Accused File-Sharer Can Challenge Music Industry’s Collection Efforts

A woman who was sued for allegedly sharing copyrighted music files over the Internet can proceed with two of her claims against a company retained by the Recording Industry Association of American to collect “settlements” from accused file-sharers, a federal judge in Seattle has ruled.

U.S. District Judge Ricardo S. Martinez, in an Aug. 22 ruling, allowed plaintiff Dawnell Leadbetter to amend two of her claims — for fraud and violation of the Washington Collection Agency Act — against Settlement Support Center LLC, which assists the RIAA in collecting money from people who have been sued for file-sharing.

Judge Martinez dismissed the remainder of the suit, which included claims by Leadbetter against her Internet service provider, Comcast Cable Communications Inc., for disclosing her identity to the RIAA. Leadbetter’s attorney, Lory R. Lybeck of Lybeck Murphy LLP in Mercer Island, Wash., said his client will appeal those portions of Judge Martinez’s ruling to the U.S. Court of Appeals for the 9th Circuit.

Google Takes On Copyright Laws

[M]any publishers’ remain wary. To endorse Google’s library initiative is to say “it’s OK to break into my house because you’re going to clean my kitchen,” said Sally Morris, chief executive of the U.K.-based Association of Learned and Professional Society Publishers. “Just because you do something that’s not harmful or (is) beneficial doesn’t make it legal.”

Priority Records v. Chan: RIAA Must Get Guardian Ad Litem Appointed for Suit Against 13 Year Old — i.e., no more suing parents? The case is Priority Records v. Candy Chan. RIAA then asked for the appointment of a guardian ad litem, which was denied.

Note that the orders make it abundantly clear that the court is not opposing the pursuit of the RIAA suits, only that the RIAA will have to file their cases against the actual infringers; Candy Chan, the mother of the child in question, was held to be an agent who obstructed the RIAA’s efforts to sue her child and, thus, is required to pay her own attorney’s fees, even though the court agreed that she should not have been the defendent in the case.

Much later: Slashdot’s RIAA Suit Rejected With Prejudice

Sony Looks for New Ways to Play [pdf]

Sony’s efforts to parlay its engineering and entertainment assets into compelling products and services for the Internet Age have yielded little to crow about. In particular, its online music store, downloadable movie service and digital music players have fallen flat in a market primed for new ways to play.

Sony’s difficulties highlight the challenges facing the entertainment industry as it tries to find its footing in an era when cheap digital technology gives consumers more power and choices. If the one company on the planet that produces movies, music and games as well as the devices that play them can’t figure out how to make them work profitably together, who can?

This week, Sony’s new chief executive, Welsh-born Howard Stringer, is expected to announce a shake-up at the 59-year-old icon. It’s the latest in a long series of efforts to generate fusion, not fission, from Sony’s creative and gadget-making units.

[...] Sony’s response to Napster and the skyrocketing popularity of MP3 files online was to play defense. It joined in the music industry’s unsuccessful efforts first to block MP3 players, then to handicap them with cumbersome anti-piracy technology. It also developed its own “digital rights management,” or DRM, software to limit copying of music files and deter piracy on portable music players.

Hoping to make this cumbersome software — called “Open Magic Gate,” or OpenMG — an industry standard, Sony put it into all its products that could play digital music files. “Otherwise,” Kimura said, “who will follow?”

Sony learned the answer: No one.

We can hope: Talking in the Dark

Is there a way to prevent such breakdowns in the future? In fact, disaster-preparedness experts and high-tech inventors are already developing the idea of blanketing cities with what they call a “WiFi mesh.” WiFi, of course, is the technology you may use at home or in a Starbucks to connect a laptop wirelessly to the Internet; a mesh is a vast, self-correcting network of WiFi antennas that could work together to provide crucial backup in a disaster.

[...] WiFi meshes elegantly dodge our phone system’s central problems. They’re low-power and ultracheap - and decentralized like the Internet itself, which was initially conceived to withstand a nuclear attack. You can use WiFi to build a do-it-yourself phone system that is highly resistant to disaster.

In Chicago, the Center for Neighborhood Technology, a nonprofit organization, hooked up dozens of households in the neighborhoods of North Lawndale and Pilsen with WiFi nodes that form a mesh. Each node can communicate with its neighbor a few hundred feet away; by cooperating in this fashion, they form an enormous bucket brigade, each passing the data signal along until everyone is sharing it. If one single household connects to the Internet, all the other households can instantly dip in. Best of all, the WiFi mesh can handle not only data but also phone calls - via the magic of “voice over IP,” an increasingly popular technique for transmitting conversation over the Internet. Should the local phone lines suddenly collapse, the residents of these neighborhoods can still make calls to one another using headsets attached to their computers. In essence, they are their own backup phone company.

