According to an editorial in The New York Times, the House’s proposed Stop Online Piracy Act is too broad as it has provisions to cut off payments from providers such as Visa and ad networks like Google simply by filing a notice of infringement.
While the legislation is aimed at foreign websites like Pirate Bay, it could also be used against domestic websites covered by the Digital Milennium Copyright Act that has safe harbor provisions.
The editorial asserts that safe harbor provisions should be made available to foreign websites that abide by the DMCA. And a court order should be required before action is taken.
A related Los Angeles Times editorial suggests that the Stop Online Piracy Act and the PROTECT IP Act both go to extremes in an effort to protect intellectual property.
The legislation could force companies to monitor their users’ behavior “turning them into a private security force for copyright and trademark owners.”
Infringement on popular sites like Facebook, Dropbox and YouTube are certainly opening them up to action in spite of safe harbor provisions now in force. The result would be less innovation to create the next YouTube and would have a potentially chilling effect on free speech.
Take a look at the toolkit for governments to legally monitor what people are doing on the Web. It’s an impressive catalog that includes hacking, intercept, data analysis, Web scraping and anonymity products. It makes one aware that nothing is safe from surveillance.
Hacking tools use techniques commonly used in malware.
Intercept tools can filter all traffic from the Internet backbone and determine which to forward to law enforcement.
Data analysis sorts, stores and analyzes information from a variety of sources including wired and wireless networks, surveillance, domestic and foreign agencies, tactical operations, etc. to build a complete profile of suspects or identify patterns across data sets.
Web scraping gathers and analyzes data from publicly available sources.
Anonymity hides the identity of investigators.
If governments are already using these tools, how long will it be before anyone can obtain them? WIll this imperil the confidence people have online?
Valve co-founder and managing director Gabe Newell has reiterated his take on the issue of piracy. Valve is the creator of game platform Steam that distributes games to a global community of 35 million players.
Newell believes that DRM does not work and pirates are not necessarily always seeking free content.
“One thing that we have learned is that piracy is not a pricing issue. It’s a service issue,” he says. “The easiest way to stop piracy is not by putting antipiracy technology to work. It’s by giving those people a service that’s better than what they’re receiving from the pirates.”
“Most games available on Steam are easily found in pirated form on the torrent sites,” writes ETCentric contributor Nick Nero. “Even if you buy the game, many users download the torrent because most DRM requires the disc to be present which slows down the game startup and level load/access times.”
“What keeps me as a Steam customer is their cloud service,” adds Nick. “I can download any of my games to another PC, I can backup my games to encrypted physical media, my game saves are stored in the cloud, and I can easily find my friends for mulitplayer. The service layer is what brings in the customers.”
An association of privacy groups, led by the Washington-based Electronic Privacy Information Center, has asked for a federal investigation into Facebook features that broadcast new information about users. The new partnerships with media platforms allow Facebook to acquire extensive data about user behavior.
“That information could also be made available to marketing companies for use in focusing advertisements, and potentially to government agencies interested in tracking people’s behavior,” suggests The New York Times.
In a letter to the Federal Trade Commission, privacy advocates wrote, “frictionless sharing creates several privacy and security problems for users.”
Facebook responded by explaining its users have more control than what is being suggested. “Some groups believe people shouldn’t have the option to easily share the songs they are listening to or other content with their friends,” company spokesman Andrew Noyes communicated via e-mail. “We couldn’t disagree more and have built a system that people can choose to use, and we hope people will give it a try. If not, they can simply continue listening and reading as they always have.”
According to the article, “the FTC does not comment on whether it is investigating any company unless it has some results to release.”
“People who are upset that Facebook is storing all their information should be really concerned that their cell phone is tracking them everywhere they’ve been… The government has this information because it wants to engage in surveillance,” an ACLU staff attorney said.
A newly released Justice Department internal memo reveals the retention policies of Verizon, T-Mobile, AT&T, and Sprint.
Verizon seems the most privacy-friendly, but is the only company that retains text message content. Messages are stored for 5 days; other companies don’t retain message content at all.
The retention of “cell-site data” (information of a phone’s movement history based on phone tower usage) varied the most among the four providers.
“Verizon keeps that data on a one-year rolling basis; T-Mobile for ‘a year or more;’ Sprint up to two years, and AT&T indefinitely, from July 2008,” reports Gizmodo.
Senator Patrick Leahy proposed to alter the Electronic Privacy Communications Act to “protect Americans from warrantless intrusions.”
To see your provider’s retention policy, check out the graphic featured in the Gizmodo post.
This week’s Senate hearings on “The Power of Google: Serving Customers or Threatening Competition?” barely scratched the surface, suggests CNNMoney.
“What Google did to Apple — copying Apple’s touchscreen operating system and offering it to Apple’s competitors for free — never came up,” indicates the article. “Amy Klobuchar (D-Minn.) and Chuck Schumer (D-NY) used much of their time to suck up to Google chairman Eric Schmidt, practically begging him to bring Google’s fiber-to-the-home experiment to their states.”
