Archive Page 2
October 12th, 2008 by Joshua Kagan
In this episode Michael and Josh team up with Tigran Palyan, a 3L at Southwestern Law School here in Los Angeles, who tells us about his research into the cutting-edge subject of Privacy in Virtual Worlds.
Click the play button below to listen, or click here to subscribe to us on iTunes!
Audio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.
Here are the show notes for this week’s episode:
Shownotes for The Singularity Law Podcast: Episode 3 for October 12, 2008
Our Panel for Today:
- Josh Kagan, author of The Josh Kagan Blog
- Prof. Michael Scott of The Singularity Law Blog
- Tigran Palyan, author of “Common Law Privacy in a Not So Common World: Prospects for the Tort of Intrusion upon Seclusion in Virtual Worlds”
Privacy in Virtual Worlds - Tigran tells Michael and Josh about his new article
Kentucky Seizes Gambling Domains
Talking Point of the Week: A EULA to End All EULAs
October 5th, 2008 by Joshua Kagan
Once again Michael and I discuss the most important tech law issues of the week. This week’s topics include RealNetworks’ new DVD-importing software, the EFF’s report on five years of RIAA litigation, net neutrality, Apple’s threats to shut down iTunes in the midst of a royalty dispute, an online gambling scam, and how you too can own “James Bond’s” computer! Click the play button below to listen, or click here to subscribe to The Singularity Law Podcast on iTunes!
Audio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.
Here are the show notes for this week’s episode:
Shownotes for The Singularity Law Podcast: Episode 2 for October 5, 2008
Our Panel for Today:
Josh Kagan, author of The Josh Kagan Blog
Prof. Michael Scott of the Singularity Law Blog
MPAA v. RealNetworks
RIAA Lawsuits - Discussion of the EFF’s Report
Did Statutory Royalties Almost Spell the End of iTunes?
Online Poker Cheating Scandal
Network Neutrality: A Few Observations
Talking Point of the Week: MI6 Photos and Data Accidentally Sold on eBay
This recording is an informational resource only. It is not designed to offer legal advice.
October 5th, 2008 by Joshua Kagan
I used to work for a video game publisher here in LA, so it’s not unusual for video game-related news and cases to come across my desk. But over the last few days I’ve seen an unusually high amount of commentary from all different corners of the industry about used game sales. I don’t think this is as big of a problem as those commentators have suggested.
The Issue of the First Sale Doctrine
The First Sale Doctrine as codified in the Copyright Act permits a purchaser to transfer ownership of a particular copy of a copyrighted work as long as no additional copies are retained. Game discs qualify for this, and so they can be freely sold. Historically, this has never been much of a problem for the industry. Unlike novels and videos which are often used once and then archived, consumers have traditionally resisted selling their used games because it’s a different kind of product. But now, with companies like Gamestop building retail businesses that aggressively promote the sale of used game discs, the situation has changed significantly. Some publishers and developers fear that an overly powerful secondhand games market could strangle the industry by cutting off consumers’ demand for new game discs. With new games costing as much as $30 million to develop in an industry that employs around 100,000 Americans, it’s not hard to understand that fear. On the other hand, novelists and movie-makers have been dealing with the First Sale Doctrine for ages, but those industries have managed to survive even with the proliferation of lending libraries and video stores.
Digital Downloads as a Work-Around
One potential solution would be for the industry to move more toward digital downloads. Some of the most successful games in recent weeks, such as Braid and the highly anticipated Capcom title Mega Man 9, have found tremendous success as downloadable games on platforms like Nintendo’s WiiWare, Sony’s PlayStation Network, and Microsoft’s Xbox Live Marketplace. Many developers have also found success on Apple’s App Store, a service that puts application and game downloads at the fingertips of iPhone and iPod users. The use of digital downloads has a number of advantages to the industry, one of which is that downloaded games are typically locked to a single device through the use of DRM, cutting off the First Sale Doctrine at its knees.
