Judges Interpreting Emoticons? :-(

from the ^_^ dept

While we'd already written about the judge's ruling in the Lenz vs. Universal lawsuit concerning a bogus DMCA takedown and whether or not damages could be awarded, there was one bit of the ruling which Eugene Volokh recently highlighted, which seems worth mentioning, if only for the amusement factor. Apparently, part of determining whether or not there was actual harm done to Lenz was looking at some email communications, including one where a friend used an emoticon:

Universal ... argues [as a defense to Lenz's lawsuit] that there are triable issues of fact as to whether Lenz has "prosecuted in good faith the assertion that she has been damaged" by Universal's alleged violation of [the DMCA]. This argument is based on four separate contentions.... [The fourth is] that an email exchange between Lenz and one of her friends shows that Lenz does not believe that she was injured substantially and irreparably by the takedown notice. In the exchange, Lenz responds to her friend's comment that the friend "love[s] how [Lenz has] been injured 'substantially and irreparably' ;-)" by writing "I have ;-)." The (";-)") symbol, according to Lenz, is a "winky" emoticon which signifies something along the lines of "just kidding."

At her deposition, Lenz testified that she believed her friend's use of the emoticon "was kind of a reference back to [the] lawyerese" of the "substantially and irreparbly harmed" language and that her use of the emoticon was "a reply to the wink that [her friend] used." Lenz maintains that the fact that she "believes that lawyers sometimes use stilted language is not evidence of bad faith." ...

While it's fascinating to see Universal using a friend's use of an emoticon to try to prove its point, it does seem like things could get a bit dicey when we have judges trying to interpret things like emoticons.

Filed Under: emoticons
Companies: universal

NBC Universal Boss Jeff Zucker Lies To Congress About Boxee

from the but-what-about-the-corn-farmers dept

NBC Universal management gets more and more ridiculous every time we come across anything they do. While they've left most of the more ridiculous statements to their chief lawyer, Rick Cotton (who is worried about the poor corn farmers harmed by movie file sharing), CEO Jeff Zucker has made his fair share of whoppers. While he got a lot of attention last month for his cowardly handling of the whole Leno/Conan mess, his latest move is to flat out lie to Congress. In a hearing in front of Congress as a part of NBC's effort to merge with Comcast, Rep. Rick Boucher asked Zucker about Hulu being forced to block Boxee (a battle that's gone back and forth a few times). When the whole thing started, Hulu management was very upfront about how they were pressured by their content partners like NBC to block Boxee, which is just another browser. It was quite clear that Hulu didn't want to do the block, but had no choice due to pressure from the likes of partial owner NBC:

Our content providers requested that we turn off access to our content via the Boxee product, and we are respecting their wishes....

The maddening part of writing this blog entry is that we realize that there is no immediate win here for users. Please know that we take very seriously our role of representing users such that we are able to provide more and more content in more and more ways over time. We embrace this activity in ways that respect content owners' -- and even the entire industry's -- challenges to create great content that users love. Yes, it's a complex matter. A tough mission, and a never-ending one, but one we are passionately committed to.

For those Boxee users reading this post, we understand and appreciate that you're likely to tell us that we're nuts. Please know that we do share the same interests and won't stop innovating in support of the bigger mission.

So how did Zucker respond when asked about it by Congressman Rick Boucher? He blamed Hulu for making the decision, and falsely claimed that Boxee illegally access Hulu content:

Rep. Rick Boucher (D-VA): What about Boxee? Mr. Zucker you probably are in a better position to answer that. Did Hulu block the Boxee users from access to the Hulu programs?

Zucker (NBC): This was a decision made by the Hulu management to, uh, what Boxee was doing was illegally taking the content that was on Hulu without any business deal. And, you know, all, all the, we have several distributors, actually many distributors of the Hulu content that we have legal distribution deals with so we don't preclude distribution deals. What we preclude are those who illegally take that content.

Of course, that's a flat out wrong, as Boxee was not illegally "taking" the content at all. Boxee is a browser, like Firefox. If what Boxee does is illegal so is accessing Hulu with Firefox or IE. But it's even worse than that, because last year, in a different situation, Zucker admitted that he had been a part of the decision makers to have Hulu block Boxee, telling Kara Swisher that "our vision" was to block Boxee in an effort to keep "Hulu being an online experience" rather than one you could access via a TV.

So why would Zucker flat out lie during a Congressional hearing, and throw Hulu under the bus while doing so? Does he not understand how Boxee works? Did he forget his own dealings with Hulu? Or is he just making stuff up in a Congressional hearing?

