Writing for Forbes last week, Phil Johnson profiles the modern-day re-creation of the venerable Harvard Book Store. When I moved to Cambridge in the pre-Web days it boasted more bookstores (and ice cream parlors) per square meter than any other place on earth. Awesome stuff. But over the years they've been dying out, like small independent and big chain bookstores everywhere. When the biggest of the lot went under it seemed like confirmation that nothing could compete with Amazon and other online offerings.

But lo, Harvard Book Store is back, under the direction of Jeff Mayersohn, who previously worked in high tech - Sonus Networks and BBN are both on his profile. And Mayersohn knows that Harvard Book Store has to be able to take on the Amazon challenge and win. So far, so good. Forbes reports "double digit sales growth month by month over the last year."

How's he doing it? Innovation and service. Innovation: he's using print-on-demand technology to satisfy customers' instant-gratification desires. "The Espresso Book Machine" as it's called has a built-in inventory of 5,000,000 titles and can be used for custom publishing. The output is high quality, and if you know what you want in advance you can even order your POD book on-line.

Service: you can get your POD book delivered locally by pedal-truck or bicycle, which appeals to the Cambridge-area green-conscious buyers. Know your customer is an ancient sales adage that Mayersohn has taken to heart. And if you go into the store you get:

fanatical attention to customer service with an unrivaled staff of passionate and educated booksellers.

I might have mentioned that idea a few times recently.

Quick adaptation, a multi-pronged sales strategy, and an eye for winning details. Maybe it really does take a technophile to save a brick-and-mortar establishment. Are any other sellers out there paying attention?

(h/t Emily L for the original pointer.)

I recently got to hear Neal Stephenson talk at MIT. As usual, he was a pleasure*, and the talk ranged over a wide variety of topics, from why America is in a massive idea deficit to why we should all stand up more and sit down less. What he didn't really discuss, to my disappointment, was the Mongoliad. Fortunately, Mark Teppo's "Big Idea" post in Scalzi's Whatever gives a little hint of what's going on here.

The Mongoliad on offer here is a book - a collaborative work. But what's of interest to Copyfight is the structure and entity that produced this book. To quote Teppo:

[W]e formed a company whose goal was to realize a new paradigm in publishing methodology, and to promulgate an argument that transmedia empires could be built using small, highly agile teams that could shift direction quickly and efficiently based on customer need and reaction. Do more of what the fans like; less of what causes them to make the ‘meh’ noise.

This could be very interesting to watch. We're starting to see several individual names break out of the existing mold - Amanda Palmer obviously, but also look at Rowling's decision on how she wanted the Potter e-books handled. But these are all individuals. The obvious next step up is small groups of creative people, and seeing which parts of what business models scale.

*Though I was sad he utterly flubbed my question on design. He confused design aesthetic with implementation shoddiness. C'est la vie.

Way back in August of last year, I noticed that there was a storm brewing over so-called "termination rights" in music recordings. That storm appears to have had a first crash, with former Village People member Victor Willis reclaiming his rights in some of their hit songs.

To review quickly: a feature of the Copyright Act that went into force in 1978 gave record companies 35 years' worth of profits from albums, after which the artists would be allowed to reclaim their rights in the music. Several artists have done so, and the Cartel is fighting them. According to Larry Rohter's NY Times piece linked above, Willis's claim was contested by Scorpio Music and Can’t Stop Productions, who had sued to stop him exercising his termination rights.

As I discussed in the August entry, Scorpio and Can't Stop initially contended that Willis wrote works for hire, meaning that he would have given up all rights. Chief Judge Barry T. Moskowitz of LA's Federal District Court, appeared set to reject that claim so it was withdrawn. Now Willis has back "his share" of ownership in 33 Village People songs.

That "his share" phrase leaves a lot of wiggle room still because the judge has to determine what Willis's share is. There's going to be a lot of unpleasant tangles yet to sort on this one, but it remains significant as the first case to test termination rights and the work-for-hire theory.

(h/t to +Rowan McVey and +Network XXIII News for the original pointer)

Last month I noted that Charles Stross was giving the stand-alone e-reader 2-5 years, whereas I was betting that sales had already peaked and we'd see a decline after the holiday season this year. I might have been too optimistic.

Now comes Jon Mitchell on ReadWriteWeb, reporting that "Kindle Sales Plummet". He claims that sucks but I think he's exaggerating. Anyway, Amazon doesn't exactly report its sales of Kindles, so it takes a little bit of sleuthing to infer this. Mainly the inference comes from E Ink Holdings, which supplies the screens for Kindles, reporting that it had a quarterly loss due to a lack of orders from its biggest customer (aka Amazon).

What makes this double-interesting is that it appears that sales of Kindle Fires are also dropping, too. ISC reported that sales of all Android-based tablets dropped in Q1 2012, including Kindle Fires. This isn't hugely surprising to me, given both Apple's splashy announcements and that fact that Android tablets had a stronger-than-expected holiday season in 2011. It will be interesting to see how that holds up over the next couple of quarters.

At the same time, I'm interested to see that more publishers (of news, this time) are backing away from iPad-as-platform. As an MIT alum I got a notice from Tech Review that they are ditching their iPad app. The reasons are strictly financial - it cost a bundle and made no money - but it's a strong cautionary tale for people and organizations that are thinking about taking the Apple golden handcuffs. TR notes that the Financial Times also made a similar decision recently, and that both TR and FT have moved to a free/open model based off HTML5.

I feel like we're in the very early stages of a chess game - most of the things being moved are pawns, and people are just beginning to consider how they're going to achieve strategic objectives like "control the center of the board". I would not be surprised to see tentative moves and hanging back from most of the major players through the next 6-8 months as everyone waits to see how things shake out and what happens to early risk-takers.

Copyfight is getting comment-bombed again. I'm cleaning up as fast as I can, but things are sluggish. Apologies in advance.

Meanwhile, let me give you a couple of pointers to things I think are worth reading relative to the past week's stories.

Amanda Palmer wrote a guest post on techdirt about her successful Kickstarter, which is well on its way to being the biggest ever. As I mentioned last week, one of the few elements I see in common among all the new success models is relentless fan service and Amanda addresses that issue head-on. She talks about "all of that real human connecting" and how it has enabled her to do what she's doing now.

She's also emphatic about another point, which you can read on the Kickstarter site: we lead, the media follows. If you're going to be successful in the independent model of the early-21st century then you make the news yourself. You do it by networking, word of mouth, taking things viral, making info in easily accessible places, in easily reposted (unlocked!) forms, etc. One way to look at this is as a failure of traditional media; another way to look at it as an opportunity for new businesses. There should be people out there setting up companies that are devoted to helping people like Palmer do this because, really, you need some kind of management when your sponsor base is over 10,000 and growing.

I thought this bit was particularly apropos:

I've seen people complaining that this is easy for me to do because I got my start on a major label. It's totally true that the label helped me and my band get known. But after that, the future was up to me. It bought me nothing but a headstart, and I used it. I could have stopped working hard and connecting in 2009. If I'd done that, and then popped up out of nowhere in 2012 to kickstart a solo record in 2012, my album would probably get funded to the tune of $10k...if I was lucky. There are huge ex-major label artists (pointless to name names) who have tried the crowd-funding method and failed dramatically, mostly because they didn't have the online relationship with their fans to rely on.

Second, Cory Doctorow posted a piece in The Guardian on "Why the death of DRM would be good news for readers, writers and publishers." That's a real mouthful of a title but it serves its purpose: DRM is bad business and we need to get that message across much more widely and emphatically. Cory's column is reasoned and historical and it covers ground I expect most of my readers know.

I was sadly amused to revisit the column today in preparation for writing this piece and find on the page the notice that "Comments on this page are now closed." I'm trying to formulate a coherent response that is not laughing out loud at the foolishness and backward-thinking-ness of a site that would close comments on a column, let alone close comments on a column that's not even a week old.

