Mississippi Attorney General Jim Hood Thinks Google Is To Blame For Infringement On The Web

from the because-Google-uploads-infringing-material-and-whatnot-*eyeroll* dept

Mississippi state attorney general Jim Hood has returned to his old punching bag, Google, for another workout. Back in June, Hood decided it was Google's fault that he could find copyright infringement and counterfeit items on the web. Back then, he complained that Google "gave" him "easy access" to illicit goods and then wondered aloud why it could work its magic with Nazi photos and child porn but somehow couldn't rid the web of infringement as well. He then threatened to issue subpoenas if Google didn't scrub the web clean by his next irate press conference.

Not much has changed, apparently. Hood is again blaming Google for copyright infringement and is using his familiar standard rhetorical props. In a letter to Google counsel Kent Walker, Hood asks why Google "allows" bad things to happen to good people (MPAA, RIAA, etc.).

Hood accused Google of being “unwilling to take basic actions to make the Internet safe from unlawful and predatory conduct, and it has refused to modify its own behavior that facilitates and profits from unlawful conduct.” His letter cites not just piracy of movies, TV shows and music but the sale of counterfeit pharmaceuticals and sex trafficking.

He also pointed out several instances in which Google has screened out criminal content, like child pornography. Nazi-related content, he noted, was removed from search results in Germany, and spam and malware are blocked because they can be damaging to users.

“Google can and does take action against unlawful or offensive conduct — when Google determines it is in its business interests to do so,” Hood wrote.

While a lot of what Hood claims is mostly wrong, the last sentence is especially disingenuous. The Nazi content he's referring to was taken down in order to comply with German and French laws, not because Google felt doing so would be good for the bottom line. Its efforts to curb child pornography are also adding nothing to its profits. It's a collaborative effort done mainly as a public service, but it also is the result of considerable political pressure from various politicians.

Google would presumably take other content down as well if ordered to by a court. As it stands now, Google does make an effort to curb infringement, but despite the fact that it removed 57 million web pages last year (with an average turnaround time of 6 hours), the MPAA (in particular) continues to claim it's not doing enough. What goes unacknowledged is the fact that Google neither encourages infringement nor contributes to infringement. It simply indexes the web.

Google has also made efforts to alter its algorithms to give so-called "rogue sites" lower rankings and it deploys ContentID at YouTube to help filter infringing content out of the 100 hours of video uploaded every minute.

But it's still not enough for critics like Jim Hood. Because Google can filter out child porn (still not 100% -- nor will it ever be), certain people feel filtering out infringing content should be just as "simple." But infringement isn't like child porn and there's simply too much of it out there to expect Google to handle with its human verification system that sorts the child porn from the "kids taking a bath" pictures. Copyright enforcers can't even build a list of rogue sites without grabbing a few false positives. (Hood makes a mention of this in his letter, building off the clearly wrong assumption that defining a rogue site is a simple task.) How's Google supposed to handle 57 million+ allegedly infringing pages without plenty of others sneaking past the detection systems?

Hood also makes these demands in his letter:

— Tailor search results to make websites providing illegal goods or services disappear or appear much lower.
— Program its auto-complete function to prevent suggestions related to illegal activity.
— Promote sites authorized to provide content, including possibly giving them an icon in search results.
— Not sell ads to illegal businesses.

Some of this Google has already done, including altering its search algorithms and stripping certain terms from autocomplete. (I assume Hood's use of the word "tailor" in this context means tailoring search results to make him happy -- rather than, say, adjust weighting, etc.) While I'm sure the MPAA, et al would love to have their preferred sites given preferable ranking, actually doing so would make a mockery of Google's ranking system. As for the ads, Google has taken steps in that direction as well.

When it comes to rogue sites that specialize in online piracy, other anti-piracy strategies will have limited effect so long as there is money to be made by their operators. As a global leader in online advertising, Google is committed to rooting out and ejecting rogue sites from our advertising services, to ensure that they are not being misused to fund these sites. In 2012, we disabled ad serving to more than 46,000 sites for violating our copyright policies, the vast majority detected through our proactive efforts.