DRM Problems
But moving further into downloadable games also has serious consequences for the industry. While mainstream gamers have generally been accepting of DRM, with services like Nintendo’s Virtual Console reporting sales on the order of 10 million games sold per year, critical demographics such as the 18-35 year-old male group have expressed dissatisfaction with the DRM restrictions placed on popular games like EA’s Spore. With the entertainment sector moving increasingly away from DRM, it’s not clear that the video games industry would benefit in the long run from increased reliance on a dying technology.
Storage and Bandwidth Problems
Another more important problem is that the storage and bandwidth limitations of game consoles don’t always meet the needs of today’s cutting edge games. For example, most games for the PlayStation 3 ship on Blu-Ray discs that can hold up to 50 GB each. Some recent games such as Konami’s Metal Gear Solid 4: Guns of the Patriots have already managed to fill these discs. Delivering games this large over the Internet is impractical with current technology because they would take far too long for players to download and would occupy too much space on game consoles’ hard disks.
There’s no denying that this situation puts the industry in a tough spot.
The Best Solution: Leverage Games’ Perceived Value and Add Replayability to Game Discs
I think that the best solution here would be to make some small changes to the nature of mainstream disc-based games. One of the things that distinguishes a game disc from a novel or a video is that, in many cases, once a novel or video has been used (i.e. read or viewed) once, there might not be a lot of perceived value to the consumer in using the product again. That’s why there will always be a sizable block of consumers who rent many DVDs but don’t buy any. But the video game industry can be different by crafting products that retain their perceived value even after they have been enjoyed once.
One way to do this is by providing gamers with experiences that go beyond a typical “single player campaign” experience. Nintendo’s Metroid series was a pioneer in this area; they contain items and areas that are not essential to finishing the game, but that greatly enhance and change the nature of the game if the player chooses to explore. Vivendi’s Diablo series is similarly innovative, with dungeon layouts and discoverable items that are randomly generated each time the game is played, presenting the player with a slightly different experience on each playthrough. Some other recent games have begun to emphasize Internet multiplayer capabilities that pit players with (or against) other players from around the world. This creates communities in which players build perceived value in the game over time. It also encourages players to push sales of those games through word-of-mouth advertising because players know that the more people have the game, the better it will be. Finally, another solution is to make available new content in the form of downloadables. These can be offered to players for free simply to drive sales even as the game gets older, or they can be sold to players in the form of revenue-generating micro-transactions. It’s worth mentioning that a gamer who has invested even a few dollars in game-related micro-transactions is probably far less likely to ever sell his copy than someone who has invested nothing other than the purchase price.
Americans spent nearly $19 billion on video games in 2007, and that number is set to look even better once 2008 comes to a close. Over the past two decades we’ve watched this industry adapt dynamically to a number of consumer and technological trends such as Internet piracy and the emergence of the “casual” games market. In every case the industry has emerged stronger than it was when it went in. I wouldn’t lose sleep over the emergence of a used games market.
Save your fear for Capcom’s upcoming Resident Evil 5 launch instead. If it’s anywhere near as good as its predecessor, when that hits in March 2009 I think we’ll all be having a few zombie nightmares.
September 29th, 2008 by Joshua Kagan
This is a pilot for a new podcast on technology law that I’ll hopefully be recording each week along with Michael Scott. In each episode we’ll cover some of the most interesting topics of the week, identify trends, discuss new legislation, analyze recent cases, and end with our favorite talking point of the week. We hope you’ll like it. Click the play button below to listen!
Audio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.
Here are the show notes for this week’s episode:
Shownotes for Singularity Law Podcast Episode 1 (September 29, 2008)
Our Panel for Today:
Josh Kagan, author of The Josh Kagan Blog
Prof. Michael Scott of the Singularity Law Blog
Cloud Computing
Walmart and DRM
Capitol Records v. Thomas
New Copyright Legislation (PRO-IP Act)
Talking Point of the Week — Banned from the Internet for Life
This recording is an informational resource only. It is not designed to offer legal advice.