Dear Guardian, comments are lifeblood. You want them. You need them. See above, where I spend my time weeding out spam comments? That's because I treasure the real feedback I get from readers. I love that my first tentative query about Createspace is one of the most commented-on pieces on this blog, over four years later. Do you think Amanda Palmer would ever close comments on something she posted? I think not.

Get with the program, Guardian. You're not doing yourselves, your readers, or your writers any favors here.

Consensus seems to be that the willingness of at least some publishers to settle the DOJ lawsuit rather than fight will put Amazon back in the catbird seat. Lots of people are reacting to that; herewith two that came across my screen today.

First, Target isn't going to sell Kindles anymore. The problem isn't the Kindle per se. It's that Amazon has been using physical retailers as its (unpaid) showrooms. Amazon has encouraged people to go shop in physical stores, then price-compare and buy from Amazon - even offering a discount for doing so. That may be a few bucks in consumers' pockets, but it's a big hit to the brick-and-mortar retailers who are losing customers right out of their showrooms.

Target is still a small fraction of Kindle sales, even though it's the biggest non-Amazon seller. So this mostly amounts to a symbolic middle finger to Amazon, since Target will continue to carry iPad and Nook devices. It's worth noting that both Apple and B&N have large physical presences and as such are much more careful about how the online and retail shopping experiences merge.

Second, Mark Glaser of PBS's Mediashift pointed me to a column by Barbara E. Hernandez titled "Can E-Books Succeed Without Amazon?" The heart of the issue seems to be Amazon's KDP Select program, about which I wrote in March. As I intimated then, the program is a hammerlock on an author and buying into it might not be the brightest move for any aspiring writer.

Hernandez paints a picture of Amazon as "heavy-handed" and notes that many authors are opting for smaller publishers who offer more freedom and leave the authors more in control, such as Bookbaby and Smashwords. Harkening back to the first story, Hernandez quotes Smashwords founder Mark Coker as saying

KDP Select [is] using self-published authors as pawns [in] a broader campaign to wage war against retail competitors

That's another bad move on Amazon's part, but they're still the 500 lb gorilla in the room. Authors ignore them at some risk. Let's just hope the gorilla decides to be better-behaved.

(full disclosure: a couple of my author friends have chosen to go with Smashwords, but I have no incentive to promote that alternative. As noted, I don't even own an e-reader yet.)

The Guardian reports that the UK government has engaged Wikipedia founder Jimmy Wales to help with a project intended to unlock taxpayer-funded research.

One of the little-reported aspects of the current situation in academic research publishing is that much (most?) of the work that is put into these very expensive academic journals is paid for by the taxpayer. In the US there are funding agencies like NIH, CDC and of course ARPA that funnel taxpayer dollars to researchers. In the UK and elsewhere there are similar agencies and grant programs that make this research possible.

Given, then, that the work was paid for by the public it seems a wholly fair question to ask by what rights are the fruits of that work concealed from the public behind expensive paywalls. Wales acknowledges that academic publishers bring value to the process of research publication. However, adding value doesn't equate to having a monopoly lock. Or at least it shouldn't. The effort, dubbed the "Gateway to Research project", has about two years, and currently about UKP 2 million to create an open access environment. They're working with several partners in the UK, including representatives from academia, librarians, and publishers.

There are a number of thorny questions to be hashed out - it's not just as simple as moving research papers from expensive journals to a free Web site. How will research be accessed? How will it be vetted? What processes are necessary for updating or outright retraction of research? What other research materials might be valuable in such a portal - personally I'd like to see the inclusion of things like molecular models, part descriptions, software simulations, data sets, data analysis tools and much more. But can anyone make head or tail of this if it all gets dumped into one portal?

All of these are good and tough questions. Now the next question we want to be asking is: why limit this to just the UK? Where is the US effort?

(h/t Donna Wentworth... yes THAT Donna Wentworth for the pointer)

A couple of Copyfight readers pointed me to Defective By Design's "Day Against DRM" scheduled for May 4th, a subsidiary of the Free Software Foundation.

Last year the event attracted little media attention (see PCWorld's coverage from that day) and, sadly, it appears that little notice will be given again this year.

As the site notes, there has been slow progress on the de-DRM-ing fronts of the past. In particular, much more music is available for download unencumbered now than in the past. But the new fronts that have opened up - particularly ebooks and streaming music/video - remain badly broken and un-free for legal, private uses because of DRM.

DRM is bad business, and bad user experience. Let's get some attention on the need to make it part of the past.

Both of the stories behind yesterday's pair of posts are getting more commentary. Here are a couple quickies and thoughts to go with them:

Michael Marotta writes for the Phoenix on Palmer's choice to skip the major-label route. The Phoenix, being Boston's alternative paper, was one of the first media outlets to notice and publicize Palmer and the Dresden Dolls. Thus, she writes them from time to time.

In her letter this time she points out that even though the Kickstarter has blown the roof off its fundraising goal that still only represents a few thousand fans. Any major-label release that sold that few copies would be considered a flop, and the artist would make no money, never mind that a major label couldn't possibly manage to put out the kind of complex multi-pronged project that Palmer is fundraising for.

In response to yesterday's post, Luis Cruz asked the question of how well this model would work for someone who isn't already established with a fan base. It's a fair and unfair question at the same time. The answer is we don't really know - there are thousands of people trying to find their way through Kickstarter, maxing out their credit cards, busking, playing open mic nights, etc. A few will make it via each of these routes but most won't. But they don't have a lot of alternatives - the number of acts that will make it via the major-label last-century model is also minuscule.

Each year we see a few creative types that seem to break out (Jonathan Coulton, Felicia Day, etc.) and each has a unique path to present success. There doesn't seem to be a good general model, but I think we're starting to see certain elements in common. For example, intense fan service, a hawk eye on the business details, and a willingness to roll with the punches and adapt all seem to be necessary ingredients. Palmer's success didn't come overnight - Dresden Dolls formed in 2000 I think - which means she's busted ass for over a decade now. What she's doing now would not have been possible in 2000 but that says more about the Internet age than about Palmer.

On the Microsoft/B&N partnership, the blog entry by Tobias Buckell is typical of the reactions I'm seeing. Buckell's point, which I think is spot-on, is that this is not at all about a Windows 8 Nook. It's about the merging of two software ecosystems and the possibilities that opens up. And also that neither big entity seems to have concrete plans for how that's going to happen. Hell, they couldn't even figure out a real final name for their joint venture. This makes me think the whole thing was rushed and not necessarily well thought-out.

Above I mentioned "rolling with the punches." In particular I think a key element of this is being willing to re-invent one's self-conception. Day moved from doing standard television shows to running her own YouTube channel. Palmer has always had theatrical elements as part of her musical acts, but lately she's added spoken word, poetry, and art/photography. What makes me doubt that the MS/B&N merger will work is that I can't see either company pivoting quickly enough to re-imagine themselves in new ways. But a big bankroll buys you a lot, not least of it time, so I'm not willing to write them off entirely just yet.

This is how we fucking do it.

In juxtaposition to the previous story, which is all about big companies sticking with last year's model, I bring you yet another Kickstarter from Amada Palmer, who chucked over a half-million dollar big-budget studio production in favor of getting to do it herself, if people fund her. And, she admits, maybe make some money for herself this way, even though you can get the entire album as digital download for a buck.

Everything about this project screams 'forward-thinking': it's crowd-funded (via Kickstarter). There is an option for patronage beyond what Kickstarter allows. The project involves multiple artists, all retaining control of their work. The product is multi-faceted (album AND book AND art tour AND maybe more). The experience is multi-layered - even tickets to the shows are exclusively on Kickstarter. The promotion is direct and from the heart - Ms. Palmer is not ashamed to say "fucking" nor is she ashamed to express her love for her fans.

This is the sort of thing you can't buy with astro-turfing. This is the sort of thing that will blaze trails for this century's creative artists. I confess I am not a huge fan of Ms. Palmer's music and her stage acts. But I admire the hell out of what she's doing.