What Hood is proposing is to turn Google into a search engine that's only as good as politicians and certain industries will allow it to be. When it starts altering rankings based on political pressure, its flagship offering will become worthless. The danger of allowing a foot in the door is that it encourages the body behind it to follow it inside.

The problems Hood sees in Google are present in all search engines. If it's on the web, it can be indexed (unless instructed otherwise by sites themselves). Sites rise and fall based on algorithms that (supposedly) reflect popularity and trustworthiness. Hood and others like him want a search engine to present a sanitized 'net -- one free of everything that might infringe, offend or cater to illicit tastes. What Hood wants is commonly called "censorship," but his letter attempts to lay the blame for everything that's "wrong" with the web at the feet of the world's most popular search engine. Google's job isn't to make sure everyone with an axe to grind is satisfied with their search results. Its job is to provide a useful, searchable index of the web. Period.

Filed Under: attorney general, jim hood, liability, mississippi, search engines, secondary liability
Companies: google

UK Police Target Advertising On Infringing Sites, Opens Door For Scammers And Malware Purveyors

from the replacing-bad-ads-with-foul-software dept

No good deed by government agencies goes unpunished it seems, although it appears the average citizen bears the brunt of these punishments nearly every time. The UK's long-running battle with porn and infringement recently combined to the detriment of computer users across the country.

City of London Police are claiming credit for the suspension of 40 ad-funded websites that provided unauthorised access to copyright-protected content – but may have caused a rise in the number of web ads carrying malware or promoting pornography.

Operation Creative has resulted in the suspension of 40 national and international websites by domain name registrars during a three month pilot. The campaign was led by the new Police Intellectual Property Crime Unit (PIPCU) in collaboration with the creative industry, as represented by FACT (Federation Against Copyright Theft), the BPI (British Phonographic Industry), IFPI (International Federation of the Phonographic Industry) and The Publishers Association.

That's the upside. Dozens of infringing sites suspended and pleased industry execs smiling warmly at the results of their latest attempt to drain the web of infringement using a handful of thimbles.

The suspensions and extra public attention resulted in a 12% drop in advertising from major brands. But, when you create a hole on the internet, something will rush in and fill it.

[A]dverts that led users to sites with explicit adult content or exposed them to malware increased by 39 per cent during the same period...

Almost half (46 per cent) of total ads served to the sites were for unknown or unidentified brands which invited users to click through, often to fraudulent scams.

While infringement may have been dented, the rise in fraudulent activity more than made up for it. And what didn't lead to infected computers led to sites the government is actively discouraging people from visiting with its mandatory porn filtering.

This, of course, was pitched by the masters of the inadvertent disasters as a good thing:

Police put a positive spin on this development, arguing that switching to shadier sources of advertising is unsustainable and that "site owners may struggle to maintain their revenue streams when adverts from established brands are removed".

In all reality, relying solely on low quality web ads isn't really a "business model." What the City of London police have done is slow a trickle of income to a halt and allowed those with shadier (but more lucrative) "business models" to fill the void with malware infections and scams.

BPI's statement on the takedowns seems to imply that this activity has made the web safer, despite evidence gathered to the contrary.

Geoff Taylor, chief executive of the BPI, said: “The early results from Operation Creative show that through working with the police and the online advertising industry, we can begin to disrupt the funding that sustains illegal websites. These sites expose consumers to scams and malware, deny creators their living, and harm brands by associating them with illegal and unsafe content."

Right. Except that disrupting the sites has led to even more malware and scammy behavior. This may be a small win for BPI and its cohorts, but the consumers aren't being protected in any way. But I suppose that's a small price (for someone else) to pay when fighting infringement. If someone looking for illicit content ends up with an infected computer, it's no one's fault but their own, right?

I'm not suggesting the rights holders are actively working to make the web less safe, but that seems to be the end result, intended or not. Maybe the City of London police will throw a little of its investigative muscle into shutting those operators down, rather than just running interference for the copyright industry. Or maybe it will just continue to "enforce" the law by skirting ICANN policies as it has in the past with its highly-questionable domain takedowns that were backed with threats to hold registrars responsible for the alleged infringement happening on the disabled sites.

