Company Wants To Patent Automated Pay-Up-Or-We-Sue Pre-Settlement Letters For File Sharing
from the by-a-cigarette-company? dept
Well, well, well. The latest story about a "solution" to the "problem" of piracy has an interesting twist to it. A company named Nexicon, claims that it's about to launch an automated piracy tracker/payment collector. It says that it's able to watch various file sharing systems, tracking who's sharing and downloading unauthorized files -- and then sends them an automated letter demanding they pay up, including a "convenient" one-click payment system where you can settle up via your credit card or PayPal. Even better, the company claims that it's trying to patent this method, which is hardly new or unique (and, you have to wonder if Nexicon is paying Amazon a license for using "one-click" payments -- as the company even seems to brag that it copied Amazon's one-click solution).There are plenty of questions raised by this. First, if it's actually put into use as described, it would be the first time we see the industry attempting to target downloaders as opposed to uploaders. All of the various lawsuits and pre-settlement letters have always targeted those who share the unauthorized content. But the article claims this will go after downloaders (though, it's not entirely clear how they'll know who actually downloads the file). Then, of course, there's the whole extortion question of demanding payment to avoid a lawsuit -- especially when the actual evidence may be rather flimsy.
As for the patent application (which a casual search did not turn up), it's hard to see how copying the same strategy that's been used for years by the recording industry, merged with the already-questionably-patented Amazon 1-click method is somehow patentable.
Oh yeah, there are also some questions about Nexicon itself. Just last week the company announced a deal with YouTube to provide some audio fingerprinting technology -- at which point Wired pointed out the rather bizarre history of Nexicon. It started out as an online cigarette seller, that got sued for taking orders from kids, falsely advertising cigarettes as being tax-free and then (not surprisingly) failing to report taxes. Then there were the problems with the SEC over not filing its tax returns on time as well as questionable activities in some sort of reverse stock swap merger. Oh, and did we mention at one point the company was going to be a portal? These are the folks who are going to be popping up automated messages demanding you pay up for downloading a Frank Zappa tune?
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Filed Under: copyright, extortion, pre-settlement, scams
Companies: nexicon
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Automated Extortion
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patenting automated extortion
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Is this possible?
Finally, and I think most interesting, is the legal aspect. I am no copyright law scholar, so I am not sure what penalty there is for receiving infringing material. I don't have time to look it up right now, but I know copyright law covers distribution (uploading) of content, but what about downloading?
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Re: Is this possible?
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Automated Extortion
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is it really illegal to download?
And echoing Anonymous Coward, how can you find the person that did the download? An e-mail address gives no information about where the person is or even who it is. And if you ignore the extortion letter, how could they find you?
Anyway, from the book The Godfather "..lawyers can steal more money than men with guns." or some such.
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No quite accurate Mike / But a good BUSINESS MODEL
I seems to be using the FREE sharing services as a way of creating a BUSINESS MODEL for the Artists. Simply finding out who has downloaded the music for FREE and offer them a convenient way to pay. Why is this not a good BUSINESS MODEL?
"As early as next week, Nexicon is preparing to announce the debut of a service for musicians and music owners that will sort through billions of files from peer-to-peer and other file-sharing services as they are downloaded, identify those which are being downloaded illegally, and send notices automatically to the downloading party that they are breaking the law. As part of sending the notice, the service will propose a settlement that includes instant payment by Visa, MasterCard, PayPal or electronic check of the retail price of the file plus an administrative fee to cover costs."
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Re: No quite accurate Mike / But a good BUSINESS MODEL
I'm sorry, but a notice saying you are breaking the law and here's a way to settle is a pretty clear de facto threat to sue.
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Mike it's opposite of what your title says.
Nexicon maintains there will be no witch-hunting or bounty-hunting of illegal downloaders. Instead, the process will give content owners a chance to turn the downloaders into paying customers. According to Glines:
“We’re not looking to break the bank and sue individuals. We understand that these folks are the fans of these musicians. The content owners want to embrace the fans and want to connect with the fans. They just want to be compensated for the work that they have produced.”
