Bold: Matthew Storman, Sans Lawyer, Counter Sues Nintendo For False Allegation Of Copyright Infringement

from the rom-com dept

The ongoing fight between Nintendo and RomUniverse continues! While most of the targets of Nintendo's ire in its war on ROM sites folded to the company fairly quickly, RomUniverse's Matthew Storman boldly chose to fight in court. That led to Nintendo suing the site for copyright infringement. Storman attempted to crowdsource his legal defense, failed at that, and has been fighting this battle without legal representation. That likely explains the site's lame argument that somehow first sale doctrine makes the Nintendo ROMs on its site non-infringing, as though owners of game cartridges could copy the content to the site and resell or give them away there. The court saw through Storman's argument and allowed the trial to move forward.

Which brings us to the present, in which Storman has not only responded to the lawsuit by claiming, again, that first sale doctrine protects him, but has now added a claim that he had no idea infringing files were on the site at all, and has demanded that Nintendo pay him for false claims of infringement. This reply was supposed to be due to the court in January, but the judge delayed that due date... so that Storman could attend a Federal Pro Se Clinic, where he got advice on how to represent himself.

After the brief delay, Storman filed his answer to the complaint at the California federal court. Still without an attorney, he maintains his innocence and denies all allegations of piracy and infringement.

The site operator states that he is unaware of any infringing content that was uploaded to the website. And if there is any, these uploads may be legally protected by the first sale doctrine.

This is not going to work. Claiming ignorance as to the infringing material is fairly laughable. The first sale doctrine argument is a likely loser as well. And the fact that RomUniverse sold memberships in order to get around download limits makes it so as Storman was profiting off of the infringing material. That Nintendo didn't request takedowns of infringing ROMs, giving Storman a chance to comply and stay on the right side of the law, is annoying, but it doesn't suddenly make his other legal arguments any more valid.

Storman goes on to claim, perhaps not entirely without merit, that RomUniverse is actually good for Nintendo.

In an attempt to turn the tables, Storman argues that Nintendo profited from his site. RomUniverse.com and the associated NDSUniverse.com, serve as free advertising vehicles for the gaming company which generated profit from it, for which the site owner never received a penny.

“Copies on the Website originally from Nintendo when seen by users is a positive advertising asset to Nintendo. It is part of an implied contract with Nintendo over the last 10 years. This advertising asset can be calculated and measured by Nintendo in cooperation with Defendant,” Storman adds.

It's an argument we've made ourselves and it probably has some legs. The problem here is that there is no implied contract and Nintendo is well within its rights to sue for copyright infringement, even if that infringement has benefits for Nintendo.

The real bonkers part of this, however, is Storman's counterclaim for damages from Nintendo.

Instead of compensating Nintendo, Storman wants the gaming company to pay up instead. He demands $150,000 per copyrighted work for the false allegations of infringement, as well as $2,000,000 for each false counterfeiting claim.

On top of that, Storman also wants Nintendo to “permanently approve all copying, distributing, selling, performing, displaying, playing, or otherwise using any copy of an [Nintendo] copyrighted work, or any derivative thereof.”

I don't even know where to begin. Storman's play isn't going to work. Whatever lessons he learned in the Pro Forma classes, his actions aren't a good advertisement for those classes. RomUniverse, whatever its benefits to Nintendo, pretty clearly was a purveyor of infringing material. The site made money off of it. Nintendo, whatever you think of the company, is well within its rights here.

It'd be best if Storman would realize he's digging his hole deeper and cut his losses.

Filed Under: copyright, first sale doctrine, matthew storman, pro se, roms
Companies: nintendo, romuniverse

Do You Own What You Own? Not So Much Anymore, Thanks To Copyright

from the a-disaster dept

Do you own the things you own? No, that is not a riddle being served up by the Cat in the Hat. Nor is it a rhyme spoken by the Lorax -- after all, he speaks for the trees, not for copyright laws.

It seems like every week there is a debate about a new topic involving ownership rights. Consumers are engaged in a constant tug of war with rights holders over what they can do with the products that they already purchased from them. A wide array of questions has confused the understanding of fundamental issues such as when people can resell or repair the things that they bought. The First Sale Doctrine stipulates that a rights holder is no longer entitled to control the distribution of a good once it has gone through a legitimate first sale. However, recent technological developments have created a new disagreement to this long-standing law -- do people ever actually own the things that they purchased? Were the products ever truly sold to them, or is everything instead just a temporary lease?