(Hat-tip +Kee Hinckley for the original pointer.)

PW has a story today about Barnes & Noble looking for deep pockets to help it survive against the Amazon & Apple juggernauts. The Nook maker is teaming up with Microsoft, which is putting in a bunch of cash and getting a first-out-of-the-box Nook for Windows 8 app.

This seems like a bad and backward-thinking way for B&N to go, to me. As we've been discussing this month, dedicated e-readers are going to die, including Nook. Tablets running things like Windows 8 will replace these devices. Of course B&N wants there to be a Nook app for Windows 8. But it also wants one for iPad and Android tablets. Microsoft's money might get them first place in the development line, but it can't possibly buy exclusivity. B&N is also probably being foolish to prioritize a Windows-OS version, in that Windows 8 has such a tiny user-base. A Nook app for either of the other big sellers would likely reach far more of B&N's customers.

The PW piece has a bit of puffery about how they're going to do unspecified other things, and combine assets and blah blah. It includes blather about B&N's physical stores, about which Microsoft cares not one whit, and has not one word about the one truly revolutionary thing to happen in e-books this year: Tom Doherty imprints' decision to dump DRM.

All of which tells me they don't have an actual business model. That's kind of a shame, actually, because I can think of at least two that would be absolutely rocking, given these two companies' expertise and current footprints.

Yesterday, when I linked to Charles Stross's later entry I should also have linked back to his earlier piece "What Amazon's ebook strategy means". This piece, published earlier this month, forthrightly declared that "DRM on ebooks is dead."

Stross has been careful to state that he had no insider view that Tom Doherty Associates - the publishers who put out the Tor, Forge, and other lines of books - were going to make a big move to drop DRM. But even without that knowledge, Stross put together what he saw as the business case for getting rid of DRM. Long-time readers here will know that I am a big fan of the creators should get paid viewpoint, but that we also share the view put forth by people like Cory Doctorow that the actual business effect of DRM is not to control illegal copying, but rather to hand the manufacturers of ebook readers a stranglehold on everyone and everything.

It's not going to surprise any of my readers that Stross concludes that the only way to break Amazon's stranglehold is to drop DRM. In a DRM-free world, you can buy a book that is readable on a Kindle and on a Nook and on an iPad. Thus, it doesn't matter if you buy that book from Amazon. It may be the case that Amazon offers you a discount, or a frequent-buyer program, or some other incentive. The publishers can't guarantee that Amazon won't be able to dominate the market by virtue of its strong competitive position, wide inventory of products, and other advantages. What they can guarantee is that their readers will no longer be locked into a Kindle.

Although Stross doesn't say this directly, I feel this also opens up a world of other direct-sale opportunities for publishers. I mentioned Emily Books a couple weeks back, who are trying to operate as independents. In a DRM-free world there's no reason that a big-name publisher can't do a deal with Emily Books or any of a thousand other small, high-value, curated ebook outfits. Get DRM-free versions of Emily Books on every device, with a publisher like Tom Doherty Associates lending its marketing and mass distribution expertise and getting a cut of the profits. I can think up at least six more profitable-to-the-publisher ways to build business in a DRM-free work. Stross's piece claims that dropping DRM won't lead to immediate revenue gains, but I think that's true only if you consider going DRM-free as a stand-alone action rather than part of a comprehensive business strategy.

I was also amused to see that Stross also predicts the demise of the dedicated e-reader, given that most people I talk to think I'm nuts when I say that. He's more generous than I was, giving the stand-alone reader "2-3 years possibly, 5 years probably" where I think that by this time next year everyone will be talking about the decline of the device as tablets ascend.

Lastly, I wanted to bring to your attention a fascinating piece that appeared yesterday on PaidContent, '"Why I break DRM on e-books”: A publishing exec speaks out.' In this column, Laura Hazard Owen tells the story of one (obviously anonymous) executive from the publishing industry whom she introduced to the common practice of unlocking a purchased book so it can be read anywhere.

Exec, as she dubs her story protagonist, admits to being influenced by Stross's writing. Exec realized that s/he had no control over the ability to do perfectly legal things with purchased ebooks. Exec isn't sharing the cracked books with anyone, let alone putting them out for general downloading. Exec just wants to be able to read the stuff, and has figured out that the sole purpose of DRM is to control the consumer. Sadly, even though Exec admits to a decision to break every DRMed ebook from now on it doesn't appear that Exec will do anything to change stupid corporate policies that put the DRM there in the first place.

Still, admitting you have a problem is the first step to recovery, right? Maybe we should set up a 12-step program for all the members of the Cartel who are addicted to DRM.

Yes, Tor and Forge will soon be publishing their e-book titles in a DRM-free way. Not just some titles - the entirety of their lines are scheduled to get unshackled. I still need to digest this and think about it for a while before I have a reaction to post, so in the meantime let me link you to two thoughtful guys who have a fair bit to say from the inside.

John Scalzi posts what he calls "Immediate Thoughts" on the news. Expect another thoughtful analysis from him later in his Whatever blog.

Charles Stross writes his reactions as "More on DRM and ebooks". Worth noting that Stross has been one of the most outspoken anti-DRM voices in the SFWA stables of late.

Two stories today that update the earlier discussion of academics on boycott. (Hat-tip to Boingboing for original pointers.)

To review: academics who publish provide free material and free labor to big publishers like Elsevier who take this free material and package it into things like journals that are then sold at great expense to places like libraries. And by "great expense" I mean tens of thousands of dollars per journal per year. More on that below.

Often, to be published requires not just giving up your time and energy but also all kinds of rights on your own writing. Some academic publishers will, for example, forbid authors from having copies of their own papers on their own Web sites. Sometimes you're not allowed to submit the entire body of your writing to a scientific indexing service, just an abstract. Both of these hurt authors by making their work harder to find and read, but bring more revenue to the publishers who charge for things like reprints, access to their walled "digital libraries," and so on.

If you think this is nuts, you're not alone. The Cost of Knowledge anti-Elsevier petition, for example, is up over 10,000 signatories as I write this. That brings me to the first item, a story by John Naughton for The Observer titled "Academic publishing doesn't add up".

In his column, Naughton reviews the costs, power structures, and "intrinsic absurdity" of the academic publishing racket, pointing out among other things that at least one estimate of the free labor provided for peer reviewing states its value at over UKP 165,000,000. He notes that Tim Gowers' petition is but one of many gaining traction and that even some research-funding bodies are beginning to require that people who accept their funding agree to publication that isn't behind a paywall.

About that "pay" bit... Boingboing recently highlighted a letter from Harvard Library's Faculty Advisory Council. In it, the Council expresses the view that the costs of these journals will soon put the library out of business. Remember those tens of thousands I mentioned? They add up really fast, particularly when you want to run a world-class research library for a multi-disciplinary faculty. Harvard (or MIT or Boston University or Tufts, just to name four world-class institutions close to where I sit) doesn't just have to keep in the high-prestige journals in biology. They also need the journals in mathematics, physics, chemistry, astronomy, computer science, mechanical engineering, and on and on and on. They don't have the option to leave out some.

The result, at least in the case of Harvard, is an annual cost just for journals of USD 3,750,000. That doesn't count access fees, reprint fees, and other costs. And the memorandum points out that the rate of increase in these costs far exceeds other measures such as the rise in tuition costs, inflation, and so on. In plain English, the publishers are gouging ever harder.

So, where does that leave us? Libraries are grumbling, funders are disquieted, and individual faculty members are happy to sign petitions of protest. But none of this addresses what I see as the key issue: faculty give these journals this much power because they rest entire careers on them. You get tenure based on your academic publications. You submit your publications list when you apply for grants and funding. Look at any academic C.V. and you'll see that it's structured so that the big name journals in which the person has published are listed promptly. It's one of the first things that gets looked at when someone applies for an academic job.

