One Of The Most Successful NY Startups... Is Dedicated To Infringing Activities (According To The Entertainment Industry)

from the but-of-course dept

A few months back, we wrote about the bizarre situation in which advertising giant, GroupM, had put together a list of "pirate sites" on which they would not allow their advertising to appear. From what we've heard, GroupM relied heavily on its entertainment industry clients, including Warner Bros., Paramount and Summit Entertainment on the movie side, and Universal Music on the music side. Universal Music was a key player in compiling the list, which is why a bunch of hip hop blogs it wanted power over ended up on the list (along with other non-infringers like the Internet Archive, Vimeo, SoundCloud and personal websites of Universal's own artists.

As we noted in the article, one of the sites listed as a "pirate" site was the site Complex.com, which is a rapidly growing popular "lifestyle" site, focused on young men. What I didn't realize was just how big and successful the site is. Business Insider recently ranked Complex as one of the most valuable NY startups, pinning its value around $140 million. It also has two of the most respected VC firms around backing it: Accel and Austin Ventures. This is not a fly-by-night operation.

And this is a big issue. We keep hearing from supporters of PROTECT IP that people shouldn't worry about it and similar legal attempts taking down legitimate businesses, because it's only designed to go after sites that are dedicated to infringing activities. But as this shows, according to folks in the legacy entertainment world, successful new media companies, like Complex, can be harmed by falsely accusing them of being "dedicated to infringing activities," and seeking to get advertisers or payment processors blocked from the site.

This is why so many tech entrepreneurs are so worried about legal changes like PROTECT IP. We've seen how the old industry likes to accuse anyone who does anything new or interesting of merely being "pirates," and using that to harm them. Why should we then allow Congress to pass new laws that will only come back to haunt the successful new generation of startups that are growing, creating jobs and actually innovating?

Filed Under: copyright, infringement, protect ip
Companies: complex media, groupm, universal music

As Expected, Alternative DNS Systems Sprouting Up To Ignore US Censorship

from the not-like-people-weren't-warned dept

After the US government, via Homeland Security's Immigration and Customs Enforcement (ICE) division, started seizing domains without any notification or adversarial hearing (things that most of the world would consider to be reasonable due process), some folks quickly put together a browser extension, called MAFIAAfire, that would route around any ICE seizures and take you directly to the sites whose domains had been seized. This is, as the internet saying goes, a form of seeing censorship as "damage" and routing around it. Of course, that could be done on a much larger scale. As a bunch of the folks who built key pieces of the core internet infrastructure warned, continuing this kind of policy (and extending it with PROTECT IP) will lead to more workarounds that inevitably will fracture key pieces of the internet and make it significantly less secure. Supporters of PROTECT IP refuse to heed this warning -- and, from what we've heard -- refuse to compromise and make sure that the basic functioning of DNS will be protected.

So now, totally as expected, we're already seeing alternative DNS systems showing up, advertising that they should be used to route around US government censorship of such websites. The one getting attention these days is called BlockAid.me.

What's just as stunning as the fact that supporters of PROTECT IP still can't figure out how this is really, really bad, is that they also don't realize how this pretty much destroys any argument the US makes around the globe in trying to protest political censorship. Some claim it's entirely different, but it's not. Both involve a government entity deciding that websites cannot be reached without a trial. This makes the US look ridiculous in the eyes of the world, but I guess as long as it makes sure that Universal and Warner Bros. can prop up their profits for a few more years... it's all good.

Filed Under: alternatives, censorship, dns, protect ip

Norway The Latest Country To Look At Censorship As A 'Solution' To Entertainment Industry's Failed Business Models

from the so-sad dept

Almost exactly two years ago, I spent a nice week in Norway for Nordic Music Week, where I was able to spend a lot of time talking with musicians and music industry folks from various Nordic countries, including Norway, Sweden, Finland, Denmark and Iceland. One thing, that I found encouraging about many that I spoke to in Norway, was how eager and willing they were to embrace new opportunities. I wrote about how refreshing this was at the time. There were lots of success stories coming about and a general optimism for new technologies, without much worry about things like "copyright" infringement.

