Hey, You Got Music in My Baseball!

This evening, the Ippers went to a little going away pub crawl for a friend who’s heading off to the wonderful(?) world of SoCal.  We did the mini-version, making it through only one pub (hey, some people get to work in the mornings).  Of course, that pub had the mandatory large flat screen television airing ESPN’s Sports Center.  In the course of the repeated runnings of highlights, the image to the left caught my eye.  Probably familiar to many, this is the logo of the New York Yankees baseball team. 

This Ipper, however, is far less into baseball than she is into hip hop.  So the first thing she thought of when she saw the logo was Lil’ Wayne’s record label, Young Money Entertainment.  That logo is the one on the right.

Likelihood of confusion anyone?  Since these are both US marks, let’s play around with the Polaroid factors for likelihood of confusion.  (Assuming NY, as the longer established mark, as Plaintiffs.)

1. Strength of the plaintiff’s mark. The Yankees mark is very strong.  Probably recognizable around the world.  A google image search for “New York Yankees” brings up mostly pictures of the logo and almost no pictures of players or games.  The logo has gone beyond something used to show fan support and has practically become a brand in and of itself.  Hats bearing the logo come in ever color, including black on black, and are worn by people across the US regardless of their baseball team affiliation.  (I once saw a fan at a Giants game remove his Giants cap as soon as the game ended and put on his everyday Yankees cap to leave the stadium.  No, the Giants had not lost.)
2. Degree of similarity between the two marks. Both marks have the same font and the same layout.  In addition, the letters M and N are very similar, thus giving the two marks the same general look and feel, despite the different letters.  Although the Yankees' specific team colors are navy and white, the mark appears in many different colors, as does the Young Money mark.  Black white color combinations are very common for both marks.
3. The proximity of products or services. A baseball franchise and record label seem pretty far apart, however there is lots of overlap here.  To start with, there’s the New York Yankees Greatest Hits albums.  Then there’s the merchandising aspect.  Hip hop labels and baseball teams both deal in clothing and accessories bearing their marks.  The products and services of the two marks aren’t directly related, but do have a lot of side-overlap.  Incidentally, the Yankees mark happens to be one that is very common for hip hop artists and fans to wear.  Just another area where the marks might be seen in close proximity.  (Compare this NY bling to this YM bling.)
4. Likelihood that plaintiff will bridge the gap between markets.  As discussed above, the gap is pretty much already bridged, especially since the Yankees have put out music albums.
5. Evidence of actual confusion.  For this, I can only give my own antidotal experience.  Several times while preparing this post, I accidently copied one mark thinking I had the other one, or opened a new webpage for the mark that was on an open page instead of the one I needed.  It appears others have at least noticed the striking similarity.  Link (WARNING!!! foul language and what is best described as ‘ignent’ behavior on that link.)  That’s not much, but it’s all I’ve got.
6. Defendant’s good faith in adopting the mark.  Without asking Lil’ Wayne himself, I have no idea why he chose this mark.  I am guessing it’s partly in homage to the Yankees, but also partly because the Yankees logo is so popular in hip hop.  The style and familiarity of the logo express a message that, on some level, associate with hip hop.
7. The quality of defendant’s product or services. Judging the quality of hip hop…. I think we’re going to skip this factor this time.
8. The sophistication of the buyers.  I would guess that buyers of Yankees logo emblazoned items span the whole gauntlet of sophistication.  Purchasers of Young Money items are probably less likely to be sophisticated in the way courts would think of it, but they’re more likely to be very street smart and able to protect themselves from being ripped off by the wrong mark. (Ripped off in the sense of not getting what they thought they were paying for.)

Seems to me, the Yankees would have a decent case.  But I don’t think they would (or should) bring an action.  The mark is very strong; most people who care will know which mark they want, and a suit would probably bring nothing but bad PR.

But what do our readers think?  Likelihood of confusion?  If you were the Yankees, would you bring suit?

Souter's Mark on IP

United States Supreme Court Justice David Souter announced last week that he will be retiring from the Court at the end of next month. Justice Souter authored several important opinions in the field of IP, including Markman, Grokster, and Campbell.

Markman v. Westview Instruments, Inc., 517 U.S. 370 (1996) changed the face of patent litigation. Markman challenged the Court with the question of whether interpreting patent claims was a question of law or a question of fact. This is an extremely important question because in American court cases, questions of law are decided by the judge but questions of fact are decided by the jury. The Court in Markman held that the interpretation of patent claims was a question of law to be decided by the judge. This led to the development of mini-trials now generally referred to as Markman Hearings. During these hearings, the judge basically determines the meaning of the patent. Sometimes the judge's determinations may lead to a settlement of the case or the plaintiff dropping the case completely, because of how the judge has interpreted the claims of the patent at issue. The value and appropriateness of Markman hearings remain much debated issues. [Some views on Markman hearings here and here.]

MGM Studios, Inc. v. Grokster, Ltd., 545 U.S. 913 (2005), is the case that put an end to the popular post-Napster file sharing programs. Grokster, like Napster, was a program made for people to share files. However, in an attempt to avoid the same fate as Napster, Grokster allowed file sharing without owning or running any of its own servers. Grokster was strictly peer to peer. However, in Grokster, the Court held that one who distributes a device or program with the object of promoting copyright infringement may be held liable for the resulting infringement by third parties. Thus, Grokster could be held liable for the infringement of its users. Like Napster before it, Grokster became a set of blue prints for the development of the next stage of file sharing software, eventually leading to BitTorrent and the recently litigated Pirate Bay.