Until that changes, nothing is going to change. I'm sorry to be so consistently negative but "publish or perish" is still the law of the ivory tower.

Earlier this week, Adam Messinger, VP of Engineering at Twitter posted a notice on the Twitter blog, "Introducing the Innovator's Patent Agreement". If this works right - which is to say as intended - then it could potentially do a great deal to demilitarize the current worldwide patent war. Sadly, I think this is going to go the way of "Don't Be Evil" - a great idea that eroded to the perceived necessities of competitive business.

Start by reading the agreement as posted to Github. There's a lot of discussion around it, and the specific language will likely change, but the basic agreement is very short and readable. It is intended to replace the default blanket assignment that is used in most industries. In the default you give the company everything, and they can do anything with it. Your name still appears on the patent, but you assign all rights to your employer - usually as a consideration of employment, meaning you can't work (at tech, bio, pharma, or any other IP-using company) unless you agree to this.

The company then is free to use the patents however it wishes. You may recall that this was the topic of some outrage about a month ago, when Andy Baio complained bitterly in a WIRED piece about how Yahoo was using patents (not his, keep in mind, but he was upset anyway). This freedom is restricted under Twitter's proposed IPA, which specifically limits companies' ability to use assigned patents to what the IPA calls "Defensive Purposes."

In theory, a company with this agreement in place could use patents to defend itself, but not to initiate patent-enforcement action. That's a nice theory, but there are two problems I see with it. The first, and smaller problem, is that the way the language of the IPA currently stands, it permits IPA-covered patents to be asserted

against an Entity that has filed, maintained, or voluntarily participated in a patent infringement lawsuit against another in the past ten years

Which is to say, everybody. Really, if you can name a going tech/bio/pharma concern that hasn't been involved in patent litigation in the past 10 years I'll be shocked. It's probably not 100%, but it's certainly 80% and all the big players are in those 80%. So unless the IPA's language is changed, its effect will be nil.

But leave that aside for the moment, and consider what it means to be a publicly traded corporation. It means you are legally bound to do whatever increases shareholder value. Voluntarily disarming yourself in this way leaves you at a competitive disadvantage against other players in your marketplace who are free to infringe your patents, so long as they don't sue. Can you imagine trying to go before your biggest shareholders and say "Well, yes, I'm going to allow our competitors to continue infringing all these patents even though we think we have a good legal case."

You'd be fired in a heartbeat, and with very good justification. You'd be lucky if you didn't find yourself on the wrong end of a shareholder lawsuit. Private companies can get something of a pass on this kind of thing as they don't have the same legal obligations to shareholders. In addition, private companies can be much more easily molded to the personalities of the founders and controlling early stakeholders. But big public companies? The Apples, IBMs, HPs, GEs, Genzymes, Motorolas, Honeywells, etc? They're all going to continue to use patents offensively to protect their markets and products. I hear Google used to be a not-evil place, too.

The IPA is not an inherently bad idea. I applaud Messinger and Twitter for thinking innovatively and trying to get something new started. But I think that the press are being vastly overoptimistic about the likelihood of success here; for example, see Joe Brockmeier's piece.

He lists four reasons why companies should adopt the IPA, which come down to hoping a lot. #1 is that developers will prefer to work at an IPA-using company. I'm sorry but 99.999% of developers don't think about patents and certainly don't think about them during the hiring process. Developers go where the work is interesting and the pay is good. Developers go where they get to do stuff that's fun and looks good on their resumes.

Number 2 is that companies won't need incentive plans to convince developers to file patents. I take it from this that Brockmeier has never filed a patent. The process is BORING and TEDIOUS in the extreme, involving hours of meetings with lawyers who don't understand your work and who insist you do all sorts of annoying arcana. Incentive programs exist because companies realize that developers hate this stuff, but hey for five thousand bucks they can get a really cool new toy so sure, they'll put up with the annoyance. The future use of whatever comes out the lawyer's pen is not even part of the consideration.

Number 3 - it could reduce the number of trolls, but frankly trolls are an overblown annoyance. They're a pack of fleas on the ass of the bull that is rampaging in the tech china shop. The bull is composed of those very same big names (IBM, Apple, HP, Microsoft, etc) aided and abetted by a thoroughly broken patent system. I think Mark Cuban gets overheated at times, but I definitely understand his visceral desire to burn down the entire broken edifice that is software patenting right now. Patent trolls are a symptom, not the disease.

Number 4 - the IPA can be a poison pill. Which is to say that if you're someone like AOL or Yahoo and your company is collapsing then you can't even scrape a bit of value out of what little you have left. Boy, that's attractive! I'm about to default on my mortgage, so I'll set my car on fire, too! Seriously, who thinks like that?

The press needs to take a much more realistic look at this proposal and talk about the ways in which it can be made more workable. For example, I'm personally a fan of patent pools, in which companies contribute mutual value, take mutual value and have financial incentives to avoid hostile legal actions. IPA-like agreements and additional steps like compulsory licensing could play a big part in creating an environment where nobody gets everything, but everyone gets enough to be satisfied, without having to disarm themselves.

Discussion and thought continues in the wake of DOJ's suit against the e-book publishers and Apple.

In a New York Times piece, David Streitfeld notes that Amazon has already announced plans to "push down" e-book prices. Of course, the problem isn't what happens in the short term, it's what happens over the longer term. There continue to be two diametrically opposed opinions on this. On the one hand, we have the old-school notion that says monopolists will raise prices no matter what - the view argued by those who didn't settle with DOJ. I continue to find this ironic after Apple's history of holding the line on music prices against publishers who wanted to charge far more. On the other hand, we see independent authors like Konrath who argue that sales are extremely sensitive to pricing and monopolist price-jacking will just cause people to switch back to physical books.

There is already a potentially significant price gap in the (retail) costs of e-books and physical books. To the degree that a consumer has a choice - that is, already owns the e-book device - the price gap has to matter. For consumers who aren't already locked into a device, the gap has to be factored against the cost of buying a new device.

A possible third way could come from small e-booksellers, according to a Time Techland piece by Keith Wagstaff this week. Under the two very photogenic ladies from Emily Books the column points out that for all the hand-wringing over the potential power Amazon will have, nobody at the big publishers is actually doing anything about it. Hopping into bed with Apple isn't precisely a great move, but nobody at the big houses seems to have a better idea.

Emily's idea is to offer a high-touch hands-on approach, giving readers a better idea of the quality of what they're getting. It's a simple model, and one that has been replicated with all kinds of specialty brands and products in all kinds of industries. But it's nearly impossible to do with e-books because the publishers are so afraid that they won't let anyone sell their e-books without massive, complicated, and expensive DRM.

Wagstaff devotes more than half his column to excoriating the idiocy that is DRM, a story that I'm sure most Copyfight readers know by now. He ends by saying:

DRM requirements are going to have to go. It’s probably going to happen eventually; if I were a publisher, I’d get ahead of the curve and embrace a more diverse marketplace sooner rather than later.

Oh, would that the big publishers were so willing to dip even a tiny toe into the 21st century.

Which brings me back around to a piece Cory Doctorow put up on Boingboing last week titled "Antitrust and ebooks: regulators miss the big DRM lock-in picture" which itself spins off a Tim Carmody piece for WIRED.

The point these two are making is that antitrust regulators are looking at the wrong thing. Sure, agency pricing set up by collusion would be illegal, but it's not half so anti-competitive as the kinds of platform locks that DRM and other restrictions the DOJ is giving a pass to. Carmody points out that Apple also employs a variety of anti-competitive measures to lock customers in. And, as I'm getting sick of saying and you are probably getting sick of hearing, every bit of lock-in is going to end up harming the marketplace and harming readers particularly.

Yeah, I get that e-books have lots of advantages. I'd like to get some. But not at this cost - and I don't mean whatever Amazon decides to charge.