Filed Under: browsers, congress, content, jeff zucker, merger, online, rick boucher
Companies: boxee, comcast, hulu, nbc, nbc universal, universal

Looking At The Redbox Antitrust Fight

from the is-it-an-antitrust-issue-or-not? dept

Law.com has a nice article detailing the legal issues involved in the battles between Redbox and the various movie studios. The main question is whether or not it's an antitrust violation on the part of the studios to block distributors, wholesalers and retailers from selling DVDs to Redbox. The studios want (a) a revenue share from Redbox (b) Redbox not to offer new release DVD movies for rental and (c) Redbox not to sell used DVDs. The reasons are pretty obvious: Redbox is a much more competitive offering. Since it's a lot less labor intensive, it's able to offer the DVDs for much less (both rental and sale), and the movie studios are freaking out, because in their minds, their old revenue streams should never be allowed to decrease.

The statements from the studios on the dispute is incredibly disingenuous:

"The real complaint is Fox won't sell DVDs to Redbox on the terms Redbox demands, and that is not in our view an antitrust violation," said Watson, an antitrust expert who has teamed with Yosef Riemer, a litigation partner in Kirkland & Ellis' New York office, in representing Fox, part of News Corp.'s Fox Filmed Entertainment. "There's nothing in the law, antitrust or otherwise, that says a seller must sell its product at the price that the buyer demands on the date the buyer demands and through the distribution channel that the buyer demands."

Indeed, Watson is correct that no seller needs to offer the product at the price the buyer demands, but that's not what's being disputed here at all. Clearly, prior to Fox and some of the other studios throwing their hissy fit, the distributors had no problem selling DVDs to Redbox at the prices Redbox thought were reasonable. The studios sold the movies to the distributors at the usual price, and the distributors sold them to Redbox at the usual price. Everyone should be happy.

But... what happened now is that these studios (Fox, Universal and Warner Bros.) told not just the distributors (Ingram and Video Product Distribution) but also retailers like Best Buy and Wal-Mart to not sell to Redbox. That's restraint of trade. The studios have every right not to sell videos to whomever they want -- but those distributors and retailers can then sell to whomever they want. The studios should have no say in the downstream sales of the videos once they've been sold to the distributor, wholesaler or retailer. That's where the antitrust issue is. The studios are successfully controlling downstream sales.

The studios are either being disingenuous or are just playing dumb when they claim that there's no antitrust violation because end users can still rent movies from Blockbuster or Netflix. But, that's defining the wrong "user" for the market in question. The market is in being able to buy from the distributor/wholesaler, and the "customer" is a retailer like Redbox. And these studios have stopped that customer from being able to make a perfectly legitimate purchase. That's the antitrust issue, and it's amazing that the studios think anyone will believe their false market definition or this bizarre claim that this about Redbox demanding some special price. It's not. Hopefully the judge recognizes that and doesn't fall for the studios simply making stuff up.

Filed Under: antitrust, dvds, rental
Companies: 20th century fox, ingram, redbox, universal, video product distribution, warner bros.

New Mobile Music Service Works Via Voice Calls

from the well,-that's-different... dept

There are a bunch of different mobile music services out there (and more popping up every day). Some involve getting downloads to your phone, and others involve streaming (and, of course, there are things like ringtones and ringbacktones for specific functions). But Music Ally points us to a new service launched with Orange UK (and Universal Music) that will let users dial a voice call to hear some music. Basically, you call into an IVR system, and get a variety of options on what playlist you want to listen to. There's some functionality where you can set up your own playlist on a computer, and then access it via the IVR. Of course, the service is quite limited, especially in that it only has Universal Music music right now. The article describes the service as "free" but also targeting "pay as you go" customers, which makes me wonder if people are paying for those voice "minutes" that they'd use (which could add up). Perhaps I'm missing something? I also would think the very limited selection is an issue. Still, it's fascinating to see someone try such an experiment to get around some of the other barriers -- especially for folks with lower-end phones that don't have all the bells and whistles and app stores of higher end phones.

Filed Under: mobile, music, voice calls
Companies: orange uk, universal

Universal's War On Redbox Continues

from the innovation?-attack! dept

You'd think that movie companies would like it when people want to rent and watch their movies -- but surprise, surprise, only if it's on their terms. Universal has been fighting, for some time, with Redbox, the company whose kiosks rent DVDs for $1 per night, trying to get the company to sign a contract that would hamper its business model, while working on rental kiosks of its own. The WSJ is reporting that Universal asked a court to toss out Redbox's lawsuit over the contract last week, and that Redbox had to resort to "new acquisition strategies" in order to get a hold of the recent Universal release Wanted. Redbox wouldn't elaborate on those strategies, but it sounds as if Universal and its distributors cut the company off, as the studio had threatened. So once again, we're left with a company that's innovated in the movie space and delivered a product to consumers in a way they like, at a price they love. But since it didn't come from a movie studio, Universal wants to cut the company off. Once again, it's puzzling exactly how Universal can think that keeping people from seeing its movies can be good for its business.

