Monthly Archives: July 2009

Big Brother Amazon?

kindle-parodyBy now most everyone online knows that last week Amazon deleted copies of George Orwell’s “Animal Farm” and “1984” from customers’ Kindles. They did so, they say, because Amazon was fooled by the supplier of the e-books. It turns out that they didn’t have the rights.

There is nothing explicitly stated in Amazon’s licensing agreement with customers, however, to allow it (effectively) to enter a customer’s Kindle and delete what the customer has paid for.

The Kindle License Agreement and Terms of Use, states as follows:

Use of Digital Content. Upon your payment of the applicable fees set by Amazon, Amazon grants you the non-exclusive right to keep a permanent copy of the applicable Digital Content and to view, use, and display such Digital Content an unlimited number of times, solely on the Device or as authorized by Amazon as part of the Service and solely for your personal, non-commercial use.

There are no restrictions, no caveats that would hinder the conclusion that Amazon breached this clause.

That said, it should be clear that while Amazon may sell books, it does not sell e-books. It licenses software. As the Terms of Use state:

Digital Content will be deemed licensed to you by Amazon under this Agreement unless otherwise expressly provided by Amazon.

All of the Software is licensed, not sold, and such license is non-exclusive.

You acknowledge that the sale of the Device to you does not transfer to you title to or ownership of any intellectual property rights of Amazon or its suppliers.

While that latter provision is really meant to apply to the underlying work and not the the particular copy on your Kindle, it does drive the point home that the End User is nobody, at least in the opinion of Amazon’s lawyers.

The current uproar should make Amazon wary of repeating such an episode, but more importantly it raises the issues of both the value and risk of paying for digital content which a company has only licensed and to which the company has ongoing access via the electronic device on which it is stored. Think of it like going to a book store and having the clerk follow you home to stick his foot in your front door.

Numerous kinds of disputes can result in a company (or an individual) losing the right to distribute a written text or any other copyrightable property, including sound recordings, musical compositions, films and videos. Such disputes include copyright infringement, libel, fraud, misrepresentation (apparently as in the case of the Orwell e-books), negligence and contractual differences.

Due to unauthorized sampling, Warner Bros. lost the right to distribute the original version of Biz Markie’s album, “Get A Haircut.” As part of the verdict, the court ordered Warner to delete the album from its catalog and recall all extant copies from stores and distributors, as far as practicable. (Similarly, Arista was ordered to yank the original release of the Notorious B.I.G.’s “Ready To Die.”) How much better it would have been for the plaintiffs if the court could have ordered the defendants to pull every copy out of the hands of consumers!

The capability (and evident willingness) of Amazon to remove intellectual property not just from its website, but from its consumers’ devices, is a welcome gift to plaintiffs in disputes over intellectual property, since it is usually the desire of such plaintiffs to have the offending work obliterated from the face of the earth. Those who value privacy or have a less Orwellian view of how information should be controlled will understand why this is not good.

Perhaps even more chilling is the possibility that Amazon’s capabilities and policies could be exploited by the government. Amazon sells plenty of “adult” books, any number of which could be found “obscene” in some locale. It is an axiom of federal obscenity law that no one has the right to receive obscenity even for private consumption. (One needn’t even know the item is “obscene.” Under the law, one only need know that the material is “sexually oriented.”) Now an e-book is found on someone’s computer, say, in the Middle District of Georgia, or the Western District of Pennsylvania, and is declared to be “obscene” by a jury. Amazon might or might not stop offering it for sale, but it is certain that Amazon has the data of everyone who has downloaded the e-book. What happens when the government approaches Amazon and asks it to turn over information on those customers? What if the government takes an interest in who’s reading certain other kinds of books – for example, those that pertain to terrorism or radical environmentalism or animal rights – and wants to know what readers are thinking about them?

The policies are already in place for Amazon’s cooperation:

No Illegal Use and Reservation of Rights. You may not use the Device, the Service or the Digital Content for any illegal purpose.

Under federal law, it is illegal to receive obscene matter via “interstate commerce,” e.g., Amazon’s whispersynch network. Furthermore, someone who applied knowledge s/he learned in a book to committing any illegal act would be in breach of this provision.)

The Device Software will provide Amazon with data about your Device and its interaction with the Service (such as available memory, up-time, log files and signal strength) and information related to the content on your Device and your use of it (such as automatic bookmarking of the last page read and content deletions from the Device). Annotations, bookmarks, notes, highlights, or similar markings you make in your Device are backed up through the Service.

Marking passages and highlights could be used against someone in a prosecution, at the very least to impeach his or her character.

Protection of Amazon.com and Others: We release account and other personal information when we believe release is appropriate to comply with the law; … or protect the rights, property, or safety of Amazon.com, our users, or others.

