Must Read: CCIA Sets US IP Czar Straight On Intellectual Property

from the wow dept

A few days ago, I posted the letter I submitted to the White House IP Czar, Victoria Espinel, concerning her request for comments on the strategic plan for IP enforcement. It was a bit troubling that the questions asked in the RFC focused solely on increased enforcement and the amount of harm done by infringement -- as if it never even occurred to folks that increased enforcement might not be best for culture or the economy, and that there may also be mitigating benefits to infringement. I tried to make that clear in my filing, and it was great to see folks like Public Knowledge and the EFF submit comments as well -- but the really wonderful filing came from the NetCoalition and CCIA, which we discuss below. First, though, it's worth noting that the entertainment industry also made its demands...

The RIAA, MPAA and the Screen Actors Guild teamed up to submit their own filing, and as the LA Times noted "it's a doozy." Consider it a wishlist of protectionist, anti-consumer, anti-innovation policies, basically demanding that the White House prop up their own businesses, because of their unwillingness to adapt:

Among other things, the "creative community organizations" urged that:

• The federal government encourage ISPs to use, and companies to develop, monitoring, filtering, blocking, scanning and throttling technologies to combat the flow of unauthorized material online;
• Copyright holders be able to combat infringement by making a database of their works available to service providers, rather than submitting individual takedown notices. And once a work is taken down, service providers should be expected to employ "reasonable efforts" to prohibit users from uploading or even linking to them again;
• Copyright owners be able to block unauthorized streams of live broadcasts without going through the formal notice-and-takedown process;
• The federal government press search engines, social networks, hosting companies, domain name registrars and online advertising and payment networks to cooperate with copyright holders on efforts to combat piracy ("Encouraging these intermediaries to work with content owners on a voluntary basis to reduce infringements, and assuring these intermediaries that such cooperation will not be second-guessed, should be top priories that call for the personal intervention of senior government officials if necessary.");
• A federal interagency task force work with industry to interdict prerelease bootlegs of Hollywood blockbusters and crack down on U.S. services that assist foreign piracy hotbeds;
• States adopt "labeling laws" that "defined unauthorized online file sharing and streaming as a felony," giving state and local law enforcement jurisdiction to go after unauthorized copying online;
• States use consumer protection laws to go after file-sharing sites that "expose consumers to intrusion, viruses and revelation of personal data."

You can read the entire entertainment industry filing below, but be ready to laugh at the highly questionable claims:
IPEC Filing: RIAA, MPAA, SAG However, if you want read something enjoyable you should check out the incredibly long, but ridiculously thorough and brilliant filing from the NetCoalition and CCIA. It's over 100 pages long, but every last page is worth reading. It says everything I wish I could have said in my letter, but does so in excruciating detail, with tremendous sources to back up each point. It kicks off by going through a detailed list of "fallacies" found in the request for comment itself, as well as in the typical complaints from the entertainment industry, including:

• The objectivity fallacy: highlighting how the studies from the entertainment industry that pretend to be objective are anything but -- and tend to greatly, if not ridiculously exaggerate the problem.
• The lost sale fallacy: of course, demolishing the industry's desire to pretend that each act of infringement represents a "lost" sale.
• The causation fallacy: showing how the entertainment industry always places the blame for its problems on infringement, even if there's little evidence to support that any troubles in the industry were due to infringement. Instead, the filing points out that there are many, many reasons why some companies in the industry have run into trouble that have nothing to do with infringement.
• The innovation fallacy: dismantling the industry's claim that infringement destroys jobs and discourages innovation, noting that it is historically evident that competition breeds greater innovation than gov't-backed monopolies, which can be shown to create economic rents and dead-weight loss.
• The industry size fallacy: a favorite of the entertainment industry, which bundles in all sorts of unrelated industries that just sorta barely are touched by intellectual property (furniture!) to make the industry seem huge, in an effort to imply the importance of extra protectionism. But the filing points out how flawed the methodology is, pointing to the CCIA's own (awesome) use of the same methodology to show that exceptions to copyright contribute more to the economy than the "copyright industries." This part also points out that if the industry really is so big, then it should be well positioned to withstand any challenges...
• The equivalence fallacy: picking apart how the entertainment industry likes to lump all forms of infringement into one "evil" bucket, without ever acknowledging that there are very, very different types of infringement, and understanding the differences is key in determining actual harm and any "enforcement" strategies.
• The theft fallacy: once again reinforcing that infringement is a different beast than theft, and even the Supreme Court recognizes this... though the entertainment industry seems unwilling to admit it.
• The silo fallacy: elegantly highlighting how the industry loves to talk up losses in CD sales, while totally ignoring how other parts of the business, such as live performances, continue to grow. It also highlights how, despite CD and DVD sales dropping, the number of albums and movies being made has vastly increased.
• The relevance fallacy: laying out the argument that, even if you accept the industry's claims of losses, they're often submitting aggregate data that includes a variety of different factors and information that may be distorting the direct impact on specific areas, and setting policy based on such aggregate data could be quite damaging.