However, testimony from Jeremy Stoppelman, CEO of Yelp, was compelling, especially in regards to his take on the search giant’s apparent new mission.
“Let’s be clear. Google is no longer in the business of sending users to the best sources of information on the Web,” explained Stoppelman. “It now hopes to become a destination site itself for one vertical market after another, including news, shopping, travel, and now, local business reviews. It would be one thing if these efforts were conducted on a level playing field, but the reality is they’re not.”
“The experience in my industry is telling,” he added. “Google forces review websites to provide their content for free to benefit Google’s own competing product, not consumers. Google then gives its own product preferential treatment in Google search results.”
Stoppelman suggested the company’s actions were essentially part of an ultimatum: “Google first began taking our content without permission a year ago. Despite public and private protests, Google gave the ultimatum that only a monopolist can give: In order to appear in Web search, you must allow us to use your content to compete against you. As everyone in this room knows, not being in Google is equivalent to not existing on the Internet. We had no choice.”
Looking at a database of over 1,600 patent troll lawsuits compiled by Patent Freedom, a team of Boston University researchers estimate that these suits have cost companies some $500 billion since 1990. These costs include not only legal fees and payouts to plaintiffs, but indirect costs such as employee distraction, legal uncertainty, and the need to redesign or drop key products.
The authors of the study also estimate that the original inventors received less than 10 percent of the “defendant’s lost wealth.”
Additionally, they found that software patents accounted for approximately 62 percent of the lawsuits (while a mere two percent of suits were related to drug or chemical patents, and only six percent involved mechanical patents).
The article concludes that the patent system is becoming a disincentive to innovation. “These results are important because the patent system is supposed to reward companies who invest in innovation,” suggests Ars Technica. “Yet thanks to the growing blizzard of frivolous patent lawsuits against technology companies, the patent system is actually becoming a net disincentive to innovation, especially software. We hope Congress and the Supreme Court are paying attention.”
A federal grand jury has returned indictments against five people associated with the NinjaVideo.net website. The indictments include one count of conspiracy and five copyright infringement counts.
The individuals were charged with engaging in illegal downloads of Hollywood movies following investigations conducted by several federal agencies, including the departments of Homeland Security and Justice.
“From February 2008 until June 2010, NinjaVideo.net allegedly offered users the ability to illegally download infringing copies of copyright-protected movies and television programs,” reports Home Media Magazine. “Many of the movies offered on the website still were playing in theaters, while others had not yet been released.”
According to the article, the site allegedly offered access to copyrighted movies and TV shows for free, with increased access to a greater content selection for users who would donate at least $25. In addition to “donations,” the website generated revenue through advertising.
“The action today marks one of the first such prosecutions of an illegal download and streaming site — indeed, one of the most notorious infringing sites on the Internet until it was shut down by law enforcement,” said Mike Robinson, EVP of content protection and chief of operations with the MPAA.
In April, the FBI raided the apartment of Screen Actors Guild member Wes DeSoto who was suspected of uploading Hollywood pre-release screeners to The Pirate Bay.
DeSoto had reportedly uploaded torrents including “The King’s Speech,” “Rabbit Hole,” “127 Hours,” “The Fighter” and “Black Swan” (the actor had access to DVD-quality screeners via the use of special codes on iTunes).
According to reports, DeSoto has now agreed to plead guilty to breaching the Family Entertainment and Copyright Act of 2005 (for “Black Swan”) and possibly faces three years in prison.
The actor’s IP address was apparently discovered by Deluxe Webwatch using Google after DeSoto responded to criticism in The Pirate Bay’s comments section. According to Torrent Freak: “After several users questioned the authenticity of the file, mf34inc weighed in with ‘SAG now send out iTunes download codes for screeners’ and the utterly priceless ‘I’m a SAG member and thought i’d share these.'”
The article describes in detail how “an almost unbelievable series of amateurish mistakes” helped the FBI work its way from Deluxe Webwatch’s initial discovery to DeSoto’s apartment.
The Justice Department is blocking the proposed $39 billion takeover of T-Mobile by AT&T, citing the move would result in less competition and higher prices. AT&T said it was “surprised and disappointed” by the suit.
The FCC is also reviewing the deal and has “serious concerns” about its impact on competition. The antitrust challenge comes five months after the deal between the second- and fourth-largest cellphone companies in the U.S. was announced.
“The lawsuit is the Obama administration’s boldest antitrust challenge to date and the latest evidence of its intention to reinvigorate enforcement after what it says was a lull during the previous administration,” reports The Wall Street Journal.
However, the Justice Department left open the possibility of concessions which could lead to a settlement.
In a case that indicates the U.S. government will hold websites liable for any illegal advertisements shown on their pages, Google settled its case over illegal online pharmacy ads by paying a $500 million fine.
The investigation (first revealed in May) led to this week’s settlement that has reportedly decreased Google’s quarterly profits by 22 percent.