September 29th, 2008 by Joshua Kagan
Last Wednesday a federal judge declared a mistrial in Capitol v. Thomas and set aside the judgment for the plaintiffs when he found that the theory of “making available” may not have been sufficient to constitute infringement. The core of the RIAA’s position here is that Thomas infringed by merely offering to distribute copies of a work from her computer, even if no one ever actually downloaded a single copy. The problem with this sort of a theory lies of course in the Copyright Act. While § 106(3) provides recovery for “distribution,” nowhere does the Act permit recovery for “attempted” copyright infringement of any kind.
If you haven’t been following this case, the solution might seem obvious. Why doesn’t the copyright owner simply present evidence that the defendant actually distributed some copies? But it’s not that simple, and I don’t think the RIAA can win this time. Here’s why.
Recording companies identify plaintiffs through a fairly crude process. When an Internet user runs a file-sharing application that uses the peer-to-peer model, the file-sharing application typically searches the user’s computer for media files and indexes all that it finds. The index will normally contain a list of the audio files sorted by artist, album, genre, and some other criteria. It then uploads this index to another computer on the peer-to-peer network with a fast connection and large storage capacity. The computers that store indexes of other users’ files are commonly called “supernodes,” while other users are called simply “nodes.”
When one node on the network wants to find a particular recording, it submits a search query to a supernode. The supernode returns a response that indicates which computers on the file-sharing network have copies of the file along with the IP addresses of those computers. When a copyright owner (or one of its contractors such as MediaSentry, a company that provides online copyright enforcement services) wants to identify infringers, it connects to a file-sharing network as a node and searches for the name of a recording for which it owns the copyright. When the supernode returns a list of computers that are offering the file for download, the copyright owner sends another query to the supernode called “find more from this user” that returns a list of all of the files being offered from one of those computers. The copyright owner then brings suit against the Internet subscriber using that IP address for damages arising from infringement of the copyright owner’s exclusive distribution right under 17 USCS § 106(3).
Assuming that the indices generated by the defendants’ computers accurately convey the media files that are hosted by that node, the copyright owner now has an accurate list of files that the defendant is making available to the public–nothing less and nothing more. The node is offering these files for download and, if a third party wants to initiate a file transfer, such a transfer will likely occur. But neither the supernode nor the node contains any evidence that such a transfer actually took place. In other words, the copyright owner has plenty of evidence that the defendant made an offer to distribute infringing copies but no evidence that anyone actually took him up on that offer. Worse yet, given the number of nodes available on most file-sharing networks at any one time (typically millions or more), for popular sound recordings and movies, it is actually exceedingly unlikely that most nodes have ever consummated an outgoing transfer because there are so many other nodes with copies of the same content.
In a court filing, an RIAA attorney contended that ”requiring proof of actual transfers would cripple efforts to enforce copyright owners’ rights online – and would solely benefit those who seek to freeload off plaintiff’s investment.” If the plaintiffs continue to limit themselves to the methods I described above, I don’t doubt this. But there’s no question in my mind that “making available” is not equivalent to any of the exclusive rights enumerated in the Copyright Act. To win with the evidence they have, the plaintiff would need to in effect fashion a new kind of claim for attempted copyright infringement. In the Ninth Circuit, judges have already resisted such attempts. In Perfect 10 v. Amazon.com, the Court in dicta blocked what it called “the proposition that merely making images ‘available’ violates the copyright owner’s distribution right.” A separate line of cases has also evolved out of an Eighth Circuit case that has been applied to file-sharing actions. These Judges consistently find that “record companies must show that an unlawful copy was disseminated ‘to the public.’”
The problem here is that, because of the way the Internet works, we don’t really have those kinds of records in an easily accessible form anywhere. The RIAA seems to understand this. It’s one thing to use the discovery process to find out what a particular computer has downloaded. That’s trivial. But finding out what other computers have downloaded from a defendant, while not impossible, could be extremely difficult.