Seriously, the entire document is wonderful. It feels like it should be published as a book, and should become required reading for anyone ever writing about, litigating or setting intellectual property policy. You can read the whole thing below:
IPEC Comments: CCIA & NetCoalition Of course, after going through the fallacies, the filing gets to specific policy recommendations, wisely going back to the ProIP bill's language, highlighting how the purpose of the IP Czar is really supposed to be about true criminal infringement and counterfeiting, and arguing that any enforcement should be focused on those issues, rather than stepping in on civil disputes in what is, effectively, a business model problem. The filing also points out that diplomats enforcing US IP policy around the world are often uneducated in the balance of interests that IP law is supposed to hold, and frequently just push for greater laws and restrictions, without understanding the harm it causes. Along those lines, the CCIA takes the time to express its grave concerns over ACTA -- noting its broad scope and potential harm both in the US and abroad.

The conclusion of the document sums up everything nicely:

The spread of the global Internet has facilitated the unauthorized and at times infringing distribution of certain forms of intellectual property, especially copyright-protected content. The ease and minimal cost of copying makes meaningful enforcement costly and difficult. This widely recognized problem has stirred passionate debate about how the problem should be handled by copyright owners, the government, and third parties. This problem is amplified and complicated by the importance of both the content and Internet industries in the U.S. export market, as well as and demands for the U.S. to assert leadership at the international level. This creates a danger of rigid, oversimplified policies toward infringement that (a) make little sense in other intellectual property domains, and (b) undermine the perceived legitimacy of the global intellectual property system.

The solutions to the real and perceived problems the disruptive technology of the Internet has caused for certain entertainment and luxury goods companies cannot be solved by greater government intervention or by shifting more costs to Internet companies. Rather, the solution lies in the evolution of business models to adapt to the new realities of the marketplace.

Seriously. This is an absolute must read, start to finish.

Filed Under: enforcement, fallacies, intellectual property, ip czar
Companies: ccia, mpaa, netchoice, riaa, sag

Hollywood Continues To Make Up Facts; AP Continues To Parrot Them

from the evidence-please? dept

So, the MPAA's latest target for crackdowns on camcording appears to be India. You may remember that it went through a series of questionable claims about camcording in Canada and the US, where if you looked at the math, none of it added up. Apparently, the same thing is happening in India and the reporters at the Associated Press don't feel the need to investigate bogus Hollywood numbers. In this AP report about the MPAA's new "crackdown" on camcording in India, the reporter says that camcording is to blame for 90% of "pirated" movies:

A year in the making, the coalition to fight film piracy in India will work with movie theaters to crack down on camcorder piracy -- the source of 90 percent of all pirated DVDs -- with police to tighten enforcement, with Internet service providers to fight Internet piracy and with politicians to create more effective laws.

With these big professional reporters, you might think they would try to fact check a claim like "90% of all "pirated" DVDs come from camcorded movies." They might have trouble doing that, because the actual research suggests something quite different. A study that we wrote about a few years ago found otherwise. Specifically, it found that "77% appear to have been leaked originally by industry insiders."

But, of course, we need to save the AP, because they do real fact checking, right?

