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March 30, 2004

Off to Alan Davidson’s Second Seminar [4:12 pm]

Privacy by Design: VOIP and the Golden Age of Government Surveillance?; from his class site

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US Export Growth [3:51 pm]

Of course, I assume the RIAA has secured the relevant business method patent on this approach: File-sharing lawsuits go abroad (IFPI press release)

The International Federation of the Phonographic Industry, a worldwide recording industry association, announced on Tuesday its initial round of lawsuits against individuals whom it asserts illegally share files of copyrighted music. The 247 suits against alleged that file sharers in Denmark, Germany, Italy and Canada mirror similar action by the Recording Industry Association of America–the results of which have gotten mixed reviews from analysts and researchers.

The IFPI said it plans to bring additional lawsuits in other countries over the coming months, after filing criminal complaints in Italy and Germany, and civil litigation in Canada and Denmark.

Here’s an excerpt to parse from Statement by Jay Berman, Chairman and CEO of IFPI

Ultimately, though, we have learned that education alone is not sufficient, and that some people persist because, like shop-lifters, they think they can ‘get away with it’. So we have decided that only the prospect of legal action is going to make those people rethink what they are doing.

Today we are making it clear that we are totally prepared to enforce the law, and we will start actions against those people who are breaking it by uploading hundreds of music files on to the internet. We will not stand by while thousands of people involved in the creation of music see their careers and livelihoods destroyed. The message is that people are at a real risk of being sued or prosecuted if they continue to rip off those who make music.

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I’m Not Sure What Sort of Headline This Deserves [3:42 pm]

But it is worth reading, just to see how far someone can take a lucrative IP dispute: After 13 Years, Judge Dismisses Case on Pooh Bear Royalties

The Walt Disney Company prevailed on Monday in a 13-year legal dispute over royalties related to its Winnie the Pooh franchise when a judge dismissed the case, contending the plaintiff altered confidential memorandums and covered up the theft of documents obtained by a private investigator who sifted through the company’s trash.

Judge Charles W. McCoy of Los Angeles Superior Court wrote in his decision that the misconduct of the Slesinger family, which sued Disney in 1991 after contending the company cheated it out of royalty fees, was “so egregious that no remedy short of terminating sanctions” would adequately protect Disney and the justice system from further abuse.

[...] The Slesinger family said it intended to appeal the judge’s decision, the result of hearings held a month ago. The point of contention over the years has been that the family had not been paid royalty fees for Pooh videocassettes, games and DVD’s. Such a provision was not written into the contract with Disney, but lawyers for the family contended they were promised the fees anyway.

“The decision unfortunately sends a strong message to corporate America that it is O.K. for companies like Disney to steal and renege on its contractual promises,” the family said in a statement. “This is just one round in a very long and complicated relationship and another delay of justice.”

The two sides have been locked in a bitter and often contentious fight which, if Disney had lost, could have cost the company hundreds of millions of dollars. Over the years, the Slesinger family has been represented by nearly a dozen lawyers - three in the last year alone - including Bertram Fields, the well-known entertainment lawyer who has made a career out of representing Disney’s opponents. He abruptly resigned last summer without explanation. Most recently, the Slesingers were represented by Johnnie Cochran.

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Sharing — Help or Hindrance [2:08 pm]

Weighing in on the idea that file sharing = music promotion, we have the following: Music sharing doesn’t kill CD sales, study says (Slashdot: Study: MP3 Sharing Not Serious Threat To CD Sales) — (the study, The Effect of File Sharing on Record Sales An Empirical Analysis)

For the study, released Monday, researchers at Harvard University and the University of North Carolina tracked music downloads over 17 weeks in 2002, matching data on file transfers with actual market performance of the songs and albums being downloaded. Even high levels of file-swapping seemed to translate into an effect on album sales that was “statistically indistinguishable from zero,” they wrote.

“We find that file sharing has only had a limited effect on record sales,” the study’s authors wrote. “While downloads occur on a vast scale, most users are likely individuals who would not have bought the album even in the absence of file sharing.”

The study, the most detailed economic modeling survey to use data obtained directly from file-sharing networks, is sure to rekindle debates over the effects of widely used software such as Kazaa or Morpheus on an ailing record business.

Here’s the abstract:

A longstanding economic question is the appropriate level of protection for intellectual property. The Internet has drastically lowered the cost of copying information goods and provides a natural crucible to assess the implications of reduced protection. We consider the specific case of file sharing and its effect on the legal sales of music. A dataset containing 0.01% of the world s downloads is matched to U.S. sales data for a large number of albums. To establish causality, downloads are instrumented using technical features related to file sharing, such as network congestion or song length, as well as international school holidays. Downloads have an effect on sales which is statistically indistinguishable from zero, despite rather precise estimates. Moreover, these estimates are of moderate economic significance and are inconsistent with claims that file sharing is the primary reason for the recent decline in music sales.

Recall the earlier work by Stan Liebowitz started out with this conclusion as well, but then reversed position. It will be interesting to see how this analysis evolves.

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