More freshly-squeezed Lime

In a fresh blow, peer-to-peer file-sharing service LimeWire has been sued for copyright infringement by eight member companies from the National Music Publishers Association (NMPA) headed up by EMI and Universal. The lawsuit is similar to the thus far successful suit filed by the Recording Industry Association of America (RIAA) against LimeWire and its executives, seeking damages and injunctive relief and is also filed in the Manhatten federal court. A trial is scheduled for January and the NMPA said in a statement “The songs that make their illegal venture lucrative don’t appear out of thin air .... Behind every song is a vast network of people - a songwriter, a publisher, a performer, a record label. They have robbed every individual in that chain.”

Limewire publicly remains convinced it can offer legitimate business models to the content owners in the music industry saying in a statement "We have had many promising meetings with labels, publishers, and artists alike about our new music service and a business model that will compensate the entire industry”.

EMI April Music Inc. v. Lime Wire LLC, 10-cv-04695, U.S. District Court, Southern District of New York (Manhattan).

http://www.dailytech.com/New+Suit+Against+Limewire+Could+Total+15+Times+Music+Industrys+Yearly+Income/article18769.htm

Why you won't find Specsavers in the Thesaurus ...

In "Synonyms – a shortsighted attempt to avoid copyright infringement", Tim Golder and Nadia Guadagno discuss Budget Eyewear Australia Pty Ltd v Specsavers Pty Ltd [2010] FCA 507, a recent Australian Federal Court decision in which interim injunctive relief was granted to restrain the use and publication of an advertising campaign where the alleged infringement consisted of the substitution of synonyms for the plaintiff's original work.

In short, Budget alleged that Specsavers' print ad and itscorresponding terms and conditions infringed copyright in two versions of a print advertisement, a radio script and a set of terms and conditions under which an offer in the advertisements were made, seeking interlocutory relief for infringement. Budget pointed to the following phrases as reflecting originality:

'If your Specsavers glasses break – and we're not saying they will – simply bring them into Budget Eyewear. We'll replace them with [sic] pair from our own range – free of charge';

'We're not saying they will, but if your Specsavers glasses break, we'll replace them for free'; and

'If your glasses aren't all they're cracked up to be, don't worry, we'll come to the rescue. For the next two weeks... you can take any Specsavers glasses to your nearest participating Budget Eyewear store and we'll replace them with a pair from our range – free of charge'.

Specsaver's print ad contained the following phrases:

'If your OPSM glasses happen to break, and we're not saying they're going to, we'll exchange them with a pair from Specsavers with a 2 year guarantee, for free'

'If your prescription glasses aren't what you hoped for, don't stress – we're here to help. From Thursday 13th May to Thursday 27th May, take any broken OPSM glasses to your nearest Specsavers store and we'll give you a pair from our range – for free'.

Did copyright subsist in the works? Before asking whether there had been infringement, Bennett J first had to establish whether copyright subsisted in the works at all. She felt there was sufficient evidence of authorship for the purposes of seeking interim relief, and said Budget had an arguable case that

"the way in which a concept is expressed in an advertisement intended to attract customers may involve originality that attracts copyright protection ... the fact that the words are commonplace does not mean that the way in which they are put together cannot have a degree of originality".

On the issue of infringement, Specsavers acknowledged the a causal connection since it had read and absorbed Budget's advertisement and did not deny it had copied the text of Budget's ad for its own ads; it also accepted that it had copied the idea of the campaign, although this copying did not extend to exact word reproduction. Said Budget, Specsavers had sought to avoid infringement by the simple use of synonyms; Specsavers in return argued that the use and arrangement of the words and phrases in the ads was 'obvious and prosaic' and since there was a lack of any requisite originality.

Justice Bennett agreed with Budget that Specsavers chose to adopt the same expression of ideas where various means could have been used to express the concept. Specsavers could have copied the idea but exercised its own imagination to express that novel concept in new and different language. rather than "using a thesaurus" to substitute a synonym. Accordingly a prima facie case of infringement had been made out.

Says the 1709 Blog, if the original Budget ads had been more imaginative and less prosaic, Specsavers' synonyms might -- at least in an application for interim relief -- been clad with the figleaves of parody and/or commercial free speech. Even so, the message is clear: that well-known Thesaurus Rex no longer rules the world of advertising copy, if indeed it ever did.

Squeezing the Lime Dry?