Filed Under: camcording, copyright, india, stats
Companies: mpaa

MPAA Brags About How Awesome The Movie Business Is; Right After It Claims File Sharing Is Destroying The Industry

from the two-faced dept

You gotta love the MPAA for the sheer Hollywood brashness of two recent press releases, that the Washington Post's Rob Pegoraro decided to compare and call the MPAA on its blatant dishonesty. The first press release, from back in December, was all about how the internet and file trading were killing the industry:

Yet our industry faces the relentless challenge of the theft of its creative content, a challenge extracting an increasingly unbearable cost.

Now, we already knew that wasn't true, and were among those who pointed out that the industry had just experienced its best year at the box office ever. And, of course, that's what the second press release was about. It was the MPAA bragging about what an awesome year Hollywood had in 2009.

Of course, the MPAA spokesperson that Pegoraro spoke to pulled out the usual claim that while the box office may be doing great, it's the secondary market (DVDs and such) that are suffering from all those nasty internet people. Of course, this is quite ironic, since the MPAA fought about as hard as possible against the very concept of a secondary market, with former MPAA boss Jack Valenti once declaring: "I say to you that the VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone." For the MPAA to now whine that the very secondary market it fought so hard to prevent from existing is now shrinking is the height of ridiculousness.

And, of course, even that claim by the MPAA isn't accurate. It pointed Pegoraro to a report that it claimed supported this claim of file sharing killing the DVD market -- but Pegoraro notes that the report actually notes the decline in sales of DVDs isn't because of file sharing, but because of a better, more efficient rental market. Of course, the MPAA and Hollywood are also trying to stop that new rental market from existing as well (another Boston strangler, huh?) by falsely pointing to a study which it pretends says that Redbox and Netflix are killing jobs in Hollywood -- but which actually notes jobs will grow.

Basically, it looks like Hollywood will repeatedly say the exact opposite of what research shows in its quest to get ever greater protectionist policies out of the US government, even as it's absolutely thriving, despite an economic downturn.

Filed Under: movie business, mpaa, studies
Companies: mpaa

RealNetworks Agrees To Pay $4.5 Million In Legal Fees To Hollywood Over RealDVD; Gives Up

from the something's-wrong-with-the-system dept

We still can't quite understand Hollywood's crusade against RealNetworks over its RealDVD offering. The software presented a way for DVD owners to backup their DVDs. It didn't allow for distribution -- unlike pretty much every other ripping software. In fact, Real basically put a new DRM around each backup copy. Personally, this seemed to make the product less useful, but the MPAA still sued RealNetworks for daring to let people backup their movies, and amazingly won nearly every aspect of the lawsuit. The judge (the same one who shut down Napster, by the way) had already banned the sale of RealDVD, and now she's agreed to a settlement that basically involves RealNetworks conceding every point, and paying $4.5 million to Hollywood to cover legal fees. It's a full capitulation.

So what did Hollywood accomplish here? It shut down a software product that allows people to backup the DVDs they legally own -- not to distribute them. In the meantime, of course, there are a bunch of DVD ripping programs out there that have no such restrictions. In other words, Hollywood's brilliant legal strategists just pushed anyone who wants to back up their movies to use solutions that make it easier for them to share those movies with others. It just made sure that such products will always be underground, rather than where the industry can actually work together with them. Congrats, guys, for killing yet another tech product you didn't like, just because it made your products more valuable.

Filed Under: copyright, drm, dvds, movies, realdvd, ripped dvds
Companies: mpaa, realnetworks

MPAA Boss Doesn't Even Make It To The End Of His Contract

from the now-what? dept

Back in October, we reported on rumors that the movie studios were so upset with MPAA boss Dan Glickman that many thought he wouldn't make it to the end of his contract. While he had said all the usual stuff about "evil piracy," apparently the studios were upset that he couldn't stop technological progress with the wave of a magic wand, and wanted someone who would attack file sharing even more aggressively. At that time, the MPAA revamped to focus more on content protection -- which is the exact wrong thing to be focused on. They should be focusing on providing increased scarce value that gets people to buy -- but instead, they wanted to focus on building up artificial scarcity that technology (and much of the market) will ignore.

Of course, right after the rumors, Glickman came out and announced that he would be stepping down at the end of his contract in September of 2010. So it seemed like maybe the studios would let him stick around to the end, since it was clear he wasn't coming back. Apparently even that plan has been thrown out the window, as Glickman has now announced that he's leaving as of April 1 in order to take over Refugees International, which seems like a worthy enough cause.