Filed Under: advertising, city of london police, copyright infringement, liability, malware, uk
Companies: bpi

Lawyer Wants New Law To Hold Parents Criminally Liable For Their Kids' 'Cyberbullying'

from the another-tragedy-and-another-misguided-crusade dept

Lakeland, Florida has yet to erect any cyberbullying laws in the wake of a 12-years-old student's suicide, setting it apart from many other locales which have reacted badly to tragedies by rushing out overly broad and under-thought legislation. Of course, this plus is somewhat mitigated by the fact that Polk County Sheriff Grady Judd has pretty much turned his office into a vigilante squad after declaring his "zero tolerance" (and made up just right now) policy against cyberbullying.

Judd arrested 14-year-old Guadalupe Shaw for a Facebook post in which she acknowledged bullying Rebecca Sedwick and noted she "didn't give a fuck" that the 12-year-old had killed herself. Judd charged Shaw with aggravated stalking. Not content with that, Judd tasked his investigators with finding something he could charge Shaw's parents with because he was unimpressed with Shaw's unrepentant attitude and her parents' failure to "smash" Shaw's computer into "thousands of pieces" after they found out about her activities.

Lucky for Judd, investigators found something, although that "something" isn't entirely related to Shaw's alleged bullying of Sedwick.

An outspoken Florida sheriff who arrested a 14-year-old girl for cyber-bullying after a younger schoolmate killed herself has filed child abuse charges against her mother, over an unrelated incident.

Polk County sheriff Grady Judd said Vivien Lee Vosburg, 30, punched and shouted obscenities at several children in her care in a violent incident in June that was captured on video [which can be viewed here] and later posted to Facebook by one of the children.

Judd has held Shaw's mother, Vivian Lee Vosburg, on child abuse charges. Meanwhile, Shaw has been released pending a court appearance. Not exactly what Judd was looking for when he first stated his desire to charge Shaw's parents for contributing (I guess) to the bullying of Rebecca Sedwick, but it seems to fit the narrative he's portraying.

"This clearly indicates to us that this appears to be a normal way of life," said Judd, who has declared a "zero tolerance" approach to cyber-bullying in his county. "They're laughing and cussing and throwing the F-bomb around, then they're posting that conduct for all to see. It is clear not only has Vosburg demonstrated she cannot control the behaviour of children she has access to without using violence, but she is obviously not monitoring the social media sites of children she has access to either.

"I'm astounded by this conduct, I'm astounded that it was posted and then I'm even more astounded that it stayed there."

Of Guadalupe Shaw, Judd said: "The apple doesn't fall far from the tree."

Judd's getting what he wants: a chance to prosecute parents for a child's behavior, all of which is punishment for another child's suicide. But so far, he and his "zero tolerance" have been limited to existing laws. Unfortunately, someone wants to change that, and that someone is none other than George Zimmerman's defense attorney, Mark O'Mara.

Florida attorney Mark O'Mara is stepping onto center stage in the debate over how much parents should be held responsible for children’s cyberbullying. He plans to draft legislation to impose criminal liability on parents who show "willful blindness or gross negligence" to the kind of online torment allegedly inflicted on Rebecca Sedwick, for which two girls were recently arrested.

"If a child kills someone while operating a parent’s car, the parents can be held responsible. If a child kills someone while using a parent's gun, the parent can be held responsible. If a child breaks the law using a computer or cellphone provided by the parent, how is that different?" wrote Mr. O'Mara, who served as defense attorney for George Zimmerman in this year's Trayvon Martin murder trial, in his "O'Mara Law Blog" on Thursday.

O'Mara's terrible idea looks to do more damage than Sheriff Judd's new found interest in zero tolerance policing of cyberbullies. O'Mara's proposal aims to do what Nova Scotia's atrociously bad cyberbullying law does: hold parents responsible for their children's actions. While O'Mara may have point about legal adults having been historically held responsible for certain illegal acts utilizing property owned by parents, this is breaking new ground.

For one thing, while Nova Scotia's law has the (to date untested) potential to hold parents civilly liable for their children's online bullying actions, O'Mara's draft legislation would hold parents criminally liable, a much more negative potential outcome. The attorney believes the law is needed because (in his opinion) parents have become too lax in monitoring and controlling their children's online activities.