Campbell v. Acuff-Rose Music, 510 U.S. 569 (1994) firmly established parody, whether commercial or not, as a fair use of copyrighted material. In this rather infamous case, publishing company Acuff-Rose claimed 2 Live Crew's rap song "Pretty Woman" infringed on their rights in the Roy Orbison hit "Oh, Pretty Woman." The Sixth Circuit had found that 2 Live Crew did commit copyright infringement because of the commercial nature of their song. The Supreme Court overturned this decision, saying that all of the fair use factors need to be considered, not just the commercial nature of the new work. Parody is considered as an aspect of free speech, something American jurisprudence holds in high regard. This case gets the best lawyering award because both Ippers and many scholars do not think Pretty Woman was actually a parody. But it was close enough that the legal argument won the day at the USSC.

Despite his simple lifestyle and his brief, rather uncontroversial, time on the Court, Souter has made a large impact on intellectual property law in the United States and the future of technology development in the country.

Nigeria and the Special 301 Report 2009

Last November, Ip's What's Up did a special two-part segment on Nigeria and the United States Trade Representative (USTR) Special 301 Report.  (Part 1, Part 2.)  Nigeria has never appeared on the Special 301 report, and this year, the country continued its good work.

The International Intellectual Property Alliance (IIPA) submits a list of recommendations to the USTR each year.  Despite IIPA's inclusion of Nigeria on their "Special Watch List," the USTR did not feel problems in Nigeria warrant inclusion on the Special 301 list.  This is certainly good news for Nigeria!

[The IIPA report on Nigeria basically contains the same information as previous years' reports.  It is available here.

Copyrighting Cakes?

Jen over at Cakewrecks runs a very popular blog called, well, Cakewrecks.  Her blog is so popular, that it has led to a book deal.  Obviously, the photos used on her blog and in her upcoming book are protected by copyright.  (Thank you Burrow-Giles Lithographic Company v. Sarony.)  But what about the cakes?

A recent Cakewrecks comment said "There is now a "Copyright" sign up about taking photos and recreating their cakes!"  But are cakes really protected by copyright?  A search for US case law about cakes and copyright infringement led to nothing.  The closest case, Kitchens of Sara Lee v. Nifty Foods Corporation (266 F.2d 541), is about covers for frozen cakes.  However, there are apparently a lot of recording artists attempting to "have their cake and eat it, too."

Unable to find case law directly on topic, this Ipper has decided to do her own little analysis on the copyrightability of cakes under the US Copyright Act.

Analyzing Cake

Copyrightable?

Cake certainly is a fixed in a tangible medium of expression.  (Yummy one, too, usually.)  Otherwise, how would we get to eat it? 

Subject matter (Sec. 102): If a cake fits anywhere here, it would fit under (5) "pictorial, graphic, and sculptural works."  Some cakes are indeed sculptural masterpieces.  Some cakes are the regular geometric shapes, but involve very artistic pictorial and graphical designs on the tops.  (That link may not be the best example since many of the cakes could potentially be copyright infringements themselves, but you'll get the idea.)  Then there are the regular cakes:  "Happy Birthday,"  "Merry Christmas," "It's Legal in Iceland, etc.  These are still pictorial or graphical works.

But, are the cakes original works of authorship?  Of course, this is one of those questions a judge would have to answer in regards to a particular cake in court.  In general, cakes are creations of the baker/decorator.  Some cakes are based on designs that appear in books.  If these designs are copied exactly, then there would be no originality.  Other cakes consist of elements common to cake decoration, sort of scenes-a-fair of cakes.  These are usually not considered copyrightable because they are common and necessary parts to creating the art.  However, even if cakes are based off of a picture, or use only common elements, they can still be very unique (as those links show).

It appears, by this analysis, that cakes are copyrightable.  Although, some with very slim protection.  This Ipper, however, doesn't really like that answer and would much prefer a different one.  So please, feel free to explain why the entire analysis is wrong ;)

The real question though is, even if cakes are copyrightable, does it matter?  How would one infringe a cake?  We'll explore that later.

Deciding the Fate of Music

A follow-up from the pre-Easter Tenenbaum fair use defense post - a further look at why a court should not address the issue (again) of whether or not file sharing is fair use.  As mentioned in the previous post, legal free music is coming.  A court decision ruling file sharing as fair use would only hasten the inevitable.  This hurrying is unnecessary and would be detrimental to the progress already being made.

Let the People Do It

There are companies in the industry currently working on how to make the music industry work best for everyone, including the fans and artists.   Let the industry play it out a little while longer and figure out where its going.  Forcing the industry's hand never proves good; it freaks out and reacts without taking time to figure out if its actions make sense.   

Allowing the industry players, the musicians, the experts and the fans (yes, they have a say now, too - the musicians are listening) to hammer out a solution that works for all will produce a much better result than a court handing down a decision from on high.  Allowing those who have a stake in the matter to develop a solution fosters more cooperation.  A value our democratic society is supposed to value.  Cooperation in an industry that desperately needs to rebuild its relationship with the rest of us.  It also gives those who participate a deeper connection to the outcome; they find value in the product of their creation and are more likely to support it.

A Week of Reflection on LMDS - Is the US the Only Country in the World?