The real question, though, is who is going to take over, and just how much more of a mess of things will they make. One could hope for more enlightened leadership, that actually focuses on adapting to the modern age, but all signs suggest the studios have no interest in doing that any time soon.

Filed Under: dan glickman
Companies: mpaa

Halt...In The Name Of The MPAA/RIAA/FBI/NSA! [Updated: Hoax]

from the you're-in-trouble-now dept

See update below. GeneralEmergency writes "I was performing a Google search on the phrase "this website has been closed" recently, and the sixteenth result was a link to http://vxbinaca.beevomit.org/party_van/ where you get treated to the following (which you may want to read before clicking):

"This website has been closed by the United States Federal Bureau of Investigation, in association with the United States National Security Agency, the Motion Picture Association of America, and the Recording Industry Association of America; pending a federal investigation.

Your visit to this URL has been logged. Please stay where you are. You will be contacted for questioning regarding the investigations related to this website. Any attempt to evade questioning will be considered obstruction of justice, and is subject to fines and imprisonment, pursuant to 18USC1510(a).

The owner(s) of this site will no longer be available for comment. For inquiries or if you wish to assist in this investigation, please contact:

Federal Bureau of Investigation
Attention: Internet Investigation Unit
935 Pennsylvania Avenue, NW, Room 7350
Washington, DC 20535

(202) 324-3000

iiu@fbi.gov"

My first thought was, "OK....Ummm...Wait for how long? I was really thinking about going to Lowes this afternoon for a new tube of Loctite."

But the more I thought about this apparent method of "Honey Pot Trap" investigation, assuming it is genuine, the more silly this seems. If they were serious about this site being an investigatory tool, you would think that they would have the basic internet common sense to use a robots.txt file to keep Google (and other polite netizens) from indexing the site. Moreover, it only takes one guy like me to stumble across a site like this, post it's URL elsewhere obfuscated as a TinyURL, and their little honeypot get overrun with ants!

If the F.B.I. is not serious about this method as an investigation tool, then why put up silly threats like this?

You can also find plenty of other sites that Google says contain the text string "This website has been closed by the United States Federal Bureau of Investigation."

Guess I'm in big trouble now! I'll let you know if any suits show up on my doorstep!"

I actually don't believe this is a honey pot at all. Just a bogus threat tactic. It's the same message that goes up on every file sharing site that eventually gets taken down. Four years ago, we wrote about the same message on the front of Grokster's site. It's a blatant (and bogus) scare tactic, and pretty ridiculous as well. It is a bit silly that (1) the FBI and NSA allow their names to be posted with the RIAA and MPAA (2) that they imply just visiting the site is somehow illegal and worthy of being logged followed by a "visit" and (3) that they somehow think this is effective. Update: As pointed out in the comments, the particular site singled out above is a hoax... but really isn't all that different from the site that actually did go up on the Grokster page...

Filed Under: copyright, criminal, file sharing, honeypots, law enforcement
Companies: mpaa, riaa

Entertainment Industry Explains How True Net Neutrality Is Just Another Word For Theft

from the say-what-now? dept

With comments due last week on the FCC's proposed new net neutrality rules, we've already covered some of the filings, while noting the problems of carving out a special exemption for copyright. But, of course, that special exemption for copyright means everything to an entertainment industry that has no interest in adapting its business models. Both the RIAA and MPAA filed their own comments, which were pretty similar, and equally misleading. The RIAA's filing (pdf) repeatedly referred to copyright infringement as "theft" (you would think lawyers would know the difference) and insisted not just that there should be a copyright exemption, but that the FCC itself should require ISPs to act as copyright cops. The MPAA's filing (pdf) is almost a carbon copy of the RIAA's. There is very little difference between the two.

But if you want to see an even more extreme argument, check out the filing from the Songwriters Guild of America (SGA) (pdf), who we'd already pointed out was running around aimlessly screaming that network neutrality would mean more unauthorized file sharing (they call it "piracy"). In the SGA's filing, they claim that net neutrality wouldn't solve any actual problem, and the real problem is the inability of songwriters to get paid in the way they used to, back in the idyllic days before the internet existed. So they'd much rather that the FCC break the internet in order to bring back those days. That's a bit of a paraphrase, but it's really not that far off.