A couple weeks ago, I took TechCrunch's Mike Masnick to task for being wrong about the current purposes of copyright under US law. A Copyfight reader pointed me to Masnick's follow-up piece in which he vigorously re-asserts this wrong position.

I feel compelled to repeat before I light into this that my personal belief is that the current construction of copyright law in the US is far too tilted in favor of maximalism, by which I mean putting the rights of copyright holders above other considerations such as scholarship and the general welfare. It was obvious to me that SCOTUS would see how Eldred should be decided, and how continuing to extend at whim the term of copyright violated the originalist language of "for a limited time." As the man said, I may have been (on the) the losing side. Still not convinced it was the wrong one.

What I am convinced of is that Eldred remains the current settled law of the land, and that officials such as Maria Pallante, the Register of Copyrights, have a duty to follow and uphold the law until such time as it's changed. Let's not forget this all started with Masnick hyperventilating about how her statements in favor of copyright maximalism made her incompetent to do her job.

Now let's look at Masnick's current long screed. Without delving into too much detail what he seems to be harping on is the distinction between 'purpose' and 'method.' He still asserts that the purpose of copyright is contained it its preamble language, and that the methods should serve that purpose and that's what everyone else should believe, too, or they're wrong and he's right. This is a less well-written version of the Breyer test and I really do recommend that you, and Masnick, go reread that opinion. Breyer's writing on IP matters is not always good enough or clear enough, but in this case I think he makes the argument cogently and persuasively. But as we reread, let's keep in mind Breyer was writing a minority opinion. Breyer's side didn't win that case (Golan v Holder) and thus it is not the law of the land.

Masnick seems to think he can bolster his argument with a "bunch of quotes" (his words) that support his view. Dear Mike Masnick, I can personally guarantee you that every losing side in every SCOTUS case came equipped with more than a few "quotes." They had amicus briefs, and detailed citations of precedential cases that they believed supported their side. Having a bunch of quotes doesn't make you right and the other guy wrong.

With very little due respect to Chief Justice Roberts, the job of a judge - particularly a Supreme Court justice - is a hell of a lot more than just calling balls and strikes. It's weighing meanings, and examining evidence that supports potentially contradictory interpretations and deciding which one is right. Precedents exist, but may not apply. Or someone else may read that precedent differently than you read it. If you read a dissenting opinion in a Supreme Court case you may find language that says, in effect, "those other five guys are wrong." Justice Scalia is known for taking his colleagues to task in his minority opinions for, in his view, being wrong. He does this in great detail, with extensive citations and as much weight of authority as he can bring to bear. But that doesn't make him right - the majority opinion remains the majority opinion and thus the governing interpretation of our laws.

Which is to say, you can't just pick a few quotes that support your opinion and then say, "See, this means the law says what I think it says." Well, apparently if you're Mike Masnick you can. But I'm still going to laugh at you for doing it.

Over a year ago, I pointed out that a potentially big story was being missed: people were migrating off file-sharing networks because of a change to always-on, high-speed, mobile Internet use that meant people would rather have their media streamed to them wherever they were, rather than held as bits on a single disk. Having media in the cloud was worth more than downloading, legal or illegal.

Sure, there's still a ton of copyrighted files flowing on Bittorrent but there are also files on Twitter and Facebook and YouTube and any other social media you care to name. More interestingly, the shift to streaming has opened up space for new services like Spotify and for companies like Vevo to stake out legal and interesting new turf on places like YouTube. And to be fair, some mainstream media has started talking about the idea (see this PCWorld story from Oct 2011).

But never mind all that interesting new stuff, the RIAA has its own version of history and it's going to stick to that version no matter what. In a blog entry posted last week, Joshua Friedlander, the Cartel's VP of "Strategic Data Analysis," trumpets their success at smashing sharing networks. He's not just relying on marketing "research" like last time, he's relying on a truly dreadful paper put out by an actual (Wellesley) college professor.

Here's the paper itself, "The Effect of Graduated Response Anti-Piracy Laws on Music Sales". It's an abominable piece of badly put-together propaganda masquerading as research. How do I know this? I read the paper. I bet you plenty of journalists will not bother with this; they'll just blandly repeat what's in the RIAA blog entry. Are you listening, Greg Sandoval?

To highlight just one critical flaw, I call your attention to the methods used, which involve looking at results data (the change in purchases from iTunes) and then inferring what caused those changes. Rather than doing something like asking people "why are you buying more music" or investigating things like public awareness, Professor Danaher simply assumes the counterfactual. If sales went up, it must be because of Factor A. Shame on him for bad experimental design, and double shame on Friedlander for citing this paper as if it was actual published work. It's not, it's a "working paper" which means it hasn't been subjected to the kind of peer review that would highlight methodological flaws. Two words, Professor Danaher: confounding factors.

Friedlander also points to "Nielsen Netview data" (which I could not find the source for) in order to tell us that "the vast majority of those who used Limewire in September 2010 did not use it in September 2011." Could that possibly be because Limewire was shut down in October of 2010? So, a year after a service was shut down, 90% of people had stopped using it. That's a remarkable achievement; next, do a survey on how many people are renting DVDs from Blockbuster.

Also shocking is that if you mention Limewire, and then ask people whether they use other sharing sites, they tend to say "no." Could that be because people are not stupid? Seriously, I'm more surprised that 35% of people who used to use Limewire would admit to migrating to another file-sharing network. Brazen is as brazen does, but no, officer I promise never to speed again. Honest!

I've ranted on about this long enough; I'm not even going to dignify Friedlander's continued reference to NDP puff pieces with a response. I will instead say that I agree with Paul of digitalmusicnews.com who say that "This isn't whack-a-mole anymore." The Cartel has adopted a vastly scaled-up, scorched earth policy. They've co-opted law enforcement into becoming their enforcement thugs and they are taking no prisoners.

I'd stress out about this, but I have to go refresh my music stream instead.

Today I want to spend a few minutes on a couple reflections posted in response to the DOJ's suit against publishers and Apple.

First, the practical response. Dearauthor.com has a very nice (if lengthy) guide to "What happens next?" It's complicated, in part because some of the publishers accepted a settlement and some rejected it. So what happens with your e-books (both as an author and as a reader) depends on who the publisher is. Also bear in mind that the settlement doesn't yet have the official court stamp of approval, which could take as much as 60 days to get.

For example, it's quite likely that those publishers that signed the consent agreement will quickly negotiate new agreements with Amazon, which still has a dominant position in the e-book market. Because of the terms of the agreement, books will appear in Amazon's Marketplace at variable prices. There will be an ability to discount, to manage prices, and I suspect Amazon will not pass up the opportunity to promote its (re)acquisitions, possibly with sales and offers. If you were holding off on buying some e-books because of pricing in the past few months now is an excellent time to start scanning for bargains. Assuming, of course, that your preferred books are published by certain publishers and are on your locked-in platform. But I digress.

Dearauthor seems to think that the prices on physical books are due for another rise, and that the entire concept of a mass-market edition is at risk. I generally agree, but don't think it will happen this year, for reasons I think will become apparent as 2012 unfolds, particularly the end-of-year shopping/gifting season.

To wit: I believe that the dedicated e-book reader may well have plateaued already. In 2013 I think we'll start to see the dedicated e-reader go the way of the point-and-shoot camera as tablet computers start to become less pricey and expand their reach and function in accordance with some version of Moore's Law. Just as peoples' mobile phones took over every function that a point-and-shoot had, tablets will do everything that e-readers do. Yes, phones and tablets cost more, but people want mobile devices for other reasons and once you have those devices you don't want or need a second single-purpose device. In the mass consumer electronics market, special-purpose hardware tends to lose badly to general-purpose hardware. Your set-top box is a DVR (and maybe a DVD/Blue-Ray player too). Your home movie camera is called "iPhone" or "Droid." Et cetera.

