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November 17, 2006

Inducement v. Safe Harbors [7:41 pm]

Universal Music Sues MySpace.com - pdf

Universal Music Group on Friday sued MySpace.com, claiming the online social-networking hub illegally encourages its users to share music and music videos on the site without permission.

In the lawsuit, filed in U.S. District Court, Universal Music contends MySpace, a unit of News Corp., attempts to shield itself from liability by requiring users agree to grant the Web site a license to publish the content they upload to the site. Users, however, have no such authority over works they don’t own.

The Web site also ”encourages, facilitates and participates in the unauthorized reproduction, adaptation, distribution and public performance,” according to the suit.

The Reuters article contrasts MySpace with YouTube: Universal Music sues MySpace over music copyrights - pdf

[The lawsuit] follows several months of talks on music rights with News Corp.’s (NYSE:NWS - news) MySpace, which broke down late on Thursday, a source familiar with the discussions said.

It claims thousands of links to music from Universal’s biggest artists, including Jay-Z and Gwen Stefani, are widely available on MySpace, even ahead of their release to music stores. It estimated maximum statutory damages for each copyrighted work at $150,000.

Earlier on Friday, MySpace unveiled an enhanced copyright protection tool to make it easier for content owners to remove unauthorized material.

[..] In the case of YouTube, now owned by Google Inc. (Nasdaq:GOOG - news), Universal Music reached a licensing agreement to give the site and its users access to thousands of music videos.

Other entertainment companies have been reluctant to take legal action against the likes of YouTube and MySpace because of the potential promotional exposure such sites may give to their artists. MySpace says it has more than 130 million users.

News of Universal’s suit comes a day after News Corp. said Ross Levinsohn, the executive who led the $580-million acquisition of MySpace, had resigned from the company.

Later: FindLaw has the filing

Later - NYTimes full article - Universal Music Sues MySpace for Copyright Infringement

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A Look At Google As It Nears $500/share [6:52 pm]

Scaling the heights - pdf

Many investors question whether the sixfold rise in Google’s stock since it went public in August 2004 can be sustained. Some say Google may be one or two bad quarters away from the sort of spectacular fall common during the dot-com crash of 2000.

But just as many, if not more, expect the Mountain View, Calif.-based company to continue to gain power — and market value — in the next few years. It’s already worth more than Time Warner Inc. and Walt Disney Co. combined, and it’s more than four times as valuable as Yahoo.

That’s because the amount of traffic flowing through its Web services gives Google unparalleled insight into its market. Half of all search queries in the U.S. in September used Google, more than twice the volume of second-place Yahoo, according to research firm Nielsen/Net-Ratings.

Google uses that data as a weapon. Competitors such as Microsoft Corp. say Google has an advantage because it knows so much about the behavior of Web surfers and has relationships with so many advertisers, large and small.

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DoubleTwist [4:58 pm]

New software promises to unlock iPod, iTunes - pdf

The issue is the same for many music fans because Apple makes content bought from its iTunes online music store available only for its own products, while songs purchased from other online stores typically do not work on the market-dominating iPods.

[...] But this could soon change — because of a 22-year-old hacker who as a teen cracked the encryption on DVDs and now has developed a system compatible with Apple’s “FairPlay” copyright technology that allows iTunes music to play on other devices and gives iPod users access to other music stores.

“He imitated Apple’s system; he didn’t remove any copyright protections,” said Monique Farantzos, whose DoubleTwist Ventures plans to license the code to businesses. “He made a system that behaves in a similar way.”

Jon Lech Johansen has essentially created software that in a way tricks iTunes into thinking a competing device with the DoubleTwist code is an iPod, said Farantzos who predicted it could be available to consumers as soon as the beginning of 2007.

“What this means in practice is that competing (download) stores would be able to make their encrypted content compatible with the iPod, she said. “Hardware devices that have this code embedded could play iTunes content.”

DoubleTwist’s website asserts the following:

DoubleTwist Ventures focuses on the development of interoperability solutions for digital media and the reverse engineering of proprietary systesm for which licensing options are non-existent or impractical.

Indeed.

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