It appears that the big record companies are at it again! Universal Music and Warner Music Group are urging advertisers to boycott a Chinese search engine (Baidu.com), due to claims Baidu encourages copyright infringement (read the full article here). They estimate that they are only receiving 20% of the revenue they would expect from China's music industry, and that 99% of their music is believed to be pirated.
Recently, it appears that attention has shifted from peer to peer (p2p) file sharing software, to either individuals or in this case, search engines. In Australia, the case of A&N Records v Napster, MGM v Grokster, and Universal Music v Sharman License (Kazaar Case), it was found that although p2p softare has legitimate uses, providing a means for illegally copyrighted files went well beyond the the US 'fair use'. However, it appears that p2p are now taking heed of such cases, and implementing steps to prevent themselves from suffering the same fate. In the Napster case, the decision appeared to turn on the presence of a central index, which prevented them from denying any knowledge of copyright infringement. Many p2p file sharing programs now divert responsibility by giving warnings (see Universal Music v Sharman License), and ensuring that there is no central index. After the RIAA's controversial law suits against individuals, it appears that the record companies are beginning to grasp at straws by targeting yet another source.
Following the massive success of Grand Theft Auto IV with profits in excess of $500 million, perhaps it is time for the record companies to review their business plan. Consumers appear to be willing to pay for some forms of entertainment, so perhaps it has something to do with the 'quality' of the product they are marketing. Consumers are purchasing more items online, and with much music sold online riddled with Data Rights Management (DRM) protection, it is no wonder consumers are resorting to piracy. If someone had to choose between music which they have to pay for, but the music cannot be moved once it is downloaded (these includes burning the music onto a disk for personal use, or loading the music onto your MP3 player), or music which is free without any restrictions, it is not difficult to see why consumers choose to download the pirated version. I do not think it is fair that consumers receive music for free, however I do firmly believe that rather than resisting the new technology available to consumers, they should be embracing it by letting of of business plans which are long obsolete.
Wednesday, June 4, 2008
Wednesday, April 23, 2008
Monday, April 21, 2008
Marketing Information Masters v. The Trustees of the California State University: Court Finds Part of Copyright Act Unconstitutional
In this American decision, it was found that a section of the Copyright Remedy Clarification Act was an invalid exercise of power under the Constitution. This section states that "[a]ny State, instrumentality of a state... or employee of a State or instrumentality of a State... shall not be immune, under the Eleventh Amendment" to a suit for copyright infringement. 17 U.S.C. section 511(a).
A win I suppose for those who believe that copyright is draconian and should be replaced with a share and share alike mantra?
Here is an article which outlines the legal effect of such a decision, and here is the link to the Slashdot article.
A win I suppose for those who believe that copyright is draconian and should be replaced with a share and share alike mantra?
Here is an article which outlines the legal effect of such a decision, and here is the link to the Slashdot article.
Copyright and Intellectual Property: A look at the Facebook law suit
Many students, and others who spend their days looking for ways to procrastinate, probably have a face book account. Many may recall the spread of the news that face book is going to be shut down due to law suits stemming from Mark Zuckerberg's fellow students, Tyler Winklevoss, Cameron Winklevoss and Divya Narendra, claiming that Zuckerberg had taken code he had written for ConnectU to launch his rival site.
The background to the lawsuit is this: Mark Zuckerberg, as a student at Harvard University, joined with three classmates who were working on a new idea called ConnectU, a set of interlinked social networks for students at a single college. Zuckerberg did some work for them, but then launched his own website — what's now known as Facebook. His three former classmates than launched an action against Zuckerberg on the 2 September 2004 for the alleged theft of their idea - and argued breach of fiduciary duty, breach of contract, and fraud amongst other things. While the case appears to be settling out of court (see the New York Times article here), an obvious legal issue arises from this case: can code be considered intellectual property in the same way that other literary works are? Can it be protected by a copyright?