E-book readers will not be immune, and their demise will shake up the market significantly. If Apple continues to be this hostile, what will be the fate of a "Kindle app" for iPad? Will Apple even allow such an app in the store? Disruption of this sort always hurts consumer adoption, as does a failure to converge to a single standard. A slowdown in consumer adoption of e-readers may well delay the demise of the mass-market paperback, at least for a year.

To close out the Dearauthor piece, I think they hit the nail on the head where they say

[P]ublishers have sustained a big public relations blow. People who never read an ebook or haven’t followed this issue closely now are exposed to this idea that publishers stand accused of engaging in price fixing

As I said earlier this week, it really looks like the publishers need to work on their PR.

The second good thinky piece comes from Scott M Fulton, III on ReadWriteWeb, who published a column titled "Does Amazon Have a Right to a Price Monopoly?" This is an excellent question, to which the answer seems to be "no" on the face of it, but do read Fulton's thinking because really it seems nobody has yet put forth a good answer.

Fulton makes a couple good points, the first of which is that Amazon's behavior in arousing the book publishers' ire is remarkably akin to what Apple itself did with its iTunes store pricing. Jobs wanted a certain price for songs and he got that price. The music publishers fumed and fought and flailed but 99 cents it stayed. His other point is that the publishers (and Apple) who are fighting the suit may be in position to counter at least the prima facie evidence of collusion that the government seems to be making its case on. Whether that's a wise move is still debatable. Making yourself look bad in front of customers is rarely a winning strategy.

Finally, In delightful counterpoint to Jon Sargent, we get US DOJ (acting) Antitrust Chief Sharis Pozen claiming that the point of the settlement is to "[open] up the competitive marketplace and the competitive landscape." So now both sides claim they're all about open competition - isn't that wonderful? And that brings me to John Scalzi's Whatever column published yesterday in response to the public drama. As he points out, all of the players here are in it for their own (and their shareholders') pocketbooks.

You, and me, and those who read or might read e-books are here solely for the purpose of giving these companies money. That's what they're in business for. Statements about the public interest, or open competition are just part of the PR maneuvering game. Corporate strategies have everything to do with profit and nothing to do with "good" or "evil." Really.

A couple months ago, Nest found itself on the wrong end of a patent-infringement lawsuit from Honeywell, over so-called smart thermostats. At the time, I thought that Nest would probably choose to settle rather than get dragged into a possible protracted bit of litigation against a much-bigger company. Honeywell makes tens of thousands of products and smart thermostats are a tiny fraction of their business. For Nest, though, they're the showcase - the whole point.

This morning, Kate Brinks (the official Press Contact for Nest) was kind enough to send me a copy of Nest's just-filed response. It's dressed up in polite language, but what it amounts to is Nest calling "BS" on Honeywell, and filing its own counter-claims. In order to lead this fight it has brought on board one Chip Lutton who hasn't even had time to update his LinkedIn profile there. See, he's left Apple and joined Nest as Chief Counsel. This is very good news for Nest, I think, as Lutton has been helping steer Apple's worldwide patent war and knows a thing or two about how big companies do the patent dance.

So, what do Lutton and Nest have to say in response to Honeywell's charges of patent and design infringement? It's the usual - Honeywell are stifling competition, their patents are "hopelessly invalid" where they are "not worthy of a patent". The deep deep irony of someone from Apple complaining that someone else is asserting crap patents is apparently not a factor in drafting press releases like these. In summary: Nest are going to challenge the patents' validity, push for re-examination, and hope that the judge finds that they have sufficient grounds to proceed. If the judge thinks they have even a reasonable chance then it's likely they won't be hit with an injunction and can go on building their business.

If Honeywell is able to convince a judge otherwise it's possible Nest could be cut off from its sole source of revenue, which would make its investors even less happy. My guess is that Lutton's first job is to make sure that doesn't happen. Whether this leads to serious negotiations or to a courtroom date afterward is something we probably won't know for many months.

Jon Sargent, in case you were wondering, is the current CEO of Macmillan publishers, and has gotten himself in the news a bit today because of his reactions to the DOJ finally filing suit against his company and the other big publishing houses.

Quick recap: the DOJ has been hinting about filing this thing for at least a month. The core charge is that five big publishers colluded with Apple to fix prices via an agency model for e-books. According to the WSJ piece, the civil suit alleges that the publishers banded together by phone and email to break Amazon's back over its "wretched $9.99 price point."

The new news is that three of the five would rather smoke than fight, agreeing to a settlement that will let Amazon resume discounting e-books. They may also have to pay "tens of millions of dollars in restitution " to consumers who were ripped off by the illegally priced e-books, settling a separate suit brought by a group of states. Apple and two of the publishers didn't like DOJ's terms and will do the "see you in court" routine.

The first part of that routine is, of course, trying one's case in the press. DOJ tries to make its case look as strong as possible, and the defendants respond by denying guilt and making charges about government interfering in good ole American business. If that's what Sargent wants to do he needs a better writer - maybe he knows a few?

See his blog post on tor.com (Tor is owned by Macmillan). In this triumph of illogic he claims that switching to the agency model would "make less money on our e book business." Say what? You jump prices 30% overnight and make less money? Either you're not fit to run a business or something very fishy is going on. Trust me, if I'm hurting trying to sell a product for $9.99 and tomorrow you let me sell it for $12.99 and prevent anyone from discounting it back down? I'm going to make more money.

Unless, somehow, you think the 30% price jump is going to kill your customers' willingness to buy that product, in which case you are a frakking moron for jumping the price in the first place.

Moving on, we then get the claim that "We made the change to support an open and competitive market." Would someone like to tell me how a price-fixed, guaranteed-no-discounting market is more "open" or "competitive" than one that lets prices vary? Oh, never mind. This is code for "we found a way to force people to buy our stuff at the price we wanted and from the people we want you to buy from, who are not Amazon."

The best part is the personal story: "I made the decision on January 22nd, 2010 a little after 4:00 AM, on an exercise bike in my basement." Dude, if you're deciding the entire future of your business at dark-o'clock when you can't sleep then you need to take a big step back, and maybe step down. The corporate cowboy routine may play well if you're Mark Cuban or Donald Trump, but (even though your company is privately held) there are people who depend on a management team making responsible, well thought-out decisions. Preferably not at four in the morning.

This is more technical than my usual pieces; please bear with me and remember I'm still not a lawyer, just doing my best.

The decision last month in Mayo v Prometheus was either good or bad, depending on which side you stand for. Organizations such as the (generally liberal) ACLU, the (generally libertarian) Cato Institute, and the (generally non-politically aligned) AMA were all pleased by the ruling in Mayo's favor. Biotech/pharma companies were dismayed. But there's a third group, nominally neutral in this particular dispute, who have to deal with its consequences: the patent examiners who have to decide what they should and should not allow as patents and the applicants (and their attorneys) who have to construct patent applications, draw defensible claims, and secure the patents that the SCOTUS decision should enable.

To the dismay of this third group the majority decision, written by Justice Breyer, is causing more confusion than clarity, as has happened with several recent SCOTUS patent decisions. Greg Aharonian's PATNEWS published a letter this month from an anonymous group of examiners in the USPTO's "biotech Art Groups" - the people responsible for making judgments of patent applications in light of this decision. And they are not happy people.

It seems that Breyer's opinion confuses 35 U.S.C. 101 and 35 U.S.C. 103. That's two key sections of US patent law covering the requirements for an invention to be patentable. See the Wikipedia entry for a mostly non-legalese discussion. The actual (sparse) legal language can be found at sites such as Cornell's Legal Information Institute.

Taken as a whole, a non-patenting outsider doesn't care about these distinctions. Either something is or is not covered by a patent and it doesn't matter why unless you plan to challenge the patent somehow. But the people who are involved in practicing the law care a great deal about these distinctions. An invention may be rejected on 101 grounds or, separately, on 103 grounds. Challenges to patents, or to specific patent claims, can be brought under different sections of the law, and there are different requirements in each of these cases

And let's not forget that none of these things is free. Patent examiners always have more work to do than they can handle; if they reject wrongly and have to re-examine then they've taken away time that could have been used to examine another patent, which harms them and the long queue of waiting applicants. Patent applicants have to pay lawyers, court costs, their own time, etc., none of which are cheap. Getting 101/103 wrong can cost a lot of money, so it really matters if Breyer's opinion has messed this up.

