EU Joins In The Bullying Of South Africa For Daring To Adopt US-Style Fair Use Principles

from the copyright-maximalists-made-me-do-it dept

As part of its copyright reform, South Africa plans to bring in a fair use right. Despite the fact its proposal is closely modeled on fair use in American law, the copyright industry has persuaded the US government to threaten to kill an important free trade deal with South Africa if the latter dares to follow America's example. If you thought only US copyright companies were capable of this stunningly selfish behavior, think again. It seems that the European copyright industry has been having words with the EU, which has now sent a politely threatening letter to the South African government about its copyright reform (pdf). After the usual fake compliments, it gets down to business in the following passage:

we once again regret the foreseen introduction in the South African copyright regime of provisions relating to fair use in combination with an extensive list of broadly defined and non-compensated exceptions. This is bound to result in a significant degree of legal uncertainty with negative effects on the South African creative community at large as well as on foreign investments, including the European ones.

Invoking "uncertainty" is a standard ploy, already used back in 2011 when the UK was considering bringing in fair use. It is manifestly ridiculous, since the US provides a shining example of how fair use does not engender any terrible uncertainty. America also offers a rich set of legal and commercial experiences others can draw on when they implement a fair use right. Here, "uncertainty" is just a coded way of threatening to withdraw investment in South Africa. It's an empty threat, though, since US history shows that fair use encourages innovation, notably in the digital sector, for which investors have a huge appetite. The EU letter goes on to tip its hand about who is behind this whining:

The European right holders continue expressing their concerns to us in this regard as they have done during the consultation period. All creative sectors in the EU, film industry, music and publishing industry have pointed to the possibility of revisiting their investment plans in South Africa due to these concerns. Other sectors, such as those which are high- technology based, could also suffer as a result of legal uncertainty created by the new regime.

That last sentence is revealing. If the digital sector had actually expressed its fears about "uncertainty", you can bet that the EU would have mentioned it as a serious issue. Since it is framed as "could also suffer as a result", we know that this is just the EU's hypothetical. It is an attempt to get around the awkward fact that high-tech companies love fair use in general, since it gives them far more scope to try out exciting new ideas. It's sad to see the EU slavishly doing the bidding of copyright's digital dinosaurs, and joining with the US in the unedifying spectacle of bullying a small nation trying to modernize its laws.

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Filed Under: copyright, eu, fair use, innovation, south africa, uncertainty

Did Aereo Kill The Cablevision Ruling That Enabled So Much Innovation? Who The Hell Knows?

from the and-that's-why-it's-a-problem... dept

We've already discussed how the Aereo ruling is a disaster because of its lack of guidance, and a perfect example of that is that reading the decision you would have no idea whether or not it outlaws Cablevision's remote DVR service. None. It all depends on who you talk to. During the oral arguments, it appeared that the Justices recognized that they wanted to keep the important 2nd Circuit ruling that found Cablevision's remote DVR legal, with Justices even asking lawyers to take that ruling as precedent (even though it's not, since the Supreme Court refused to review that ruling). That's why it's been somewhat shocking to many that the final ruling from the Supreme Court doesn't even address Cablevision, other than an aside in a footnote.

And that means it's basically an open question as to whether or not Cablevision's remote DVR is still legal or not.

Cablevision, not surprisingly, insists that the ruling vindicates its position. You may recall that even though Aereo was relying on the Cablevision precedent, Cablevision sided with the broadcasters, stupidly believing that the Supreme Court would reject Aereo while preserving the Cablevision ruling. So, when the ruling came out, the company announced victory:

"We are gratified that the Court's decision adopted a sensible middle ground, holding that unlicensed retransmission services like Aereo violate the copyright law, while protecting consumer-friendly, cloud-based technologies, such as RS-DVR. The real winner today is the consumer who will continue to benefit from future innovation."