The Leadership Music Digital Summit ended last week Wednesday, but one particular thing from the Summit have continued to weight on this Ipper's mind.  Throughout the entire two days, there were no discussions involving the international aspects of copyright.

Big deal, you might say.  The Summit was about the American music industry, so why should there be any international talk?  Two main reasons: first, many of the panelist spoke about how their various companies are attempting to take advantage of worldwide markets.  Markets around the world means copyright laws around the world. 

Second, and more importantly, several discussions at the Summit discussed changes to the United States Copyright Act.  This is not unusual for these types of gatherings.  The same types of suggestions are made at legal training seminars, in articles, on blogs, and in classrooms.  But one fact always seems to be ignored: the US has international obligations.

The United States cannot just willy-nilly change its copyright law without first understanding the potential implications beyond its own borders.  There are diplomatic concerns: 'if we change this, how will it affect foreign artists? What will countries do and say on behalf of protecting their artists?'  There are trade concerns, 'if we change this, and it violates TRIPs, how much will it cost us?'  (And, there are probably a number of other concerns, which this Ipper would need a great deal more experience in international politics to understand.)

This does not mean the US cannot do anything that violates its international copyright obligations (indeed, the US often does), it just means that those who present ideas about changing the United States copyright law should consider the international side of things: bring the international aspects into the discussions. 

As people who have made suggestions improve and develop their ideas more fully, others can begin to suggest changes that do not interfere with international obligations.  Or, if the changes they want cannot be done without making international waves, maybe they can even begin to suggest changes to the international framework.  This Ipper's plea is simple: don't forget the rest of the world.

State and Federal Trademarks - What's the Difference?

Today's post from guest Ipper Andrew Flusche.  Andrew is a practicing attorney who helps his clients with their real-life IP problems.  In this post, Andrew addresses one of the most common questions he receives from clients, "what's the difference between state and federal trademarks?"

One issue that complicates trademark law is the fact that the United States has two different levels of trademark protection: federal and state. This makes trademark protection a little confusing for business owners. Here are some key issues to understand when evaluating the two different types of trademarks. Hopefully this will demystify the distinction.

Federalism

We have two levels of trademark protection because the United States has two main levels of government. Each state has its own laws and local sphere of activity that it regulates. Then the federal government regulates international and interstate affairs. (That's over-simplified, but it works for our purposes here.)

Trademarks are no different that other areas of the law. Federal and state governments both have their hands in them.

Protection

The main substantive difference between a federal and state trademark is the geographic sphere of protection.

A state trademark only protects your brand within the state of registration. A federal trademark protects your brand across the entire country.

Importantly, remember that trademarks protect mainly against future users of the registered mark. If you register a state trademark, then a competitor registers the same mark on the federal level, you wouldn't be able to later register the mark federally.

Cost and difficulty

Another difference between these two types of marks is the cost and difficulty of obtaining registrations. You generally own a trademark by using it in commerce. But to obtain the benefits of a registration, you have to jump over some hurdles.

Many states make trademark registration extremely easy and cheap. For example, a Virginia trademark application is simple to fill out and only costs $30 to file.

On the other hand, the federal registration process costs at least $275 in filing fees (sometimes several multiples of $275). Also, the application isn't easy for the layperson to figure out, and there are many technical legal requirements to meet.

Which to use?

But what does all this mean, especially for small business owners? Which trademark do you register?

I counsel clients to focus on their target markets. If you just operate on a local level within your state, a state trademark will probably be all you need.

However, many businesses have broader markets with the use of the internet. If you serve customers outside your state, you really should think about a federal trademark.

At the very least, all these complexities mean that you should consult a trademark attorney to discuss protecting your brand. You don't want to obtain the wrong type of trademark registration.

Andrew Flusche is a Virginia attorney who practices in the areas of intellectual property, estate planning, and reckless driving defense. He can be reached via his website at http://www.andrewflusche.com

Following the French?

Earlier this month, the American Bar Association Journal reported in a little article that the RIAA is going to stop randomly suing people for illegal music downloading.  Seems the RIAA finally realized that tactic was not producing the desired results and getting them extra problems.  This is good news.  However, the new approach is not without its own problems.

"The RIAA now plans a more practical enforcement effort concerning illegal downloads," the article explains.  And just what is this more practical enforcement?

"With the help of Internet service providers, those who repeatedly download music illegally and ignore ISP warnings are expected to have their Internet service first slowed down and then stopped entirely..."

That's practical?!  In a country that historically places such a high value on freedom of speech, independence and privacy, in a society that revolves around technology, this "practical" solution is opening several very large cans of worms.

As it turns out, the solution may not be quite as draconian as the quote makes it sound.  According to the Wall Street Journal, the new plan is actually a series of agreements between the RIAA and different ISP providers.  The deal is that the RIAA will stop suing consumers and the ISP providers will start contacting customers who appear to be illegally uploading copyright protected material.  If the customers ignore the warnings, the ISP providers can slow down and eventually cut-off the internet service.

The IPKat reported some months ago on a similar plan in France.  In late October, the French Senate approved a law that would cut off the internet service of people who illegally download copyright protected material.  Under the French model, internet access revocation is the final out in a three-strikes law.  Strike one: warning email.  Strike two: warning snail mail letter.  Strike three: the dark ages for an entire year.

