Obeying a Takedown Letter a Binding Contract

TechDirt reports today on a vexing case out of Pennsylvania dealing with contract, defamation, and website take-down letters.  Apparently, the Pennsylvania Supreme Court of Philadelphia believes that obeying a take-down letter constitutes a binding contract and any reposting of the material constitutes a breach, despite any legal justification for posting the information at issue.

The case deals with Dominic Morgan, a Philadelphia man who had Lasik surgery in 1998 and whose doctors, Herbert Nevyas and Anita Nevyas-Wallace, he later sued for malpractice because he was left legally blind and was awarded only paltry damages.  Still unhappy, Morgan started www.LASIKsucks4u.com on which he wrote about his experience and dissatisfaction with his doctors.  The Nevyas sent Morgan a letter claiming his site was defamatory and demanded that all references to them be removed from the site (if he did, they promised not to sue).  As almost every lawyer would recommend, Morgan immediately removed the material at issue and proceeded to seek advice from a lawyer about the letter.  After determining that the Nevyas’ claim of defamation was weak, Morgan reposted the material and the Nevyas sued.

In April, the court found that

The parties had agreed that in exchange for the Nevyas’ agreement to refrain from  filing a lawsuit against Morgan for Defamation, Morgan would remove all defamatory statements from the site and refrain from doing so in the future. This Court found that Morgan agreed to this, even providing proof to the Nevyases of his agreement and compliance therewith… Essentially the Court found an offer, acceptance, including Morgan’s compliance with the agreement to alter the web site, removing the Nevyas name, and consideration.  Nevyas v. Morgan, No. 946, 2006 Phila. Ct. Com. Pl. LEXIS 203, 3 (PA. 2006).

So Morgan’s act of reposting the alleged defamatory material, though its defamatory nature was never discussed by the court, constituted a breach of contract between Morgan and the Nevyas.

Morgan is being represented by Public Citizen and has just filed his appeal (read here).  The appeal notes that not only did the correspondence between Morgan and the Nevyas not constitute a contract to not criticize the Nevyas, but that finding that it does is an impermissible waiver of Morgan’s free speech rights.  At some level, Morgan’s criticisms are mere accounts of what factually happened to him and as such he has every right to report that info to the public.  A fair and true report would not be defamatory, but the court never bothered to address the issue in basing its decision in contract.

As Public Citizen’s press release regarding the appeal points out, it is common practice for companies to threaten companies and individuals with take-letters in response to legitimate criticism and just as common for the information to be removed to avoid costly litigation.  If abiding by a take-down notice is determined to be a binding agreement, essentially an admission of guilt, such a practice could create numerous problems.  The time it takes for an individual to consult with a lawyer may create an undue delay, creating more severe penalties in the event of a lawsuit.  Further, because of the immediate need to respond to a take-down letter, legal advice might be hurried and less than thorough.  It could lead to information being removed in order to prevent litigation, and because such would create a binding contract, free speech would be greatly infringed upon because, in essence, even a retraction and a correction would be a breach.

The decision could also increase the number of people who flat out reject take-down letters, since they might be less likely to remove the disputed information if they feel that common sense and justice should be on their side.  Being up against a wall like this, more people might feel obligated to fight the take-down request, causing headaches for those sending out the letters, and in a round about kind of way might actually decrease the number of such requests issued.  As of now, it makes sense for companies and people to send out frivolous take-down notices because the costs are low (most people take the stuff down).  If more people fight the letters, costs will escalate, and those that issue such letters might be forced to pick and choose their battles more carefully.  This would not be such a bad result.

Interpreting the situation as one creating a binding contract ignores the strong first amendment argument that would hold this kind of expression as protected.  To make an end run around the first amendment by characterizing this as an offer and acceptance is most troubling, and likely (I would hope) an argument that will be rejected on appeal.

