Justice Dept. takes P2P with ‘grain of salt’

Hewitt Pate, assistant attorney general for antitrust, expressed skepticism toward a bill called the Pirate Act that the Senate overwhelmingly approved in June. It’s designed to curb peer-to-peer piracy by threatening individual infringers with civil lawsuits brought by the government.

That idea is “something that people should take with a grain of salt,” Pate said at a conference held by the Progress & Freedom Foundation. While “the Justice Department is there to enforce the law, there’s something to be said for those who help themselves.”

Maybe he read this letter?

As Donna points out in Call Me Dick (and Ernest in Posner Blogs on Fair Use and Copyright), today seems to be about copyright, fair use and transactions costs.

Ernest analyzes elements of the EFF’s JibJab complaint, now online

Singles boost as UK music grows

The British Phonographic Industry (BPI) recorded a 6.4% rise in singles sales and 3.7% rise in album sales.

Sales across all music formats had a total value of £230m from April to June in the UK, compared to total sales of £221m in the same period last year.

[...] The introduction of £1.99 two-track CD singles has helped produce the first increase in the UK singles market for five years, the BPI said.

Thirteen of the top 20 selling singles between April and June were released on this format.

Macrovision: iPod support for lock-in CDs in Q4

Copy protection provider Macrovision is sufficiently confident that it will be able to incorporate FairPlay support into its CDS-300 copy control that is has begun telling customers that it will add iTunes and iPod support to its software in Q4.

According to mailings sent out with the company’s CDS-300 version 7 beta release, “support for iPod and iTunes… will be made available in a Q4 update”.

From Michael Geist’s BNA Highlights: Record companies, schmecord companies say the Pixies

“Record companies, schmecord companies – who needs ‘em? That’s not where the money is. The business is with the real customers – the fans. That’s who we’re trying to connect with,” band member Frank Black, AKA Black Francis, told the Associated Press this week.

[...] Apparently, the band doesn”t feel it needs a record label any more and, while their plans are still unformed at the moment, the idea generally is to combine selling live CDs made and then sold at concerts, producing music for movies and commercials and distributing singles via the internet.

“It’’s a revenue stream. I”m not saying we could sell lots of records if we sold them out of our garage or the Internet, but you know what? We might,” said Black, “It’’s a crazy time.”

GrokLaw points to this article, Software patents in Europe: debunking the myths, as an important example of the tenor of the EU software patent proponents’ rhetoric. The GrokLaw article dissects the article, but I found this paragraph to be so transparent a sophistry as to merit citing here, too. Otherwise, go to GrokLaw for a more thorough discussion

The patent system promotes disclosure of techniques that would otherwise have been kept secret, by offering the best ideas a limited form of monopoly. Also the person who discloses ideas publicly, whether by a patent or any other way, prevents others from monopolizing the same thing and routine developments. While patens have long been used in other fields of technology, the software industry historically has relied more on secrecy, and allowed itself in the early years to be talked out of patent protection. Only recently has it begun to think of publishing and sharing its source code for the greater good (the Open Source movement). This is the reason why patent offices do not yet have the knowledge base to tackle the sudden burst of software patent applications.

Oral Arguments in Grokster & Ch. 4, 5 of “Free Culture” (discussing the oral arguments in Grokster)

The following exchange will give you a feel for the event. One attorney argues to the court that “the Internet is not a license to steal,” and that “there’s nothing different from what they’re doing from organizing and instructing the participants in a trafficking network that is trading in counterfeit materials”.

One of the judges interrupts him and says: “Let me say what your problem is. You can use these harsh terms, but you are dealing with something new. And the question is, Does the statutory monopoly that Congress has given you reach out to that somthing new, and that’s a very debatable question. You don’t solve it by calling it theft. You have to show why this court should extend a statutory monopoly to cover the new thing. That’s your problem. So address that, if you would, rather than use abusive language.” You don’t want to miss listening to the attorney’s reaction to that rebuke.

What the judge told him matches so exactly what Larry Lessig writes in “Free Culture”, especially chapter 4 and 5 on Pirates and Piracy, that I’ve made a quick mp3 of those chapters, which you can listen to, if you’d enjoy to.