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funny looks more like the problem in the solution to me.
"falsely advertising cigarettes as being tax-free and then (not surprisingly) failing to report taxes."
thats more like misleading advertising not false advertising, the cigarettes were income tax free after all.
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Strawman Article.....
How about we hold Mike to a bit higher standard of reporting?
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Re: Strawman Article.....
It says, quite clearly, that it will tell people they are breaking the law and offer a "settlement." That's not a friendly "pay if you wish" model. That's a threat.
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ok now the on tpoc coment
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The patent system is broke!
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Mike !
As to the phraseology, haven't you gone to the counter to "settle up" your bill at an eatery?
At best you could say they were using shrewd wording in their MARKETING.
Mike you read and report with the same "fairness" as Fox News.
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Re: Mike !
As I said, a notice that you're doing something illegal and offering to "settle" IS by definition, a threat to sue. No matter what the guy says.
As to the phraseology, haven't you gone to the counter to "settle up" your bill at an eatery?
When I go to a restaurant, I am not ambushed after the fact and told that I have broken the law and need to pay up to settle.
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Re: Re: Mike !
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Re: Mike !
There is a world of difference between "settle up" (your wording) and "settlement" (the wording used in the original article). The word settlement is undeniably a reference to a legal settlement for a court case.
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Looks like Mike is right to me
And how do you know the labels won't sue if you don't pay?
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Their first move is NOT to sue
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But what about entrapment? Don't they have to post something illegally to even receive the identifying data?
Not sure how this is going to play out but will be fun watching.
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Unlike Norm, who seems to be viewing this as a legitimate "business model", I see this as a blatant infringement on my new patented business method of automatically suing everybody for everything.
You're all on notice, bitches!
Though if you wish to avoid the hassle, you're welcome to go ahead and pay my settlement offer now.
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Re:
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Re: Norm
What name calling? My filing (in everyone's favorite Texas courthouse) is honestly titled "Dosquatch vs. all you bitches", just because the "Defendant" line wasn't long enough to list you all individually.
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Re: Re: Norm
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Re: Norm
I swear to God, your mom said that was you!
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Re:
Though, on the topic of the image in question, I feel it only fair to bring it on topic.
Reading the Fair Use blurb, along with the photographer/uploader's description which states that it was uploaded to illustrate the troll article only, I believe a case could be made that I'm infringing on the intellectual property of Russ, the manufacturer of the troll doll, and of Kateshortforbob, the photographer, as using the image to insinuate that you may be a troll is not a critique or discussion of troll dolls.
Does this make me worthy of a shiny extortion letter of my very own?
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Does it bother anyone here at all...
You all start jumping up and down about YOUR rights and how wrong it is to THREATEN or perhaps this is ENTRAPMENT or INFRINGEMENT, but how about artists?
You then say "they need to get a better business model!"
But it would appear that the only business model many of you want includes you always getting their music to your computer for FREE and you not getting HASSLED about it.
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Re: Does it bother anyone here at all...
See, Norm, that actually depends on when it was recorded and how it's licensed. Long enough ago, and the music has fallen into public domain and may be copied and shared as much as you possibly can. Similarly, there are works released to the public domain, or released under Creative Commons licenses, where this is also perfectly acceptable.
Even in cases where it is not, copyright infringement is not theft.
If I take a document from your desk, you no longer have it and I do. You have suffered a real loss. That is theft.
If I take a wand scanner and wave over a document on your desk, you still have your original - untouched - and I have a copy as well, about which you would not even know unless you were told. You have NOT suffered a real "loss". That is infringement.
But, even so, all of that aside, it is "illegal" only because there is a "law". Law only has power when backed by the government, the government is of, by, and for the people and (supposedly) does our will. Therefore, "law", as such, should represent that which is held to be of merit and enforcable by "We, The People". And, if you hadn't noticed, currently we the people think the copyright and patent systems are a wee bit broken.