Specifically, the patent examiners say:

[T]he decision never says what the natural laws are in the claims or how the claims are simply an application of the natural laws. The starting material and product are not naturally occurring. How are we to justify saying something is or isn't simply an application of a natural law?

The point of novelty in the patents (Applicants' discovery) seems to be that a therapeutic amount of the drug is one that produces an amount of the metabolite in claim 1 in the blood within the range recited in claim 1. [...] Determining this indicator (metabolite range) may or may not be an invention. But that determination is better treated under 103.

[...]

We don't know what the PTO can do with this decision, because no examiner thinks like the Supremes.

The 101/103 distinction revolves around what is eligible to be patented with 101 criteria supposed to govern novelty and usefulness versus 103 criteria governing (non)obviousness. That is, even if you've come up with something new and useful, if the invention was obvious you still may not be able to get a patent on it. What Breyer's opinion seems to be doing is stating that Prometheus's patent is invalid in part because of the use of "natural laws" (which might be read as a 101 objection) and in part because the result (of reading the metabolite level) is obvious - to a person skilled in the art, remember.

But if natural law applications fail for obviousness reasons then... um, what's the point of having 101 and 103 be separate? The examiner writing above seems to be making the point that the Supreme Court majority is written as if by a layperson who doesn't care about the 101/103 distinctions, but has to be treated as law of the land by patent examiners who care very much about this.

No wonder they're tearing their hair out.

(Excerpts and quotes above taken from PATNEWS by kind permission of Greg Aharonian of Internet Patent News Service and publisher of PATNEWS. The newsletter itself has no online site, but you can subscribe at http://bustpatents.com/)

Back in April I noted that this was a case that was not getting a lot of mainstream media attention, despite its potential significance. The core of the case tests whether "safe harbor" provisions of the DMCA work as we think they do, how far they extend, and so on.

Yesterday, the Second Circuit handed down its decision, which is something of a mixed bag. The trial court had pretty completely sided with YouTube, in a way that felt like a complete victory for safe harbor. The Circuit decision is more mixed: in part they upheld, in part they overturned, and at least one key question has been remanded back down for further argument.

The response to this mixed decision has itself been mixed. Some bloggers seem to think it's hugely significant (e.g. calling it a "DMCA Game Change"). However, I come down on the side of EFF Deeplinks blogger Corynne McSherry and Volokh Conspiracy blogger David Post that the decision is not all that bad, and in fact mostly upholds the key elements of the safe harbor concept.

As I see it there are three key elements here: Does safe harbor apply? Who is responsible for finding infringing content? What must be done when infringement is claimed? YouTube clearly won on points one and two and the third will need to be further argued.

As Post points out, the Circuit's finding is that a safe harbor site such as YouTube is protected from all infringment claims, including contributory infringement, inducement, and so-called "vicarious" infringement. In addition, the Circuit clearly assigns the responsibility on the claimant, not the hosting entity, to determine specific infringement by content. The Cartel's theories about pre-filtering and keyword matching fall. Takedown notices may still be subject to abuse or over-use, but the responsibility for generating notices is still there, an important victory for YouTube.

The issues on which YouTube lost, and which are now remanded down for further argument, deal with what steps it (and similar safe harbor-protected) entities must take when made aware of infringement allegations. The Circuit clearly ruled out what's being called a "willful blindness" defense - that is, YouTube can't shield itself from knowing about infringing content. And, it must "act expeditiously" to remove or prevent access to content that is claimed to infringe. There's also an unresolved question of what the Circuit called "substantial influence" and some question about syndication of allegedly infringing content. These issues will now be re-argued at the lower court.

DeVoy calls this a "gut punch" but then goes on to delve into the details that make it less significant, though I agree some of them are thorny questions yet to be resolved. Likewise, Eriq Gardner at the Hollywood Reporter claims the Circuit "Side[d] with Viacom" but I think he is mistaken, too.

Matters of fact-finding, such as the Circuit required to be resolved, will vary from case to case. What is important here, I think is that the Circuit has affirmed the overall structure of safe harbor policy, clearly rejected attempts to drag in other sorts of copyright-infringing activities, and begun to articulate what may become a recognized standard for what actions a safe harbor-protected entity has to take. That's not a complete vindication of either side, but the scales I see are definitely tipped in YouTube's favor.

Let's start with a couple things we agree on: Maria Pallante, the Register of Copyrights, is a copyright maximalist. As you can see from her public background, she's worked for organizations like the National Writer's Union and the Guggenheim Museum that consistently hold a maximalist, and author-centric view of copyright. It's also clear that she believes the purpose of copyright is to help people make money, and that exceptions to copyright monopolies should be narrowly drawn.

Why this is surprising, or why it causes Techcrunch's Mike Masnick positively to foam at the mouth is beyond me. Masnick notes that in two recent talks she's taken a retrograde and maximalist position, and then goes on to rant that this means she "doesn't understand her job" and that holding such views should be "grounds for termination."

Beg pardon? Since when has the Copyright Office been any bastion of progressive viewpoints, or even vaguely friendly to "the copyleft agenda" - whatever that might be.
Masnick's major point seems to be that he thinks the purpose of copyright is to promote some nebulous social value. If the head of the Copyright Office seems to think the purpose of copyrights is to make money for the rights-holder that's kind of disappointing and unenlightened, but hardly a shock. Masnick seems to be referring to what I've been calling "The Breyer Test", but hasn't noticed that Breyer was writing a minority opinion.

It's an opinion I happen to agree with, but it's still the minority opinion. What Pallante is reflecting is the majority opinion, which is to say the settled law of the land. So we have a high government official saying she agrees with the law of the land, and this is cause for ranting... how? I dunno, Techdirt is a better (or at least more popular) blog than Copyfight, so maybe I should write more rants and less reasoned posts.

About two weeks ago, Yahoo sued Facebook over a set of ten patents, which caused a lot of bloggers to go into hyperdrive and flail around. Today, Facebook counter-sued.

As TechCrunch gleefully points out, Facebook is suing in part based on a patent filed with the work of a former Yahoo employee. Facebook is also suiing Yahoo for violating precisely ten patents. Anyone who thinks those are coincidences is not paying attention. This is how tech geeks call each other out.

It's also Facebook's way of saying "let's negotiate" - they're showing that they can bring weight to the table, which puts them in a better position to make the whole thing go away. Neither company can really afford this: Facebook does not want its multi-billion-dollar IPO disrupted and Yahoo can't afford to pay for a protracted patent struggle. Cross-licensing these 20 patents (and probably whatever else they've got lying around) would strengthen both companies' positions.

I also expect Facebook to throw Yahoo a bone, like paying their legal costs for this.

Fascinating item in this morning's news from ReadWriteHack: according to the linked short piece by David Strom, Microsoft used a provision of RICO (the Racketeer Influenced and Corrupt Organizations Act) to gain access to two data centers in Illinois and Pennsylvania.

There, two servers were seized - servers alleged to be "the command and control computers of two Zeus botnets". As you may know, a botnet is a network of computers (usually PCs running Microsoft Windows) that have had vulnerabilities exploited to allow remote attackers to gain control. Once in control the subverted PCs are made part of a network (botnet) that can be used for a variety of illegal purposes, including DDOS attacks, spamming, spreading worms/viruses, and crack/infiltration attempts against other machines. Usually in a botnet each member PC operates independently but periodically checks with controlling servers for new instructions, updated malware, and so on.

So far this is standard security stuff, and Microsoft was working with Kryus tech which, according to a blog entry posted Friday, had reverse-engineered the botnet software to discover where its control hubs lay.

