegally offering copyrighted content (including, of course, e-books)—and company email and chat logs prove it.

The company also charges that the DMCA file removal tools Megaupload offered didn’t really remove the files, just one of the (potentially many) links to its location. It paints the site as seeking a veneer of legitimacy by planning to file suits against its competitors while being fully aware of how bad its own behavior was.

Not necessarily all of what the DoJ accuses is actually illegal, however. Law professor James Grimmelman told Ars that many of the practices listed in the indictment were industry-standard promotional techniques, such as premium subscriptions and rewards for active users, that are used by many fully legitimate sites. Says Grimmelman:

"I hope that if this case goes to trial and results in convictions, that the court will be careful in sorting out just what Megaupload did that crossed the line of criminality."

Of course, the shuttering of Megaupload doesn’t just hurt pirates, as there were a lot of legitimate files shared through it. For example, mods for The Elder Scrolls III: Morrowind were hosted on a variety of cyberlocker sites, including Megaupload, and any Megaupload links will now no longer work.

It also calls into question whether any of the other user-upload cyberlockers, such as RapidShare and HotFile, are long for this world either. I can’t imagine that investigators would focus on only Megaupload to the exclusion of the others. Undoubtedly Megaupload was the rottenest apple of the bunch, but it didn’t seem to offer a markedly different service from the others.

Something else a lot of sites are pointing out is that this comes right after the anti-SOPA/PIPA blackout, and seems to demonstrate that we don’t need any additional laws to take down pirate operations—the DoJ is having no trouble knocking down Megaupload with the laws currently on the books.

Of course, not everyone is happy about this, and today we’re seeing a different kind of “blackout” as Anonymous attacks the websites of the Department of Justice, the White House, the MPAA, the RIAA, and various other entities. Way to make Megaupload’s defenders look good, guys. With “friends” like that, it’s doubtful Megaupload needs any additional “enemies”.

Disappointingly, the court ruled that Congress could indeed remove the works from the public domain—Congress did have the power to retroactively extend copyright on these works in order to bring the US into treaty compliance. The court rejected the idea that the First Amendment applied for orchestras that had been making a living performing these works without paying royalties because they could still perform them by paying royalties.

It’s not too big of a surprise, really; this is mostly the same court that issued a similar ruling on Eldred vs. Ashcroft nine years ago. And while it is disappointing, there is a danger that we can make too big a deal out of it. Unlike with Eldred vs. Ashcroft, the public domain was not really the central issue here—the main import of the decision regards what Congress can do in general to enforce compliance with international treaties. Copyright was just the subject of this particular treaty.

What might be more worrying are the implications this might have for things like the ACTA treaty that was signed last October, which at one point included three-strikes and global DMCA-style language. If Congress can remove works from the public domain—something that by and large had not happened before—what else can’t they do?