Winnie the Pooh

The Supreme Court refused to hear the appeal of A.A. Milne’s granddaughter and whether she can regain control of the copyright over Winnie the Pooh. The NY Law Journal reported on the ruling of the 9th Circuit against Milne in December, but the story goes like this: A.A. Milne licensed the right to sell toys based on the Pooh stories to Stephen Slesinger in 1930, who in turn granted Disney an exclusive right to distribute Pooh toys in 1961. Passage of the 1976 Copyright Act granted authors the right to terminate previous licensing agreements, but rather than reject the deal with Slesinger, the Milne estate renewed the deal in 1983 and received a larger share of royalty payments than they had enjoyed in years prior. The 1998 amendments to the Copyright Act again gave authors the opportunity to cancel previous licensing agreements and by then Claire Milne, A.A.’s granddaughter and sole remaining heir, attempted to cancel the agreement with Slesinger.  The court essentially ruled that the 1983 renewal precluded Milne from canceling the original licensing deal and could not itself be canceled under the 1998 amendments.
The case is interesting in its discussion of termination rights under the Sonny Bono Act (see here and here), but also because David Nimmer, son of Melville Nimmer and author of the influential Nimmer on Copyright, represented Milne on the losing side. Further, Melville had represented the Slesinger side in the early stages of the case.
In the opinion, the court dismissed David Nimmer’s contention, supported by his treatise, that a moment of freedom must have existed between the simultaneous revocation and regranting of the rights over Pooh in the 1983 agreement, making it a mere amendment rather than a new contract, as “his assumption.” Ouch.
The 9th Circuit opinion, Milne v. Stephen Slesinger, 430 F.3d 1036 (9th Cir. 2005), can be read here.

All About Competition

Tom Evslin has perhaps the best post I’ve seen yet on network neutrality.  In the end, it’s all about whether there is enough competition between the telcos, because if there were, this whole network neutrality thing wouldn’t be an issue.

Legal Liability of Drop-Down Menus

Just found a great site called Internet Cases run by Evan Brown. He reports on a recent decision on personal liability in trademark disputes.

The case, Qwest Comm. Int'l, Inc. v. Sonny Corp., (Slip Op.) 2006 WL 1319451 (W.D. Wash., May 15, 2006), read here, stands for the proposition that a "Select a State" drop-down menu on a purchase webpage constitutes purposeful availment for establishing personal jurisdiction over an out-of-state defendant.

Internet Cases has a great rundown of the case. Basically, in order for Qwest to sue Sonny Corp., a Michigan business doing business online, in Washington state it has to show that Sonny directed activity towards the state of Washington in order to business there. It may seem odd to think that selling goods online could expose you to being sued in any state where your website is available, but generally, courts require something more than mere passive commercial activity (ie. just running a website). Sonny Corp. runs Questy.com, a site that sells "Qwesty's," stuffed question marks kids can use to signal preoccupied parents that they have a question that needs answering. Qwest's lawsuit claims, among other things, that Sonny's use of "Qwesty" diluted its trademark.

The court looked at this:

…and decided it was enough to say that Sonny Corp. directed its actions towards the state of Washington.

If the Qwesty site did not have a drop-down menu, if it required customers to enter their state into a field on their own, then it would probably have been off the hook. The decision, however, seems to require that website operators who use such drop-down menus either accept personal jurisdiction in all states or that they include in those menus only the states that they agree to be sued in. Both seem to be an excessive regulation over how websites are created.

Online Not an Amish Paradise

Weird Al admits that he makes more money from an album sale than he does from a download. Of course, this isn't very clear as to whether he's making less in total, or if he makes less per album sold online, or whatever. It sounds like he has recently adjusted his contract, so perhaps he got screwed. Perhaps he is just suffering the fate of an artist who only has one or two worthwhile songs per album, as well as the fact that such "joke" songs are prime suspects when it comes to BitTorrent or LimeWire. Whatever the reason, I'll flip out if I ever hear Weird Al's name thrown around as proof that music downloads hurt artists because the fact that he made so much money back in the day shows exactly how successful record companies were in abusing their customers into wasting money and why they're upset they can't do the same as well today.

 6.15.2006 1:27pm:  I guess I have to flip out now.  Turns out that when you run the numbers, artists do get screwed on digital downloads.  However, they're getting screwed by their labels which makes a huge difference.  Is anyone really working to protect these artists?

Hans Zimmer Sued for Ripping Off Gustav Holst

Hans Zimmer, the Oscar-nominated composer of the Gladiator score, is being sued by the Holst Foundation for copyright infringement, claiming that Zimmer’s work is a copy of Gustav Holst’s “Planet Suite.“

I have not heard either, so can make no judgment, but here is an interesting excerpt from a review of Zimmer’s score:

It has a pacing and sometimes a melody that is similar to Gustav Holst’s “Mars, Bringer of War”, but the imagery and power that it evokes more than makes up for the brief similarities that come through the music. It’s hard really even to describe, there are so many things going on at once in the music.

