July 20, 2006

EFF Wins First Step In AT&T Wiretapping Case [6:08 pm]

Judge rejects US request on eavesdropping lawsuit - pdf

In a 72-page ruling, Judge Vaughn Walker rejected that request regarding a case that has highlighted the domestic spying program acknowledged by President George W. Bush.

“The very subject matter of this action is hardly a secret,” the U.S. District Court for Northern California judge wrote. “Public disclosures by the government and AT&T indicate that AT&T is assisting the government to implement some kind of surveillance program.”

“The compromise between liberty and security remains a difficult one,” he continued. “But dismissing this case at the outset would sacrifice liberty for no apparent enhancement of security.”

EFF case page; the ruling

Later: Judge Declines to Dismiss Privacy Suit Against AT&T

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Mixtapes and Marketing [1:49 pm]

Critic’s Notebook: Mixtapes Mix In the Marketing That Fuels the Hip-Hop Industry

Last week, when Johnny Cash topped the album charts with his posthumous CD, “American V: A Hundred Highways,” it was good news for his estate and bad news for record executives everywhere. Bad news, because the CD sold only 88,000 copies in its first week; that’s the lowest sales figure for a No. 1 album since SoundScan started keeping track in 1991. Put another way, Cash’s album would have to keep selling at that pace for half a year to tie the one-week sales record set by ’N Sync in 2000, near the end of the 1990’s CD boom.

But there is at least one CD market that still looks healthier than ever. Only one problem: that market doesn’t officially exist.

Mixtapes — unlicensed collections of new and unreleased hip-hop tracks, invariably distributed on CD’s, despite the name — continue to be an essential part of the hip-hop industry. These days they often seem less like shady contraband, circulated by samizdat, and more like vital extensions of slick marketing campaigns.

[...] “Southern Smoke 27” is a corporate-sponsored CD, even though you can’t legally buy it, which means that it’s probably also an endangered species; the era of major-label bootlegs can’t last forever. But then, mixtapes aren’t supposed to last forever. Like magazines, which they resemble in both price and energy, mixtapes are intended to be perishable. (Although the best ones, like the best magazine issues, hold up well.)

And despite their relentless hunger for novelty, mixtapes have always been a trailing indicator of the music industry. In the late 1980’s, as CD’s were booming, mixtapes were literally mixed cassette tapes. Now mp3’s are booming, and mixtapes are on CD. And you don’t have to be a nervous record executive, sweating over the latest SoundScan numbers, to know that no CD boom lasts forever.

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WaPo Business Press Columnist on RIAA Overreaching in XM Case [10:01 am]

A Sound Marketplace For Recorded Music - pdf

Here in Washington, there is nothing more amusing than watching business interests work themselves up into a righteous frenzy over a threat to their monopoly profits from a new technology or some upstart with a different business model. Invariably, the monopolists (or their first cousins, the oligopolists) try to present themselves as champions of the consumer, or defenders of a level playing field, as if they hadn’t become ridiculously rich by sticking it to consumers and enjoying years in which the playing field was tilted to their advantage.

A recent example is the political and legal attack mounted by the music-recording industry against the upstarts of satellite radio.

[...] Look, I’m still waiting for my kids to give me an iPod and teach me how to use it. My taste in music pretty much stopped with James Taylor. But if the goal here is to encourage innovation and competition in the market for recorded music, I can assure you that lawsuits and lobbying battles are a lousy way to go. The better strategy is to prune overgrown copyright protections, deregulate the industry and let the marketplace set prices and decide which companies and technologies and business models survive.

An online discussion (pdf) with the Washington Post columnist, Steven Pearlstein. Two exchanges:

Vienna: Steven:

Your column was a home run. The most important point in the article, in my opinion, is that in the past the industry has agreed to a royalty fee on recording equipment to cover the issue of consumers (you know, their customers) being able to record music for their personal use. It also should be pointed out that, in many cases, the reason you can’t buy certain music on a download site or on CD for that matter is that the record companies won’t release it. The artists usually has no say over the use of their own material. Maybe the RIAA should do something about that, but of course, then they’d have to sue a record label, instead of their customers.

Steven Pearlstein: When I spoke with the general counsel of the RIAA yesterday (yes, folks, I actually DO do reporting), I asked why the suit and all other materials put out by the association failed to mention the 1992 legislation that specifically grants royalties for the home digital recording machines, and why that was no relevant. Their explanation is that, as long as it is more sophisticated than a simple tape recorder that forces you to listen to everything you recorded every time, then its not a home audio recording device. They may be able to convince some judge of that, although I doubt it. But it certainly isn’t obvious from the plain meaning of the words involved. The unwillingness even to acknowledge the existence of the act is a pretty good tipoff that their legal position is actually quite weak.

[...]

Washinton, D.C. : Hi Steven,

I work at the RIAA, so I can’t say we loved your column. I won’t offer a line by line rebuttal but I did want to make one thing clear: we too think that satellite radio is a great thing. Both the music industry and XM and Sirius are partners. We agree with what many people have said in this chat.

The concern here is when a business tries to offer an iTunes or Rhapsody-like business model but not play by the same set of rules as those companies.

The music community been killed by piracy for the last 5 years (thousands of layoffs and enormous drops in sales), and here we have this nascent, exciting legal online marketplace that is offering real hope for the future. When businesses try to encroach upon that marketplace without playing by the same set of rules as others are, that’s when we take issue.

