It’s Baaack!

For the moment, anyway: Hackers revive iTunes music sharing

OurTunes works only among computers that share a network, however. That means that students or employees can swap songs on a local network, but cannot use it to browse computers on the Internet, as happens with file-trading programs such as Kazaa. Still, the software is likely to ring an alarm at Apple and among record company executives, who have waged war against file swapping since Napster’s heyday.

Speaking of Links…..

Ernie the Attorney points to this newsletter: LawLawLaw: Erik J. Heels: LawLawLaw 2004-08-17: News and Commentary about Law, Technology, and their Intersection

We are only about a decade into the Internet revolution and we are clearly living in the Dark Ages of the Internet. Never before have so many bad laws been drafted to benefit so few to the detriment of so many. Bad bills have the potential to become bad laws, but good bills have the potential to become good laws. Here are some of the notable bills and laws.

An extensive set of law and internet links

MGM v. Grokster Links

Too many places, so here’s an attempt to collate :

More to come, as more analysis appears. The consensus commentary, though, is that this is a shot in the arm for IICA/INDUCE supporters, although Ernest points out the elements of the 9th Circuit’s opinion that might give thoughtful supporters pause.

9th Circuit Affirms Grokster

Jason Schultz has the news: LawGeek: Ninth Circuit Affirms Grokster v. MGM Ruling

Here’s the opinion: MGM v. Grokster.

As to the question at hand, the district court’s grant of partial summary judgment to the Software Distributors is clearly dictated by applicable precedent. The Copyright Owners urge a re-examination of the law in the light of what they believe to be proper public policy, expanding exponentially the reach of the doctrines of contributory and vicarious copyright infringement. Not only would such a renovation conflict with binding precedent, it would be unwise. Doubtless, taking that step would satisfy the Copyright Owners’ immediate economic aims. However, it would also alter general copyright law in profound ways with unknown ultimate consequences outside the present context.

Further, as we have observed, we live in a quicksilver technological environment with courts ill-suited to fix the flow of internet innovation. AT&T Corp. v. City of Portland, 216 F.3d 871, 876 (9th Cir. 1999). The introduction of new technology is always disruptive to old markets, and particularly to those copyright owners whose works are sold through well-established distribution mechanisms. Yet, history has shown that time and market forces often provide equilibrium in balancing interests, whether the new technology be a player piano, a copier, a tape recorder, a video recorder, a personal computer, a karaoke machine, or an MP3 player. Thus, it is prudent for courts to exercise caution before restructuring liability theories for the purpose of addressing specific market abuses, despite their apparent present magnitude.

Indeed, the Supreme Court has admonished us to leave such matters to Congress.

I.e., the ball’s in your court, Congress — and is IICA/INDUCE really the right tool for this job?

(I see that Jason and I elected to excerpt the same bits <G> — in fact, going through Ernest’s links, it seems like everyone like that part best)

Later: More links from Donna

We Get To See Moglen’s Views Play Out

This Register article, IBM threatens SCO with GPL hearing, and this CNet News article, IBM asks for Linux ban on SCO, both point to the issues Eben Moglen alluded to last February at Harvard.

The motion says that by distributing Linux software governed by the GNU General Public License (GPL) while at the same time declaring the GPL invalid, SCO has forfeited the right to distribute Linux code, particularly code to which IBM has made contributions. SCO has been a harsh critic of the GPL, declaring it a violation of the U.S. Constitution in one legal document.

“SCO has, without permission, copied code from 16 discrete packages of copyrighted source code written by IBM for Linux and distributed those copies as part of its own Linux products,” according to IBM’s latest motion. “Although IBM’s contributions to Linux are copyrighted, they are permitted to be copied, modified and distributed by other under the terms of the…GPL. However, SCO has renounced, disclaimed and breached the GPL, and therefore the GPL does not give SCO permission or a license to copy and distribute IBM’s copyrighted works.”

The motion asks for a partial ruling that SCO has violated IBM’s Linux-related copyrights and a permanent injunction barring SCO from distributing allegedly infringing Linux code.

I’m sure there’s good stuff over at GrokLaw, but it’s not responding at the moment. This article from eWeek, SCO: Without Fear and Without Research, gives Moglen’s summary as follows:

SCO’s legal situation contains an inherent contradiction. SCO claims, in the letters it has sent to large corporate users of free software and in public statements demanding that that users of recent versions of the kernel take licenses, that the Linux program contains material over which SCO holds copyright. It also has brought trade secret claims against IBM, alleging that IBM contributed material covered by non-disclosure licenses or agreements to the Linux kernel. But it has distributed and continues to distribute Linux under GPL. It has therefore published its supposed trade secrets and copyrighted material, under a license that gives everyone permission to copy, modify, and redistribute. If the GPL means what it says, SCO loses its trade secret lawsuit against IBM, and cannot carry out its threats against users of the Linux kernel.