In general, people seem to like the idea of receiving warnings and a chance to stop infringing behavior better than lawsuits.  However, many have also expressed some concerns.  French Senator Retailleau decried cutting off internet as discriminatory.  He described internet access as an "essential commodity" and its removal as "traumatic."  Readers of IPKat also commented on the variety of privacy issues raised by this method of fighting infringement.

Groups like the Electronic Frontier Foundation and Public Knowledge express similar concerns about the American plan and raise some others.  The president of Public Knowledge is worried about the due process of the system, stating, "we want to make certain that customers are not cut off from their Internet service or have their service altered solely on the basis of a claim by a copyright holder that file sharing is taking place."  The EFF points out that the punishment here seems to greatly outweigh the crime.  Guess Gilbert and Sullivan wouldn't approve.

Some proponents of the new arrangements believe that the warnings given to infringers by their internet providers will be enough to prevent the customers from continuing their illegal behavior.  If this is true, the system is fine because the ISP providers will never need to reach the controversial step of shutting off someone's internet service completely.  But what happens when someone decides to call their bluff?

 

 

Other related links:

Will France Introduce Digital Guillotine in Europe
French Internet Law Clashes with EU Position
RIAA Shuts Down its Lawsuit Machine
Three Strikes, Three Countries: France, Japan and Sweden
RIAA to Stop Suing Music Fans, Cut Them Off Instead
RIAA Confirms It Will Take Piracy Fight to ISPs

Nigeria and the Special Case of the USTR Special 301 Report Pt. 2

This is part two of a two part series looking at Nigeria's status in regards to the US Trade Representative Special 301 Report.  In part 1, we discussed the praise the Nigerian Copyright Commission and its Director General, Adebambo Adewopo, have received for getting Nigeria removed from the USTR Special 301 Report.  Today, we are looking at what's really going on.

Quick Recap

For two years, the Nigerian press and various government officials have been citing Nigeria's removal from the Special 301 List as proof of the Nigerian Copyright Commission's success in its war on piracy.  This "list" is the USTR Special 301 Report.  The report actually includes three lists, each containing countries whose laws or practices have adverse affects on IPRs: Priority Foreign Countries, Priority Watch List, and Watch List.

The Real Deal

It seems somewhere along the way, someone in Nigeria got confused.  Nigeria was never on any of the lists contained in the Special 301 Report, at least not this century.  Previous reports appear to only be available from the Library of Congress.  (Thank you to a very kind reference librarian at Vanderbilt University for that information.)  A few Special 301 Reports have mentioned Nigeria, but always to cite activities from the past year that have protected IPR.  (Special 301 Reports from 2002 through the current year are available at the USTR website; the 2001 report is available here.)

The closest Nigeria has come to being on these lists has been inclusion in the International Intellectual Property Alliance's (IIPA) reports suggesting which countries the USTR should place on the various lists contained in the Special 301 Report.  IIPA is a group of trade associations that, among other things, assists the US Trade Representative with its Special 301 Report.  IIPA prepares its own report of suggestions for the USTR to consider in compiling its report.  (IIPA Reports from 2001-2008 available here.)

IIPA first gave Nigeria a "special mention" in 2005, citing outrageous piracy levels in sound recordings and the proliferation of optical disc replicating plants.  Concerns over optical disc plants kept Nigeria in this section through 2006.  Last year, IIPA suggested putting Nigeria on the Watch List.  This year, the organization made the same suggestion.  So in fact, Nigeria is closer than ever to being listed in the Special 301 Report.  Rather than celebrating the "accomplishment" of being taken off a list they were never on, members of the Nigerian intellectual property community should be working hard to reverse the trend of increased attention from IIPA.  This will help Nigeria stay off the Special 301 Report lists.

Nigeria and the Special Case of the USTR Special 301 Report Pt. 1

For the past two years Nigeria has been praising the Nigerian Copyright Commission (NCC) and its Director General, Adebambo Adewopo, for getting Nigeria removed from the Special 301 Lists. But inside sources say Nigeria was not removed from the Special 301 List, because Nigeria was never on the Special 301 List. This makes the Ippers ask "what's up?"

A two part series, we'll look first at what the Nigerian Press has been saying, and then at what's really going on.

The Special 301 List

What the Nigerians refer to as the Special 301 Lists is actually part of the United States Trade Representative (USTR) Special 301 Report. This report "highlights shortfalls in intellectual property protection" and "acknowledges progress" by US trading partners. (Spicy IP has a good overview of the Special 301 Report and the controversy surrounding it.) The Report includes the following lists of countries whose laws or practices have adverse affects on IPRs: Priority Foreign Countries, Priority Watch List, and Watch List.

Nigeria's "Removal"

The first reports of Nigeria's removal from the Special 301 List came in May 2007. A Nigerian newspaper, The Vanguard, and an online news source, nun gu entertainment, both carried the story. "US delists Nigeria from piracy blackist, as govt moves to enforce IP regulation," read the online headline. Both articles cited the Deputy Economic Consular at the US Embassy as the source of the news. The online story also carried a direct quote, "We have decided to keep Nigeria off any of the 301 lists this year." Keep Nigeria off, not remove.

From there, other articles, editorials and speeches included the news. An article in Sun News used the "delisting" as evidence that Adewopo was doing a great job at the NCC and anyone saying otherwise was involved in a smear campaign against him. Lagos IP law firm Aluko & Oyebode included the wonderful news in their July newsletter.