The Copyfight angle appears to be that Microsoft made the assertion (and presumably convinced a judge) that it was entitled to enforcement action against these Zeus botnet servers because one effect of the botnet was to "violate [Microsoft] copyrights and trademarks" by taking over the Windows PC. It's an interesting twist but one I haven't seen before.

I'm a little bit conflicted here - I don't generally think that ends (even good ones like silencing botnets) justify means, including potentially novel expansion of copyright and trademark enforcement. Looking back in history (e.g. see this story from Sept 2011) it appears that Microsoft has used other means in the past to move against botnets. So this may be a new tactic in their ongoing fight, or it may be just new-to-me. Does anyone know if this is truly a novel application of the law?

(Update: the Microsoft Digital Crimes Unit blog entry from yesterday has a bit more detail but does not touch on the copyright/trademark aspects of the RICO case.)

The Comic Book Legal Defense Fund (CBLDF) sent me a press release about its latest online guides for international travelers.

If you think that traveling with comics (or manga) isn't a big deal then you haven't been following the news these past few years. People have been stopped, denied entry, had their possessions searched and seized, and even been brought to trial over these kinds of materials. The rights you may have in your home country (particularly if you live in the US or Japan) may be very different from the rights you have on entering another country, even a democratic nation such as Canada or an EU member state.

The CBLDF page contains a set of links to guides on four specific topics, covering comic art, pornographic anime/manga, electronic devices, and US border privacy. Each is worth a read and as always if you have questions make sure you talk to a lawyer - these are advisory notices based on experience, not legal guidance.

No, I mean really south. Like South America south. As if to prove its long law enforcement arm reaches across the equator, too, the Cartel (in the form of HBO) has "trigger[ed] an international copyright fracas in Chile."

As Scott Fulton explained for ReadWriteWeb, HBO managed to get itself known now for having a young college student handcuffed and dragged away by local cops. This student - Cristian Alvarez Rojas - is apparently accused of being behind a site called Cuevana.tv which itself is accused of being a violation of a relatively new (April 2010) local intellectual property law. Except that Rojas may not have broken the law because he kept the site's resources outside of Chile. The law may not cover this situation.

It's unarguable that Chile, like much of South America and vast swathes of Asia, does not have respect for American copyrights. Illegal copies of videos are sold in the streets or in cheap storefronts in Chile as they are in China. Police efforts to crack down on the retail end have proven largely futile. The argument, though, is that these street copies are made from downloads provided by sites like Cuevana.tv. Even though the site isn't making Rojas any money, if it is a source feeding the illegal retailers then it's clear why the Cartel would want it shut off.

But having a college kid dragged off in handcuffs is bad juju and horrible PR, regardless of how accurate or justified the reasons behind the action may be. Just like extraditing a kid from the UK is a terrible move but the Cartel seems bent on doing it anyway. Legally right != smart, guys. The people who are buying those street-copy DVDs are your natural customer base. Do you want them to think of you as 'the strong-armed gringos"? Do you think that being known that way will help sales of your legitimate product?

I certainly don't. But then I doubt anyone from the Cartel would ever hire me anyway.

What do the US Supreme Court, the ACLU, the Cato Institute, and the AMA all have in common? Today the answer is: "unanimous opposition to the notion that mental processes constitute a violation of a patent, or are the proper subject of a patent."

This strange set of bedfellows comes from the just-decided patent infringement case known as Mayo Collaborative Services v Prometheus Laboratories, Inc; the patents in question are 6,335,623 and 6,680,302. The patents are fairly complex and detailed, but the infringement question seems straightforward. A good, if quick summary of what was decided today comes from Timothy Lee, writing for Ars, "Supreme Court saves medical profession from diagnostic patents".

Lee, who has written about this case for Ars before, played a small part in the Cato institute amicus brief, and is a strong advocate for the invalidity of the patents. I have not yet read the opinions in the case, but based on the summaries I believe I would have to side with Lee and the other amicus parties. To put it bluntly, this looks ridiculous on the face of it and it's not clear to me why the patent was issued in the first place, or why the lower courts upheld it.

The key issue appears to be that the Mayo Clinic decided to stop using Prometheus's product and started doing its own testing; in response Prometheus argued that in using the separate Mayo test doctors would still "[think] about the correlations described in Prometheus's patent" and that this would itself constitute infringement. SCOTUS disagreed, asserting that the activities of measuring thiopurine metabolites and from that determining appropriate drug dosages was, in the words of Justice Breyer, "well-understood, routine, conventional activity previously engaged in by scientists who work in the field." And thus, unpatentable.

Unfortunately, although I believe this decision to be correct, I do not think the verdict is going to do much to untangle the present snarl of what is or is not patentable in the US. It has become increasingly clear in the past decade that decisions such as in re Bilski have done nothing to clarify what ought to happen. Instead, the waters have gotten more and more muddied.

In the EFF Deep Links section earlier this month Kurt Opsahl posted a summary and discussion of one of the Nevada federal district court judgments against Righthaven.

The court rejected Righthaven's claim that online excerpting was copyright-infringing action, and also noted that a site which permits user comments is not automatically liable for material posted in those comments, even if the site is not a formal candidate for DMCA Safe Harbor provisions.

Righthaven is often referred to as a copyright troll for its practices of suing far and wide on dubious legal theories; for example, see this Boingboing post from last December on Righthaven. Courts have steadily dismissed and dismantled the company's claims and legal strategies and the company is now in (financial) ruins. Good riddance to bad garbage.

Two stories that show how far the Cartel has gone in capturing the mechanisms of law enforcement for its own ends.

First, Nate Anderson reported last week that a student from the north of the UK would be extradited to the US even though there's no case against him in the UK and even though he hasn't broken any laws there.

Back in January the first reports I read of this story had me wondering what the hell was going on. Anderson's current report makes clear that it has nothing to do with UK copyright laws and everything to do with the Cartel's ability to get law enforcement internationally to do its bidding. I truly feel sorry for Richard O'Dwyer - being treated like an international criminal mastermind because he posted a Web site full of links is beyond ludicrous.

But lest anyone think that the Cartel has no sense of proportionality, I remind you that these are the people who invented Copyright Math.

The second story was highlighted on Friday by Cory for Boingboing, under the long but sadly accurate headline "RIAA prez twirls mustache in anticipation of taking on his role of Internet Witchfinder General". The gist of the piece is that the Cartel has used their captive Department of Justice and cowed your ISP into becoming its enforcement arms. If you do things they don't like, they'll cut you off from the net, or maybe they'll just slow your download speeds or drop your connection now and then. "Nice network you got there... be a shame if something happened to it."

Seriously, how fucked up is this? I think it's important to realize that "cutting off peoples' Internet access" doesn't just mean you can't download files. My kid requires the net to do his homework, which is posted by his schoolteachers on a series of blogs. My landline phone goes over my cable wire and is provided by my ISP. I doubt I'm unique in these things; Doctorow lists several other activities that modern life assumes people will have Internet for, such as banking and participating in political life. Losing Internet means losing all these and more.

I am reminded of a long-ago conversation Bruce Sterling and I had about his novel "Islands in the Net." The gist of it was the central thesis that access to the network was about to become like electricity - it's just assumed and you only tend to notice it when it's not there. I suspect that when the Cartel starts getting its way a whole lot of people are going to find this sudden absence troubling. Maybe if a lot of them are in the US Congress then we'll see some course-correction. But I tend to doubt it.

Casey Rae-Hunter of the Future of Music Coalition sent me an announcement of the FMC's case study publications.

For these studies, the FMC worked in depth with five people in the industry who make their living full-time with music. Using data provided by the professionals, the FMC then graphed and wrote up explanations of how money flowed in, from where, etc. As with any case study the results aren't necessarily broadly interpretable but it's nice to have some detailed data to go with the more general surveys we usually see.