For this reason, I don’t think Capitol and MediaSentry can win this one.
This weblog is an informational resource only. It is not designed to offer legal advice.
September 24th, 2008 by Joshua Kagan
The Apple rumor sites are reporting that Apple has begun including the following language at the bottom of iPhone App Store rejection letters:
The information contained in this message is under non-disclosure.
I’d love to hear one of Apple’s attorneys explain what the company’s damages would be if a developer were to breach this.
That aside, there’s a bigger problem here: this is bad business sense, no matter how you spin it.
It’s also bad for society. In stark contrast to Apple’s approach, Google seems to be going in the opposite direction with their new “Android” platform. The platform is wide-open, so anyone can develop almost anything for it without any limitations. I think it’s obvious why that’s dangerous. So, as of today the market has exactly two major choices: Apple’s closed system that’s hostile to developers, and Google’s open system that’s a malware attack just waiting to happen.
I don’t think this can last.
September 21st, 2008 by Joshua Kagan
Angelo DiNardi writes that he developed an alternative email client for the iPhone called “MailWrangler” only to have it rejected by Apple’s App Store because it “duplicates the functionality of the built-in iPhone application Mail without providing sufficient differentiation or added functionality, which will lead to user confusion.”
I wonder whether an iPhone-specific version of the Firefox web browser would similarly be rejected because it’s too similar in functionality to the iPhone’s built-in Safari browser. If so, this reminds me a little (and I mean just a little) of United States v. Microsoft.
September 20th, 2008 by Joshua Kagan
Earlier this week Professor Michael Scott of Southwestern Law School called for a “coherent federal technology policy.” He pointed to the decline in government R&D spending and argued that the next president should “turn things around.”
He’s right. But I want to go one step further and specifically outline what a good federal technology policy should include. Here are my ideas.
- The first problem is that our present government doesn’t seem to understand technology when it matters. For example, Senator Ted Stevens (R. Alaska) delivered a now-infamous speech in which he demonstrated a complete lack of understanding about how the Internet works. Normally I wouldn’t care, but at the time Sen. Stevens was the chair of the Senate Telecommunications Committee. He vehemently opposed an important bill on the basis of this erroneous understanding. This is destructive. The people in charge of technology need to be experts in the technology. It’s obvious that Sen. Stevens and others in Congress have their committee chair positions simply because of seniority. In other fields this probably isn’t a big deal, but in technology it’s huge.
- Another issue is reform of the broken patent system. A good technology policy should provide consistent, predictable, and reliable protection for inventions while closing off the patent trolls as much as possible. Let’s use the U.S.P.T.O. to encourage innovation, as it was designed, instead of undermining innovators and rewarding trolls.
- We also need a consistent policy for protecting our IP abroad. We live in a nation with an increasingly information-driven economy. Innovation may soon be our greatest export, and because of the Internet information has no borders. In some industries like entertainment this is especially important. We need a fair and consistent set of rules that allow American businesses to cooperate and competitively conduct business in foreign markets over the Internet.
- The next problem is that our present government doesn’t embrace technology when it should. The Internet is a powerful tool for bringing people together and allowing them to do and understand things very efficiently. The next president should create a cabinet-level position for using technology to communicate and work with the people. For example, people should be able to use the Internet to retrieve up-to-date information about how tax dollars are being spent. Let’s use the Internet to create the ultimate transparency law.
- In addition to embracing technology, the government should also embrace science. Our current administration has an almost antagonistic relationship with science. When our scientists present valid peer-reviewed findings, the policy should be to put their recommendations first, not second to the needs of some lobbying group or faith-based position.
- The government also needs to have a policy of promoting next-generation technologies like broadband access. It’s ridiculous that the U.S. trails behind Korea, Canada, the Netherlands, and other countries in broadband penetration. The Internet is quickly becoming the most important way that people communicate, and everyone should have access, regardless of socioeconomic status. This is an area where the U.S. should lead, not trail.