Steven Pearlstein: There’s nothing wrong with anything you said there, except your assumption that there is some clear bright line between a radio broadcast that can be taped, the Inno device, and a music download. Its all along a continuum of convenience and control, with a pure radio broadcast having the least convenience and control and a download service giving consumers the most. Should there be different rates for the different services along that continuum? Absolutely. So go and negotiate them in a free and open market. But please don’t suggest that XM, which is paying the royalties it thinks it is required to pay under the 1992 law, a pirate. If you really wanted to have the law clarified on this point, considering the unforseen changes in technology since 1992, you could have asked for an advisory opinion from the Copyright Office, or the FCC, or even asked for a declaratory judgment from the same court you visited in order to sue XM for what could be hundreds of millions of dollars. Your tactics are thuggish and abusive.

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Some Testimony To Look For [8:49 am]

Experts Differ About Surveillance and Privacy

Legal experts squared off before Congress on Wednesday about the National Security Agency’s domestic surveillance program, offering radically different views on whether changes in the law are needed to allow eavesdropping on terror suspects without violating Americans’ privacy.

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The Print On Demand Business [8:47 am]

Technology Rewrites the Book

The print-on-demand business is gradually moving toward the center of the marketplace. What began as a way for publishers to reduce their inventory and stop wasting paper is becoming a tool for anyone who needs a bound document. Short-run presses can turn out books economically in small quantities or singly, and new software simplifies the process of designing a book.

As the technology becomes simpler, the market is expanding beyond the earliest adopters, the aspiring authors. The first companies like AuthorHouse, Xlibris, iUniverse and others pushed themselves as new models of publishing, with an eye on shaking up the dusty book business. They aimed at authors looking for someone to edit a manuscript, lay out the book and bring it to market.

The newer ventures also produce bound books, but they do not offer the same hand-holding or the same drive for the best-seller list. Blurb’s product will appeal to people searching for a publisher, but its business is aimed at anyone who needs a professional-looking book, from architects with plans to present to clients, to travelers looking to immortalize a trip.

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The Escalation of the Design/Copyright Fight [8:33 am]

An example of the way in which the rhetorical battlefields are drawn: Looks are deceiving for a reason - pdf

THE case underscores an issue growing ever-more prevalent in the home furnishings world: The Rug Co., a London-based purveyor of couture carpets designed by the likes of Vivienne Westwood, Paul Smith and Diane von Furstenberg, has filed a lawsuit accusing New York retailer ABC Carpet & Home of selling budget knockoffs of the Rug Co.’s bespoke creations.

[...] Sharp’s lawsuit, filed in May in federal court in New York, accuses ABC of copyright infringement and unfair trade practices. ABC owner Paulette Cole did not return calls requesting comment, but Mitchell Falber, general counsel for the company, said the charges are without merit.

Whether or not the allegations are proven, industry experts said the lawsuit is yet another sign of designers’ escalating concerns.

[...] “It is a huge problem, and it is a changing problem,” said Susan Farley, an intellectual property lawyer based in Albany, N.Y.

Blame technological advances and a global marketplace in which overseas factories can within weeks whip up inexpensive knockoffs from a photograph. Some in the industry also say the proliferation of shelter publications and decorator TV shows has awakened in consumers a taste for sophisticated design but not necessarily the willingness to pay for it.

“Magazines do a page where they show the designs a high-end way, and then on the exact opposite page, they say, ‘This is how to get the look,’ ” said Eleanor McKay, former president of the Foundation for Design Integrity, an alliance of companies fighting knockoffs.

Some say the trend reflects the democratization of design. McKay has another analogy.

“Plagiarism, is what it is,” she said.

[...] In the fashion world, knockoffs are rampant in part because it is virtually impossible to copyright the shape and cut of fabric. But home furnishings designers can legally protect many of their creations because they can copyright patterns.

According to Rug Co. attorney Peter Jacobs, copycats respond by making slight variations in hopes of placing their products outside the reach of copyright laws.

“It won’t look like your design, but yet it will capture the feeling of your design,” he said. “And then you have a real issue of whether or not it is your design they are knocking off.”

[...] Jacobs said the company has spotted purloined patterns in stores across the country. In each instance, he dispatches a cease-and-desist letter.

[...] The Rug Co.’s Sharp said the lawsuit is part of a crusade.

“What I’m trying to do is really make a point,” he said. “We’ve made a decision that we’re not going to put up with it.”

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Owning Social Networking [8:12 am]

From BusinessWeek: Friendster’s Patent Possibilities - pdf

Friendster.com may be losing some of its “friends” to upstart MySpace.com. But the old-school social-networking site just got something that MySpace lacks: a patent on—you guessed it—social networking.

The patent, issued on June 27, refers to a “system, method, and apparatus for connecting users in an online computer system based on their relationships within social networks.” While that’s pretty general, it certainly covers the activities of the dozens of other social-networking Web sites that have sprung up since Friendster filed for the patent in June, 2003 (see BusinessWeek.com, 12/12/05, “The MySpace Generation”).

It’s not yet clear how Friendster will use the patent, which names original founder Jonathan Abrahms as the inventor. Friendster President Kent Lindstrom says the company is in the process of determining whether the site will be able to charge licensing fees. “Any kind of businessperson would say, ‘Hey, we’re going to prosecute this to the full extent we can and get every penny we can out of it,’ ” says Lindstrom. “But we do work in a community of businesses and don’t want to just cause trouble if there is no reason for it.”

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