Filed Under: competition, dvd, kiosks, lawsuits
Companies: redbox, universal

Movie Studios Sue Australian ISP For Not Waving Magic Wand And Defeating Piracy

from the blame-someone-else dept

A few years ago, after realizing that blaming consumers wasn't a particularly effective strategy in covering up for the entertainment industry's own inability to adapt to a changing market, industry insiders chose a new strategy: blame ISPs. That sent them down a path of trying to force ISPs to do a variety of things, such as installing filters, policing their networks for copyright-infringing material and, of course, kicking users off their networks. In the mind of entertainment industry execs, a failure to do any of these things should be a crime. Note how the industry totally shifts responsibility here. Rather than admitting that they should change with the market, it's always someone else who needs to change to protect the entertainment industry's obsolete business model.

While the industry has been able to get some politicians and ISPs to agree (amazingly, often against their own best interests), it's now gone a step further. A bunch of the biggest movie studios (Village Roadshow, Universal Pictures, Warner Bros Entertainment, Paramount Pictures, Sony Pictures Entertainment, Twentieth Century Fox Film Corporation, Disney Enterprises, and the Seven Network) have teamed up to sue Australia's largest ISP, iiNet, for failing to stop copyright infringement. iiNet, you may recall, is the same ISP that has been mocking the Australian government for requiring filters. So, naturally, it's response to this lawsuit is rather direct. While the studios complain that iiNet isn't doing anything, iiNet responds that this is not true at all. They pass each complaint on to the police, because if there's a crime, then the police should deal with it:

They send us a list of IP addresses and say 'this IP address was involved in a breach on this date'. We look at that say 'well what do you want us to do with this? We can't release the person's details to you on the basis of an allegation and we can't go and kick the customer off on the basis of an allegation from someone else'. So we say 'you are alleging the person has broken the law; we're passing it to the police. Let them deal with it'.

We are not traffic cops. We can't stand in the middle of it and stop the individual items that might be against the law. These guys are asking us to be judge, jury and executioner.

Even better, iiNet's CEO Michael Malone gets to the heart of the matter:

I think they genuinely believe that ISPs have a secret magic wand that we are hiding and if we bring it out we can make piracy disappear just by waving it. And it doesn't exist.

Indeed, but that might mean that the entertainment industry has to actually take responsibility for their own business model failings, and they can't do that. So they have to blame others.

Filed Under: australia, blame, busines models, copyright, isps, lawsuits, movie industry, movie studios
Companies: disney, fox, iinet, paramount, seven network, sony, universal, village roadshow, warner bros

Hollywood Again Tries To Stop Innovation: Threatening Redbox DVD Rentals

from the felony-interference-with-a-business-model dept

I have to admit that when I first heard about the whole Redbox concept of renting DVDs from a kiosk I was skeptical, but that was mainly because previous experiments had all been quite expensive with very limited selection. However, in actually offering super cheap prices ($1 rentals), I've been hearing from many Techdirt readers who swear that Redbox is fantastic and, at such a cheap price, often easier than downloading the movie.

So, wouldn't you know it? Hollywood is trying to block Redbox from doing business.

The company has filed a lawsuit against Universal Studios for trying to coerce the company into signing a ridiculous, business-destroying agreement -- and threatening to try to stop others from supplying Redbox movies if the company didn't agree. Specifically, Universal wanted Redbox to agree to:

• wait 45 days after a DVD's release date before renting it;
• pay a royalty of 40% of gross rental revenues;
• promise that prices never dip below $0.99 per night; and
• destroy all previously rented DVDs rather than offering them for purchase for $7, as Redbox currently does.

In other words, Universal Studios is basically trying to kill off Redbox, a company that has innovated in its business model, and, in doing so, effectively trying to circumvent the first sale doctrine by controlling how a copyrighted product can be resold. Universal threatened that if Redbox did not agree to these business-destroying clauses, it would stop supplying movies to any distributor who supplies Redbox. Effectively, that would mean that those distributors would stop supplying Redbox, rather than lose Universal as a supplier. This is, quite clearly, a case of corporate bullying. It's also yet another example of how the movie studios want to stop any innovation in the industry that doesn't come directly from the studios.