O'Mara acknowledged in his blog that "there are substantial obstacles in the way of passing such legislation," but he said, "If parents won't adopt that responsibility, we need to hold their feet to the fire and insist they share liability, especially when their children's actions have life or death consequences."

If O'Mara's legislation is combined with the worst aspects of Nova Scotia's law (purely subjective "standard" for what can be termed "bullying," the entire process is ex parte -- no input from the accused during any step of the process), Floridians are going to have a new nightmare on their hands. Laws like this chill speech by holding normally protected expression to broadly restrictive standards. But all of this is what's come to be expected when people with the power to push legislation and deploy investigators decide to turn a tragedy into a crusade.

Filed Under: cyberbullying, grady judd, guadalupe shaw, liability, mark o'mara, parents, rebecca sedwick, vivan lee vosburg, zero tolerance

Better Business Bureaus Pushing For 'SOPA For Trademarks' On Domain Registrars & Registries

from the bad-ideas dept

Never underestimate the ability of those who over-rely on intellectual property to not just push for greater protections, but to try to pin greater and greater liability on others who they want to rope into their own fights. Phil Corwin has an article about how the Council of Better Business Bureaus, along with the Coalition Against Domain Name Abuse (a motley crew of mostly banks and insurance companies, but with random others like Dell, DirecTV and Eli Lilly thrown in there), are looking to change the Anti-Cybersquatting Protection Act (ACPA) to make it more SOPA-like when it comes to cybersquatting.

Their goal is to enact amendments to the U.S. Anti-Cybersquatting Consumer Protection Act (ACPA) that would expand the law’s coverage beyond domain registrants by creating secondary liability for domain system intermediaries like registries and registrars, increase statutory damages penalties for all targets, and establish a ‘loser pays’ regime that favors deep-pocket corporate litigants.

As with SOPA, they're using pure FUD to make this argument, inflating the "threats." With SOPA, copyright maximialists sought to conflate actual dangerous situations like counterfeit drugs (which were minimal in number) with non-dangerous activities that were more widespread (sharing movies and music). Here, the BBB and CADNA ramp up FUD about how phishing attacks use cybersquatted domains to trick people into handing over their info. Except, as Corwin notes, the actual evidence on phishing shows that it's rarely cybersquatted domains that are used in phishing (in part because companies are already quick to spot those and deal with them). In fact, he points out that the very research the BBB and CADNA are relying on to hype up cybersquatting notes that only 2.3% of phishing domains actually contain a brand or variation of a brand.

And, as with SOPA, the real goal here is to pin liability on a ton of third parties (beyond just registries and registrars) making them responsible if they happen to do business with a cybersquatted domain:

Of course, under CADNA’s proposal this potential financial jeopardy would be faced by parties far beyond the domain registrant, as they also want to “Establish liability against an affiliate, representative, or any other person or entity that is in active concert or participation with the registrant, including but not limited to a domain name registrar or domain name registry.” Potential liability would also accrue to “Internet parking pages, pay-per-click advertising, and other monetization schemes”. In other words, not just domain industry participants but everyone else involved in the Internet business ecosystem, including ad providers and payments processors, would be brought under ACPA jurisdiction if CADNA had its way. As we saw with the rightfully failed SOPA legislation, secondary liability would either vastly expand the potential windfall to litigants or cause these service providers to cut off domains at even the hint of a lawsuit, depriving registrants of the very domain-generated income required to fund litigation defense when they believe the allegations against them are bogus.

While this wouldn't impact the public as directly, it's basically a trademark version of SOPA, more specifically focused on cybersquatting. But even just setting the precedent of greater secondary liability would be a huge problem. Trademark already suffers from a lack of secondary liability safe harbors. Pinning direct liability on third parties for the actions of others is a step in the wrong direction.