“The Department of Justice will continue to hold accountable companies who in their bid for profits violate federal law and put at risk the health and safety of American consumers,” said Deputy Attorney General James M. Cole. “This settlement ensures that Google will reform its improper advertising practices with regard to these pharmacies while paying one of the largest financial forfeiture penalties in history.”
“Obviously, such a decision has far-reaching consequences beyond those of just the illegal pharmacies, as Google faces threats from a number of illegal and malicious entities who want to leverage its search engine to expose unsuspecting users to their ads,” reports TechCrunch. “Traditionally, Google itself has filed lawsuits against advertisers it suspected of breaking its rules, but this has clearly not been enough of a deterrent.”
Hollywood continues its frustration with the Chinese government’s limits on how many imported movies can play in its theaters in addition to how box office receipts are shared. Now, prominent American film producers are seeking change through ambitious deals that provide alternative routes into China’s market.
Success with the Chinese may prove crucial. With traditional distribution models such as DVD sales presently slumping, China could become a much-needed revenue source.
“It’s not about détente, it’s about making money,” suggests the Los Angeles Times. “The partnerships give the American firms better access to the country’s growing movie market.”
According to the LA Times report: “China’s box-office receipts surged 64 percent last year to a record $1.5 billion, and they will likely bring in about $2 billion in ticket sales this year. By the end of the decade, industry experts predict China will grow from the world’s No. 5 movie market to No. 1.”
Although lobbyists and the World Trade Organization have been unsuccessful in getting the Chinese to relax import restrictions, smaller American film companies such as Legendary and Relativity are partnering with Chinese-based companies in co-production and exhibition deals. Through the partnerships, companies are not subject to restrictions and find they can dramatically improve upon percentage of box office receipts.
Major Hollywood studios have not formed long-term partnerships to co-produce with Chinese firms, but have discovered other alternatives, such as making Mandarin-language productions in China and pushing digital product, including 3D: “To boost the rollout of high-tech projectors in the country’s theaters, China in 2007 began allowing several pictures per year into the country on a revenue-share basis if they played only in digital theaters.”
The ultimate goal is to eliminate the restrictions, but for the time being Hollywood is finding ways to work around them.
A federal judge has ruled that online music services that host tracks in the cloud are not liable if that music has been acquired illegally by customers. ETCentric reported earlier this week that this may seem like a hollow victory for the record labels. However, a green light for online music locker services also provides some legal certainty for the likes of Apple, Google and Amazon.
“The judgement, by U.S. District Judge William Pauley, came in a case involving EMI and fourteen other record companies and music publishers, who had sued the service MP3tunes,” reports MacUser. “Judge Pauley explained that MP3tunes and its chief executive, Michael Robertson, had not breached the Digital Millennium Copyright Act (DMCA) in allowing downloads.”
“This is a huge victory. Users can still download songs from publicly available websites, and store them without a separate license fee, so long as MP3tunes complies with takedown notices,” says Greg Gulia, representing MP3tunes and Robertson.
This ruling should also come as good news to those companies investing in cloud-based music services. For example, Apple’s iTunes Match is due in the U.S. later this year. According to MacUser: “It will scan users’ iTunes libraries and allow them to access versions of tracks in their library, but not purchased from iTunes, online in iCloud. Tracks purchased in iTunes are automatically available to computers and mobile devices associated with an iTunes account. If no match is found, users will be able to upload the track themselves.”
While a judge has ruled against MP3tunes and founder, Michael Robertson, for copyright infringement, the details of the ruling may provide online music locker businesses like those from Google and Amazon with a better legal foundation.
A key finding is that users, not MP3tunes, had the ability to determine which files were placed in their lockers.
Also, it was determined that DMCA does not require one to investigate potentially infringing activity without a specific complaint from copyright holders.
“The news is even better for Google and Amazon,” according to Ars Technica. “Those companies’ music locker services do not even offer the broad sideloading functionality that has caused Robertson legal headaches. So if Judge Pauley’s reasoning survives appeal, Google and Amazon will be on solid legal ground. Indeed, those companies may even want to start thinking about whether they’ve been too cautious. For example, they might save a lot of money by taking advantage of the deduplication part of the ruling.”
Verizon FiOS customers could potentially lose service due to ongoing litigation between Verizon and ActiveVideo Networks, a company that builds interactive TV applications.
A U.S. District Court in Virginia awarded ActiveVideo Networks $115 million based on patent infringement involving interactive applications and VOD elements. Now ActiveVideo is also seeking to shut down the entire FiOS network.
Based on the nature of the specific patents, Verizon could possibly shut down a portion of its services while finding a practical workaround. Verizon also plans to appeal the verdict.
“The ActiveVideo CloudTV platform is currently being utilized by one of Verizon’s competitors, Cablevision,” reports Digital Trends. “ActiveVideo was an early developer of video-on-demand technology over the last two decades and has turned to developing platforms for interactive applications as of late.”