So it's a bit disappointing to see that legacy industry lobbyists (with the help of US diplomats, of course) appear to have had their way with Norwegian politicians and convinced them to propose an extreme and dangerous reform, that would both order ISPs to censor websites, "where material is being made available to a great extent, evidently infringing copyright or other rights in accordance to this Act" and also slash away at current data protection rules that require careful handling of personal info. Under this law, any info related to accusations of copyright infringement would no longer need to comply with Norway's Data Protection Act, which makes sure that information is handled properly.

This is all very unfortunate, if not surprising. We're seeing similar efforts in other countries as well. To the industry players, they seem to not care at all what rights they trample, just so long as they think it makes copyright "stronger."

Filed Under: censorship, norway, privacy, protect ip

Monster Cable Claims EBay, Craigslist, Costco & Sears Are 'Rogue Sites'

from the total-failure dept

When we talk about how dangerous PROTECT IP is as a censorship bill, we're often told that we shouldn't worry so much, because it's only targeted at "rogue sites" and thus wouldn't impact any legitimate sites. We're told there's nothing about rogue sites that is worth defending. And yet, as we've seen with the list of "pirate" sites that GroupM put together with help from the music and movie industries, their definition of a "pirate" site is expansive in the extreme. It included the Internet Archive, Vimeo, Soundcloud and a ton of blogs and news sites, including the famed Vibe magazine.

And don't think it gets any different when you hop over to the trademark/counterfeit side of the debate. In Tim's post about Monster Cable lobbying in favor of PROTECT IP, as an aside at the end, he notes that on Monster Cable's own list of "rogue sites," eBay and Craigslist top the list. And it doesn't stop there. Retailing giant Costco is on the list. As is Sears. Also some Backpages sites are listed as well (Backpages is a Craigslist-like classifieds system). There's also FatWallet, which is one of the most popular "deal" listings sites out there. There's also PriceGrabber and ComputerShopper -- popular legitimate sites for comparison shopping and computer purchases. These are not "rogue sites." These are legitimate companies that Monster Cable appears to have a vendetta against, because they allow for or promote the resale of perfectly legitimate secondhand goods.

In other words, for all the misleading whining from Monster about how it needs PROTECT IP to stop "rogue sites," you can see from Monster's own definition of what it considers a rogue site, that it would like to use such things to stomp out legitimate secondhand sales. Now, you can argue over whether or not these sites would pass following a judge's scrutiny under PROTECT IP, but we've seen judges rubber stamp similarly questionable claims against blogs in the past as being "rogue sites."

If you look at both the GroupM and the Monster lists, one thing becomes clear: these companies are defining any site they can't control as being a "rogue site." This isn't about stopping "piracy." It's about using the law to stomp out channels that they can't control. This is a key point that becomes obvious if you spend any time looking at the details of this law. It's not about protecting "IP." It's about protecting old business models that were based on absolute control of the channel. The complaints of the Universal Musics and Monster Cables of the world isn't really about counterfeits and piracy, but about the fact that they no longer have absolute control.

And they're just using "piracy" as the wool to pull over Congress' eyes to pass a law that tries to give them back control over the channel... by declaring tons of perfectly legitimate sites "rogue sites."

Filed Under: competition, control, protect ip, rogue sites
Companies: costco, craigslist, ebay, monster cable, sears

Monster Cable Blames 'Rogue Sites' Rather Than Its Own Business Practices For 'Stealing Good Will'

from the apparently,-trademark-lawsuits-and-$1800-cables-aren't-profitable-enough-any dept

The Copyright Alliance blog has a new post up patting itself on the back for its tireless efforts in pushing PROTECT IP through the legislative system. CA writer Sandra Aistars has joined the deceptively-named U.S. Chamber of Commerce in a series of "educational meetings and briefings to urge support for legislation targeting these so-called rogue sites."

In addition to the expected "contribution" from the AFL-CIO ("online infringement costs jobs, steals wages, and cuts benefits, blahblahblah"), a name well-known to Techdirt has reared its astronomically-priced head to decry the global impact of pirated goods: Monster Cable.