Filed Under: cybersquatting, domains, liability, secondary liability, sopa, trademark
Companies: better business bureau

Universal Music Targeting Domain Registrars To Take Down File Sharing Sites Without Due Process

from the the-next-tactic dept

Remember back when Immigrations and Customs Enforcement (ICE) from the Department of Homeland Security was seizing domain names over file sharing claims based on a very questionable interpretation of the law? It got so bad that ICE had to return some of them because the DOJ had no case, and the federal government had flat out censored some websites for over a year based on bogus information.

Since then, ICE has mostly kept away from seizing domains related to copyright infringement issues (focusing instead on trademark issues, which have many of the same problems, but get less attention). However, it appears that the legacy entertainment industry liked what it saw with this whole "target the domains" strategy. TorrentFreak is reporting that Universal Music in Germany went after the torrent site H33t, not by going after the site directly, but by getting the court to issue an injunction against the domain registrar the site used to get its domain. The registrar looked at the injunction -- which told it that it was responsible for blocking anyone using H33t from sharing Robin Thicke's album "Blurred Lines." The registrar, Key-Systems, realized the only way to do that was to take down the entire site, which it did by removing the name servers. H33t quickly popped up on another domain (now with lots more attention due to the takedown attempt).

Either way this is disturbing on many levels. H33t didn't know this was happening and was given no chance to defend itself. The registrar seems equally concerned about the implications of this, and how others might get broad and ridiculous injunctions sent to registrars, rather than the actual party responsible:

This is the first time that a torrent site has been targeted by a copyright holder through a domain registrar. While the details of the injunction haven’t been made available to the public it sets a dangerous precedent. This is also one of the main reasons why Key-Systems is determined to fight the ruling.

“We regret that we cannot comment in detail on an ongoing legal matter that is yet to be finally decided by the court, however we are determined to get this court order lifted as soon as possible,” Greimann tells TorrentFreak.

Already, it's concerning enough that the entertainment industry likes to target secondary players like the tools providers, rather than those who are actually engaging in the infringement. But here it's gone to another level, where the target is a tool provider to a tool provider of someone who may be infringing.

Filed Under: domain registrars, due process, file sharing, germany, liability
Companies: h33t, key-systems, universal music

MPAA & RIAA Return To Blaming Google For Their Own Inability To Innovate

from the not-this-again dept

Remember how back after SOPA ended, the MPAA's Chris Dodd kept going on and on about how he was going to take a more conciliatory and partnership-based approach to the tech industry (which he mistakenly seems to believe is defined by "Google")? Apparently that's out the window. Today both the MPAA and the RIAA have launched a one-two punch on Google, which is clearly designed to do one thing: get Google to start censoring its search results so that it no longer returns what people are looking for, but instead returns what the MPAA and RIAA think should be the right search results. The fundamental problem, of course, is that the MPAA and RIAA both seem to think that Google is supposed to deliver the answers they want the public to see, when everyone else recognizes Google's role is to return the results its users are searching for.

The "one-two punch" consists of the MPAA releasing a study that blames Google for piracy, followed by the RIAA testifying before Congress that everyone else is bending over backwards to help stop piracy, but Google is failing to do enough. Let's cover these in two separate posts. This one will focus on the MPAA's joke of a study which does everything it can to pin the blame for piracy on Google, but fails pretty spectacularly as you dig into the details. Amusingly, even the MPAA's own "talking points" on the study (which a friendly bird in Congress passed along) more or less admit that the study is incredibly weak.

The key number, which the MPAA does its best to bury is that search engines "influenced" only 20% of the times when consumers accessed infringing content. This is only slightly higher than the results of our own study, and it shows that the impact of search on infringement is fairly minimal. Of course, rather than focus on that, the MPAA trumpets a different number: claiming that "74% of consumers surveyed cited using a search engine as a discovery or navigation tool in their initial viewing sessions on sites with infringing content."

Note the careful choice of words: "discovery or navigation tool." This fits with our own findings (linked above), which found that a very large percentage of the traffic to sites commonly associated with infringement are people simply using Google instead of the address bar. That is, when we looked at the data, here were the top eight search terms that sent traffic from Google to The Pirate Bay:

1. pirate bay
2. the pirate bay
3. piratebay
4. thepiratebay
5. tpb
6. piratebay.org
7. pirates bay
8. thepiratebay.org

Those are unlikely to be people really "searching" for TPB. Rather, it's just the lazy way of using Google as a "navigation" tool. If that failed, it's highly likely that most of those people would simply try again by using the actual URL. In fact, studies have shown that tons of people use searches as a navigation tool, rather than as a discovery tool. So, it seems unlikely that forcing, say, Google to return something other than TPB when people search on "pirate bay" is going to prevent infringement. It just leads people to go directly to TPB, rather than using the "short cut" of typing something faster.