On 14 May we reported that US District Judge Kimba Wood had decided that the Lime Group, the company behind Limewire, was liable for the copyright infringements committed by Limewire users. Two weeks later the Lime Group asked the court to reconsider this judgment. This request was followed by one from the RIAA, asking the court to shut down Limewire by granting a permanent injunction with the RIAA arguing that Limewire’s operation has to be stopped immediately, to avoid it doing any more harm to the music industry saying “It is patently obvious that the rampant illegal conduct that Lime Wire intentionally induced, and for which it has been adjudged liable, will continue uninterrupted day after day unless and until the Court issues an injunction to rein in this massive infringing operation” with the RIAA’s lawyers saying “Every day that Lime Wire’s conduct continues unabated guarantees harm to Plaintiffs that money damages cannot and will not compensate” adding for good measure “The scope of the infringements that Lime Wire induced...boggles the mind."

Bloggers in the USA have pondered the quantum of damages facing Lime Group and Limewire founder Mark Gorton, with one estimating damages at $1.5 trillion (see link below) The RIAA itself said “In every case in which a perpetrator of massive online infringement has been held liable on summary judgment, the courts have promptly issued an injunction to try to stop the continued harm to the plaintiffs. It does not require sophisticated mathematics to calculate that the likely damage award in this case will run into the hundreds of millions, if not the billions of dollars”. The RIAA has also argued that following the Supreme Court’s decision in MGM v Grokster, Gorton moved his own assets into ‘family partnerships’ to shield them from any judgment. Despite the fact that many bloggers and some academic papers argue that careful scrutiny of relationship between illegal downloads and lost sales to the music industry shows no direct correlation, The RIAA are relying on US statutory damages which can indeed lead to massive awards when thousands and thousands of illegal acts of infringement are involved.

In another twist to this story, Limewire has told Computerworld that it hopes it can “amicably settle” its dispute with the record industry. Pointing out that Lime Group have been developing legitimate digital services, a spokesperson told Computerworld that the company was "actively engaged" in working with the music industry to settle the labels' legal claims, and to then "move forward with a new way of working together that benefits all parties involved" adding "LimeWire absolutely does not encourage or condone the illegal copying or sharing of copyrighted material", pointing out that LimeWire had added an option to its P2P platform that could filter out unlicensed files. It has to be said that Judge Kimba Wood was earlier unimpressed by the filter – not least because it had to be activated by the user, and was disabled by default
.
The words ‘pigs’, ‘might’ and ‘fly’ spring to mind about any potential settlement but the fact remains that closing Limewire itself might have very little impact on global digital piracy and perhaps the RIAA might (just might) consider a deal, however unpalatable, to show that it is trying to promote legitimate business models for users to easily buy music.

The RIAA and representatives of Lime Wire will appear before the court on Monday. A Lime Wire spokeswoman to US reporters "We are looking forward to an opportunity to address the Court for the first time in two years and show that as a matter of fact and law there is no support for this motion."

http://news.cnet.com/8301-31001_3-20006879-261.html

http://the1709blog.blogspot.com/2010/05/limewire-bites-dust.html

Does Limewire owe the RIAA 1.5 Trillion? http://www.p2pnet.net/story/40481

British Black Music Month host copyright panel

Talking Copyright: Reflecting On A 300 Year History & The Music Industry

The University of Westminster is playing host to a British Black Music Month panel on copyright law aimed at music industry, media and law students and lecturers, and music industry and practitioners, who determine a wrap-up vote on (a) are today's copyright laws robust enough for an internet age? and (b) copyright awareness: have we lost the fight to win the hearts & minds of the youths – tomorrow’s consumers? Panellists including Kienda Hoji (lawyer/head of the University of Westminster commercial music), David Stopps (MMF UK & International copyright & related rights director), Pauline Henry (ex-Chimes singer/IP consultant), Dave Laing (researcher/lecturer), Ben Challis (lawyer/lecturer), and Kwaku (BMC) who will lead an irreverent yet factually-rich discussion covering various angles - history, landmark cases, causes célèbre, 'good' and 'bad' copyright stories/policies in association with the University's Black Music Centre.

When: Tuesday June 15, 6.30-8.30pm

Where: University Of Westminster (The Old Cinema), 309 Regents Street, London W1B 2UW

Cost: Free, but pre-booking necessary - for booking and more info contact editor@britishblackmusic.com and see http://www.britishblackmusic.com/

Economics has a go at copyright

Is copyright a good or a bad thing? Even if it’s worth keeping, is there any point in turning up the heat on illegal file-sharers? Such questions have attracted a fair amount of ideological dogma and rhetoric recently but wouldn’t it be nice if we could answer them scientifically? Can economics help guide copyright policy?