Another online review thinks that Zimmer’s “The Battle” is a rip off from “Pirates of the Carribean.”

The Amazon.com review of the Gladiator score:

Most modern Hollywood films have musical “temp tracks” laid in as they’re edited, usually classical standards or music from other soundtracks that helps shape the dramatic and emotional intentions of works in progress. Sometimes these temp tracks become the score (as in “2001″), but more often they serve as a template for the film’s eventual scorer. That said, we’ll boldly climb out on a limb and opine that director Ridley Scott was listening to a whole lot of Holst’s The Planets as he was cobbling together his modern gladiator epic.

What does Zimmer’s lawyer think of the claim?:

Just listening to the two works is enough to tell any listener this claim has no merit.

Really?

A Moral Country with Lax Moral Rights

Here is an interesting look from Plagiarism Today on how the US and Europe deal with the moral rights of creators and how the US lags behind.  Moral rights concern the personal and reputational value of a work to its creator as opposed to traditional copyright rights that protect a work’s monetary aspects.  This issue of moral rights seems especially relevant to the James Joyce lawsuit recently reported on.

A Portrait of the Artist as a Copyright Villain

I am not likely to die of bashfulness but neither am I prepared to be crucified to attest the perfection of my art. I dislike to hear of any stray heroics on the prowl for me.
~ James Joyce, explaining to his brother the balance of pride and practicality that governed the public side of his career as a writer.

Carol Schloss, a Stanford professor of English, has filed suit against the estate of James Joyce challenging its assertion that her scholarly work on Joyce would amount to copyright infringement:

Shloss accused Joyce's grandson, Stephen James Joyce, and estate trustee, Sean Sweeney, of destroying papers, improperly withholding access to copyrighted materials and intimidating academics to protect the Joyce family name.

Traditionally, copyright laws provide an exemption for academic or scholarly research when the use of copyright work is at issue – such is considered fair use – which is what is happening here:

The dispute centers on Shloss' research for "Lucia Joyce: To Dance in the Wake," her 2003 book that posited James Joyce's mentally ill daughter was the muse behind "Finnegans Wake," his last novel. Published in 1939 and filled with Joyce's trademark puns and impenetrable prose, "Finnegans Wake" traces human history through the life of an Irish everyman and his family.

Lucia Joyce, who first was committed to a mental hospital at age 25, died in 1982 at age 75. Shloss maintains in her book that Lucia Joyce's inspiration is woven throughout "Finnegans Wake," but says in her lawsuit that the Joyce family has labored to excise any public or academic mention of the woman.

Stephen James Joyce's, James' grandson who now controls the estate, has an article describing his abusive treatment of academics in this week's New Yorker. His stance is to be critical of acadamia, generally questioning its worth and its motives to expose his family's private affairs:

As I got older, I realized Joyce is not the difficult writer they say he is,” he said. “When they say, ‘We’ve done so much for him,’ I think, What about the thousands, not to say millions, of readers they scared off? All this crap they write—that’s good old American slang!”

The article also lays out the background to the lawsuit, with Lawrence Lessig provding a bit of commentary on the case. In fact, his name is at the top of the complaint, which can be read here, and is being brought by Stanford Law's Center for Internet and Society.

It's a fascinating case, with some legitimate claims brought forth by Joyce's Estate. Unfortunately, while one may share sympathy with the Joyce Estate, it's really a matter of whether the law backs up its claims, which as written probably don't to the extent that it wishes. Read the New Yorker article, as it explains the conflict like no other, until I can digest the complaint and cover it more thoroughly.  William Patry has some further analysis of the case, as well as further readings on this area.

Essentially though, if Schloss's use isn't fair use, then I'm not sure what is.

New Copyright Treaty in the Works

It appears that the US is behind a new treaty that would extend intellectual property rights to cover anything that is broadcast or webcast:

Now imagine creating an entirely new layer of rights over everything that is broadcast or webcast, on top of whatever copyrights already cover the work. You find a copy of a movie in the library and manage, at great expense, to work out that it is in the public domain, or to get the copyright holder’s permission. Perhaps the work is covered by a Creative Commons license, granting you permission to reproduce. Not so fast! Even after trudging through all the orphan works problems in copyright, you would have to prove that this copy had not been made from a broadcast or webcast. More clearance problems! More middle-men! More empirically ungrounded state-granted monopolies! Just what we wanted. There are even some serious free speech problems.

