March 30, 2006

MA Rep Weighs In On Net Neutrality [2:38 pm]

I got an email from Ed Markey’s office on today’s subcommittee hearing, pointing to his positions on the subject: Network Neutrality. From his statement at the hearing today:

In my view, rules ensuring network neutrality are indispensable.

I understand that there are those who argue that we should rely on mere network neutrality “principles,” or an imprecisely-worded FCC policy statement, rather than legally enforceable rules. Others will advise us to take a “wait-and-see” approach.

Yet we know from public statements from several industry executives that the owners of the broadband wires into our homes would like to start charging fees to Internet content providers. In other words, they want to artificially constrain the supply of Internet-based content and services to high-bandwidth consumers. This represents nothing more than the imposition of a broadband bottleneck tax on electronic commerce. Such a bottleneck tax for accessing consumers will undoubtedly have a chilling effect on investment and innovation.

There are some out there who will inevitably ask the question, “But why shouldn’t Google pay?” Google certainly has a very large market cap and presumably could afford to pay. But that is precisely the wrong question to ask. The question to ask is whether Larry Page and Sergey Brin could have afforded to pay circa 1998, whether Chief Yahoo Jerry Yang could have afforded to pay a broadband behemoth circa 1995, whether Marc Andreesen, the founder of Netscape, could have afforded to pay anyone, anything, circa 1994.

If there is an entrepreneur in some proverbial garage somewhere today, whose idea is new, whose product is still in “beta,” their dreams are just as real and valid as Larry’s, Sergey’s, Jerry’s, and Marc’s were an Internet-generation ago. We should be doing everything we can in public policy to ensure that this successful Internet model continues to drive innovation, economic growth, and job creation.

Instead, the proposed bill before us effectively condones online discrimination and then ties the hands of the agency from promulgating any guidelines to address it. The Barton bill actually says the FCC that it can never adopt rules to protect the Internet experience for the millions of entrepreneurs and consumers who rely on it.

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Expanding the Scope of Copyright [9:27 am]

One of the great examples of domains where innovation (?) is vibrant despite the absence of formal copyright protections is up for reconsideration, apparently: O.K., Knockoffs, This Is War

Designers like Diane Von Furstenberg, Narciso Rodriguez and Zac Posen have been journeying there to lobby for copyright protections like those governing books, music and other creative arts. Mr. Posen was in Washington on Tuesday with Steven Kolb, the executive director of the council, who said a bill could be introduced in Congress as early as today by Representative Bob Goodlatte, a Virginia Republican.

[...] Copyright law protects a creator of original material — like a songwriter or screenwriter — for her life plus 70 years. But clothing is not protected. In 1998 Representative Howard Coble, a Republican from North Carolina, introduced a revision to the copyright law that classified boat hulls as a design protected for 10 years. Citing the boat hull statute, fashion designers are asking for similar protection for clothing designs for three years.

Hypothetically that would mean that Allen B. Schwartz, the owner and designer of ABS, the leading brand in the $300 million business of Oscar knockoffs, would be restricted to selling copies of the embroidered beige Elie Saab gown worn by Halle Berry in 2003, not the latest Vera Wang yellow butterfly ruffles for Michelle Williams.

“That is the most ridiculous thing,” Mr. Schwartz said. “There is no such thing as an original design. All these designers are getting their inspiration from things that were done before. To me a spaghetti strap is a spaghetti strap, and a cowl neck is a cowl neck.”

Well, good luck with that argument; it hasn’t really worked in the past.  Here’s a little more from the article:

The reason clothing design is not protected under copyright or trademark law in the United States is that it is considered foremost as a utilitarian item, not an artistic expression or scientific invention. (Logos, however, and some design signatures — like the three stripes on Adidas track suits — are protected from copying under trademark statutes.)

But the designers’ trade group argues that the legal principle exempting fashion from copyright protection — a 200-year-old idea that useful objects should be unregulated to encourage the growth of industry — is outdated in this era of sophisticated mass copying.

“The whole underpinning of that 200-year-old law of functionality was to promote creativity and innovation,” said Alain Coblence, a lawyer hired by the Council of Fashion Designers and by fashion trade groups in Paris and Milan, which also promote the legislation. “Yet the situation is exactly the reverse because designers now must ask what is the incentive to innovate if you know your creation is going to be stolen within days and your designs are going to be used before you have a chance to use them for yourself?”

Although designers have occasionally pursued cases of design piracy in court, only the most egregious cases have been successful. In 1980 a federal appellate court held that a pair of belt buckles by the accessories designer Barry Kieselstein-Cord were not ordinary buckles but had reached the level of creative art. (A dissenting judge argued, “Innovations of form are inseparable from the more important function they serve — helping to keep the tops of trousers at waist level.”)