Who Swallowed the Clock flags a rather stunning fact about the UK copyright to Peter Pan, as well as a not unfamiliar strategy, cited in Hospital challenges writers to make Peter Pan fly again:

The three leading storytellers in Britain’s current golden age of children’s fiction are expected to balk at a challenge made to them today - to embark on the “awfully big adventure” of writing a sequel to Peter Pan which proves as long-lived as the original.

The invitation comes from Great Ormond Street children’s hospital in London, to which JM Barrie left the lucrative copyright of his stage play.

To mark its centenary in December - and to help it continue to buy state of the art technology to treat its acutely ill children - the hospital trustees are launching a search for “a magical sequel to JM Barrie’s timeless masterpiece”.

The trustees aim to commission a new story which will “share the same enchanting characters as the original, the same longevity, and be just as valid in a hundred years as the original is today”. They are eager for one or more of today’s leading children’s writers to enter for the project.

[...] The hospital would hold copyright, including crucial film rights, in the sequel, but would split publisher’s royalties with the author. Its lawyers said the author “could reasonably expect to participate in the exploitation of film rights”.

[...] In 1988, parliament gave Great Ormond Street what amounts to perpetual copyright in UK revenues from the stage play first performed in 1904. But the hospital is planning ahead to the expiry in 2023 of the US copyright, which generates its film revenue

These Scrivener’s Error posts on the Grokster decision, [Expletive Deleted] Headline Writers! and The Spin Cycle, get considerable discussion from Derek and Denise.

What I’m thinking about (entry 2004080902) [via InfoThought] (see earlier Bridging A Gap Through Metaphor)

So computer science, for very good reasons, is almost exclusively a calculus of numerical values, which are homomorphic to events in the universe. That’s a math term; I mean it in its precise technical sense, but a non-technical approximation of its meaning would be that we can think about numerical values and come to conclusions that are correct about events in the universe too, without needing to think about the extra complication that is attached to events in the universe.

The trouble is, homomorphic images tend to throw out important details. Computer science’s “numeric value” image of the universe eliminates some uninteresting extra complication, but law is all about things under that “extra complication” heading. Events in the universe have other attributes not included in their numerical values, and in particular, they have “causes” - other events with a special relationship to them. The questions answered by Colour seem to be the same questions answered by the answer to “What events caused the event of this file’s existence?” If you can describe those causative events, then you can answer the copyright, child porn, and randomness Colour questions rather neatly.

If we say that law is a calculus of events, with emphasis on the relation of “causality”, then I think we have a description of law that bears some relation to what lawyers actually do, but which doesn’t paint them as dangerous idiots from the computer-science point of view. So I won’t complain too loudly if you insist on saying “Colour is actually the same thing as history,” “Colour is actually the same thing as cause,” or “Colour is actually the same thing as origin.”

[...] Well, yes, I said that computer scientists deny the existence of Colour. But as I also said, that’s not because there is something wrong with computer scientists. Computer scientists deny the existence of Colour because, within the subset of the universe studied by computer science, Colour really does not exist. They are neither mistaken nor lying.

[...] I like the idea that law is a calculus of social beings and their interactions, because that makes a whole lot of seemingly knotty law-related questions just vanish. Instead of arguing endlessly about whether a Web cache “reproduces” the file being cached or similar questions, we can focus on the social beings involved instead, and answer the real questions.

The Call Is Cheap. The Wiretap Is Extra. With a good summary of the mechanics of accomplishing VoIP wiretaps.

At first glance, it might seem like the simple extension of a standard tool in the fight against the bad guys.

But in fact, wiretapping Internet phones to monitor criminals and terrorists is costly and complex, and potentially a big burden on new businesses trying to sell the phone service.

[...] But developing systems to wiretap calls that travel over high-speed data networks - a task that the companies are being asked to pay for - has caused executives and some lawmakers to worry that helping the police may stifle innovation and force the budding industry to alter its services. That requirement, they say, could undermine some of the reasons Internet phones are starting to become popular: lower cost and more flexible features.

[...] “The potential for misuse is pretty broad because what you are doing is a form of packet-sniffing,” said Lee Tien, a staff lawyer at the Electronic Frontier Foundation in San Francisco. “The problem is that if you are using a sniffer box to perform the interception, you may handle all the traffic going through. In the end, a packet sniffer gets you everything.”

Some groups, like the American Civil Liberties Union, say law enforcement agencies are trying to turn phone companies into government spies. Law enforcement groups and service providers, however, say software is sufficiently sophisticated to only siphon relevant calls. They also say that having the companies take charge of finding a solution should allay suspicion that the government is trying to overstep its authority.