In a few short months the removal of Nigeria from the Special 301 List was being touted as one of the NCC's greatest achievements. The Chief Minister of Justice and Attorney General of the Federation congratulated Adewopo on his achievement. The President of the Federation also commended the NCC for its anti-piracy work.

By the beginning of 2008, the story had changed a bit. Several papers carried an article citing a June 2007 letter from the Former US Ambassador to Nigeria as the source of the information about Nigeria's delisting. Added to this was also a statement from the Attorney General that "Government was aware that until now, the country had always been on the U.S. Special 301, adding that the President has deemed the Commission as deserving of commendation in creating an enabling environment for the country’s unprecedented delisting." (The same info was carried in Sunday Benjamin's article in The Daily Trust.)

Stories about Nigeria's amazing feat spread beyond the country's borders. AllAfrica.com picked it up just a few months ago:

Recently, the Nigeria Copyright Commission (NCC) got a rare pat on the back when the United States removed Nigeria from the Special 301 Lists of countries blacklisted for condoning intellectual property theft in recognition of the renewed battle against the increasing spate of piracy and counterfeiting.

In various seminars and paper presentations around the country, members of the Nigerian government continue to sing praises of the NCC's anti-piracy programs to the tune of the Special 301 delisting.

But the question remains, was Nigeria really removed from the lists in the USTR Special 301 Report?

A Spectrum of Perspectives

There is a common axiom that you should not discuss politics or religion at a dinner party. But what about intellectual property? One part of the Ip's What's Up team found out that this topic can be just as impassioning as the others.

This past weekend I had the opportunity of attending a friend's birthday party. A birthday party is probably one of the last places you would expect to find much conversation about intellectual property, but we had plenty. The various opinions seemed to represent a good cross-section of different perspectives on Intellectual Property Rights (IPR), so I think it could be helpful to offer a little recap.

[This video and the sound recording in it are under a different license than the blog post.  Video: cc by-sa 2008 goldenrail.  Sound recording in the video: "nunoo" cc by-sa 2004 maki, www.myspace.com/theopenwound.]

[Technical difficulties?  If the video does not appear above, you can watch it at youtube.]

Stronger is Better

First, I spoke with an Economic Counselor for the United States. He had met with the local government earlier in the week to check on the progress in its war on piracy. The local government has worked closely with the United States and other developed nations in effort to strengthen its IP laws and increase the level of copyright enforcement in the country. This gentleman clearly represented the camp working for stronger IPR, as well as the international relations and trade aspect concerns that are part of IPR.

Intellectual property is now one of the biggest commodities developed nations have. In order for these countries to reap the maximum benefits, the whole world needs to have strong intellectual property laws. Countries with large creative industries work hard to help make this happen. People on the developing country side can also be in this group. They want stronger protection in order to encourage foreign investment and often to protect their growing creative industries.  Stronger IP laws protect their domestic creations as much, or even more so, than foreign ones.

What Good is Protection if I Can't Get the Goods?

Next, I spoke to someone on the complete opposite end of the spectrum, a British NGO-worker who decried the lack of books in the country. "We just need more books, I don't care if they're copied or not!" she exclaimed. Here is one of the common arguments against increased copyright enforcement in the country. The legal supply clearly doesn't meet the demand. For those who want the products but cannot find legitimate copies, especially for things like text books, copyright seems like nothing more than a barrier to development.

Supply that cannot meet demand is not just a problem in the book industry. Two years ago the demand for Nigerian Home Videos in Nigeria was estimated at 50 million buyers, but only about 500,000 legitimate copies were produced. (NCC Committed to National Copyright Policy & Reform, 10 NCC Copyright Bulletin December, 2006 Vol. 3 No. 6, ed. Charles O. Obi.) Similar circumstances exist elsewhere, with music industries in many developing countries, and even to some extent in developed countries when dealing with out-of-print books and such.

Consumers who are generally concerned with copyright often justify obtaining infringing copies of these types of materials. They point out that the author wouldn't be receiving anything if they didn't buy the infringing copy because they cannot buy a legitimate copy. They may also blame the author for the shortage of legal goods.

Eh, So What?

Near the end of the evening, I had an encounter with a third group. Those who really don't care about or pay attention to IPR. Sometimes they are ignorant of the laws; sometimes, they just do not care. In this case, they were most likely the later. A high up government official from a developed country handed a higher-up official from the same country a clearly pirated DVD of an American Television series. For these people, piracy and infringement are matters for other people, for governments, enforcement agencies and private rights holders. They did not create the copy; they did not sell it; they are just 'innocent' purchasers.

This seems to be a very large group, and it blends into other groups, people who believe it is ok to make a copy of a cd for a friend, those who indiscriminately clip artwork from internet sites. It is highly likely that we have all fallen into this group at some time or another, and many people may be in this group with regards to some IP while falling into another group in regards to other IP.

In Between the Extremes

Of course, there are plenty of groups that care about IP but fall somewhere between the extremes represented at the party. There are organizations who want to change the system without chucking IP protection completely out the window or creating a single strict set of laws for the whole world. The trick for all these groups is balancing the interests of everyone involved, including the points of view above.

The Uncertain Future of Business Method Patents

This is an unscheduled News Update post.