Illustrating the diversity of jobs impacted by online counterfeiting and piracy, David Tognotti, General Counsel of Monster Cable, shared his company's story. Monster Cable, founded by a first-generation American in his garage, now owns 400 patents and employs 500 people. But during the last several years, the company has lost "hundreds of millions of dollars" to counterfeits.

"Our brand is respected by consumers worldwide," he said. But "rogue web sites are stealing the good will we've built, and siphoning off sales."

The implications of counterfeit versions of those created by a company like Monster Cable goes beyond lost jobs and revenues. Counterfeit electronics are made in substandard factory conditions, and can contain unlawful and harmful amounts of substances like lead and chromium, he explained. Consumers have also complained of stolen credit card information, he said.

I'm really not sure what sort of "good will" these rogue web sites are "stealing" from Monster. Could it be all the "good will" it built up by suing anybody who dared to use the word "monster" in their own ventures, including entirely unrelated businesses such as a mini-golf course, an automotive parts shop and (although it dropped this case before it went too far) the manufacturer of deer salt blocks?

Perhaps Tognotti is referring to the "good will" built up by Monster's overpriced cables that are pushed via deceptive point-of-sale displays and contain incredibly high profit margins. While there isn't anything wrong with separating fools from their money, your product should at least be able to outperform a wire coat hanger.

If anything's hurting Monster Cable these days, it's the self-inflicted beatings handed out by its pricing structures, questionable sales tactics and general disregard for its public image. With the ready availability of inexpensive cables that perform just as well as Monster's, it's highly doubtful that pirated goods are the driving force behind any "loss of sales" that Monster claims.

(Another small note: if you have a whole lot of spare time, check out Monster's extensive list of "blacklisted sites" on its corporate web site. Topping the list are ebay and Craigslist. Apparently, Monster would rather you didn't purchase second-hand cables, either.)

Filed Under: good will, lobbying, politics, protect ip
Companies: monster cable

Disney 'Analyst': My Lack Of Imagination Necessitates Passage Of PROTECT IP

from the business-model-change? dept

Last we'd heard from Disney "research analyst" Anthony Accardo, he was whining about how the tech industry somehow owes the entertainment industry a living. In that article, he seemed to believe that the massive entertainment conglomerates, like the one who employs him, are "the little guys" with no government power, who haven't had an active role in copyright policy over the last century. Apparently, no one reminded Accardo that when Homeland Security's ICE division kicked off their effort to censor websites without due process, they did so from Disney's headquarters. Perhaps Accardo was home sick that day? And need we mention Disney's role in the Sonny Bono Copyright Term Extension Act?

Anyway, his insistence that the media conglomerates in the music, movie and TV industries are somehow helpless weaklings comes across in another recent writeup by him, in which he insists that there are only two options with PROTECT IP: capitulate or pass PROTECT IP and censor websites.

You see what's missing? Any suggestion whatsoever that perhaps the solution is to adapt and to change your business model.

That there's growing evidence that when companies actually provide consumers what they want in a convenient manner, infringement declines massively, would seem to demonstrate that there is a more compelling option. Especially when you look at the history of greater enforcement of copyright law, which has been shown time and time again not to work. Shouldn't a "research" analyst be aware of all of this?

But, no, Accardo insists there are two, and only two, options, and neither of them seem to involve Disney adapting in the marketplace. The "first option" in Accardo's mind is to "uphold the status quo," which (in Accardo's world) means that infringement is unstoppable. No mention is made of new legal services and their ability to compete and drive down infringement rates. Apparently, reality doesn't match with the Disney narrative. Those Disney folks. They write such amazing fantasy.