The Strategic Advisory Board for IP Policy (SABIP) has recently published a report on the economics of copyright and digitization. Christian Handke’s report reviews the literature and empirical studies on the economics of copyright and makes recommendations for further research with the objective of informing UK government policy. The report considers a plethora of interesting issues, finds a shortage of empirical research and ultimately suggests two questions to get the ball rolling:

1. How does digital copying affect the supply of copyright works?
2. Does the copyright system entail obstacles to desirable aspects of technological transition?

There appear to be at least three major hurdles in turning economics into copyright law: determining what should be counted as the benefits and costs of copyright and infringement, and deciding their relative weight; getting good data about such a complex and rapidly changing range of human activity and agreeing on how to interpret the data; deciding what policy should follow.

Some of this is down to science; but some of it must surely always be a matter of opinion or taste. For example, some say copyright’s limits on using old material is a cost – you could say it is a benefit (it drives people on to seek original expression). Are mash-ups a wonderful upsurge of grass-roots creativity or a tedious waste of time?

Economic research appears to be sorely needed but may not make uncertainty, risk, judgment and strategy things of the past.

Uncertainty and judgment

Almost all of the empirical studies to date on the economics of copyright have been about the impact of illegal file-sharing on the music industry. They generally show a negative effect, but to varying degrees, some showing no loss of sales – the sort of conclusion that spurs on the sceptics and stokes the debate.

Many of these studies have focussed on falling CD sales, but they would probably have declined over the last decade anyway. However, isn’t it more likely that illegal file-sharing, rather than eating away at CD sales, deprived the music business of potential profits in the burgeoning online music market? Without illegal file-sharing, the music business could plausibly have expected to see unprecedented profits over the last decade. Some of those profits could have been used to seek out new talent, not just tread water. Might consumers have sparked a renaissance, rather than recycling old material?

How to quantify something that might have been? We will now be able to monitor online sales in countries that have introduced tougher anti-piracy laws (e.g. UK, France, Sweden, Taiwan and South Korea): if unauthorized copying is reduced, do legal transactions increase or are they unaffected? According to IFPI statistics, digital music sales in Sweden in 2009 were double those of 2008 and in South Korea digital music sales grew by 53% in the first nine months of 2009.

But (and there is always a ‘but’) online music sales probably would have risen to some degree even if there had not been new laws. Arriving at figures that everyone will agree with seems impossible. But science, after all, never was more than our best guess.

Risk and strategy

Perhaps the trickiest question is what the policy implications of any reliable research results would be. The UK can’t unilaterally abolish copyright or even change its basic rules, which are fixed at European level. Handke says economic studies are unlikely to be much use for fine-tuning policy.

So what’s left? Making it more or less easy to enforce IP rights? Generally the cost of enforcement is borne by copyright right owners – even under the Digital Economy Act they will continue to bear the lion’s share of this cost. So how much money is spent enforcing copyright is ultimately a cost-benefit analysis that is decided by individual businesses. They will make that decision in relation to their own business, not total social welfare. Some companies may remain unenthusiastic about spending their profits in this way.

Gambling money on chasing pirates on the high seas and hoping it will shift public attitudes is not so much the science of money as the art of war.

Armenia proposes to get tough with infringers

If you're thinking of a safe haven from which to practise the non-so-subtle arts of copyright infringement and have been checking the prices of luxury apartments in Armenia, think again. A news item from Eastern Europe and Caucasus-focused IP practice Petosevic, "Bill Tightening Penalties for Copyright Violation Introduced in Armenian Parliament", warns that things are only likely to get tougher for infringers there.

Right: Armenian prisons to welcome copyright infringers?

A bill aimed at increasing the penalties for copyright violation was introduced in the Armenian Parliament in late April. Its objective is to protect the rights of authors, to which end it calls for mandatory marking of audio and video information carriers with hologram labels.

The bill provides for a penalty to the value of US$ 2,500 (EUR 2,030) for a first offence [this is more than twice Armenia's gross per capita annual consumption], with a prison sentence of up to 12 months for second and subsequent offenders. The most recent BSA survey showed Armenia among the top nations for software piracy, where 93% of computer programs are reported to be illegal.

For prison conditions in Armenia click here

Ofcom issues first consultation on three strikes implementation

Ofcom, the UK body which exercises supervision of the nation's communications sector, has now published Online Infringement of Copyright and the Digital Economy Act 2010: Draft Initial Obligations Code. The full print version of this document is a formidable 74 pages in length (you can read it here) and is only the first step in a consultation dialogue which will end with all interested parties having a say in what sort of rope internet service providers (ISPs) are expected to hang online copyright infringers with.