Yesterday, the Court of Appeals for the Federal Circuit affirmed the denial of a patent for a business method of risk management relating to changes in energy costs.   The court ruled that in order to qualify as patent-able subject matter, a process must meet both parts of a two-part test (displacing the State Street "useful, concrete, tangible" test):

1. "tied to a particular machine or apparatus"
2. "transforms a particular article into a different state or thing"

There's plenty of coverage on the blogosphere:

Some US opinions seem very excited and optimistic for the downfall of business method patents: Techdirt and TechCrunch.

One British point of view seems a bit calmer; no point in getting excited until the case gets to the Supreme Court: The Guardian.

PatentBaristas gets down and dirty with the nitty gritty, including some court vs. legislature banter.

A rather in-depth look at the court's opinion is available at Patently-O.

And, if you're really interested, you can check out the whole opinion.

 

It will be interesting to see how the case affected the patent auction in Chicago yesterda, as well.  From the looks of IP Finance's report, the case shouldn't cause too much of a tidal wave in the area of IP trading.

Why Congress, Why Part II

As promised, we are returning to the PRO-IP bill to look at Congress's reasons for the bill.  This may be our last look at S. 3325; there's a lot of other interesting stuff going on in the international IP world (check out the sidebar).  Also, if you haven't already done so, please submit your thoughts on some good things about IP protection!

Here is a brief look at two more reasons Congress listed as its sense for why the US needed to strengthen its IP laws: (S. 3325 § 503.)

• effective criminal enforcement of the intellectual property laws against violations in all categories of works should be among the highest priorities of the Attorney General
  

Why?  Why should criminal enforcement of intellectual property be more important than violent crimes, drug issues or the government's favorite enemy, terrorism?  I'm not sure I can buy this reason.  How do others feel about it?

• terrorists and organized crime utilize piracy, counterfeiting, and infringement to fund some of their activities

Oh!  That's why.  The IP criminals are terrorists!  At first I was very skeptical about this; it was the government crying terrorism like the boy cried wolf.  But I looked into it a bit and found that there is some support for this claim.  Most of the information and studies are about 3 years old.  The reports seem to show two separate connections between terrorist organizations and copyright infringement:

(1) terrorists engage in piracy in the same manner that they engage in a variety of other illegal trade, such as arms trafficking or drug running,

(2) people who have been arrested for piracy have been supportive of or have leanings towards terrorist organizations.

I will agree then that piracy, counterfeiting and infringement funds terrorist activities.  If terrorists are fundraising with pirated goods just as they are with drugs, then yes, piracy is technically funding terrorism.  It’s also possible that pirates who support terrorist organizations might donate funds they raised from their piracy.  Again, this can technically be called piracy funding terrorism.  If the terrorists sold flowers, would we enact laws against those? 

As another author pointed out, copyright infringement is its own issue.  Yes, it is illegal, so yes, the government should address it.  But protecting the rights of creators should not be mixed up with anti-terrorism laws.  I’m sure all illegal activities can be linked together in some way.  Drug dealers might drive over the speed limit; people who drink under age might also jaywalk; and terrorists might engage in copyright infringement.  That doesn’t mean that the laws dealing with each of these crimes should be all mashed together.

As for the organized crime claim, this seems like a problem from a logic game.  If a group of people have organized their copyright infringement activities so that there are large-scale manufacturing plants and elaborate distribution networks, as is the case in Nigeria for example, are the pirates using organized crime to support their piracy, or are the criminals using piracy to support their organized crime?

For those who are interested, here are some further links for information on the terrorism/piracy connections:

the government claiming a connection (2005)

report of person engaged in infringement and supportive of Hezbollah (2006)

the scary stuff: RIAA video claiming the link (2008)

and something a bit reassuring: Current US AG’s take on the issue (2008)

Why, Congress, Why?

Today's look at the PRO-IP bill (S. 3325) will focus on the "Sense of Congress."  Perhaps there are reasons for the changes made by this law, things Congress knows that we don't understand yet.  Perhaps....

Here are four reasons Congress listed as its sense for why the US needed to strengthen its IP laws: (S. 3325 § 503.)  (Later this week, we will look at the rest.)

• the United States intellectual property industries have created millions of high-skill, high-paying United States jobs and pay billions of dollars in annual United States tax revenues;
  

Yes, this is probably true.  IP is so prevalent in society that I'll even accept that at least 1 out of every 300 Americans is employed in a high-skill, high-paying job because of an IP industry.  (Current population approx. 300 million.)

• the United States intellectual property industries continue to represent a major source of creativity and innovation, business start-ups, skilled job creation, exports, economic growth, and competitiveness;
  

Again, a true statement.  But while both these statements are factual, the nexus between them and the changes made to law seems to be missing.

• counterfeiting and infringement results in billions of dollars in lost revenue for United States companies each year and even greater losses to the United States economy in terms of reduced job growth, exports, and competitiveness;
  

Ah yes, the good ol' piracy is killing our industries and our economy.  I don't need to get into this because ars technica did a wonderful piece about "The dodgy digits behind the war on piracy."

• the growing number of willful violations of existing Federal criminal laws invoking counterfeiting and infringement by actors in the United States and increasingly, by foreign-based individuals and entities is a serious threat to the long-term vitality of the United States economy and the future competitiveness of United States industry;
  

This statement could be true; I have no idea.  I'm not a fortune-teller.  However, I think Congress overlooked something very important here:  "the growing number of willful violations."  The question should not be "how do we stop this growth?"  The question should be, "why is there a growing number of willful violations?"  Let's think about this for a moment.  What are some reasons people break the law?