Also, the 74% number came from a "survey," and we know how reliable those are, or how they can be heavily influenced by the wording of the question. Hard to take that number as anything particularly enlightening even though it's the one the MPAA is so focused on.

In the talking points the MPAA is passing around, it claims "Search engines bear a huge responsibility for introducing people to infringing content." But that's ridiculous. People know there's infringing content out there. They're not magically discovering it because of search engines. And then there's this:

Take Google's algorithm change as an example -- they held this up last summer as a step that would have meaningful impact and unfortunately we see in the data here that it hasn't.

Um, duh? That, of course, cuts against what the MPAA is arguing elsewhere in this very same release: that Google can have a meaningful impact. Except now they're admitting that it hasn't had an impact even when it did exactly what the MPAA asked it to do. The point should be clear to pretty much everyone: changing the search algo to favor Hollywood's preferred sites doesn't stop infringement, because people who want to infringe will find a way to do so. It's not that the search engine magically turns people into infringers. The MPAA, not having gotten the results it wants, just wants to do more algo changing, not recognizing that the end result is going to be the same. There's a word that describes doing the same thing and expecting different results.

Update: Matt Schruers digs deeper into the report and finds out that, indeed, 37% of the "searches" are "navigational" meaning it was just someone typing in the name of the site they wanted rather than doing a search. It also points out that the methodology is that if someone accesses infringing content within 20 minutes of doing a search, that access is blamed on the search. Dodgy methodology at best.

The report, titled “Understanding the Role of Search in Online Piracy”, asserts that 19.2% of visits to infringing content were “influenced” by a search engine (which MPAA rounds up to 20%, not down, because Hollywood accounting).

What does “influenced” mean?  It does not mean, apparently, that the user conducted a search and then clicked on a link presented in the search results.  According to the study’s methodology, such an approach would be too “narrow,” thus necessitating a “hybrid” approach that includes any instance where the user visits an infringing site within 20 minutes after conducting potentially incriminating searches.  Although the report itself makes no specific policy recommendations, MPAA personnel have complained [1], [2] to officials that search providers’ existing voluntary efforts are no replacement for government regulation.

Less prominently stated is that 37% of searches for infringing content involved a “navigational search.”  “Navigational searches” is a term of art (or a euphemism) for typing a domain name into the search bar instead of the navigational bar of the browser.  (Most Internet users have probably done this at one point or another, either by accident or out of laziness.)  This means that the study’s 19.2% figure disguises the fact that more than a third of the searches that precede a user accessing infringing content via (e.g.) MegaUpload were searches where the us

Filed Under: blame, liability, search engines, studies
Companies: google, mpaa, riaa

Judge Decides The Prenda Buck Should Stop With John Steele And Paul Hansmeier

from the another-shoe-drops dept

The latest ruling in the AF Holdings v. Navasca case has come out with Magistrate Judge Nador Vadas completely slamming Team Prenda, focusing mainly on John Steele and Paul Hansmeier, whom he thinks should clearly be directly liable for the attorneys' fees already ordered on AF Holdings in the case, but which haven't yet been paid (of course). This is in response to the hearing from a few weeks ago, in which Judge Vadas had made it clear that he wanted AF Holdings/Prenda to answer some very specific questions. Paul Duffy, representing AF Holdings, did not answer most of the questions, and the Judge noticed. He also noticed that AF Holdings did basically nothing to actually respond to most of the issues, other than trying to attack Brett Gibbs or Navasca's lawyer Nick Ranallo.

