I’ve written before about how the three strikes law that is in force in France, and is being contemplated in other countries, is fundamentally wrong.

Take a look at this short video interview from author Cory Doctorow that puts it in perspective.

Fanshawe College is putting on an eMarketing conference March1st entitled “Turning Clicks into Customers“.   The keynote speaker is Mitch Joel, author of  Six Pixels of Separation”.

I’m speaking at a breakout session on “Legal Issues for a Digital World” .

I’ll be commenting on issues including copyright, cloud computing, the Streisand effect, and social media and privacy.   

There are several factors that make digital law different from analogue law.  As I’m putting my presentation together, I’m realizing that the concept of  practical obscurity plays a big role in explaining some of the differences.

For the London Free Press – February 1, 2010

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IBM recently announced that Euro Partners, a New York-based brokerage, downloaded $1.7 US million worth of IBM software between 2003 and 2008 without permission.

Euro Partners, a unit of BGC Partners, was acquired by BGC in 2005 for about $97.3 million. IBM accuses BGC of downloading extra copies of its Informix software without paying licensing fees.

IBM is suing BGC for breach of contract and copyright infringement and is seeking an injunction to impound all improperly downloaded copies of its software.

In 2008, after a customer audit, IBM found BGC was downloading more copies of Informix than its purchase agreement allowed. In September 2008, IBM sent BGC a bill for $1,730,665.24; BGC refused to pay.

In December, IBM offered BGC a new licence covering both previously licensed copies of Informix and the improperly downloaded copies. When BGC said no, IBM terminated BGC’s International Program License Agreement.

As a condition of its IPLA, BGC was required to destroy its copies of Informix. Not only did BGC refuse to destroy existing copies, but it downloaded more after the IPLA ended.

This is not the only example of a software distributor playing hardball and cracking down on users of unlicensed software.

The Business Software Alliance, an industry trade group that polices software licences, announced last fall it settled with 12 Canadian companies for a total of $431,336 in damages for using unlicensed software. Settlements ranged from $11,900 to $128,800.

These are not always instances of intentional “theft” of software. Sometimes the business simply doesn’t keep proper track of its software use compared to what they have actually licensed.

The most common way software vendors become aware of improper use is through tips from current or former employees.

In its 2009 Global Software Piracy Study — available at www.bsa.org — the alliance notes that “in 2008, the worldwide monetary value of unlicensed software — ‘losses’ to software vendors — was $53 billion. This was up $5.1 billion from 2007, or 11%, in non-constant dollars.” In 2008, “for every $100 of legitimate software sold, another $69 was pirated.”

Calling this entire amount “losses” is a stretch, since many of those who copied would simply not use the software if they had to pay for it.

Regardless, it is clear that any business or organization that uses a significant amount of unlicensed software — whether intentionally or through lax management — exposes itself to possible fees and damage claims likely to exceed the actual licence fees. Not to mention the internal time and public embarrassment entailed in such a claim.

Mike Masnick of Techdirt has published a post that is a chapter he wrote for a book being presented at a conference for the International Association of Entertainment Lawyers (IAEL).

Its worth a read, not only for Mike’s thoughts on new ways for the music industry to make money, but also to consider how that business model might work for other industries. 

Here are some snippets to get a flavour:

It’s no secret that there’s a lot of concern these days about what the music industry will look like going forward — especially from those who work on the label side of the business and have been around for a bit. A variety of things have caused rapid change in the market. Competition from other forms of entertainment, such as the internet, movies and video games, have put more pressure on the industry, as consumers have been presented with significantly more options for their entertainment attention and dollars. And, of course, there’s the ever-present specter of unauthorized file sharing — or, as the industry prefers to call it (accurately or not), “piracy.”

…

However, there is another solution: stop worrying and learn to embrace the business models that are already helping musicians make plenty of money and use file sharing to their advantage, even in the absence of licensing or copyright enforcement.

In simplest terms, the model can be defined as:

Connect with Fans (CwF) + Reason to Buy (RtB) = The Business Model

Sound simple? It is, if you understand the basics — and it can be incredibly lucrative. The problem, of course, is that very few seem to fully understand how this model works. However, let’s go through some examples.

…

This is a business model that’s working now and it will work better and better in the future as more people understand the mechanisms and improve on them. Worrying about new copyright laws or new licensing schemes or new DRM or new lawsuits or new ways to shut down file sharing is counterproductive, unnecessary and dangerous. Focusing on what’s working and encouraging more of that is the way to go. It’s a model that works for musicians, works for enablers and works for fans. It is the future and we should be thrilled with what it’s producing.

For the  London Free Press – January 18, 2010

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Rival service Plurk alleges Microsoft copied as much as 80% of the code used in running the Juku program without permission

Microsoft recently susp-ended its new microblogging site, Juku, after it became clear the site contained code taken without permission from rival startup Plurk, a free social networking and microblogging service based in Canada.

Plurk recently alleged Microsoft copied as much as 80% of the code used in running the Juku program without permission. After investigating, Microsoft confirmed some Juku code had been used without permission and apologized to Plurk.

Though Microsoft admitted the plagiarism, it claimed a Chinese vendor developing the Juku application for MSN China was responsible for copying the code without permission.

“When we hire an outside company to do development work, our practice is to include strong language in our contract that clearly states the company must provide work that does not infringe the intellectual property rights of others . . . we are obviously very disappointed, but we assume responsibility for the situation. We apologize to Plurk and we will be reaching out to them directly to explain what happened and the steps we have taken to resolve the situation,” Microsoft said in a statement.