When the vastness of popular opinion is against a law, or any action of government, it is the DUTY of the citizens to ignore it. This is called "Civil Disobedience", and is one of the founding principles of the USA.
So, you see, we're only doing our jobs.
I have yet to encounter anybody in any serious business that advocates threats, hassles, and extortion as a "better business model" except, perhaps, the Mob. But even THEY won't go after 10 year old little girls and their grandmothers.
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Hey Norm, Please read this...
From the www.getamnesty.com homepage:
"ADVANTAGES OF SETTLING
* Avoid possible criminal charges
* Avoid a costly civil lawsuit
* Peace of mind knowing copyright owner won’t sue you
* Avoid disconnection from your ISP
* No longer stealing copyrighted material
RISKS OF NOT SETTLING
* Copyright owner sues you in civil court for up to $150,000 per infringement (one file)
* Department of Justice sues with maximum fines of $250,000 per infringement and/or 3-5 years in prison
* Your ISP no longer provides Internet connection
* Bad conscience
GetAmnesty.com provides a way for copyright infringers to "clear their record" by settling with the copyright owner who employs GetAmnesty.com for their copyright enforcements, to better help infringers avoid expensive civil lawsuits and possible criminal charges.
DID YOU RECEIVE
AN INFRINGEMENT NOTICE?
SETTLE HERE NOW
Official PayPal Seal
Terms of Use | Privacy Policy
© 2006-2007 Nexicon, Inc. GetAmnesty.com is powered by Nexicon, Inc."
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Re: Hey Norm, Please read this...
Now that we've established that Nexicon is evil, Record Companies that charge for music are evil, bands who don't want us to share/download for free are evil...
...is there anything to be said about the folks who share music illegally and the artists who are trying to get some money for their art?
Or is that a taboo subject here?
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Re: Re: Hey Norm, Please read this...
, but no need to worry about any real evil from Nexicon, they have been attempting to do get amnesty for the porn industry since last sept...to no avail. this is just a desperate penny stock pump job...they are out of available shares and need to pump the stock up more before they can dilute it again.
the YouTube 'deal' is the same any copyright holder can get here with a few clicks: http://www.youtube.com/t/copyright_program
its all a ham with an s
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Re: Re: Re: Hey Norm, Please read this...
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Re: Re: Re: Re: Hey Norm, Please read this...
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Re: Re: Hey Norm, Please read this...
Exaggerate much, Norm? How to you go from an article that points out the questionable nature of automated settlement offers for downloaders to record companies and bands being evil?
...is there anything to be said about the folks who share music illegally and the artists who are trying to get some money for their art?
Or is that a taboo subject here?
The illegality of "sharing" music is discussed quite often on TD. You'll get and earful if you make the mistake of calling it theft instead of copyright infringement, but it's discussed all of the time. In fact, one of the most common themes on TD is that in spite of music sharing being illegal in many cases, it can actually be part of a money-making strategy for the artists and even the record companies. So no, it's not taboo.
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Really?
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I'm calling BS
Although Mike is serious to report about this and the company is probably putting out a serious press release, this whole thing is giving off "bull***" vibes.
From suing downloaders (which is a new one) to connecting a valid e-mail to the downloader AND sending them a threating e-mail AND hoping that e-mail gets through the spam filters AND hoping the person actually pays AND...
I get 10-20 e-mails a day from companies claiming to be from the UK lottery board or a Nigerian embassy- what's one more e-mail asking for money? Yep: right in the spam folder, reported to spamcop, link reported as phishing, etc.
And has anyone even checked to see if PayPal will accept money for extortion purposes?
Personally, I think this is a fake story designed to scare people off of the file sharing services. There are just too many holes to make this a viable plan or business model.
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Re: I'm calling BS
But, consider that it could be the beginning of a new form of Nigerian email scam.