The Act itself requires ISPs to notify their subscribers if their internet protocol addresses are reported by copyright owners, in a copyright infringement report (CIR), as being used for the purpose of infringing copyright. ISPs will also have to furnish copyright owners with anonymised copyright infringement lists concerning subscribers whose CIRs exceed the threshold of illicit permissibility. Initially Ofcom's code is proposed to cover only the seven fixed-line ISPs with over 400,000 subscribers (BT, Talk Talk, Virgin Media, Sky, Orange, O2 and -- perhaps a surprise for some readers -- the Post Office).

Ofcom proposes that notifications be sent to subscribers on receipt of the first CIR, on receipt of a second CIR a month or more later, then on receipt of a third CIR received a month or more after the second (the 'three strikes'). Any subscriber would be included in a CIL if he or she receives three notifications within a year and the copyright owner requesting the CIL has sent at least one CIR relating to that subscriber within that year. Any subscriber facing cut-off will be able to appeal to an independent body, which Ofcom is required to establish, and which must adopt "specific measures to protect subscribers during the hearing of appeals, including a right to anonymity".

According to the draft code's Executive Summary, what Ofcom proposes is

"a system of quality assurance reporting to ensure that where allegations are made against subscribers they are based upon credible evidence, gathered in a robust manner".

The code has to be up and running by 8 January 2011 unless the Secretary of State extends the timetable [or the Act is subject to a new Statutory Scrappage scheme?]. Variable factors such as the need to pass subordinate legislation, notification of the code to the European Commission and Parliamentary approval may slow things down.

Two further consultation exercises are planned. These will cover (i) enforcement of the code and the handling of industry disputes, which is expected next month, and (ii) tariff setting – i.e. sharing costs - from implementing and fulfilling requirements in the code (possibly as early as September, depending on the progress of the government's cost-sharing plans).

Responses to this consultation are invited by 30 July 2010. To respond, click here. To see if anyone else has responded yet, click here.

Eyeworks: Dutch court keeps an eye on Newzbin

From Boek9.nl, via Piter de Weerd, comes news of the Hague District Court's judgment in preliminary proceedings of 2 June 2010 in Case KG ZA 10-639, FTD BV v Eyeworks Film & TV Drama BV. Says Piter, this is a ruling in which

"facilitating downloading is ‘making available to the public’. The court explicitly follows Mr Justice Kitchin in Twentieth Century Fox v Newzbin".

According to the Dutch court,

"2.1. The issue of this case is the downloading from Usenet of copyright material and the role played by [the defendant] FTD in this …

2.6. FTD provides a service by which users can find and download files on Usenet in an easy way. To that end it gives access to a computer application, referred to hereinafter as FTD Application, by which users can share information about files stored in Usenet servers. In the FTD Application users post so-called spots, data regarding files which are considered interesting by users. A spot comprises the name under which the file in question can be found on Usenet.

4.3. The present preliminary proceedings concern the question whether by its behaviour FTD makes the work available to the public.

4.4. FTD argues that it does not make available, because the copyright files are not within its power at any time. The servers in which the files are stored are not controlled by it, nor does it have any influence on the downloading by users, so it argues. Be that as it may, provisionally judging it is not relevant whether the copyright files are actually in the power of FTD at any time. Instead it is important whether the behaviour of FTD allows users to download copyright files (in an easier manner) and that it thus makes such files in fact available to the public. This is the case, provisionally judging".

On the decision of Kitchin J the court had this to say:

"4.10. The Preliminary Relief Judge looks for adhesion with a recent decision of the English court. In a judgment with detailed reasons Mr Justice Kitchin finds that Newzbin, a company operating in a way which is similar on relevant points with the behaviour of FTD, infringes copyrights, despite the circumstance that on the site of Newzbin no copyright works have been posted. Just like FTD, Newzbin offers a platform for the exchange of data concerning inter alia the exact location of copyright works in Usenet servers. Thus Newzbin allows its users to download such works (in an easier way). Just like FTD in this provisional judgment, Newzbin was actively and substantially involved in the data posted by users, inter alia by categorizing such data and – at the request of users or not – removing unusable spots. Moreover the activities of Newzbin were aimed, in the view of the English court, at (enabling) large-scale copyright infringement".

You can read the judgment in translation here or, if you prefer it in the original, here. It's good to see how much more comfortable the judiciary in Europe is when looking at decisions of other national courts within the EU: there's no suggestion that a judge is bound by a decision made by a brother judge in another country, but there is at least the prospect of a sanity check, available to any judge who might otherwise feel he was heading in the wrong direction.