This overbroad provision speaks for itself. Amazon has reserved the right to do anything it believes is “appropriate,” whatever that means.

This article is not an attack on Amazon, but a suggestion that it take a good look at how it formulates policy, respects customers and defends privacy. In many ways, intellectual property and criminal laws lag far behind developments in digital commerce and without big and powerful companies like Amazon taking principled stands, consumers can expect more incursions into their privacy and freedom. Orwell would not be amused.

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(For more information on the Biz Markie and Notorious B.I.G. disputes, see “A Short History of Sample Clearing” on Clearance 13′-8″, Inc.’, website.

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File-sharing down in the UK: It’s all in the business model

According to U.K.-based Music Ally, which describes itself as “the leading digital music business information and strategy company…since 2001,” a survey of 1000 music fans1 shows that “regular music filesharing amongst UK teenagers” has dropped by a third, and that a higher percentage are “obtaining their downloads via purchase.”

“We think the positive figures represent both greater takeup of legal streaming services among teens – in particular YouTube – and other competing ways of finding music for free such as CD burning and Bluetooth,” Music Ally’s site reports. (Currently Youtube’s offerings of majors’ songs are restricted due to a dispute between Youtube and PRS, Britains public performance rights society.)

The Guardian‘s report on the survey added this:

The research revealed that many teenagers (65%) are streaming music regularly, with more 14 to 18 year olds (31%) listening to streamed music on their computer every day compared with music fans overall (18%).

The picture may be more complex than a simple shift from filesharing to streaming, with people sharing music in new ways such as via bluetooth technology, on blogs, and through copying, also known as ripping content from friends’ MP3 devices.

But if these changes have occurred, it is easy to see why. The major record companies have spent most of their energy persecuting and prosecuting up- and downloaders. (This policy has been – temporarily? – suspended in the United States, but the majors are leaning on regulators across Europe to cut or slow down internet connections of people who download files.) Little effort was given to the task of understanding listening habits and bringing music online to reach the broadest number of consumers and listeners. A trickle of music to this or that service, and under onerous conditions to both online retailers and consumers (remember digital rights management?), was the best they could  muster.

It was this complete anti-marketing strategy which facilitated the growth of file-sharing.

In fact, what is happening is that people are discovering that streaming and buying from sites like iTunes is actually less time-consuming than illegal downloading. Even if you have a lot of time on your hands, if there is something you want, you don’t necessarily want to spend a lot of time doing it. It might seem to record executives that “everything” is readily available on sites like Pirate Bay, but this is far from the case.

Then there is the question of quality. A rip might come from a scratched CD or vinyl record (Radiohead’s Itch is an example), or be at an embarrassingly low bitrate only suitable for listening on a cheap pair of earphones (128 kbps is enough to strip out the production quality of most music), or be missing songs, or offer the songs out of order or without proper track titles so the downloader is left surfing to Amazon or allmusic to get the right information. Downloading from blogs has its own hazards, like that of malware being installed on your computer. This is all more time wasted.

And speaking of Radiohead’s Itch, why can I download this release from Pirate Bay, but not buy it from Amazon?

As the Dead Kennedys know, nothing beats convenience. The more quality downloads and streaming at competitive prices there are at the greatest number of online outlets, the more people will pay for downloads and streaming. It’s a pretty simple business model. The majors would be wise to follow it.

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1Unfortunately neither Music Ally, nor The Leading Question, its research arm, provided details as to whether responders to the survey were chosen randomly, how many declined to participate or whether participants were self-selected. Nor were any other details of the survey or its degree of reliability released on Music Ally’s or The Leading Question’s respective websites.  Caveat emptor as to any conclusions.

J.D. Salinger Stops a Sequel, But Only In The U.S.

When Salinger v. Colting was first reported in the media, I assumed (like many people who believe that current copyright law constrains too much) that this was another bad result along the lines of the district court order in Suntrust Bank v. Houghton Mifflin, temporarily enjoining The Wind Done Gone from publication. (That order was fortunately vacated by the 11th Circuit Court of Appeals.)

So I was surprised to find that the result was correct and that District Court Judge Deborah Batts was justified in preliminarily enjoining Frederik Colting (writing as John David California) from publishing, advertising or distributing his book, 60 Years Later.

60 Years Later is the story of “Mr. C,” who is not Mr. Colting, but J.D. Salinger’s Holden Caulfield, 60 years after the events in Catcher in the Rye. Mr. Colting’s book relies heavily on Catcher in the Rye in every respect.