1. Extreme Desperation: such as drove Jean Valjean to steal a loaf of bread in Les Miserables.  While that could be a reason for people supporting their families through the sale of pirated cds in third world markets , it probably does not explain the "growing number of willful violations" in the US. 
   
2. Ignorance: On the other extreme there's the ignorance plea, the kind used to excuse a child for stealing a candy bar from the supermarket.  "He didn't know any better; I'll pay for it," and all is well again.  With the high-profile lawsuits like Napster, Grokster and the Thomas case, as well as the ever present anti-piracy trailers at the beginning of every movie and warnings posted on everything we buy, it's highly unlikely anyone can claim ignorance of copyright infringement laws.
   
3. Bullshit: The general population either doesn't care about the law or doesn't understand the reasoning behind the law.  Or, even more likely with such a large increase in willful violations, the people DISAGREE with the law.  They don't think it's for their benefit, or even the benefit of the country as a whole.
   

Now, without getting into all the different philosophical theories about laws and legal systems, I would like to suggest that if there is a large showing of people who break a law or do not believe in a law, the lawmakers should step back and re-evaluate said law, and possibly who this government is "of," "for," and "by."

Image by: Lovelypetal cc-by, available at http://farm1.static.flickr.com/181/445070705_c2b64a0560.jpg?v=0

PRO-IP Bill is Now Law (and still wasting our tax dollars)

Well folks, he did it.  Bush signed the PRO-IP bill into law.  Now, I can only hope it goes unenforced.  Torrent Freak has a good post on just how crazy this new law is.  One thing people have been celebrating (people that aren't lobbyists or the RIAA) is the removal by the Senate of a section that would have given the DOJ the ability to bring civil infringement claims.  It was the DOJ itself that had to step in before Congress could be talked out of that idea.

A sigh of relief swept the country when the provision was struck.  There was a general feeling of "at least our tax dollars won't be fighting Hollywood's battles for them."  But it's a false sense of relief.  Our tax dollars are not as safe as we hoped or believed.  What am I talking about?  Title IV of the new law: Department of Justice Programs.

There's plenty in this title that could serve as fodder for burning our tax dollars (improved forensic research for IP crimes!), but I'm going to focus on one provision:  Sec. 401 Local Law Enforcement Grants.

The Federal Government has had a program in place for many years that provides grants to State and local governments to aid them in the prosecution of computer crimes.  (42 U.S.C. 3713.)  To obtain these funds, State and local governments need to have enacted laws that prohibit and penalize certain types of computer crimes, like on-line fraud or hacking.  The grant funds may be used for enforcing laws against and prosecuting computer crimes, and for the development of educational and awareness programs.

Copyright infringement was just added to the list of computer crimes.  In the law's language:

The Office of Justice Programs of the Department of Justice may make grants to eligible State or local law enforcement entities, including law enforcement agencies of municipal governments and public educational institutions, for training, prevention, enforcement, and prosecution of intellectual property theft and infringement crimes. (S.3325 Sec. 401(b).)

So there it is.  Our tax dollars are still hard at work to "protect" the mass media companies from theft.  A grant program that used to protect the security of our identities and the sanctity of our on-line information, now panders to the iniquitous MPAA/RIAA (or as one blogger called them, the MAFIAA).

Slight Changes, Big Effects?

Continuing our examination of S.3325, the PRO-IP bill, we're going to look at two separate provisions that I believe are interrelated.  The first of these is Sec. 105 of the new bill, Importation and Exportation; the second is Sec. 303, Joint Strategic Plan.

Don't Bring It In, Don't Take It Out - Sec. 105

Sec. 105 amends Sec. 602(a) of the Copyright Act (17 U.S.C. § 602), formerly Infringing Importation of Copies or Phonorecords.  Importing infringing works is considered, along with unauthorized importation of legally made works, to be an infringement of the exclusive distribution right (given in 17 U.S.C. § 106(3)).  That provision has been in the Copyright Act since 1976.  The new bill adds another way to infringe this right: exporting infringing works.

My initial reaction upon reading this was, "oh, wow, they're trying to help developing countries by doing what they can to limit the amount of pirated materials entering those countries."  After all, the Nigerian Copyright Commission's recent study of piracy in Nigeria found the US to be the fourth largest source of pirated goods in Nigeria (tied with India, and falling far behind Singapore, China and Malaysia.)  [See Survey of Copyright Piracy in Nigeria, The Ford Foundation (2008), p. 49.]

As I continued looking at the new bill,  I realized just how over-generous my reaction was.  The more likely real reason for the inclusion of exportation is much more self-serving.  I believe Sec. 303 holds a clue.

Never Fear, the Americans are Here! - Sec. 303

The goal of the Joint Strategic Plan outlined in Sec. 303 is to fight piracy, reduce the amount of infringing goods in existence... in the world.  It includes a subsection entitled "Enhancing Enforcement Efforts of Foreign Governments."  (§ 303(f).)  This includes giving "training and technical assistance to foreign governments." It's not a new idea.  The current Copyright Act provides for this a bit, just not in such infringement-fighting focused language.  (See 17 U.S.C. §  701(b)(3).)  The US government has been engaging in foreign trainings on IP law for some time. (Description of the program already in existence can be found on the Intellectual Property Rights Training Program website.)  A DOJ workshop in Nigeria last year on "Investigative Skills for Intellectual Property Crimes" discussed amending the Nigerian Copyright Act.  In Zambia, Intellectual Property Rights trainings are conducted by the USPTO. (Page 7 of link.)