Even after the excoriating decision Judge Wright issued in Ingenuity 13, and the troublesome findings Judge Chen made in his order awarding attorneys' fees to Navasca, AF chose not to oppose the majority of the arguments in Navasca's motion for sanctions. Instead, AF introduced immaterial issues in its opposition, attacked its former counsel Gibbs, and attacked Navasca's counsel.... AF addressed the “Salt Marsh” issue and the working relationship between AF's former counsel Gibbs and its CEO/manager/sole employee Lutz.... However, AF failed to oppose Navasca's arguments that Steele and/or Hansmeier (1) manufactured Cooper's involvement in AF and forged his signature; (2) were in cahoots with the computer forensic experts who identified the alleged illegal downloaders that AF then sued; and (3) themselves uploaded the Video to Pirate Bay to induce others to download the Video. AF failed to offer any evidence to rebut Navasca's evidence establishing these points. AF's counsel attacked the affidavit of Delvan Neville, who explains how he determined that John Steele or someone with access to Steele's GoDaddy account uploaded the copyrighted works that form the basis of AF's lawsuits to BitTorrent swarms in order to induce infringement.... But AF did not actually rebut the evidence Neville presents. Instead of grappling with these admittedly difficult accusations, AF “respectfully request[ed] that to the extent the Court deems one or more to be relevant in any respect, that it identify those matters and allow Plaintiff opportunity to respond and present evidence to contradict them.” .... AF's counsel is apparently not familiar with the rules of federal procedure, or with basic principles of motion practice

That last sentence? Ouch. Later, the Judge restates the three straightforward questions he'd ordered Duffy and AF Holdings be prepared to answer, and then notes "AF chose not to present any witness at the evidentiary hearing, continuing its campaign of obfuscation."

From there, the Judge notes that Judge Wright's initial findings against Team Prenda were compelling and adopted in this case. He finds that Gibbs' testimony concerning John Steele and Paul Hansmeier was convincing, and notes that Paul Duffy presented little evidence to counter any of it. The Judge also faults Steele and Hansmeier for claiming that they haven't had "a full and fair opportunity to litigate these issues," noting that's not at all true, going back to the opportunity before Judge Wright.

The key point of all of this is to see if John Steele and Paul Hansmeier could be made personally liable to pay the attorneys' fees ordered by Judge Chen in this case, and Judge Vadas is clearly convinced. Still, he notes that he's unable to do so under some of the proposed theories. He can't use the court's inherent powers, since neither Steele nor Hansmeier technically appeared as attorneys in the case (even if Hansmeier was deposed as a corporate representative). Still, the court notes that there's tons of evidence that Steele and Hansmeier deserve sanctions, but since they're not officially part of the case, there's just no jurisdiction.

However, that doesn't let them off the hook. The court finds that it can add Steele and Hansmeier personally as debtors to the original judgment, noting that they are basically an "alter ego to the original debtor." It then goes into a fair amount of detail about why this makes sense, highlighting the evidence that Steele and Hansmeier really controlled the lawsuit, that they had a financial interest in the ruling, and, most importantly, their near total failure to refute any of the evidence against them, despite multiple opportunities.

The evidence adduced at the August 28, 2013 evidentiary hearing confirms Judge Wright's findings. AF's failure to refute that evidence with any of its own also speaks volumes. Although the undersigned ordered AF to be prepared to explain at the hearing the money trail and provide an accounting of the funds it received from copyright infringement actions or settlements, AF failed to present a witness who could do so or documents that might shed light on these issues. During the evidentiary hearing, Duffy represented to the undersigned (but did not testify) that it was his belief that the settlement or litigation proceeds were held in IOLTA trust accounts by AF's attorneys (including Prenda Law, formerly known as Steele Hansmeier). Duffy also represented as a "fact" to this court that a settlement check in another matter was written to Prenda Law.... However, no witness testified regarding whether any of the funds ever left Prenda's trust account(s). Thus, there is no evidence before the undersigned that any settlement or litigation proceeds ever reached AF.

The end result is that Vadas has sent the case back to Judge Chen with a recommendation for yet another Order to Show Cause why Steele and Hansmeier shouldn't be added as debtors to the original award for attorney's fees. In short, Hansmeier and Steele now get to argue why they shouldn't personally be liable for this debt. I'm sure their filings will be highly entertaining.