The language used by the SGA goes even beyond that of the others, referring to things like "rampant looting" and insisting that with net neutrality we would face the end of songwriting. Seriously. While the SGA claims that it wants to promote new innovation and technology, it appears to only mean technology that can be used to block file sharing. It's very excited about those technologies, and not at all concerned about all the technologies (even the ones used by lots of folks every day) that would be broken without a neutral internet.

Not that any of these filings are all that surprising, but it does show how low the entertainment industry has decided to stoop in trying to get others to bring back old business models, rather than adapt to the changing times.

Filed Under: net neutrality, rules, theft
Companies: mpaa, riaa, sga

Judge Says No Antitrust Violation In Hollywood Killing RealDVD

from the it's-just-a-mad-power-grab-by-paranoid-delusionals dept

In the ongoing saga of Hollywood's bizarre and self-defeating attack on RealNetworks for its RealDVD offering, a judge has dismissed Real's countersuit claiming antitrust violations by the Hollywood studios in effectively creating a cartel that controls the encryption on DVDs and refusing to license it to Real for the purpose of its DVD backup solution. The court basically said that there is no harm to Real caused by any actions of the Hollywood studios, because the real "harm" is in the fact that it created an infringing product in RealDVD.

This reasoning isn't surprising given the earlier rulings in this case, but is no less ridiculous when looked at in context (and with any bit of common sense). Remember, the product in question does not allow for anyone to make a bunch of copies and pass them along. It allows you to make a single backup copy for personal use -- a use that has been found to be perfectly fair use for software and music. It makes little sense that the law did not intend for movies to be backed up in this manner as well. The only reason this is stopped is because of the bogus DRM that the studios put on DVDs, known as CSS. This has been widely broken and does absolutely nothing whatsoever to stop copying of DVDs. The only thing that CSS serves to do these days is act as a tool for the Hollywood studios to team up to prevent products like RealDVD, because they can use the DMCA's anti-circumvention rule to claim that products like that circumvent the broken DRM they use. And, even if it's for a legal backup that can't be copied again (i.e., like RealDVD, it puts new DRM on top of it), suddenly it's "infringing" thanks to the DRM. In other words, the only purpose CSS serves is for the Hollywood studios to have full veto control over any software product that wants to be marketed legitimately, rather than underground. Under almost any definition of antitrust, it's difficult to see why this is not an antitrust violation. It's the major companies in a market, putting in place a tool whose sole purpose is to block others from offering up products.

Of course, the whole lawsuit and this whole charade is incredibly self-defeating for the studios anyway. Because now, instead of having a product on the market that limits what kind of copies people can make, instead, people who want to back up their DVDs simply get one of the long list of underground products out there that will let you rip your DVDs with no limitations whatsoever. It's simply stunning that the studios think it makes sense to drive users to such a solution. The only possible way it makes sense is if you put on your "studio thinking cap" and realize that the studios, in their infinite wisdom, think that they can ship these special -- much more expensive -- dual layered DVDs that have a DRM'd-up digital copy included. But, again, this should raise an antitrust flag, in that the studios are killing off the RealDVD product to try to protect their own sales of these DVDs with the silly Digital Copy technology. But, instead, many users are simply using the underground technology that doesn't cost them anything and gives them much more value.

Filed Under: antitrust, competition, copyright, css, dvds, realdvd
Companies: mpaa, realnetworks

MPAA Gives 'It's Complicated' An R Rating Because It Shows Pot Might Make You Giggle

from the what-are-they-smoking? dept

Via That Kevin Smith (who has had his own share of run ins with the MPAA over bizarre ratings) comes the story of how the MPAA decided the romantic comedy It's Complicated deserved an "R" rating, because it has one scene that involves two characters (played by Steve Martin and Meryl Streep) who smoke marijuana... and then giggle. Specifically, the MPAA appears to be upset that there are "no negative consequences" to the two characters smoking pot.