It’s an old trick.  Congress supports making international treaties more draconian so it can defend its domestic actions by saying “We’re merely trying to step in line with the rest of the world.”  By the way, William Patry made this point as to this treaty a while ago.  It certainly is convenient that Congress is so concerned with world opinion when that opinion is driven by domestic corporate interests.  And where are the complaints of foreign or international law shaping our Constitution?

Thanks Slashdot.

Hollywood’s Sacred Cow Growing Thin

DVD sales are slowing, causing Hollywood to worry about how to maintain their current profit levels.  Statistics show that DVDs represent half of the revenue Hollywood generates from its movies and sales are expected to only grow 2% this year after double-digit growth only 2 years ago.  By 2010, DVD sales are expected to drop 20% from their current levels.

This shouldn’t be much of a surprise.  The DVD was originally introduced in America in 1997 with the movie Twister being the first DVD release.  It should be expected that over the course of 10 years Americans would be able to build up their DVD collections to the point where they are only concerned with keeping an eye out for newly released movies to buy.  And considering that most movies these days are dogs or are remakes of movies that most already own (and are terrible to boot), such should only further slow DVD sales.

Also, customers seem to be catching on to the favorite studio tactic of repackaging old movies in new ways, and the studios seem to realize this:

“We were shameless,” said Steve Beeks, the president of Lions Gate Entertainment, which has issued several new versions of the Terminator movies. “We would release special editions as long as people would buy them.”

Honestly, except for fanatics, is there really any reason to buy 4 or 5 different versions of the Star Wars Trilogy?

Hollywood’s hope lies in the the future of HD-DVDs (or Blu-ray, if it ever comes out).  With a new format and shiny new players that may or may not work with all the new HD-TVs on the market, Hollywood seems poised to push consumers towards restocking their collections with the new format.  Whether consumers, who may have finally gotten that last DVD to finish their collection, start buying up the new format is questionable.  As the saying goes, you can lead a man to a cow, but you can’t make him drink the milk.

I’ll Take a Fendi and a 10-Pack of Socks

Fendi, a unit of Louis Vuitton, is suing Wal-Mart, claiming that it carries knockoff handbags, wallets and key chains and is passing them off as genuine items.  No reports, however, about how many of the counterfeit goods, available for as much as 45% off, have been sold.  It’s good to see that the venerable Wal-Mart is not above the Chinatown counterfeit operation, but it remains to be seen whether Fendi will seek to have the guilty Wal-Mart stores evicted from their buildings, a favorite trick of LVMH’s legal team.

Vikings Were the Original Pirates

This Norwegian website has a rundown of the trouble Apple is having in that country over iTunes and DRM.  A complaint was filed in January by the Consumer Council with the Consumer Ombudsman (I love that title) claiming that iTunes is unfair to Norwegian consumers because, among other things, it can change consumer’s rights to their purchased music at any time after the purchase, consumers are unable to crack the FairPlay DRM system to allow iTunes music on non-Apple players, Norwegians must subject themselves to English law regarding any dispute over iTunes, nor is iTunes liable if it harms a consumer’s computer (a la the Sony rootkit fiasco).  The official complaint can be read here.  Then last week the Consumer Ombudsman agreed with the complaint and has contacted Apple over the allegations:

Among other things, the decision clearly states that the terms of agreement demanded by iTunes are unreasonable with respect to Section 9a of the Norwegian Marketing Control Act. Moreover, it is unreasonable that the agreement the consumer must give consent to is regulated by English law. That iTunes disclaims all liability for possible damage the software may cause and that it may alter the rights to the music, are also considered unreasonable. iTunes must now alter their terms and conditions to comply with Norwegian law by the 21.of June.

Thanks to (c)opyBites.

People So Excited Over Shiloh, It’s Suing

Gawker appears to be in some hot water with Time's lawyers over last weeks pictures of Brangelina's Shiloh. Last Tuesday Gawker reported that People magazine won the auction for the North American rights to the baby pictures by ponying up a whopping $4.1 million. In its coverage, Gawker included a thumbnail of the Hello magazine cover, a magazine that bought the rights for the pictures overseas. It wasn't long after the posting that Time's lawyers contacted Gawker and threatened legal action over copyright infringement. Reading the play-by-play provided by the emails is also quite interesting. EFF is all over this and provides a fair use analysis. Gawker has since replaced the Hello thumbnail with one of the People cover.