The problem is that's not true. The Court doesn't really say a damn thing about Cablevision, and leaves it out to hang based on the amorphous "looks like a" test. Law professor James Grimmelman is pretty sure that the Cablevision ruling is now dead, because the Aereo ruling totally overshadows it and creates this new standard that would clearly wipe out the Cablevision standard. Similarly, law professor Eric Goldman wonders what's left of that ruling:

... because the court said Aereo took the legally significant actions, it's possible this ruling overturned the 2008 Second Circuit ruling, exposing DVR service operators to new liability. The opinion further reinforces the riskiness of DVR-as-a-service when it says the simultaneous delivery of content to multiple viewers is an infringement, even if the system stores and delivers a personal copy for each viewer (the court later implies that even simultaneous delivery isn't required to violate the law).

Another commentator, Deborah Goldman, notes that the SCOTUS ruling "eviscerates" that ruling.

However, not everyone is convinced. Matt Schruers suggests that the Supreme Court effectively side-stepped the question by avoiding even looking at the DVR features of Aereo's system:

Importantly, yesterday's decision doesn't reach the question of Aereo's DVR-like features, and it seems clear that the Court's opinion does not aim to upset Cablevision.

But, of course, there's a difference between aiming to upset Cablevision and actually upsetting Cablevision, and there's nothing in the ruling that suggests a second shot at a remote DVR system won't turn out quite differently, given that plaintiffs can now use the "looks like a duck" test, rather than ever looking into the black box to see if the company hosting the DVR is really doing any infringement. And it gets especially worrisome with non-tech-savvy judges. While Schruers isn't sure if this ruling upsets the Cablevision standard, he is worried about the resulting uncertainty:

On the other hand, the Court's approach offers technology lawyers counseling clients little guidance. Who can predict whether a non-tech savvy federal judge will think that the next innovative service "looks like cable"? Yesterday's decision creates considerable uncertainty, suggesting that lawyers should counsel their clients based on what analogy will most appeal to a federal judge in the distant future. The Court — like others in the lead-up to the decision — promises its opinion won't threaten new technology, but as the dissent points out, it cannot deliver on that promise.

And this is not a small issue. As we've noted, a study by Harvard professor Josh Lerner found that the certainty created by the Cablevision ruling, resulted in somewhere around a billion dollars in new investment. Take that certainty away... and a lot of investment is about to go elsewhere.

Filed Under: copyright, innovation, looks like a duck, remote dvr, supreme court, uncertainty
Companies: aereo, cablevision

How Software Patents' Fuzzy Boundaries Create Unnecessary Litigation

from the subject-matter-test-please dept

James Bessen and Michael Meurer, authors of an important new book on the patent system, have a great post on the problems created specifically by software patents. They argue that the most serious problem with software patents is that they tend to cover abstract concepts rather than specific physical devices or processes. As a result, the boundaries of software patents tend to be uncertain, leading to a lot of litigation. In many areas of patent law, the "enablement" rule (which says that patent applications have to describe an invention in enough detail to "enable" someone to replicate it) helps to ensure more precise definition of patent boundaries. But the patent office only requires a general description of an "invention's" functionality to get a software patent. As a result, there tends to be a lot of uncertainty about what a software patent covers, and uncertainty inevitably spawns litigation.

Bessen and Meurer don't offer a strong recommendation on the best way to solve the problems with software patents, but they tentatively endorse a "subject matter test" -- that is, reinstating the ban on software patents -- as one part of a solution to the problem. However, they worry that a subject matter restriction won't entirely solve the problem because applicants might resort to creative drafting to evade it. I'm not sure it's so hard to draw a line to exclude software patents. Ben Klemens has suggested a standard that strikes me as pretty serviceable: mathematical algorithms are not patentable, and coupling an algorithm with "insignificant postsolution activity" does not transform an unpatentable mathematical algorithm into a patentable machine. In particular, the mere act of loading software onto an ordinary general-purpose computer cannot transform an unpatentable algorithm into a patentable machine. Although this standard might not invalidate all problematic software patents, it would invalidate most of the really harmful ones. To take one example, NTP's infamous wireless email patents almost certainly wouldn't pass muster under Klemens's test because the "invention" in question consisted of running certain email-processing algorithms on generic computer hardware. If you took away the software component, you'd be left with an unpatentable collection of generic computers and generic wireless links. I'm sure there would be some hard cases that Klemens's test wouldn't deal with precisely, but it's certainly more precise than the tests the Federal Circuit is using now.

Filed Under: litigation, software patents, uncertainty