[...] So why don’t cities build their own WiFi meshes to help cope with the next disaster? Scatter enough nodes on rooftops citywide, and then if the phone system collapses, there will probably be a surviving mesh strong enough to serve as a rudimentary backup. Connect even a single satellite uplink to the mesh, and the entire town remains linked to the outside world. Best of all, each WiFi node uses extremely little power - about 10 watts, barely a sixth of the average light bulb. Even if a city’s power grid fails, a car battery or solar panel could keep a node running for days or weeks, filling the gap while the phone companies rebuild their land-line and mobile-phone structures.

The Supreme Court’s Biggest Question

In his opening statement in the confirmation hearings, Senator Joseph R. Biden Jr. of Delaware suggested as much, when he traced the 20th-century court’s evolving notions of privacy, then posed pointed rhetorical questions to Judge Roberts about the future: Can a microscopic tag be implanted in a person’s body to track his every movement? Can brain scans be used to determine whether a person is inclined toward criminality or violent behavior?

“You will rule on that,” Mr. Biden said.

Kermit T. Hall, president of the State University at Albany and an expert on the Constitution, predicted that 30 years from now, a Roberts court would be judged by “the stands that it took with regard to the issues of individual personhood - for me, privacy - and the technological revolution.” There will be a range of issues, from the right of universities to peer over the shoulders of students sharing computer files to new pregnancy-ending technologies and life-preserving treatments that might make abortion as it is now understood moot, but even more troubling to some.

If Yahoo! is willing to sell out to maintain a Chinese presence, how long will the US cellphone position vis a vis cell porn going to last? Ring Tones, Cameras, Now This: Sex Is Latest Cellphone Feature

With the advent of advanced cellular networks that deliver full-motion video from the Internet - and the latest wave of phones featuring larger screens with bright color - the pornography industry is eyeing the cellphone, like the videocassette recorder before it, as a lucrative new vehicle for distribution.

[...] The major American cellular carriers have so far been adamant in their refusal to sell pornography from the same content menus on which they sell ring tones and video games. But there are signs that they may soften their stance.

The cellular industry’s major trade group is drafting ratings for mobile content - akin to those for movies or video games - signaling that phones, too, will be a subject of viewer discretion.

Hollywood Unites in the Battle to Wipe Out Movie Pirates

The six major Hollywood studios, hoping to gain more control over their technological destiny, have agreed to jointly finance a multimillion-dollar research laboratory to speed the development of new ways to foil movie pirates.

The new nonprofit consortium is to be called Motion Picture Laboratories Inc. - MovieLabs for short - and will begin operation later this year. According to Hollywood executives involved in its establishment, MovieLabs will have a budget of more than $30 million for its first two years. The idea arose out of Hollywood’s contention that the consumer electronics and information technology industries are not investing heavily or quickly enough in piracy-fighting technology.

The lab is modeled after CableLabs, which since 1988 has spearheaded pivotal innovations in the cable television industry - hastening the adoption of fiber optics, cable modems, telephony and digital video. Hollywood’s version will begin with a more modest mandate, said Dan Glickman, chairman of the Motion Picture Association of America. It will focus principally on piracy prevention, though it will be given some flexibility to expand its mission later, he said.

Of course, it helps if you actually distribute the licensing fees that are collected: For Hollywood Writers, a Whiff of Unclaimed Foreign Gold

Inquiries through the guild’s less-than-prominent search mechanism show that the union is holding money for all of them as “undeliverable funds” - a substantial part of which come from so-called foreign levies collected from countries that tax videocassette sales or rentals or use other devices to compensate copyright holders for the reuse of their work.

According to guild officials, about $6 million had been classified as undeliverable as of April, and as much as 40 percent of an additional $18 million then held in trust was expected to eventually fall into that category.

How that unclaimed treasure piled up at the Writers Guild - and whether the guild is doing enough to find the rightful owners, many of whom are not members - has become the latest controversy roiling a Hollywood union that in the last two years has weathered strife over its screen credits arbitration process and the resignations of two presidents under pressure.

[...] Unlike television residuals, which producers and studios have been obligated to pay since the 1950’s, foreign levies stem from VCR, DVD and Internet technology. While American viewers can tape programs from their television sets free of charge, in other nations people pay taxes like one on blank videocassettes and DVD’s, or assessments on cassette rentals so the copyright holders can be compensated.

It is this revenue into which the three Hollywood guilds began tapping as early as 1990, on behalf of members and also of others who had a stake in films but did not belong to the unions. Thus far, Mr. Hadl said, he had been able to extract income from a dozen nations and is negotiating with three more: Belgium, Sweden and Romania. Latvia and Lithuania may be next.

“This is a great program,” he said. “They send us money, and we send nothing back.”

Think of it!

Grokster in talks with Mashboxx: WSJ [pdf]

File-sharing service Grokster Ltd. is in talks to be acquired by Mashboxx LLC, which is attempting to establish a legal peer-to-peer music company, the Wall Street Journal reported on Monday.

Financial terms of the deal under discussion could not be learned, the newspaper said, but Grokster itself is expected to have little or no value.

Instead, Mashboxx would likely share a portion of any future revenue Grokster generates with Grokster’s current owners, the Journal cited people familiar with the matter as saying.

It said the talks are a sign that file-sharing companies like Grokster are under pressure to join the mainstream music industry.