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Downloading vs. Uploading
I have no doubt that they used the word "downloading", just as I have no doubt that they didn't actually mean "downloading" at all. There's no way to tell what someone is downloading unless they download it from them and if that's the case, then they obviously have permission to distribute the file, so no laws are being broken.
I'm sure it was an intentional mi-use of the word though. They want people to think downloaders are being targetted because they want people to be scared.
The second point that you're all missing is that their company deals with P2P networks and with the vast majority of P2P programs there's no way to download without uploading, so downloaders are uploaders. So if you're downloading, there's a chance they'll catch you uploading and that's what they'll sue you for.
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But none of you want to come up with any viable way that artists can be compensated for the music you download.
But because I ask such a question I'm a troll.
Because everyone wants to do it there should be civil disobedience action against the copyright law.
I'll bet if you spent hundreds of hours developing something original and wanted to have compensation for it, such as a program or music, and 50 people bought it, but they shared it and now 15,000 were using your program for FREE when it's not FREE - I wonder how you'd actually feel. Discouraged, frustrated, angry? Of course you'll all SAY that you wouldn't, but how many of you actually create original work?
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Re:
Assuming everyone is doing what you dislike is a bad assumption no matter what it is about.
I will not suggest draconian measures so that you will feel better about yourself.
Piss off.
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Re: Re:
As to "assuming", you seriously aren't suggesting that people aren't sharing movies and music in droves that they don't own the copyright are you?
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Re:
It isn't a white elephant...it gets discussed here all the time. Plenty of examples have been given, including real world situations where an artist has given away music to drive sales for concerts, merchandise, etc. That isn't the only business model, but it's one that some artists have found to be viable.
But because I ask such a question I'm a troll.
Reiterating the inaccurate "you people just want something for nothing" argument is certainly not a point in your favor...
Because everyone wants to do it there should be civil disobedience action against the copyright law.
And unfounded statements like these are definitely not helping your case. It has been repeated, often, that illegal activities are not being advocated. But there's nothing wrong with criticizing and discussing better alternatives to the present system.
I'll bet if you spent hundreds of hours developing something original and wanted to have compensation for it, such as a program or music, and 50 people bought it, but they shared it and now 15,000 were using your program for FREE when it's not FREE - I wonder how you'd actually feel.
The problem is that you're limiting your definition of compensation to direct sales. It should be fairly obvious that if 50 people paid for your program, 15,000 people are using it, and you're relying solely on direct sales of the software, then you've chosen a rather poor business model. That does not, however, mean that the people that have infringed on your software are somehow exonerated.
As has often been said in reference to both authors and musicians, the biggest problem is getting noticed. There are plenty of musicians that would be thrilled to have a large audience listening to their work whether the music was purchased or not. As your audience gets bigger, more opportunities to derive an income from that audience emerge.
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Re: Re:
Likely like me you often read Mike's articles and the comments after. And I have to say DanC that it's not often, at least in my memory, that a constructive conversation takes off concerning what I think is a legitimate issue for artists.
The gamut seems to run from f**k the RIAA (who by the way personally don't care for) to "it's the artists fault because..."
You yourself counter my illustration by saying relying on direct sales is a flawed idea.
I agree completely with what you are saying about artists getting noticed and income opportunities from that.
In this case I think it's a rather clever marketing and business plan to directly solicit those who have downloaded music. Although their does seem to be a vast difference in what the CEO of Nexicon said in the to what their written policies are.)
I just see the commenters as so virulent to anything that inhibits or restricts free downloading of copyright material.
Look at the comments in this article for instance
http://techdirt.com/articles/20080907/1602562186.shtml
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Re: Re: Re:
I also don't really think Nexicon's statement that it's not looking to sue people is really all that relevant. After all, the copyrighted material their automated system looks for doesn't belong to Nexicon, so the company itself doesn't really have anything to sue over. That doesn't mean Nexicon's clients won't file a lawsuit.