The F.B.I. is not trying to use the wiretap law “to dip into the Internet,” said one senior official at the bureau.

[...] The biggest challenge, Mr. Tworek and others say, is tracking down phone conversations that are connected by peer-to-peer software. This software essentially piggybacks on the networks of its users; calls are not connected at a central location. To trace such calls, investigators would have to sift through trillions of packets at routers that channel data around Internet networks - a daunting task, industry experts say.

This type of peer-to-peer calling is still emerging, so the threat is rather remote. But some companies that offer this software operate overseas, so they fall outside the jurisdiction of the United States government. The communications commission’s recent ruling does not cover this type of peer-to-peer communication.

Slashdot: VOIP Progress To Be Hobbled By Wiretap Costs?; EFF Deep links: The Call Is Cheap. The Wiretap Is Extra.

More Is Not Necessarily Better — With a firm whose public persona is notable for its informal motto “Don’t be evil,” is this straining at gnat, or pointing to a real problem?

Imagine if one company controlled the card catalog of every library in the world. The influence it would have over what people see, read and discuss would be enormous. Now consider online search engines.

Few people realize that 95 percent of all Web searches in the United States are handled by two companies, Google and Yahoo, either directly or through other sites that use their technology. In the case of Google, whose shares started to trade publicly last week, the company holds the world’s largest index of Web content, at more than four billion pages, and handles more than 200 million searches a day. The influence of search companies in determining what users worldwide can see and do online is breathtaking.

Will a DMCA-based strategy be far behind? To installers of car stereos, auto systems sound fishy [pdf]

Vehicles are increasingly being designed with all of their electronics systems wired to each other; i.e., the system in the Cadillac that ties the stereo and the air conditioning together. The changes allow both drivers and the manufacturers to take advantage of leaps in technology, making it possible for the driver to control his air conditioning from the radio controls, or for a dealership to diagnose mechanical problems easily.

But many in the aftermarket suspect that more sinister motives are at play. The new integrated systems make it difficult, if not impossible, to upgrade cars with new stereos, speakers, or alarms in some cases. That, they say cuts into aftermarket sales and forces drivers to go to manufacturer-controlled dealerships where upgrades are often more expensive.

“It’s obviously a good business model for them to maintain full control over the delivery chain, and it’s more convenient for them to be able to add all of the car’s features into the car’s stereo,” said Matthew Swanston, a spokesman for the Consumer Electronics Association, an Arlington, Va., trade group that represents aftermarket parts makers.

Another school year is getting ready to start, and there are some surprises — and a look at how to limit used book sales: Open your textbooks… [pdf]

The National Association of College Stores estimates that the wholesale prices of college textbooks are rising 6 to 7 percent a year and are up 32.8 percent since 1998.

Resistance and protest have been building. A recent report by the California consumer group CALPIRG, called “Ripoff 101: How the Current Practices of the Textbook Industry Drive Up the Cost of College Textbooks,” led to hearings last month before a subcommittee of the US House Education Committee. Bills have been filed in California and in Congress, mostly directed at extending federal college grants, or tax credits, to cover textbook costs. Meanwhile, the General Accounting Office agreed to a request by Representative David Wu, an Oregon Democrat, that it investigate textbook prices.

[...] “The books are much more comprehensive,” said Bruce Hildebrand, executive director for higher education of the American Association of Publishers. “Pedagogy has become the overwhelming driver. A textbook in 1993 might have a study guide for the professor. The 2003 book will still have one additional item for the professor but seven or eight for the student. If you’re in a math class, you buy the book, but you might also get 24-hour-a-day tutoring online. The publishers are not producing this stuff just because they can but because there’s a demand.” Hildebrand says that most books and support materials are available a la carte and that it’s usually faculty who decide what they want in a “bundle.”

Even so, Melanie Butler, manager of the Suffolk University bookstore, says the practice complicates used-book resale. “It makes it harder for us to buy the book back,” she said. “The sales rep will tell the professor, `You get this free study guide with the package.’ Some of them come back to us with the study guide, some without.”

[...] [Northeastern Professor Ira] Krull scorns publishers’ arguments about the need for new editions. “Some books are in their 11th edition,” he said. “They’d do a new edition every year if they could. There’s no scientific justification, other than to make a higher profit. The fundamentals of chemistry don’t change every year.”