So, if this provision doesn't really add anything new, why did it catch my attention?  Because of Sec. 105. 

Simon Says - Sec. 105 in light of Sec. 303

Section 105's inclusion of exportation is probably less for the US and more for developing countries.  Developing countries, developing their intellectual property laws, turn to countries like the US for examples, guidance and assistance.  It will be much easier for the United States to control the movement of infringing material made in other countries if the DOJ can say "look, we have this provision in our copyright law, you should put it in yours, too."  Several directors at the Nigerian Copyright Commission have told me that when the US comes in with suggestions for IP laws, the countries "just eat them right up."

Other countries enacting similar laws would benefit the US in several ways.  Not only could this lower the amount of infringing materials moving around the global market, it would also shift the burden of enforcement from the US to countries where the infringing works originate.  The pirates will be handled at the export stage, before they've had a chance to import goods into the US.

I neither condemn nor condone these provisions; I'm fairly agnostic towards them.  While I do think it's a bit sneaky, I also think it's a fairly decent approach.  There is  a sense of legitimacy added when a country is willing to do itself what it asks others to do.  Additionally, neither of  these provisions are creating any drastic changes.  The US government will continue to work with other countries in the area of IP laws, perhaps with just a little more focus on piracy.  And trading in infringing goods is still illegal, it's just illegal in both directions now.  What I'm interested to see is the impact this provision has on the development of global IP standards.

IP Can Save the Economy!

The Enforcement of Intellectual Property Rights Act of 2008 (S.3325) passed the Senate and the House last week.  I was hoping the economic situation might have caused enough of a distraction for this bill to fall by the wayside.  No such luck. 

This is the first post in a series here on Ip's What's Up that will be taking a closer look at the new Pro-Ip bill, breaking it down into simpler parts and analyzing a bit of the changes.  If you would like a more detailed review of the law, Jennifer L. Elgin and Matthew J. Astle of Wiley Rein LLP have done a very thorough report of the bill at The Metropolitan Corporate Counsel.

Give it to the Gov.

Section 206 of the new Act is entitled "Forfeiture, Destruction, and Restitution."  It amends Title 18 of the US Code (Crimes and Criminal Procedure) by adding a new section in Chapter 113 (Stolen Property).  This new section, 18 U.S.C. 2323 is called, you guessed it, "Forfeiture, Destruction, and Restitution."  In many ways, it matches similar forfeiture laws for drug related offenses.  But Sec. 2323 has something special - Civil Forfeiture:

"The following is subject to forfeiture to the United States Government:

(A) Any article, the making or trafficking of which is, prohibited under section 506 of title 17 . . .

(B) Any property used, or intended to be used ...(for doing what's in part A)...

(C) Any property constituting or derived from any proceeds obtained directly or indirectly as a result of ... (doing what's in part A) ..." (italics added)

The above mentioned Section 506 is the Criminal Offenses section of the Copyright Act.  It covers three different types of willful infringement:

1. bootleg pre-releases via computer of works intended for the commercial market (Sec. 506(a)(1)(C)),
2. infringement for "commercial advantage or personal financial gain" (Sec. 506(a)(1)(A)), and
3. internet file-sharing [with some stipulations - the combined retail value of files shared in a 180-day period must be at least $1000] (Sec. 506(a)(B)).

Let's take a look at what this could mean.  Ignoring, for now, the "everyday people" internet infringements, we'll focus on the infringement for financial gain.

Mr. Combs Saves the Economy

About a year ago, the Sixth Circuit heard a case involving infringement for commercial advantage, Sean Combs sampling of the Ohio Players song "Singing in the Morning" on the Notorious B.I.G. (Biggie) album Ready to Die.  The court remanded the case because it found the $3.5 million in punitive damages excessive.  (Bridgeport Music, Inc. v. Justin Combs Publ'g, 507 F.3d 470.)

But what does the $3.5 million matter?  Under the upcoming 18 U.S.C. 2323, any money made directly or indirectly from Ready to Die, any equipment used to make the infringing track, and anything Bad Boy Entertainment or Universal Records (part of the defendant-group) has that came from proceeds directly or indirectly created by Ready to Die is subject to forfeiture to the United States Government.

Sean Combs' success as a producer, rapper, entertainment mogul and everything else he does can be traced to his work on Biggie's albums.  Ready to Die itself fueled Bad Boy Entertainment's rise to the top; the album was it's first multi-platinum seller.

So, Mr. Combs, your Sean John clothing line, your East Hampton home, your share in Ciroc vodka and your nearly $350 million net-worth are all directly or indirectly related to your infringement for commercial advantage of "Singing in the Morning."  Fork it over.  The government does have a plan to fix the deficit and the financial crisis!  Look out Dr. Dre. 

Ok,ok - that's a bit extreme, but you can see why this new provision worries me a little bit.  Forfeiture for crimes like drug trafficking, that actually make a few wealthy at the expense of the entire community, make some sense.  After all, the government has to pay to maintain the community.  But, I fail to see the causal connection that allows a private right of action to allow forfeiture to the government.  What's next?  If the cops recover my car from a joy-rider, do they get to keep it?