- Finally, a good technology policy needs to be committed to information neutrality across all channels. This includes everything from net neutrality on the Internet to continuing the U.S. tradition of content neutrality on the airwaves. Give everyone a chance to express their opinions and to try to make their business models work.
Obviously there’s more that can be done, but I think this would be a terrific start toward “turning things around,” back on the road to being the technological leader that our nation could be. Let’s invest in our future. Let’s embrace the 21st century instead of running from it.
September 20th, 2008 by Joshua Kagan
- DRM promotes the premature obsolescence of devices and media. Digital formats and standards change all the time, and content that is restricted by DRM cannot be transitioned to a new format. In addition, many DRM schemes require communication with a central server to “authenticate” the product before it can be used. Once these servers are no longer maintained by the provider, the content can no longer be accessed.
- DRM significantly narrows the audience that can experience DRM-restricted content because such content can only be accessed by particular devices in particular ways, and must be sold through particular outlets.
- DRM is easily defeated by the professional pirates who are responsible for the vast majority of relevant industry losses that DRM schemes purport to target.
- DRM schemes tend to inconvenience honest purchasers far more than they deter piracy. As Cory Doctorow jested in a recent presentation at Microsoft’s campus, “keeping an honest user honest is like keeping a tall user tall.” Yet, in practice, casual users who legitimately purchased content are the ones who are most likely to be inconvenienced by DRM schemes.
- Because they restrict future usage, DRM schemes are incompatible with open source and so-called “copyleft” licenses like the GPL and Creative Commons which are good for society.
- DRM schemes and similar restrictions stifle artist creativity by putting distribution decisions solely in the hands of those distributors who have access to the restricted devices and DRM schemes.
- DRM schemes freeze out competition by small and emerging businesses by preventing new players from distributing their content to owners of existing devices. This is great news for conglomerates with established bases but awful news for newcomers and innovation in the industry.
- DRM severely stifles product innovation by requiring that device manufacturers make products that copyright holders want instead of the products that would be best for consumers. Could the VHS recorder (as-is) be introduced for the first time in today’s market? Of course not; the MPAA would require all sorts of restrictions and “broadcast flags.” In a world of DRM, product innovation can never reach that height again.
- DRM schemes raise the costs of distribution. Support costs for the inevitable inconveniences that DRM restrictions cause for legitimate purchasers (see #4 above) coupled with encoding and encryption costs mean that distributors need to spend significantly more to distribute and market content to end-users.
- DRM schemes enable content owners to force outdated business models even when newer, superior ones are available that would be preferable to consumers.
August 22nd, 2008 by Joshua Kagan
New PCs from certain vendors have always included at least some bundled software that is of dubious value to the purchaser, but after spending over an hour cleaning “crapware” from my grandmother’s new Acer PC, I wonder if at least one vendor has finally gone too far.
Whenever I visit, my grandmother always takes some time to ask me for help with various electronic gadgets around her home in southern Arizona. And, likewise, I’m always eager to help her by checking the house for problems that might be obvious to me but not-so-obvious to her. This time she threw a curveball at me: she decided to buy herself a new computer and wanted me to help her get started with it.
She certainly didn’t act a moment too soon. Her old computer was equipped with an aging Pentium III processor that could barely run Windows XP adequately. Over a hundred “Windows Updates” later and with new software like Internet Explorer 7 and the latest versions of her virus-checking software and some “utilities” suite, that computer’s performance was absolutely abysmal. To replace it, my grandmother chose an Acer machine that she found at the local Costco that appeared to have impressive hardware specs, especially considering its price. For $569, Costco sold her a computer with a dual-core AMD 64-bit processor clocked at 2.3 GHz, 2 GB of RAM, a fairly generous hard disk, and even threw in a 19″ widescreen flat panel monitor. Not bad.