As a post script to this story, elsewhere we had noted that Mark Lutz had failed to show up at the hearing, despite Paul Duffy insisting that he knew Lutz was in town and would be present soon. A week later, Duffy finally filed with the court stating that Lutz had a good excuse, but wanted it to remain secret from the public. The court rejected two separate attempts to explain secretly why Lutz did so, and then just before Vadas' ruling filed a statement from Lutz that claims he was detained at the airport for the entire day by federal officials and unable to contact anyone, including his lawyer. He does not explain why he was detained, other than that it "was not for any actions I took at the airport and had no way of knowing that I was going to be detained on that day until it happened."

There are a number of oddities in this explanation, including the earlier claims from Duffy that he knew Lutz was apparently in town, when he wasn't, as well as the claim that he was unable to contact his lawyer during the entire 16.5 hours that Lutz claims he was detained. That's an awfully long time to be detained without access to one's lawyers. It also doesn't explain why it took Duffy a week to file anything with the court about this absence.

Filed Under: alan cooper, brett gibbs, edward chen, joe navasca, john steele, liability, mark lutz, nador vadas, nick ranallo, otis wright, paul duffy, paul hansmeier, sanctions
Companies: af holdings, ingenuity 13, prenda, prenda law

Suddenly The Terms And Conditions Of Your 'Cloud' Service Provider Matter A Lot More

from the pay-attention dept

With everything going on with the NSA and other intelligence agencies relying on being able to reach out to third parties for data, we've pointed out a few times now that this may do serious harm to the tech industry. But what about from the consumer (or business buyer) perspective? It seems likely that companies (especially) should really start rethinking how they make use of certain cloud services. There are, clearly, tremendous potential benefits from cloud providers, which is why it's become so popular lately. But, there are certain downsides as well, and the whole concept of government access (or government demands, a la Lavabit) has really woken people up to some additional potential hazards they may not have paid close attention to in the past.

It also means that a lot of users of cloud services are suddenly reviewing their options a lot more carefully. We've talked about how this may be a boon for private cloud offerings, but there are still plenty of benefits to remote cloud offerings as well. But, suddenly the exact terms that are associated with those offerings, and the potential liability you might face for using those services becomes much more important. In the past, people may have grumbled about the terms of service or potential liabilities they were taking on, but the threats seemed more theoretical. That's now changed.

Over at OpenSource.com, Georg Greve has a good post that looks into questions that need to be asked before using a cloud service these days in light of the revelations about government snooping. For example, in the past, while many people might not have cared what country their service was hosted in, now it becomes critically important. He also highlights the importance of open source software and open source expertise -- both of which provide benefits on mulitple levels, including a higher likelihood of standardization and, frankly, probably a stronger interest in not just caving to government snooping.

But the biggest one is the final point: having a way out.

Know your escape plan.

Solutions that are provided to you as fully open source have an elegant escape hatch built into them by their design. Read: You can take the entire stack and host it yourself without losing productivity or data. This backup plan protects you against legislative changes, company restructuring, and much more. The other side to this is provided by open standards.

The Takeaway: Choose solutions that have the most complete open standards approach to go with open source, because if your escape plan fails for whatever reason, there is a backup. Beware of "Open Core" offers masquerading as open source, though. Gartner called them the "emperor's new clothes" for a reason.

Indeed. As I've argued a few times in the past, so many "cloud" services available today aren't fulfilling the real power of the cloud. Instead, they're little more than locked-in silos, where you're stuck with that particular vendor. The switching costs are incredibly high in those cases, which may not matter when everything's going great, but when you're suddenly worried about the privacy of all of your users (or yourself!) these things suddenly matter quite a bit. And yet, many who are jumping on the cloud bandwagon don't take the time to explore the amount of lock-in and what it means for their own flexibility and liability as well.

Part of the problem, of course, is that many users of cloud services just haven't put a premium on having such control and freedoms. Hopefully, with the growing recognition of why this is an issue, more cloud providers will recognize that not locking people in, and providing more open and flexible solutions is a powerful selling point.

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This post is sponsored by The Hartford.

Filed Under: cloud, data security, liability, sponsored post