Under the law, the substantial use of another’s copyrighted work is permitted where the portion taken is used in a “transformative” way, that is, as a springboard to comment upon the prior work in an original and substantial manner. This means that the new work must “add[ ] something new, with a further purpose or different character, altering the [prior work] with new expression, meaning or message.”  Acuff-Rose v. Campbell, 510 U.S. 569 (1994) at 579.1 Normally this occurs in making a parody, but the Supreme Court taught that one shouldn’t put too fine a point on the word for the simple reason that a strict parody is only one type of possible transformation. As the 11th Circuit in SunTrust Bank interpreted it:

The Supreme Court’s definition of parody in Campbell, however, is somewhat vague. On the one hand, the Court suggests that the aim of parody is “comic effect or ridicule,” but it then proceeds to discuss parody more expansively in terms of its “commentary” on the original. Id. at 580, 114 S. Ct. at 1172. In light of the admonition in Campbell that courts should not judge the quality of the work or the success of the attempted humor in discerning its parodic character, we choose to take the broader view. For purposes of our fair-use analysis, we will treat a work as a parody if its aim is to comment upon or criticize a prior work by appropriating elements of the original in creating a new artistic, as opposed to scholarly or journalistic, work.

Suntrust Bank v. Houghton Mifflin Company, 268 F.3d 1257, 2166 (11th Cir. 2001).

In Acuff-Rose, the rap group 2-Live Crew was sued by the publisher of “Pretty Woman” for stealing the heart of that song in order to make its own version, which happened to poke crude fun at it. 2 In reversing the lower court rulings in favor of Acuff-Rose, the Supreme Court clearly considered 2-Live Crew to have transformed the song into a parody and remanded the case for further findings of fact. This was enough to end the legal dispute. Similarly, The Wind Done Gone almost certainly used the book on which it was based, Gone With The Wind, in a transformative manner, given that The Wind Done Gone was, in the words of the 11th Circuit, “a specific criticism of and rejoinder to the depiction of slavery and the relationships between blacks and whites in Gone With The Wind.” (Like the Supreme Court, the 11th Circuit remanded the case to the trial court for the actual determination, but the parties settled and the book was published.)

Unlike The Wind Done Gone60 Years Later was intended as a sequel to, rather than any kind of commentary on, the prior work. 60 Years Later is told from the perspective of the original book’s protagonist. Mr. C uses the same vocabulary and “has similar or identical thoughts, memories and personality traits to Caulfield, often using precisely the same or only slightly modified language from that used by Caulfield in Catcher, and has the same friends and family as Caulfield.” Both novels share the “same supporting characters, setting tone, plot devices.”3 In addition, the 76-year-old Mr. C is constantly remembering details of incidents and conversations that occured at 16, in Catcher in the Rye, creating a continuity rather than a transformation. Finally,

Colting does not use a change in style to reinforce any parodic or other tranformative purpose, but to the contrary, utilizes a very similar style with the effect of emphasizing the similarities between 60 Years and Catcher, rather than casting a new, contrary light upon the latter.

Nowhere is Colting’s literary intention to make a sequel clearer than in the publicity for 60 Years Later prior to the lawsuit. In a footnote which is absolutely crucial to the decision, the Court notes that the original book jacket proclaimed that 60 Years Later “a marvelous sequel to one of our most beloved classics.” Moreover, it cites these statements by the author (any ellipses are the Court’s):

  • Catcher in the Rye sequel published, but not by Salinger, guardian.co.uk, Alison Flood, May 14, 2009: “Just like the first novel, he leaves, but this time he’s not at a prep school, he’s at a retirement home in upstate New York,” said California. “It’s pretty much like the first book… He’s still Holden Caulfield, and has a particular view on things. He can be tired, and he’s disappointed in the goddamn [sic] world. He’s older and wiser in a sense, but in another sense he doesn’t have all the answers.”
  • (from the same article) “California said he was moved to write the book [] because he’d ‘always wondered what happened to [Caulfield] … he deserves to have another life than just his 16 years.’ He’d tried, he added, to be ‘very respectful’ to both Caulfield and Salinger’s status as ‘American icons.’ ‘I thought about it and tried to handle it very delicately. I like the story and Holden and I wanted to keep it respectful.”
  • Sequel to Catcher in the Rye Published, Boston Literary Scene Examiner, Ann Livermore, May 14, 2009: “California has said in various statements to the media that he was inspired to create a second half to the story because he’s ‘always wondered what happened…'”;
  • JD Salinger considers legal action to stop The Catcher in the Rye sequel, Telegraph.co.uk, Philip Sherwell, May 30, 2009: “Author John David California…said the message was described as a Caulfield-style tribute to a ‘great inspiration.’ He added: ‘He’s a great writer who influenced the entire world with the words he made up. It’s a tribute the way Holden would have said it.'”‘But this is no spoof,’ said Windupbird’s Fredrik Colting. ‘We are not concerned about any legal issues. We think 60 Years Later is a very original story that compliments Catcher in the Rye.”