Option 2, then, is to pass PROTECT IP, break the internet and censor websites. Accardo, of course, insists that this isn't censorship. He ignores the reports from key internet architects that PROTECT IP would break the internet, but instead decides to focus on the claims of censorship. Or, rather, he doesn't focus on the actual claims of censorship, but instead focuses on a fuzzy strawman:

Censorship is suppression of speech deemed harmful or objectionable to the general public by a government body. Those who profit from piracy want to include unauthorized distribution of copyrighted content in the category of speech. In our earlier example, my distribution of Tha Carter IV through newalbumreleases, RapidShare and Google to a million people without the consent of Lil Wayne would be considered an exercise of free speech. Let's ignore the fact that Tha Carter IV isn't my speech, but Lil Wayne's (and piracy hardly falls under "fair use"). If blocking unauthorized access to a work of art that is available ubiquitously through legal channels is censorship, then we need a new definition of censorship.

I've seen a few similar arguments made in the comments, and it's beyond intellectually dishonest. Because the complaint of the law professors, that Accardo is discussing, is not about how taking down such sites will stop infringement. Everyone agrees that infringement is not protected by the First Amendment. The complaint is in how the bulldozer approach of PROTECT IP doesn't just stop infringing speech, but all speech on those websites, including tremendous amounts of legitimate and protected speech.

This is not a theoretical argument either. We have real evidence. The same "Operation In Our Sites" effort that launched at Disney headquarters took down a bunch of blogs and forums with protected speech on them. There's a lawsuit going on about that right now. Playing the card of "infringement isn't protected speech" is not valid, because no one's saying we should protect infringement. We're talking about the massive amount of collateral damage that happens when you use such a bull-in-a-china-shop approach of taking down entire websites (with no or limited due process) including tons of protected speech.

Furthermore, considering that Accardo's colleagues in the entertainment industry have a long, long history of describing perfectly legitimate activities as "infringing," we're pretty reasonably worried that his employers would end up taking down important protected speech in their willy-nilly, why-should-we-innovate approach to the modern market. After all, this is the industry that declared the player piano, the radio, the photocopier, the VCR, the DVR, the MP3 player and online video platforms to be dedicated to infringing activity. And, most recently, some of his colleagues in the industry decided that such resources as the Internet Archive and popular content sites like Vibe Magazine were dedicated to infringing activities.

So while Accardo may be sure that such things would never, ever happen under PROTECT IP, given the fact that we see them taking down and blocking legitimate, protected, non-infringing speech all the time... forgive us for saying that we (and many others) are very, very worried about the censorship mechanism provided by PROTECT IP.

Filed Under: anthony accardo, censorship, copyright, protect ip
Companies: disney

House Version Of PROTECT IP To Cover Cyberlockers Too

from the of-course-it-will dept

It's been rumored for a while, but there's growing evidence that the long-delayed House version of the PROTECT IP Act will include provisions for attacking cyberlockers. For whatever reason, the MPAA (in particular) has had an infatuation with cyberlockers as the next big "evil," so this is hardly a surprise. Of course, there's a big problem here: cyberlockers are nothing but online storage, and they have tons of legitimate uses as well. It's difficult to see how any legislation can be crafted that won't have massive unintended consequences and liabilities for all sorts of perfectly legitimate online storage providers. How do you distinguish things like Dropbox or Box.net from one of the cyberlockers that the MPAA loves to hate, such as Hotfile? And as cloud storage continues to grow, the issue only gets worse. How about Amazon.com's S3 offerings? In some ways that's a cyberlocker as well. The fact is that the MPAA is playing a silly and pointless game of whac-a-mole. All this new effort will serve to do is piss people off. It won't lead to any more purchases, but will make it clear that the MPAA has no problem trampling innovation when it can't figure out how to use it properly. Cyberlockers have perfectly legitimate purposes -- as did VCRs before them... but the MPAA tried to kill that, and is now seeking to do the same for lots of other services, just because the MPAA can't comprehend how they're useful.

Filed Under: cyberlockers, protect ip

Senate Lets Copyright Lobby Set Up Shop In Senate Building During PROTECT IP Debate

from the how-about-some-bias-with-your-coffee? dept

This is pretty ridiculous. Just as the Senate is debating the PROTECT IP bill, the Copyright Alliance, a lobbying group created and funded by a bunch of the big legacy copyright maximalist companies, apparently got to set up an "educational display" in the Senate Russell Building Rotunda. The Copyright Alliance has no shame about how it's using this "educational display" to influence the vote:

The exhibit is an opportunity to showcase for lawmakers and visitors to the U.S. Capitol Complex the importance of copyright to creators across America, by focusing on people behind the lens, sharing stories about the images, and helping viewers understand the investment and commitment made by photographers capturing our nation’s many stories.