Now the claim that code can be protected intellectual property is not new. In the case of Computer Edge v Apple, it was held that code was a literary work and was therefore was not able to be protected by copyright under Copyright Amendment Act 1984. At the time, it was unlikely that the legislature could have envisaged computer programs when they enacted this act, however the Section 10 of the Copyright Act now states that a computer program is subject to copyright protection. It appears that a computer program (and presumably the code contained within it) are protected by copyright.
The question also arises as to what a substantial reproduction would entail: could stealing a single line of code constitute a breach of copyright? The court in Autodesk v Dyason there was a computer program of 20 000 lines long. A string of data which was 16 bytes long, which was said to be essential to the execution of the program, was taken by a competitor to create a similar program. The question for the court was whether this was substantial. They applied a but for test: but for this part of the program, would the program still exist? However, this decision was questioned in Powerflex services v Data access, where it was held that the test should look at the quality of the part; if the but for test was used this would result in rediculous outcomes as even the removal of a semi colon could be disastrous for a computer program (with the outcome that even a semi colon could be protected by copyright!).
It is arguable as to whether Zuckerberg's classmates could have gotten up on a copyright argument, as it should be recognised that these decisions were heard in Australia. It appears that they did not consider the possibility of breach of copyright (however, another line of thinking is that if they could show breach of fiduciary duty, they could be entitled to such equitable remedies as account of profits). It is interesting to note that a similar situation arose in the Apple vs Microsoft war to release an operating system, Steve Jobs showed Bill Gates his idea for a graphics based OS, which was ripped off in the release of Microsoft's own Windows (well from the portrayal in Pirates of Silicon Valley, which while written without interviews with either Jobs or Gates, was well researched by writer Martyn Burke).
However, if anything, Facebook and other such cases have shown that perhaps that copyright of code is not productive for entrepreneurial pursuits. Sharing and building on others code could be more beneficial, as shown in the Open Source community. Furthermore, what is boils down to is that Zuckerberg had a better business model that the ConnectU founders: it is questionable as to whether their site would have gone to the same heights as FaceBook. The same goes for Microsoft and Apple: it is arguable that Bill Gates had the better business model to market the graphics based operating system.
The background to the lawsuit is this: Mark Zuckerberg, as a student at Harvard University, joined with three classmates who were working on a new idea called ConnectU, a set of interlinked social networks for students at a single college. Zuckerberg did some work for them, but then launched his own website — what's now known as Facebook. His three former classmates than launched an action against Zuckerberg on the 2 September 2004 for the alleged theft of their idea - and argued breach of fiduciary duty, breach of contract, and fraud amongst other things. While the case appears to be settling out of court (see the New York Times article here), an obvious legal issue arises from this case: can code be considered intellectual property in the same way that other literary works are? Can it be protected by a copyright?
Now the claim that code can be protected intellectual property is not new. In the case of Computer Edge v Apple, it was held that code was a literary work and was therefore was not able to be protected by copyright under Copyright Amendment Act 1984. At the time, it was unlikely that the legislature could have envisaged computer programs when they enacted this act, however the Section 10 of the Copyright Act now states that a computer program is subject to copyright protection. It appears that a computer program (and presumably the code contained within it) are protected by copyright.
The question also arises as to what a substantial reproduction would entail: could stealing a single line of code constitute a breach of copyright? The court in Autodesk v Dyason there was a computer program of 20 000 lines long. A string of data which was 16 bytes long, which was said to be essential to the execution of the program, was taken by a competitor to create a similar program. The question for the court was whether this was substantial. They applied a but for test: but for this part of the program, would the program still exist? However, this decision was questioned in Powerflex services v Data access, where it was held that the test should look at the quality of the part; if the but for test was used this would result in rediculous outcomes as even the removal of a semi colon could be disastrous for a computer program (with the outcome that even a semi colon could be protected by copyright!).