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Cato Institute Report on DMCA Failings [8:53 am]

Via Copyfight: Circumventing Competition: The Perverse Consequences of the Digital Millennium Copyright Act

The courts have a proven track record of fashioning balanced remedies for the copyright challenges created by new technologies. But when Congress passed the Digital Millennium Copyright Act in 1998, it cut the courts out of this role and instead banned any devices that “circumvent” digital rights management (DRM) technologies, which control access to copyrighted content.

The result has been a legal regime that reduces options and competition in how consumers enjoy media and entertainment. Today, the copyright industry is exerting increasing control over playback devices, cable media offerings, and even Internet streaming. Some firms have used the DMCA to thwart competition by preventing research and reverse engineering. Others have brought the weight of criminal sanctions to bear against critics, competitors, and researchers.

The DMCA is anti-competitive. It gives copyright holders—and the technology companies that distribute their content—the legal power to create closed technology platforms and exclude competitors from interoperating with them. Worst of all, DRM technologies are clumsy and ineffective; they inconvenience legitimate users but do little to stop pirates.

Fortunately, repeal of the DMCA would not lead to intellectual property anarchy. Prior to the DMCA’s enactment, the courts had already been developing a body of law that strikes a sensible balance between innovation and the protection of intellectual property. That body of law protected competition, consumer choice, and the important principle of fair use without sacrificing the rights of copyright holders. And because it focused on the actions of people rather than on the design of technologies, it gave the courts the flexibility they needed to adapt to rapid technological change.

PDF link to the full report

Related, at Slashdot: DRM and the Myth of the Analog Hole

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eBay Patent Case Session Fallout (update) [7:28 am]

The various summaries and discussions of yesterday’s Supreme Court hearing:

  • Washington Post: High Court Considers EBay Case On Patent [pdf]

    Some patent experts said yesterday that eBay v. MercExchange, No. 05-130, is likely to spur action on Capitol Hill. A House bill introduced by Rep. Lamar S. Smith (R-Tex.) would essentially back software companies’ interests by allowing permanent injunctions only in cases in which the patent holder could prove it would suffer irreparable harm without one. But the bill is on hold, stymied largely by opposition from the pharmaceutical industry.

    “I think the biggest issue this is going to result in is a more urgent push for patent reform” among legislators, said Brian Ferguson, a patent attorney in Washington who did not represent either side in this case. “There is a concern that the patent office is overwhelmed and it isn’t doing as good a job as it could” in reviewing existing technologies or issuing patents in new technology areas, he said.

    The Bush administration, faced with a division within the business community, weighed in on MercExchange’s side. But its cautious brief urged the court to address the specific issues in the case, instead of trying to address “general policy concerns respecting potential abuse of the patent system.”

    [...] The district judge reasoned that, among other things, MercExchange was not practicing the patents and was willing to license its technologies to other companies.

    The judge also cited “growing concern over the issuance of business-method patents” as a reason that an injunction would not be in the public interest.

  • Others to be added as found….

The appellate court decision: MercExchange v eBay errata

MercExchange has a page of the district court orders.

Later: Something a little more significant? Reuters says EBay: patent office dismisses MercExchange claims [pdf]

EBay said it learned on March 27 that the Patent Office had dismissed arguments raised by MercExchange to a prior rejection of that company’s claims.

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ARGs - Alternative Reality Games and Viral Marketing [7:12 am]

New games; and blurring the line between entertainment and marketing online: These players phone it in [pdf]

To the casual eye, the clothes’ graphics look like the latest in urban cool, but step a little closer and you’ll see words embedded in the designs. Each word translates into a secret code that when typed into the Edoc website (edoclaundry.com) unlocks a video that plays into a larger story. It’s a game — piece together enough clues, and the players solve a murder mystery.

Landing in boutique stores and online outlets last week, Edoc’s shirts, caps, wallets, belts and backpacks are the newest permutation in alternate reality games, or ARGs — games that blur boundaries between the virtual and real worlds using websites, blogs, instant messaging, e-mail, telephones, fax machines and more to bring players together in solving a multilayered puzzle. Conceived as marketing tools for movies, video games and other products, some ARGs are now becoming commercially viable in their own right.

It’s been five years since the first ARG sent players on a story-based scavenger hunt both on- and offline. Since then, thousands have joined in, and dozens of games have come and gone, doling out clues on the Web and sending players into the real world to pick up ringing pay phones, play poker in cemeteries and engage in acts of derring-do.

[...] “Our society’s become increasingly adept at filtering out all the marketing messages they’re barraged with constantly,” said [42 Entertainment's Jordan] Weisman, whose company plans to branch out into non-product-pushing ARGs later this year. “Our premise was, maybe it’s time to whisper as opposed to scream. If you’re providing entertainment and they enjoy it, then they’ll seek it out as opposed to filter it out.”

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