I'm curious if the Senate allows such other totally biased parties to set up exhibits like that during debate on other bills. How about pharmaceutical lobbyists setting up an "educational" nursing station in the Senate, just to show the "importance" of protecting pharma. And I'm sure the banks would love to set up an "educational" bank vault in the rotunda during Wall Street reform hearings. How could anyone in the Senate see such a biased effort as being okay?

Filed Under: copyright, lobbyists, protect ip, senate
Companies: copyright alliance

Can The US Chamber Of Commerce Lobby For PROTECT IP Without Being So Blatantly Intellectually Dishonest?

from the or-is-that-not-possible dept

Ah, the US Chamber of Commerce. The private lobbying giant, which thrives on people confusing it with the US Department of Commerce, is really, really angry about "counterfeits." Of course, one might argue that the only reason its been so successful itself is the likelihood of confusion between it and the US Department of Commerce. But we'll leave that aside for now. The CoC has been a big time supporter of PROTECT IP lately, but apparently is simply unable to make a credible argument in favor of the law.

The group has put out two incredibly misleading videos. The first one focused on a woman in Canada who got bogus drugs that allegedly led to her death. Of course, Protect IP only applies to the US, so the woman in Canada still would have had a problem. And, a larger point is that there are tons of legitimate pharmacies, and it's pretty easy to tell what's legit and what's not. Why this woman was ordering from a questionable pharmacy is never explained. Furthermore, the scare stories about fake drugs killing people tend to be overblown as well. It doesn't do fake pharmacies much good either to kill customers. Finally, the fake drugs issue could be dealt with by legislation that focuses on fake drugs. Not ridiculously broad legislation that encourages censorship and puts the compliance burden and liability on tons of US companies.

The second video was even more ridiculous. Finally moving away from the "fake drugs kill people, and therefore we need to censor the internet to stop people from sharing music" line of argument, it presented some content creators whining about a changing world. Except... as our own research showed, none of the "victims" in the video had their stories fully check out. Two of them had relied on the works of others to build their own careers, while complaining that others might do the same to them. The actress had a bit role in one film nearly a decade ago that got unanimously dreadful reviews ("so bad that it makes you feel like tearing your eyebrows off one by one just to numb the pain") and was complaining that her royalty checks a decade later were too low. The author complained that her industry was suffering because of file sharing -- directly contradicted by other authors and the publishing industry's own statistics.

So... now, the CoC is back to screaming "fake drugs! dead people!" In a piece penned by the CoC's "executive VP" of its "Global Intellectual Property Center," Mark Elliot, the claim is made that if we don't censor the internet, the US won't be able to innovate any more. Complete and utter hogwash.

We need to create an environment that rewards that innovation.

We have one. It's called the marketplace. And you know what doesn't reward innovation? When the legacy companies run to the government to have every new innovative platform -- the player piano, radio, cable TV, the photocopier, the VCR, the mp3 player, the DVR, online video, etc. -- declared infringing and locked up and shut down. But that's what PROTECT IP is designed to do.

For example, imagine spending hundreds of millions of dollars on research for a new lifesaving drug, only to have a counterfeiter make an unregulated, substandard version, with little or no medical value. Imagine that counterfeiter selling this product — with your name on it — online with impunity.

Well, they can't sell it online with impunity. We already have trademark law, which doesn't allow that kind of thing. Why doesn't Elliot mention that? Ah, well, because it undermines his whole argument. Also, the idea that people are confused into buying the fake drugs has little support in reality. Legitimate pharmacies sell the real thing and most people know how to find a legitimate pharmacy. The people seeking alternatives are those priced out of the market -- due in large part to the ridiculously high prices set on drugs due to draconian and excessive IP laws... the same laws Elliot now seeks to make even more draconian.