Both the “Product Description” and “About the Author” on Amazon.co.uk — information which is supplied by the publisher (not invented by Amazon) — as well as two customer comments currently on the site, make it quite clear that the book is a sequel. Sequels are, and should be, the sole property of the author. Given that 60 Years Later contains no “reasonably discernable rejoinder” to or “specific criticism” of Catcher in the Rye, were J.D. Salinger to write a sequel, 60 Years Later would be its direct competitor. This may not be bad in itself, but Mr. Salinger would be placed in the untenable position of fighting for control of the very character he created. That Mr. Salinger doesn’t want a sequel and clearly will not write one should be his prerogative. A parody? No problem, but Mr. Colting didn’t write one.

As with many lawsuits in the digital age, Mr. Salinger’s will not accomplish exactly what he hoped for, at least for now. Anyone wanting to read 60 Years Later can order it from Amazon UK.

[1] Internal quotations and citations omitted.

[2] You can hear and compare 2-Live Crew’s version of “Pretty Woman” with the Roy Orbison original on the Clearance 13′-8″ website.

[3] See. pp. 25-26 of Judge Batts’ decision.

How Much Will Youtube and Google Pay?

The partially futile battle by some copyright owners to maintain tight control over their copyrights and exploitation of same continues in the Football Association Premier League Limited, et al. v. Youtube, Inc., Youtube, LLC and Google, Inc.

The case is a class action suit begun in 2007 by the Football Association, Bourne Co., Cherry Lane Music Pub. Co., Inc., and a host of other plaintiffs who seek a variety of remedies, both monetary and equitable. (Equitable remedies include injunctions from using material and imposition of technical measures to prevent infringement.) (A copy of the Second Amended complaint can be read right here.)

Most of the allegations in the complaint still stand, but this week the court knocked out claims by some foreign copyright holders to statutory damages and attorneys’ fees. The decision has little impact on the basic claims and issues in the lawsuit, however, which alleged that Youtube (and by extension, Google), “materially contribute to [infringing activities by uploaders] by, among other things, providing the means and facilities to infringe; inducing, encouraging or facilitating infringement; providing functions designed to proliferate unauthorized copies of Protected Works, without the authorization of the rights owner; and by enabling and encouraging users to engage in the unauthorized copying and dissemination of infringing copies of works.” (See paragraph 77 of the Second Amended Complaint.)

What is the importance, then, of the court’s ruling? The simple reiteration of the principle that foreign copyright holders may not seek statutory damages and attorneys’ fees unless they register their copyrights with the United States Copyright Office. Foreign copyright holders should take notice, as statutory damages may be the only monetary damages available in many cases. However, foreign copyright holders may still seek actual damages (i.e., profits earned by the defendants and which are attributable to the infringing action) and equitable relief. These are facts that the mainstream media seem to have missed. Reuters, for example, reported that “the judge ruled that damages are not available for any foreign works that were not registered in the United States, except those that fall under a ‘live broadcast exemption’ in the Act.” But what the court ruled was that STATUTORY damages are unavailable for unregistered foreign works which do not satisfy the live broadcast criteria .

The result wasn’t a surprise. According to the plaintiffs’ attorneys, the plaintiffs are, “pursuant to section 411(b) of the U.S. Copyright Act, entitled to all remedies under U.S. copyright law, including statutory damages and attorneys’ fees,” but this was less a statement of the law than an invitation to the court to modify it. This the court declined.

Youtube and Google are probably going to be found liable BIG TIME in this lawsuit, since at the very least they have gained substantially from acts of copyright infringement on the part of those who upload content. However, as with previous lawsuits against online services it will probably appear to have serious repercussions while changing very little — least of all the culture that wants free content. This can be seen right in the plaintiffs’ complaint where they allege that after Youtube removed a clip of the Man U v. Tottenham match of August 26, 2007, it was re-posted several times, one with the introduction “FUCK THE NETRESULT WANKERS,” a reference to the monitoring and takedown agency used by one of the lead plaintiffs. The plaintiffs in this case would hold Youtube legally responsible for such re-postings (and they alleged that even an infringement lasting eight hours is intolerable), but the Digital Millennium Copyright Act (the “DMCA”), which requires takedown notices followed by compliance, protects Youtube from just such a result.

I don’t necessarily have an answer how the balance should be struck between copyright holders and the free flow of information online, but the answer to the question “Should Youtube and Google be able to make a lot of money and pay copyright holders nothing unless they agree to Youtube’s  unilateral negotiations?” must be “no.”