It is arguable as to whether Zuckerberg's classmates could have gotten up on a copyright argument, as it should be recognised that these decisions were heard in Australia. It appears that they did not consider the possibility of breach of copyright (however, another line of thinking is that if they could show breach of fiduciary duty, they could be entitled to such equitable remedies as account of profits). It is interesting to note that a similar situation arose in the Apple vs Microsoft war to release an operating system, Steve Jobs showed Bill Gates his idea for a graphics based OS, which was ripped off in the release of Microsoft's own Windows (well from the portrayal in Pirates of Silicon Valley, which while written without interviews with either Jobs or Gates, was well researched by writer Martyn Burke).
However, if anything, Facebook and other such cases have shown that perhaps that copyright of code is not productive for entrepreneurial pursuits. Sharing and building on others code could be more beneficial, as shown in the Open Source community. Furthermore, what is boils down to is that Zuckerberg had a better business model that the ConnectU founders: it is questionable as to whether their site would have gone to the same heights as FaceBook. The same goes for Microsoft and Apple: it is arguable that Bill Gates had the better business model to market the graphics based operating system.
Saturday, April 5, 2008
Ebay - Peter Smyth v Vincent Thomas
I have purchased many things on ebay, and I am sure that a substantial amount of the population have done the same. But what happens when things go wrong, is there a binding contract on which to rely on? Is Ebay liable if an item doesn't turn up?
In the 2007 case of Peter Smythe v Vincent Thomas, the Defendant Thomas listed a Wirrawau Australian Warbird aircraft for sale, with a starting bid of $150,000.00, even though Thomas thought the aircraft was probably worth around $200K to $250K. With 20 seconds remaining, Smythe made a bid on the aircraft, in accordance with Ebay rules, and 'won' the aircraft (which is a peculiar way of buying something in my opinion, as you still have to pay for it at the end: I mean you don't go into Woolworths to buy a bottle of milk, and at the counter they tell you have won a bottle of milk... but you still have to pay for it....). Both parties were registered users of ebay, and both were aware of how ebay worked. Smythe then claimed that as a result, a contract for the sale of goods had been entered into, and there was now a binding contract between himself and Thomas. Thomas claimed that the ebay entry was simply an invitation to treat or in other words a request for expressions of interest. Thomas said that it was rediculous that a contract for the sale of a plane could occur, as Smythe had never inspected the plane, and he said that his intention was to advertise the plane, then discuss the terms later on. He also had another offer for the plane for $220,000.00, so this might have also been a factor as to why he was so keen to ensure this contract was not binding. Thomas also claimed that he did not know that he would be committed to sell the plane.
The New South Wales Supreme Court found it surprising that Thomas was not aware that he would be committed to sell, as he had bought vintage car parts previously, and knew how ebay worked. In the view of Rein AJ, by listing the plane for sale on ebay, with a disclosed reserve of $150,000.00, he offered to sell the plane to a bidder who bid before the end of the auction, with a bid for $150,000.00, and was the highest bidder at the end of the auction. However, it should be noted that ebay is actually not an auction site, it only provides an auction like format for users to sell their items. Therefore, the rules of a traditional auction did not apply. It was held that there was a binding contract formed between the parties, and it should therefore be specifically enforced. All the essential terms of the Contract were listed on ebay, such as the price, and that Thomas had never stated that the sale was subject to an inspection or further discussion of the terms of the sale.
One has to wonder though, what would happen if Smythe then purchases the plane, but finds it is poor repair? Would he have a further action? Could Ebay be liable? Further could Ebay be liable should an item not turn up, and the Seller had absconded with the purchase money? In Eva Gora v Ebay, a person in Victoria bought a computer from someone in the Middle East. It never turn up, and the person who sold it disappeared. They contacted the police, who refused to investigate. They then decided to take ebay to court. Ebay argued that they were not a party to the contract, only a forum for users, but that she could claim $270 insurance. However, Ebay said on its website ‘safest place to do your shopping’. Under the fair trading legislation, the question was were they inducing people to rely on their message that ebay was safe to use? It was held that they were bound to this statement. The court found that ebay had conducted itself that it was safe to use, and was for all cases automatically insured. They failed to disclose that their insurance was small. They were therefore held liable under TPA.