Though one would hope that this is a clear case of fair use, the more interesting question to me is the international flavor of the controversy. Does it make sense anymore for exclusive geographic rights agreements, like this one, if the magazines are going to post their pictures online as well as in print? And assuming this is fair use, is Gawker's behavior a real problem or is the problem that Time paid lots of money for a right that wasn't as good a deal as they thought? I'm not sure that Time actually thought about the fact that Hello's cover would be available online before their cover was, essentially robbing them of their exclusive North American rights. Such could explain what appears to be a rushed legal effort to stamp out Gawker's coverage, or perhaps it strikes me as rushed merely because their trying to defend a suspect position.

Hollywood v. Hackers

In the left corner:

John Perry Barlow used to be the lyricist in the US supergroup ‘The Grateful Dead.’ He went on to co-found the Electronic Frontier Foundation, the pressure group that’s placed itself front and centre in the fight to keep the tanks of government and corporation off the lawns of cyberspace.

In the right corner:

Congressman Dan Glickman became US Secretary for Agriculture under Bill Clinton. Nowadays he’s the President and CEO of the Motion Picture Association of America, the body that wields the collective political and legal muscle of the Hollywood studios.

And the decision goes to Barlow, for when he says:

These are aging industries run by aging men, and they’re up against 17-year-olds who have turned themselves into electronic Hezbollah because they resent the content industry for its proprietary practices. And I don’t have a question about who’s going to win that one eventually.
…
But you know the problem is – the bad news is that you’re up against a dedicated foe that is younger and smarter that you are and will be alive when you’re dead. You’re 55 years old and these kids are 17 and they’re just smarter than you. So you’re gonna lose that one.

To Telecommute or Not To Telecommute

Techdirt posts on extremes in the telecommuting managing fad. For an interesting look into the costs and benefits of working from home, I suggest The Social Life of Information by John Seely Brown and Paul Duguid. It's a great book that's well written and discusses all of the ways that people absorb and process information without ever thinking about it. The central argument of the book is that even with all the technology that allows us to be somewhere else, there is much we take for granted about face-to-face interaction that needs to be recognized in an online world. One learning situation the book describes is sitting in the desk next to a more experienced worker and all the knowledge you gain merely by overhearing the difficulties and solutions they encounter. I may not be much of a book reviewer, so don't take my word for it, this is what Slashdot had to say:

This book is fantastic. I would like to buy a few dozen copies and pass them out in airports while I wear saffron robes. Or leave them in hotel rooms Gideon style.

Major Murphy and the DMCA

Whether it can be attributed to Murphy's Law, or perhaps I think Hanlon's Razor, the IEEE Spectrum reports on a whole host of useful technologies and projects which were abandoned because of the legal restrictions imposed by the DMCA. This is just the latest in a series of reports that condemn the DMCA, whether because of the chilling effects of DMCA take-down notices, the problems it creates for search engines, or simply because its just a bad law from front to back. DMCA's supporters no doubt praise its effectiveness, but they are also in the business of propaganda and protecting profits at all costs. Hopefully members of Congress will take heed of these reports before ramming another insane copyright bill down our throats. Though it's difficult to compete with the lobbying budgets of the big content companies, they and Congress should at least offer the public a reach around in the form of some sort of concession towards protecting consumers through ensuring interoperability of formats and devices, for example.

Net2Phone Sues Skype Over Patent

Net2Phone has filed suit against Skype for patent infringement. The patent, number 6,108,704, purports to cover a point-to-point internet protocol that allows one computer to tell whether another is online and then allows them to connect for the transmission of data. Sounds pretty vague, eh? Only a few weeks ago the Supreme Court sided with eBay, which bought Skype in 2005, over MercExchange's infamous "Buy It Now" patent, ruling that injunctions should not be issued automatically whenever a patent is found to be valid and infringed upon. It follows that the court hearing this case will then consider whether Net2Phone has suffered "irreparable damage" and whether money damages are an adequate remedy before issuing the injunction that Net2Phone seeks against Skype to halt its business (or more likely to exact a hefty licensing fee). However, Net2Phone may have a leg up on MercExchange because it appears to that it may actually be using its patent, elevating it above the dubious label of patent troll and making it slightly more likely an injunction could be handed down.

You can read Net2Phone's complaint against Skype here.