Take the recent debate over Nest products. Nest is one of the leading companies in "smart" thermostats for personal use. These products utilize a variety of light, sound, and heating sensors to automatically regulate the climate in a home and increase energy efficiency. Back in 2014, Nest purchased a company named Revolv that also made "smart" thermostats and proceeded to continue selling them for $300 each.

This once promising acquisition soon turned into a highly publicized controversy when Nest recently announced that it would be disabling the Revolv product line. At first glance this hardly seems worthy of news coverage. This is not the first time that a company has decided to suspend sales and maintenance of an older product. For example, Microsoft stopped maintaining Windows XP and the Zune, while video game companies slowly stop making new products for their old systems (eg. Playstation and Xbox) upon the release of a new platform. The Nest case has become a lightning rod because as opposed to these examples, it's not just stopping the maintenance, upkeep, or the addition of new features. Nest will shut down the device entirely, rendering it as nothing more than a $300 doorstop.

How can a product that was purchased legally by a consumer be turned off by a flip of the switch by the company that sold it? The answer is as simple as it is troubling -- it is because that consumer does not in fact "own" the product. Yes, they own the physical device. But they only lease the software embedded inside the product that makes it go. And because this is a license, the company that made the product retains the right to shut it down. The product was not sold with any stipulation on the box that said that it carried this risk. A consumer would have to be a copyright lawyer to foresee this result.

Every day new telephones, watches, cars, books, and even household appliances like refrigerators are introduced into the market and have had a tremendously positive impact on our lives. An increasing number of products that did not contain any software five or fifteen years ago now do. As this trend continues to grow, the same phenomenon will grow with it. You will own less and less of your own products and will instead simply be leasing them. Maybe one day you will wake up and discover that you are out $300 because the company decides it would rather sell you a different product and shut yours down.
This is not just limited to electronic products. The use of a license to control the resale of a variety of other, totally unrelated products has also grown substantially. Sports teams like the New York Yankees, Golden State Warriors, and Minnesota Timberwolves have all started to use the very same tactic. You might buy a ticket to the event, but you can no longer freely sell it, donate it to charity, or give it to a friend like any other product that you would purchase. Teams are forcing ticket owners to either sell through a select service (of which they get a cut of the revenue), or get their tickets revoked. These services set a variety of economic controls, such as a pricing floor, in order to limit the ability of people to freely exchange the tickets that they lawfully purchased.

As technology continues to be intertwined with every day goods and services, we have to ask ourselves if we want to accept the erosion of our ownership rights. My organization, and those that we work with do not believe so, and will continue to fight to make sure that you do, indeed, own the things you own. A variety of large and small companies and associations have come together to form the Owners' Rights Initiative. ORI has worked with members of Congress of both parties such as Blake Farenthold and Jared Polis in order to ensure the protection of every persons' ownership rights. They've introduced the You Own Devices Act, or, YODA, to ensure that essential software travels with the hardware you purchase. Representatives Farenthold and Polis are leaders in this arena, and ORI is working to build even more champions. Join us in the fight by contacting your Congressman and Senator and asking them to cosponsor YODA.

Lyle Gore is CEO of Ethos Dynamics, a technology reseller in Atlanta, Georgia. He is the past-President of the United Network of Equipment Dealers (UNEDA) and represents the organization on the Steering Committee of the Owners' Rights Initiative.

Filed Under: copyright, first sale doctrine, ownership, rights, software, yoda
Companies: owners' rights initiative

Speak Out Against Copyright Holders Destroying True Property Rights

from the can-you-resell-your-stuff? dept

For a while now, we've been following a series of very scary court cases that could take away your ability to sell physical products you own, by using a bizarre interpretation of copyright law by the courts. You can click back on that link to read some of the background, but the short version is that courts are suggesting that if a physical product is manufactured outside the US, but anywhere on it includes something covered by copyright (an etching, content, software, etc.) then the entire product cannot be sold without permission from the copyright holder. The reasoning makes so little sense as to be unbelievable. Basically, it says that those products weren't made under US copyright law -- so they don't get "first sale" rights -- but they are still covered by copyright law, so selling them is copyright infringement.

This is nonsensical for any number of reasons. Unfortunately, the Supreme Court is about to hear the latest such case, after ending up with a split court the last time around. The reason it was split was because Justice Kagan recused herself, due to being involved in the case prior to becoming a Justice. Her involvement? Penning the filing of the US government against first sale rights. So it's very possible that she'll continue to retain that viewpoint on the court and basically kill off your ability to resell any good manufactured outside the US without permission. This is scary stuff.