Supreme Court decisions have a way of doing that….

Later: LATimes’ File-Sharing Services May Reform Themselves [pdf]

How long do you expect that this will go unremarked by the MPAA, et al? (Remember, the publishing industry is still trying to get rid of the “first sale doctrine” in books.) Peerflix DVD exchange gives old discs new life [pdf]

Launched by two friends in Menlo Park, California, Peerflix went live a year ago last summer and has grown to 40,000 users in the six months or so that it has been widely available.

Peerflix is a trading platform that asks users to make lists of DVDs they want and DVDs they want to get rid of, then matches “wants” with “haves” for 99 cents a trade.

The company provides a mailing label with a tracking number and shipping envelopes. Users must pay postage.

Each movie title is assigned between one and three “Peerbux,” based on their desirability. Users rack up Peerbux each time they ship a movie, and can then use their loot to purchase movies from other users. Or they can buy Peerbux for cash to get the cycle started.

Earlier posting; related Slashdot link: Authors Guild To Members: De-link Amazon.com

Later, in the LATimes: Watch it and then swap it [pdf]

Virtual Games Create A Real World Market [pdf]

For a year and a half, Tod Kellen roamed the universe in the online computer game Star Wars Galaxies, living a fantasy life as a successful Jedi knight. Last week, Kellen decided the game was stealing too much time from his real life as a salesman for a chain of Wisconsin funeral homes, so he took extreme action: He auctioned off his fictional alter-ego on eBay.

[...] Kellen’s auction is just one example of how increasingly popular online role-playing games have created a shadow economy in which the lines between the real world and the virtual world are getting blurred. More than 20 million people play these games worldwide, according to Edward Castronova, an economics professor at Indiana University who has written a book on the subject, and he thinks such gamers spend more than $200 million a year on virtual goods. [...]

[...] As such items gain value, real-world problems are creeping into the virtual world. In China this year, a man was stabbed to death for selling a virtual sword that didn’t belong to him. In Japan this summer, police arrested a student for creating a software hack that killed and robbed other characters in Lineage II, a game with nearly 4 million subscribers worldwide.

After Hurricane Katrina, the operators of EverQuest II assured more than 13,000 members in the Gulf Coast region that their virtual property would be protected and preserved until they could resume playing.

Before today’s emergence of TimesSelect, we got this on Sunday - a recapitulation of a theme - and a warning to those who seek to “fix the Internet” outside of China: Building the Great Firewall of China, With Foreign Help

America has a bipartisan human rights policy in China. It is called trade. The idea is that Western companies will bring Western values - especially when they develop the Internet, supposedly an unstoppable force for openness. But Mr. Shi’s fate is the latest piece of evidence that it’s not working out that way.

China now has more than 100 million Internet users, more than any nation but the United States. But as the Internet booms, China is growing more politically closed. Its government has used the Internet masterfully as a steam valve, allowing Chinese to participate in a world that is modern in all senses but one. A controlled Internet may seem like an oxymoron, but China has one. Sophisticated filters block access for users in China to ideas about democracy, human rights, Taiwan, Tiananmen and other sensitive subjects. Type in “democracy” on a search engine in China and you get a limited choice of government-approved sites, or nothing at all, or a warning that the word is prohibited. If you use one of these words in an e-mail message, chat room or blog, you will be censored, and possibly arrested.

American companies like Microsoft and Cisco have all sold China security tools and firewalls that China has turned into political controls. The companies argue that it is not their fault if China misuses standard politically neutral technology. They are right, but many foreign Internet companies in China have gone beyond neutrality. Some, including Yahoo, signed a pledge of “self-discipline” in 2002, promising to follow China’s censorship laws. Many Internet portals actively censor their Chinese Web sites.

Snitching on a client to totalitarian police is still another category of bad behavior, a move that should shrivel the keyboard fingers of Yahoo users everywhere.

The copyright challenge in China - a story with an interesting contradiction at its heart; companies can’t afford not to be in Chinese markets, yet they “lose” money to IP infringement. Given the history of emerging economies, including our own, when it comes to IP, it’s surprising that they haven’t adjusted their business plans accordingly.

Signs of China embracing global market rules abound, from Beijing’s decision to loosen its currency’s peg to the dollar to the willingness of Chinese companies to pursue acquisitions abroad.

But one thing never seems to change, and it’s as obvious on street corners today as it was six years ago. In 1999, when “Star Wars Episode 1–The Phantom Menace” debuted, it was quickly pirated on DVDs that sold throughout China for next to nothing.

[...] For movie executives, those DVDs drove home the fact that their ongoing fight against counterfeiters has basically made no headway. Frustrated, Motion Picture Association of America president Dan Glickman recently raised the prospect of a push for action at the World Trade Organization.

[...] The new, harder line says much about the level of exasperation among foreign companies in China. They can’t afford to stay out of such a large and potentially lucrative market. They’re well aware they face IP theft there. But the extent of piracy–which continues to escalate, according to a 2004 white paper by the American Chamber of Commerce in China–still catches many off guard.