Looking over their site, this doesn't really appear to be anything more than a veiled "pay up or lawsuit", with Nexicon acting as the middleman. It doesn't honestly look to be all that different than what the RIAA already does.
Look at the comments in this article for instance
http://techdirt.com/articles/20080907/1602562186.shtml
I only noticed 3 or 4 comment that were particularly 'off' in the comment section, most of them being AC one-liners, and the other being your "author only wants free music" comment.
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Re:
We debate those aspects because they are pertinent. That you may disagree with the general direction of the debate is neither a dance nor an elephant in the room.
You asked nothing. Because you said 'BUSINESS MODEL' (emphasis yours) a good half-dozen times in an effort to win your point with quantity over quality of argument inspired me... though I never called you a troll. I only linked to a picture. And again, I was going for funny. You might want to check the oil level in your funnybone.
Something that is rare, unique, or difficult to construct has value. Mass production drives that value down. This is what Henry Ford did for the automobile. The product has utility, and is somewhat difficult to make, but the assembly line drove quantity up an difficulty down, making the per-item price much lower.
Music takes skill. That skill should be rewarded.
Say an hour's worth of live performance is worth $10,000 (what with equipment, all the band members, roadies, so on). If you're playing live, that's $10,000.
If you are instead in a studio, you still exert that hour's worth of effort, but now instead of only getting an hour's worth of utility from the effort, you can make endless reproductions at essentially no cost or effort. If they make two copies, to recoup their effort each is worth $5,000. If they make 1000 copies each copy is worth about $10 to recoup their effort. What happens when there are 10,000,000 copies circling the planet? What is the fair recoupable cost of each one, given that the band has still only put in that initial one hour of effort?
Mass production drives the value and cost down. The more of an item you produce, the closer market value comes to actual production cost. And, again, copies shooting across the internet are practially free of manufacturing cost.
Where do you expect the price should trend?
Furthermore, the entire concept of a musical recording as a saleable product is very, very recent. It's only been maybe the last 50 or 60 years. Before that, it was more of a novelty, and before that, there was NO SUCH THING as "recording". The Edison Phonograph was invented in 1877.
Oh, woe! A world without the ability to sell recorded music? How ever shall the poor musicians survive? Surely they'll starve, or music may even vanish forever!
You'll notice that was NOT the case. Travelling minstrels, live shows, house bands, royal composers, those who felt a need to express themselves musically found a way to be compensated. They will so again. The industry evolved to financially take advantage of recorded music, it will do so again as reproduction costs drop to zero.
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Re:
How about a real life working example of exactly this that I'm willing to bet you yourself are currently directly benefiting from?
Adobe Acrobat. Acrobat Reader is a nice piece of software, into which I'm sure Adobe poured thousands of hours in development. They give it away for free. They want you to use it, and share it with your friends. Why would they do this?
Because the more popular the READER is, the easier it is to sell the writer to those who want to publish such documents. Acrobat would not be remotely as popular as it is, if it even continued to exist at all, if Adobe had not made the product free.
This is called the "loss leader" model. It is well documented and functional, and if it didn't work then successful companies would not continue to use it.
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Re: Re:
The artists aren't given that choice nor are the programmers who's software is put onto the likes of Pirate Bay.
If an artist decided to give music away in order to get a following as a loss leader that would be similar to the Adobe example you brought up.
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Re:
Fine, then, how about a software company admitting that piracy benefits them even when it ISN'T their choice?
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Re:
And lest you miss it, the relevant quote is this:
"Although about 3 million computers get sold every year in China, people don't pay for the software. Someday they will, though," Gates told an audience at the University of Washington. "And as long as they're going to steal it, we want them to steal ours. They'll get sort of addicted, and then we'll somehow figure out how to collect sometime in the next decade."
They aren't eager about it, but even so they recognize that it is a benefit.
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Dan & DosS
I guess the trouble I have in the most basic form is that the mass production of the music, lowering it's value, is not the choice of the owner - just something that can be done.
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...but sue they must!!
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Can't patent it
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