While the issue is before the court, it's still important to get people to speak out about this. A few public interest groups have put together a petition site called You've Been Owned: Don't Let Copyright Trolls Steal Our Property Rights! and Citizens for Ownership Rights. The goal is to get the Obama administration to actually recommend preserving first sale rights (contrary to its earlier position). And, failing that, get Congress to change the laws to fix this problem which will drive many American manufacturers to move overseas. This is, of course, part of the real problem: the language of the statute is awkward in a way that lets the court come to a completely nonsensical and contradictory result.

What's important to recognize is that, for all the talk by copyright maximalists to falsely claim that copyright is no different than real property, and to insist we must "defend property rights" for copyright, here's a true case of property rights being under attack -- and it's because of an overly aggressive use of copyright. The idea that you don't actually own what you bought is an anathema to true property rights. That companies may be able to use copyright law to block you from selling used goods is a massive encroachment on individuals' property rights. If all those copyright maximalists truly believed in property rights (rather than the truth: that they support a government granted monopoly privilege that benefits themselves) they, too, would support this effort against the demolition of first sale rights.

Filed Under: first sale doctrine, property, resale, scotus

Video Game Developers Continue To Ignorantly Attack Used Game Sales

from the not-this-again dept

Every few months or so we see yet another story of a video game developer or publisher hating on the used games market, claiming that it's totally killing video games. Of course, the actual video game market is thriving, but facts aren't that important. Furthermore, as we've been pointing out for many years, studies have shown that a thriving used market helps the primary market, because buyers know they may be able to resell products in the future, and possibly make back a portion of the money in question.

Still, it doesn't stop game developers from insisting that the sky is falling and the world is ending because of used video game sales (thanks to Silence8 for being the first of many with that link):

Game designer Richard Browne has come out swinging in favor of the rumored antipiracy features in the next-gen PlayStation Orbis and Xbox Durango. "The real cost of used games is the damage that is being wrought on the creativity and variety of games available to the consumer," Browne writes. "The real cost of used games is the death of single player gaming."

The HotHardware post on this does a nice job debunking the claims, though it seems that earlier comments from the same site, noting that used game sales don't appear to be economically different than used books, should have ended this debate long ago. If video gamers are struggling to compete with the used market, they only have themselves to blame. Unless they want to overturn the first sale doctrine, they're just going t have to suck it up and learn to live with it. The idea that there's less creativity in the video game space because some people buy used games is simply ridiculous and not supported by any facts. If some publishers/developers are struggling to make money, then they need to work on problems with their own business model, rather than lashing out at the used market.

Filed Under: first sale doctrine, used games, video games

Supreme Court To Review If It's Legal To Resell A Book You Bought Abroad

from the first-sale-ftw dept

This isn't a huge surprise, but it's good to see that the Supreme Court has agreed to hear an important case regarding the first sale doctrine in copyright law, and whether or not it applies to products made outside the US. The specific case is one we've been covering, involving a guy, Sudap Kirtsaeng, who was (legally) buying textbooks that were sold in Asia, and then reselling them in the US. Under the first sale doctrine this should be perfectly legal. But... due to a twisted interpretation of copyright law, a 2nd Circuit appeals court went against Kirtsaeng, siding instead with publisher John Wiley. The issue is that the law says that first sale applies to copyrights to products made "under this" law. And the argument is that a product made outside the US may have copyright, but it isn't made "under" US copyright law, and thus it doesn't qualify.

As the dissenting judge in the 2nd Circuit noted, this interpretation doesn't make any sense. The law doesn't say anything about location, just about whether or not it was "manufactured lawfully" under the terms of the law. So, as the judge noted, as long as the product can be subject to US copyright law, then first sale should apply. This makes sense, and hopefully the Supreme Court agrees.

Of course, the Supreme Court has addressed this to some extent. The 9th Circuit had ruled similarly in the Omega/Costco case, and while the Supreme Court had taken the case, Justice Kagan recused herself from that case, because she had said that the first sale doctrine should not apply to foreign goods. And, in the end, the court split down the middle. So that means that, as a deciding vote, there's a reasonable worry that Kagan will again say that the First Sale doctrine does not apply to foreign goods.

This is a dangerous and stupid interpretation of the law. It will cause tremendous trouble for anyone trying to sell pretty much any product made outside the US, because makers can claim that no one can resell such products without getting a new license. It will also drive more works to be made offshore, since (especially the copyright legacy players) will look to completely get rid of the first sale doctrine by "manufacturing" everything offshore. Hopefully, the Supreme Court recognizes the ridiculousness of such a result, but the result in the Omega case was not encouraging.

Filed Under: first sale doctrine, resale, scotus