But if the GPL is not a valid and effective copyright permission, by what right is SCO distributing the copyrighted works of Linux’s contributors, and the authors of all the other copyrighted software it currently purports to distribute under GPL? IBM’s counterclaim against SCO raises that question with respect to IBM’s contributions to the Linux kernel. Under GPL section 6, no redistributor of GPL’d code can add any terms to the license; SCO has demanded that parties using the Linux kernel buy an additional license from it, and conform to additional terms. Under GPL section 4, anyone who violates GPL automatically loses the right to distribute the work as to which it is violating. IBM therefore rightly claims that SCO has no permission to distribute the kernel, and is infringing not only its copyrights, but those of all kernel contributors. Unless SCO can show that the GPL is a valid form of permission, and that it has never violated that permission’s terms, it loses the counterclaim, and should be answerable in damages not only to IBM but to all kernel contributors.

Illinois DMCA Decision

Michael Geist cites a court decision from Illinois that expands the notion of DMCA enforcement into a new realm: Comcast of Illinois X LLC v. Hightech Elec. Inc. (find it yourself here; search on case number “3231”)

The BNA summary:

A cable service provider’s allegation that the operator of a Web site received compensation to include hyperlinks to sites that sell cable piracy devices is sufficient to support a claim that the Web site operator violated the Digital Millennium Copyright Act, the U.S. District Court for the Northern District of Illinois ruled July 28 in denying, in part, the defendants’ motion to dismiss (Comcast of Illinois X LLC v. Hightech Elec. Inc., N.D. Ill., 03 C 3231, 7/28/04).

Though the cable provider is not the copyright owner of the works allegedly infringed, it nonetheless has standing to sue under the DMCA, the court concluded, because it controls access to the copyrighted works through its scrambling technology. [emphasis added]

But while the hyperlinks may support a claim under the DMCA, they do not support a claim under the Cable Communications Act, the court ruled. For under that act, a defendant does not “assist” in the interception of the signal unless it manufacturers or distributes the hardware used for that purpose.

The Boston Globe on “Found Money”

DVD boxed sets resurrect short-lived TV shows [pdf]

It’s just one example of a surprisingly strong stream of this business: underachieving shows that find new life on DVDs.

[…] This isn’t to say that marketing DVDs of less popular or cult shows is the same as what’s done for hits such as “CSI” or “Friends.” Typically, collections of the underperformers piggyback on more established releases or take advantage of stars’ higher profiles.

It may just be network programmers’ itchy trigger fingers that spurred this TV-on-DVD torrent. Shows often get pulled off the air just when they’re entering the consciousness of many viewers. “Certain shows get a buzz around them,” Lesinski says. “Some people don’t get to see the first episodes, or they catch it in midseason, second season. They lose continuity and they want to get the whole flavor.”

Research by several studios has shown that consumers are drawn to TV DVDs because they’re commercial-free, so it’s easy to watch as many — or as few — episodes as you choose, and because they’re a new form of collectible, from the big hits to the cult favorites.

The market for TV shows on DVD caught nearly everyone by surprise, precisely because the shows were already so available.

But Scott Hettrick, editor of DVD Exclusive and Video Business, trade magazines that closely chronicle the DVD realm, notes, “This is all found money. . . . You can spend a few bucks and put it on DVD, and even if you just make $5 million a set, it’s $5 million more than you had before.”

The Rise of i2Hub

Supercharged college P2P project expands

The I2hub founders have acquired a small online textbook exchange and are tying it into the file-swapping service, hoping that students will start reselling books to each other instead of using local bookstores. With this, and other similar student-focused services, they’re aiming to turn the file-swapping traffic into a more traditional–and potentially profitable–hub of campus activities.

“We want to get away from the P2P image and more towards a student service,” said Wayne Chang, a University of Massachusetts student who serves as the project’s organizer. “I2hub is like the solid tree that leaf projects, like the book exchange, will spring from. Most other people in our space focus on the leaf projects, but they don’t have a solid tree on campus.”