Imagine, for another example, opening up your own small business, a photography studio. You work by yourself, maybe with one assistant, and take wonderful, high-quality photographs that you sell to advertising agencies or the hometown newspaper. Imagine that you are able to expand — and hire two or three of your neighbors to meet the growing demand.

Then imagine your customers downloading your photos from a website that stole your best images, posted them online and profited from either sales of your photos or advertising revenue from the attraction of your photos.

Imagine being smart about that, and using it to your advantage. Imagine highlighting those who copied your image, and destroying their reputations while building your own. Furthermore, existing copyright law already handles the situation described above. PROTECT IP does nothing to deal with the situation described here.

These rogue websites dedicated to counterfeiting and piracy put U.S. jobs, consumers and innovation at risk. Last year, these rogue sites stole an estimated $135 billion in sales from legitimate retailers around the globe. They clearly violate the intellectual property rights of U.S. citizens by ignoring our trademark and copyright laws.

Funny. The "rogue sites" that have been described in the past were not posting photos. Furthermore, no rogue site "stole" sales from anyone. Why can't the USCoC use the proper language? And that $135 billion number has been debunked so many times -- even by the US government -- that it's sad that its still trotting that out.

The Senate is waiting to vote on the legislation, and the House is due to introduce its version of rogue site legislation in the coming days. We look forward to the enactment of rogue-site legislation this year to protect American jobs and consumers by cutting off the worst online intellectual property thieves from the U.S. marketplace.

Translation: the old dying legacy business, who pay the US Chamber of Commerce to lie in public for them, want a new protectionist, anti-innovation law to shut down any technology that interferes with their business model -- and they believe the best way to do so is to put the entire compliance and legal burden on the upcoming startups who are building the platforms that will disrupt their existing business.

It's a really disgusting and cynical approach from an organization that has a history of such bogus efforts.

Filed Under: copyright, counterfeits, protect ip
Companies: us chamber of commerce

UK Politician Pushing For Its Own Version Of PROTECT IP

from the and-so-it-spreads dept

One thing that entertainment industry lobbyists are exceptionally skilled at is making their campaigns global. You notice it all the time. You see a particular (usually bad) law pop up in one country... and, very soon after, nearly identical legislation pops up elsewhere. The really nefarious part is that the lobbyists then use these attempts in a few countries to make it seem like there's a "worldwide push" for such laws -- even though they're all written by the same lobbyists. Even worse, they introduce slight differences in different countries, which then allows them to make use of the most draconian laws in one place to pressure the other countries to ratchet up their own laws in the name of "harmonization" -- usually under the bogus guise of a "free trade agreement."

The latest example of this is that it appears that lobbyists have convinced some UK politicians to create their own version of PROTECT IP, which is now being run up the flagpole by Culture Secretary Jeremy Hunt, who says that Google should be liable if it doesn't block links to pirate sites. Of course, the basic description of what he's proposing sounds like a near perfect clone of PROTECT IP:

Hunt is expected to tell the Royal Television Society that search engines, advertisers and credit card companies should go further to “make life more difficult” for online pirates.

According to reports, if a court deems a site to be unlawful the government wants search engines to push it down the rankings to stifle traffic and at the same time cut off advertising or payment revenues to make the site economically unviable.

That sounds almost the same as PROTECT IP, including putting the liability and compliance effort entirely on "search engines, advertisers and credit card companies"... except that in the actual bill the terms are defined much more broadly and ambiguously. In PROTECT IP, it uses "information location tools," "internet advertising services" and "financial transaction provider" (and also domain name system server). Note that "information location tools" and "financial transaction provider" could be interpreted much more broadly than just search engines and credit card companies.

Of course, I'm curious how all the Google critics will react to this. After all, for months, they've been slamming the Hargreaves report for being the "Google copyright review" and insisting that the UK government is in the pocket of Google on copyright issues. Instead, it looks like, as per usual, the government is still very much under the sway of some legacy entertainment industry lobbyists.

Filed Under: protect ip, search engines, uk
Companies: google