Now, I've never smoked marijuana (or ingested it in other forms either), but I'm at a loss to see how this makes something deserving of an R rating. The NY Times article quotes someone from the Parents Television Council -- the group famous for bombarding the FCC with bogus indecency complaints -- who says "The last I checked, smoking pot was still illegal, illicit behavior." Indeed. But, then again, so is blowing up Los Angeles, and "last I checked," the movie 2012 got a PG-13 rating.

The larger point, of course, is just how incredibly out of touch the MPAA is beyond just its laughable ratings system. This is a group that's still trying to break your TV because it can't figure out how to release movies on TV in a reasonable amount of time without doing so (even though its own studios have figured it out). This is the same group that argues that blames tech companies for its own inability to recognize and embrace what technology allows. This is the same group that insists that piracy is "killing" the movie industry as the industry scores yet another box office record. This is the same group that insists that ACTA is necessary, but won't share what its own lobbyists helped write.

The NY Times article admits that the decision to rate this particular movie "R" is more of a political move from an organization that doesn't want to be attacked during the next elections -- and even that should be troubling. This is an organization that will do amazingly dumb things just to stay in the good graces of our politicians, so that it can continue to push through protectionist laws. One simple rating may not seem like a huge deal (and, by itself, it is not), but it's yet another sign in how out of touch the MPAA really is, and how its actions are entirely about protecting its political power and helping its members get favors from the government, rather than anything else.

Filed Under: it's complicated, movies, ratings
Companies: mpaa

IsoHunt Loses Big; Court Says: You Induce, You Lose

from the ah,-the-old-inducement-standard dept

One of the many lawsuits against file sharing sites/search engines around the world is the IsoHunt lawsuit -- yet another case where the entertainment industry decided a marginal player in the space didn't have enough attention and sued. While the judge in the case had earlier pointed out that the MPAA failed to show actual evidence of infringement of copyrights by US users on IsoHunt, that still didn't stop the judge from granting summary judgment to the movie studios, saying that because IsoHunt induced infringement, it loses, no trial needed. This isn't a huge surprise, given how courts have ruled previously, but there are some oddities in the ruling, which you can see below: The court relies on the fact that IsoHunt owner Gary Fung made many statements that could be read as inducing infringement, but most of the statements appear to have been taken out of context. In fact, it looks like the court interpreted any time Fung mentioned "stealing" to mean support for copyright infringement, even if the words he stated were actually suggesting something different. For example, the court cites the following statement by Fung:

"Morally, I'm a Christian. 'Thou shalt not steal.' But to me, even copyright infringement when it occurs may not necessarily be stealing."

The court seems to think this indicates inducement, but if that's the case, then shouldn't the Supreme Court itself be guilty as well for famously stating in the Dowling case:

"(copyright infringement) does not easily equate with theft, conversion, or fraud... The infringer invades a statutorily defined province guaranteed to the copyright holder alone. But he does not assume physical control over copyright; nor does he wholly deprive its owner of its use."

If the first is inducement, isn't the latter as well? Furthermore, the court seems to take a quote that refers to "stealing from leechers" to mean inducing infringement, apparently not recognizing that leechers have a very specific meaning in the BitTorrent world, and the statement appears to have nothing to do with infringing on copyright.

That said, there are some other things that put Fung on much thinner ice, including helping people find certain files and helping explain how trackers work -- though, again, it's not clear that Fung would know for certain that the files being searched for were infringing. The court does find it (reasonably) damning that Fung presented a list of top box office films, with links to pages that asked people to share torrent files that pointed to the films themselves. You can certainly see how that could trigger the "inducement" finding.

But what may be most interesting (or troubling, depending on your perspective) is the court's discussion on the DMCA, which basically says that DMCA safe harbors do not apply if it can be shown that the site turned a blind eye to infringement. If that reasoning is used, it could eventually implicate sites like YouTube, despite rulings like the one in the Veoh case. Expect IsoHunt to appeal, though given the details in the case, it seems quite unlikely that it will prevail. There are too many precedents against this sort of operation, even if the court misinterpreted Fung's statements, which it deems as "most telling" in the ruling.

Filed Under: copyright, gary fung, inducement
Companies: isohunt, mpaa