I think we both assumed that “help her get started” meant that I would assemble the new computer for her, configure it for internet and email access, transfer some files from her old computer, and then spend some time patiently answering her questions about how to use it to accomplish certain tasks.
Before you start laughing, understand that we were both sort of naïve. The last three computers that I’ve purchased for my own personal use have been Apple Macs. Macs aren’t cheap, but they ship pre-loaded with tons of high quality “full version” software like iPhoto, iDVD, iChat, and iCal that makes them ready-to-use right out of the box. I’ve also had a two company notebook PCs issued to me by my last two jobs, but both of those were also extensively configured for me by an IT professional before I ever got to touch them. When it comes to opening a new computer, I’m spoiled rotten. And, as for my grandmother, she hasn’t purchased a new computer since sometime shortly after the birth of Christ. The Compaq Pentium III that we replaced today was positively ancient.
So, even though I keep very up-to-date with respect to Windows news, and I even dual-boot Windows Vista Ultimate on my MacBook in addition to a desktop, nothing could have prepared me for what I faced when I booted up my grandmother’s new Acer computer for the first time.
The computer ran like molasses. Mouse-clicks took whole seconds to register. The Windows desktop was a mess of icons for “Trial”-this and “Demo”-that. A “McAfee 30-day virus protection BUY NOW!” window popped up at twice during the first few minutes the computer was powered on. The system tray was filled with littered with the icons of a backup application, a trial version Office 2007, and something called “Acer GameZone,” each with its own respective “bubble” begging me to click it and learn about its offer. The top of the screen was occupied by an always-on-top “Acer Empower” windowpane application that could not be hidden or quit without accessing the Windows Task Manager. Internet Explorer also had at least two non-standard toolbars, including Yahoo’s annoying one that simply duplicates the functionality of IE7’s built-in search bar.
My grandmother’s brand new computer was truly loaded to the brim with crapware.
I can’t say that it completely surprised me. Apple CEO Steve Jobs has often made comments about how, in contrast to many PCs that ship with tons of bundled software that is either of poor quality or that the hardware vendor was simply paid to include, new Macs ship only with “software you’ll actually use,” like the iLife suite and other first-party applications like iTunes and iChat. And I’ve read reports about how some vendors like Sony actually charge extra fees for computers that ship without crapware. There’s no question in my mind that Acer was paid to include much, if not all, of this extra software with the computer.
In principle I don’t have a problem with this. If vendors like Acer want to offer value-priced products like my grandmother’s $569 desktop and keep the price that low by agreeing to bundle third-party software that consumers might not otherwise be inclined to install on their own, they’re absolutely free to do that. But I also feel that PC vendors should be required to disclose when they do this. It might affect a consumer’s decision to purchase a computer if she learned that she needs to spend potentially hours uninstalling demos, trials, and redundant toolbars (in addition to re-installing the appropriate non-trialware like the full version of Microsoft Office) before she can actually use the computer productively. I’m sorry, Acer, but there was absolutely no way I could leave my grandmother with that computer as it came right out of the box; it was simply unusable.
What happened to the days when unboxing a new computer was something to look forward to? Back in my retail days I was a firm believer that a customer’s opinion of a product is based primarily on her very first experience with it. I think that consumers should at least be told what they’re getting themselves into. This is exactly the sort of thing that companies like Acer should care about. We have a very mixed opinion of Acer right now. On the one hand, the hardware seems very good for the price and, now that I’ve removed over a dozen applications from it, the software seems adequate too (for a Windows PC of course). But our out-of-box experience was irreparably marred by what we saw when we first powered on that computer. Maybe it’s time that some PC vendors learned from Apple’s strategies. If you ship a computer “clean,” with no stickers to peel off and no crapware to remove, ready to work right out of the box, consumers will love it from the first moment they hold it. We love that kind of an experience. It makes us feel like we just purchased something wonderful, and when you keep offering it, we’ll keep coming back to you for it over and over again.