The i2Hub site — their About page:

i2hub is an organization by students for students. The organization delivers a platform for students from colleges, universities, and institutions globally providing instant access to an academic community built on collaboration. Our organization is made up of over 80 dedicated and talented individuals.

i2hub provides access for hundreds of thousands of students from hundreds of universities to form one of the largest student networks. i2hub is the first-ever system on a completely separate high-speed network that’s faster than normal internet garnering worldwide support from college-level students.

i2hub’s groundbreaking, peer-to-peer (P2P) solution proven effective for online collaboration between students, is the first and largest student community in the world with hundreds of thousands of users. Our team of software developers are working on adding new functionality and value to the i2hub system.

Through our system, i2hub offers the most advanced and innovative solutions for online collaboration to the students worldwide. With the inevitable meshing of university cultures and networks, the organization is poised to emerge as the world leader. i2hub is the conduit in which students across the planet connect to share ideas, collaborate, and form social networks in a real-time environment never before achieved.

Two Quickies from Digital Music News

  • CD Sales Continue Positive Trend, Questions Linger

    CD sales in the US continue to show life, most recently totaling 26.9 million units in 2004. That is 7.5% higher than the running total at the same point last year. Is this a recovery in the CD market, or just an increase powered by heavy price cuts? That remains an open question, with many pointing to cheaper CD prices as a temporary band-aid. Others look to changes in the digital space as having a strong influence on shopping patterns, including increased action by the RIAA. But the picture remains confusing, with both P2P usage and paid music services both seeing continued increases. CD sales figures for the all-important holiday buying season will be an important data point.

  • Ringbacks: A Closer Look at the Evolving Market – with ringtones being a serious source of cash, can this be the next?

    For the uninitiated, ringbacks allow consumers to choose the sound callers hear while they wait for an answer, providing a new twist to the ringtone explosion.

    As is often the case with mobile phone technology, Asia has been a first mover. The first ringback service was launched in 2002 in South Korea by operator SK Telecom. An immediate success story emerged, causing a rapid spread throughout various Asian countries.

    Demand suddenly hit a fever pitch: by June 2004, SK had reportedly gained more than 8 million users out of its 30 million total subscriber base. That led to a cash machine, with ringbacks generating more than $9 million per month for SK. In The Philippines, mobile operator Globe Telecom claimed that 100,000 people signed up within a week after a service launch in April 2004.

    Now, Europe is the next on the list.

StarForce Interview and Piracy Discussion

A Slashdot story on copy protection for games (whose economic viability is apparently hugely challenged by unauthorized copying) cites this StarForce Interview and Piracy Discussion. In particular, this quote gave me pause:

Copy protection is getting more invasive. While we’re not quite yet seeing dongles, copy protection has become a bigger hassle in recent years. First it was simply a matter of keeping the CD in the drive. Then we had CD keys. Then those CD keys began being authenticated online. Windows XP uses a scary validation system that I’m not looking forward to messing with when I upgrade my hardware in a few weeks. Now copy protection is disabling games if you have utilities that simply might help pirate a game – like Alcohol 120%, Nero or CloneCD.

Furthermore, copy protection denies users the right to an archival copy. We’ve all damaged, destroyed or lost discs and CD keys. Getting a replacement from a publisher can be and often is another hassle. Of course, if we honestly ask ourselves how many purely legitimate users of those utilities there are, odds are probably that deep down inside we have to admit “not many”.

In recent months there’s been an increasing awareness and alarm over StarForce copy protection. It’s actually a driver that installs itself with the games that come shipped with it, and originally it didn’t uninstall when the game was uninstalled.

The article goes on to an interview, where the situation only gets murkier. But you have to ask yourself — knowing that a game installs drivers that limit the functionality of your computer, just how much is that game worth?

At what point does the economic state of the gaming industry become a reflection of consumer’s reaction to the copy protection instead of a reflection of the consumer’s reaction to the game? The close of the article puts it this way:

Yes, invasive copy protection sucks and probably contributes somewhat to the popularity of CD cracks and even outright piracy – but let’s face it, publishers aren’t stupid. They likely think long and hard before deciding whether it’s worth paying for copy protection and irritating the very customers they’re trying to court. The irresponsible behavior of gamers is forcing publishers to take more drastic measures to protect their investment. Yes, they’re trying to make money off us, but that money is used to make more games. The very games we enjoy. We have to take responsibility for our actions. Does anyone actually believe if there were no copy protection, game sales would increase?

PC games will never go away, but if the market keeps shrinking due to the increasing ease of piracy – through the proliferation of CD burners, DVD burners and broadband internet connections – then the number and quality of games will almost certainly decrease.

Maybe — or maybe this is just an inevitable death spiral of an industry.

Related: One of Ed Foster’s many GripeLog postings on copy protection: New Frontiers in Frustration