Filed Under: business models, dvd rentals, dvds, hollywood, innovation
Companies: redbox, universal

Labels Concede That File-Sharing Isn't So Bad After All

from the a-little-late dept

Imeem, a social networking site that was in the recording industry's crosshairs earlier this year for allowing file-sharing on its network, has pulled off an impressive feat. This summer it settled its lawsuit with Warner Music by promising to give Warner a cut of advertising revenues from the site. Now the Wall Street Journal is reporting that it's signed similar deals with all four major labels, meaning that Imeem is now the first website whose users have the music industry's blessing to share music for free. What's especially striking about this is that for the last decade, the fundamental principle of the labels' business strategy is that sharing music without paying for it is stealing. They drove Napster, AudioGalaxy, Grokster, Kazaa, and other peer-to-peer file-sharing services out of business on that basis. As we pointed out way back in 2000, all this accomplished was to drive file-sharing underground where the recording industry couldn't get a cut of the profits. Had they approached Napster in 2000 the way they approached Imeem this year, they could have been collecting ad revenue from every file-sharing transaction over the last seven years. Instead, they wasted a lot of money on lawsuits, angered a lot of their customers, and ultimately still had to concede that music sharing might be OK as long as they get a cut. The only significant difference between Napster and Imeem is that Imeem only allows you to play music on its website, whereas Napster allowed you to download songs to your hard drive. But this isn't as big of a difference as it might appear at first glance. The Imeem website doesn't provide a "download" button, but there's no DRM involved, and it's quite easy to download music files from Imeem using third-party tools. And because Imeem's site doesn't use DRM, Imeem downloading tools are probably legal under the DMCA. So what we have here is the de facto legalization of Napster-like sites, as long as the record labels get a cut of the advertising revenue. It's an exciting development, albeit one that should have happened seven years ago.

Filed Under: advertising, file sharing, p2p, record labels, riaa
Companies: imeem, napster, riaa, universal

The Pirate Bay To Sue Entertainment Companies For Attacks

from the could-get-interesting dept

Well, this could get interesting. Following the leak of MediaDefender's emails, the folks behind The Pirate Bay now believe they have enough evidence to sue many major entertainment firms for "infrastructural sabotage, denial of service attacks, hacking and spamming." Basically, there's evidence in the emails that a bunch of firms, including Universal, EMI, Sony, Paramount and others were using MediaDefender to try to mess with The Pirate Bay's system. Whether or not the lawsuit actually goes anywhere may depend on a lot of factors (including Swedish laws, which I am totally unfamiliar with). There may be some questions about how the emails in question were obtained. And, of course, the entertainment companies will likely counter that they were just trying to protect their own materials -- which could find a sympathetic ear in a courtroom. Either way it would be quite a lawsuit.

Filed Under: copyright, denial of service, p2p, sabotage
Companies: emi, fox, paramount, pirate bay, sony, ubisoft, universal

Bertelsmann Agrees To Pay One More Time To Finally Settle All Of Napster's Mistargeted Lawsuits

from the bad-precedents dept

It never made sense that the various record labels and music publishers sued record label Bertelsmann for the Napster affair. Yes, it's true that Bertelsmann was the only major record label to view Napster as an opportunity rather than a threat. And it's true that Bertelsmann invested quite a bit of money into Napster. But, the other record labels' misguided complaint was with Napster -- not with Bertelsmann. The problem was that after winning the original Napster lawsuit, the other record labels realized that Napster had no money. So they sued Bertelsmann instead, for being the only record label with forward-thinking management to invest in Napster. However, it makes no sense to put any kind of liability on investors in a company. Otherwise, it would make life quite difficult for any investor today -- who could then be sued for the actions of the company he or she invested in. It would greatly increase the liability for retail investors as well as institutional investors. It's for that reason that it would have been nice to see Bertelsmann fight this case and win it.

Unfortunately, before the case had a chance to get anywhere, Universal Music (who was the first to sue Bertelsmann) bought Bertelsmann. Then, rather than sue itself, the company quickly settled that portion of the lawsuit and proceeded to settle the other portions as well, with the final part of the case finally settling late last week. Bertelsmann eventually had to pay out approximately $300 million in all of these "settlements," which is a real shame since all the company did was invest in a service that its executives (who were soon fired) realized could have revolutionized the music business. While these are all settlements, meaning that there's no court precedent, this could still encourage companies to sue investors in companies rather than the companies themselves. Venture capitalists and private equity firms might want to take note.

Filed Under: copyright, investors, liability
Companies: bertelsmann, napster, universal