[Followup to Who's Surprised and Followup: RIAA Settlement & Libraries ] RIAA CDs Start Landing at MLS [via BoingBoing]

Our CDs from the RIAA settlement have started coming in. We received 367 boxes yesterday and 503 more today. We’re not sure if there will be more, but it seems likely since someone said we’re supposed to get 30,000 CDs. We’re still debating the best way to distribute them to our 86 public libraries, so I took the opportunity to browse through some of the boxes.

[...] Several of the boxes are literally cut on the side, and the cut goes into the jewel cases themselves. Hence my declaration that we received a ton of “cut-outs.” Some of the boxes even have dates of 2001 and 2002 posted on the labels, which I hope doesn’t mean the date they were boxed up and put into storage. There is no way these boxes were packed by mistake as the result of a computer glitch. [emphasis added -- see earlier postings] Some of the labels very clearly say 30 copies of this or that title, and I highly doubt the labels were supposed to cut the boxes after boxing and labeling them.

In A swan song for the music industry [pdf], Hiawatha Bray points to what might be the Achilles Heel of INDUCE/IICA — realization that it’s a threat to Betamax. If that worries Bray, it’s bound to worry a large part of the population that otherwise would support Hatch’s efforts — of course, Hatch insists that’s not the likely consequence of the act, but Marybeth’s fawning performance may have tainted that perception for good:

For those of us who despise the file-swappers as larcenous hypocrites, it’s not a happy verdict. But it’s well nigh impossible to dispute it. The judges simply pointed to a crucial 1984 Supreme Court decision that protected the rights of Americans to own videotape recorders. The movie industry scowled that these devices would enable people to practice a lively trade in pirated movies. The court responded that VCRs could also enable a fellow working the night shift to watch “The Waltons” when he got home. And because the technology had “substantial noninfringing uses,” VCRs could not be banned, even if they could also be used for illegal purposes.

The so-called “Betamax case” liberated technologists to create CD and DVD burners, portable MP3 music players, and music-ripping software, secure in the knowledge that they couldn’t be sued for it.

[...] Republican Senator Orrin Hatch of Utah must have seen this coming. Hatch went out on a limb a few months back, proposing a federal law that would ban products that sought to “induce” copyright violations. In this space, I defended Hatch against the scorn of outraged technologists, who insisted the new law would have stifled the invention of the Apple iPod and other tech goodies.

But I changed my mind when Marybeth Peters, the chief of the US Copyright Office, praised the Hatch bill because it would undermine the Betamax case. If that happened, the next generation of digital marvels would be buried in an avalanche of injunctions, depositions, and discovery motions. No thanks, Marybeth. We’d rather learn to live with digital thievery.

Note that a letter in today’s NYTimes [pdf] parrots the current industry strategy — we’ll float IICA and, if you think it’s so bad, you tell us how to fix it so we can get what we want:

To the Editor:

“In-House Advice” (editorial, Aug. 17) correctly articulates the need for balance in our nation’s intellectual property laws. What is happening to copyright owners on today’s file-sharing networks, though, is a one-sided mauling in which millions of users illegally download music while loopholes in the laws allow those who facilitate the theft in the first place to escape accountability.

Congress appropriately wants to do something about this crisis. It makes sense to apply the “aiding and abetting” legal concept to the copyright laws - to get at those who deliberately immunize themselves from liability by passing on their liability to kids and other users.

If there are concerns about the Induce Act’s scope, let’s work constructively to address them. We, too, want to see technology flourish. But what of the legitimate online entertainment services forced to compete against stolen copies of the same product offered for free? That’s a decidedly unbalanced playing field.

Mitch Bainwol

Chairman, Recording Industry Association of America

Washington, Aug. 18, 2004

Related: Music stores lack excitement, executive says [pdf]

Music mogul Clive Davis has some advice for retailers looking to persuade music fans to return to traditional record shops: Make shopping more fun.

“You are faced with a major threat . . . competition from digital distribution,” Davis warned merchants and recording industry executives at a conference yesterday.

The chairman and chief executive of BMG North America compared the choice between buying music online or in a store to eating dinner at a restaurant or at home. “It’s fun to shop for music . . . and you’re not making it a fun experience,” he said. “You have got to make it exciting.”