In response, Plurk co-founder Alvin Woon said, “we are still thinking of pursuing the full extent of our legal options available due the seriousness of the situation . . . basically, Microsoft accepts responsibility, but they do not offer accountability.”

“This event wasn’t just a simple matter of merely lifting code . . . due to the nature of the uniqueness of our product and user interface, it took a good amount of deliberate studying and digging through our code with the full intention of replicating our product-user experience, functionality, and end results. This product was later launched and heavily promoted by Microsoft with its big marketing budget,” Woon said.

This is not the first time Microsoft has apologized for infringing the intellectual property rights of others.

A month before the Juku allegations, Microsoft apologized for another third-party vendor improperly incorporating open-source codes into a Windows 7 download tool. The tool was developed to allow users to more easily load Windows 7 onto thumb drives. Microsoft subsequently withdrew the tool.

The recent allegations about Microsoft have caught many by surprise given that Microsoft has been a leader in the fight against piracy in China and elsewhere.

The lesson for anyone who hires others to create code or other creative works is the importance of having an agreement in place that requires the code to be original.

In the Juku case, it appears the contractor did not abide by that requirement. But having it in place let Microsoft move swiftly to protect its reputation, and show that, while it may be ultimately responsible, it did not intend or condone the copying. It should also give Microsoft some recourse against the contractor.

That’s ‘fair use’ as in copyright, not ‘world’s fair’ – although copyright does sometimes seem to have a carnival atmosphere around the various debates and tactics around copyright law and enforcement.

Michael posted a good summary of the issue regarding Canadian law. (Its called ‘fair dealing’ here.)

Also see the WFUD web site.

Its amusing / ironic / puzzling whenever someone who aggressively tries to protects its own copyright, trade-marks, or other intellectual property finds itself on the opposite side.   In other words, they engage in the very behaviour that they find offensive in others.

The latest example is Vanoc (aka the Vancouver Olympics).  Seems that there are a couple of instances where Vanoc has been accused of trying to acquire rights from others that crossed the line.

See the details on Excess Copyright or Techdirt.

For the London Free Press – November 23. 2009

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INFRINGEMENT: It addresses concerns of creators and publishers of movies and music

The “three-strikes law” is a controversial proposal to address download infringement concerns of creators and publishers of movies and music.

The concept is that if someone alleges an Internet user is downloading copyrighted material, they can advise their Internet Service Provider (ISP). The ISP then tells the customer to cease this illegal activity. If this happens three times, the ISP must turn off the customer’s Internet access.

France recently approved such a plan, but not without a struggle. An initial version was ruled unconstitutional by the French courts. An amended version was approved this fall which calls on a judge, not a government actor, to sign off on account suspensions.

France is now viewed by supporters as a pioneer against piracy, leading the way by implementing this legislation.

The same proposal in Britain met with public backlash. Public consensus is these measures are too drastic and draconian. The measures will generate a bureaucratic nightmare while having little impact on the overall prevalence of file-sharing.

Other critics argue the increasing prominence of the Internet in everyday life makes suspending that privilege a limit on individual freedom of expression.

Even holders of copyrighted material are split on the subject. Artists, such as the music group Radiohead, argue that any effort to criminalize file-sharing is in vain. They believe artists would be better to embrace the potential of file sharing to share their work with a larger audience. This will allow them the opportunity to generate revenues through concerts and merchandising, and even the sale of their music.

Other artists are of an opposite view, believing that file-sharing restricts the ability of young artists to make a living, lessening the likelihood of success for emerging artists.

The three-strikes law is misguided, even if you believe such activity should be controlled.

Whether someone has violated copyright is often not a black-or-white issue. Copyright law is complex, and knowing in any given instance whether an infringement happened isn’t easy.

To implement these policies on a mass basis, in a similar manner to handing out parking tickets, ignores this complexity. And the penalty is more than paying a few dollars in parking fines.

The proposal is also open to abuse as sanctions imposed at the request of an alleged victim can be taken advantage of.

There are numerous examples of questionable takedown notices under the existing U.S. DMCA rules. In fact, the Electronic Frontier Foundation has created a Takedown Hall of Shame, which lists “bogus copyright and trademark complaints” which “have threatened all kinds of creative expression on the Internet.”

This points up another problem with the concept: violations need only be alleged, not proven. An individual may be accused and given a strike by their ISP with no proof of misconduct. Guilty till proven innocent is not something we should condone.

The issue of digital piracy will continue to be a contentious topic. The three strikes proposal is not a palatable solution.

International negotiations continue on the Anti-Counterfeiting Trade Agreement.  The latest round of talks just ended.  It is a proposed treaty among a few countries to help stem the flow of counterfeit goods at borders.  Sounds reasonable - but there is a growing concern that the treaty would go far beyond that. 

It seems to support the US entertainment industry agenda that is being pushed by the US government – the same agenda that has garnered huge opposition on the Canadian copyright reform front.  It may even include support for the ill-advised three strikes law (I’ll have more to say about that in an upcoming Free Press column).   And if that’s not bad enough in substance, it is being negotiated out of the public eye.

For more details on the topic, search for “ACTA” on Michael Geist’s blog.  Michael includes his own thoughts, his presentation from a recent conference, and links to comments by others.

… at least not in the US.  Public performances of musical works are subject to copyright.  That leads to things like copyright fees being payable when a hair salon or dentist plays a CD .   The EFF reports that a US federal court ruled yesterday that  ”when a ringtone plays on a cellular telephone, even when that occurs in public, the user is exempt from copyright liability, and [the cellular carrier] is not liable either secondarily or directly”. 

Seems that ASCAP wanted public performance royalties for ringtones.