In the 2007 case of Peter Smythe v Vincent Thomas, the Defendant Thomas listed a Wirrawau Australian Warbird aircraft for sale, with a starting bid of $150,000.00, even though Thomas thought the aircraft was probably worth around $200K to $250K. With 20 seconds remaining, Smythe made a bid on the aircraft, in accordance with Ebay rules, and 'won' the aircraft (which is a peculiar way of buying something in my opinion, as you still have to pay for it at the end: I mean you don't go into Woolworths to buy a bottle of milk, and at the counter they tell you have won a bottle of milk... but you still have to pay for it....). Both parties were registered users of ebay, and both were aware of how ebay worked. Smythe then claimed that as a result, a contract for the sale of goods had been entered into, and there was now a binding contract between himself and Thomas. Thomas claimed that the ebay entry was simply an invitation to treat or in other words a request for expressions of interest. Thomas said that it was rediculous that a contract for the sale of a plane could occur, as Smythe had never inspected the plane, and he said that his intention was to advertise the plane, then discuss the terms later on. He also had another offer for the plane for $220,000.00, so this might have also been a factor as to why he was so keen to ensure this contract was not binding. Thomas also claimed that he did not know that he would be committed to sell the plane.
The New South Wales Supreme Court found it surprising that Thomas was not aware that he would be committed to sell, as he had bought vintage car parts previously, and knew how ebay worked. In the view of Rein AJ, by listing the plane for sale on ebay, with a disclosed reserve of $150,000.00, he offered to sell the plane to a bidder who bid before the end of the auction, with a bid for $150,000.00, and was the highest bidder at the end of the auction. However, it should be noted that ebay is actually not an auction site, it only provides an auction like format for users to sell their items. Therefore, the rules of a traditional auction did not apply. It was held that there was a binding contract formed between the parties, and it should therefore be specifically enforced. All the essential terms of the Contract were listed on ebay, such as the price, and that Thomas had never stated that the sale was subject to an inspection or further discussion of the terms of the sale.
One has to wonder though, what would happen if Smythe then purchases the plane, but finds it is poor repair? Would he have a further action? Could Ebay be liable? Further could Ebay be liable should an item not turn up, and the Seller had absconded with the purchase money? In Eva Gora v Ebay, a person in Victoria bought a computer from someone in the Middle East. It never turn up, and the person who sold it disappeared. They contacted the police, who refused to investigate. They then decided to take ebay to court. Ebay argued that they were not a party to the contract, only a forum for users, but that she could claim $270 insurance. However, Ebay said on its website ‘safest place to do your shopping’. Under the fair trading legislation, the question was were they inducing people to rely on their message that ebay was safe to use? It was held that they were bound to this statement. The court found that ebay had conducted itself that it was safe to use, and was for all cases automatically insured. They failed to disclose that their insurance was small. They were therefore held liable under TPA.
Electronic Contracting - the legal effect of EULA's
Electronic contracting - almost everyone who has access to the computer has probably at some point entered into an online contract. The most common is the End User Licensing Agreement (EULA), which is often seen when installing a piece of software. But by scrolling down to the bottom and clicking "I agree", even when you don't have the slightest idea as to what you agreed to, are you legally bound to the terms of the EULA? In Hotmail Corporation v Van Money Pie Inc and Steven J Caspi v Microsoft, the US courts have said yes, as long as there is unambiguous assent to the terms and conditions (which included scrolling through the terms and conditions and clicking an "I agree" button to continue with the installation, however the browsewrap cases where the user has to click up the conditions seperately is a bit more ambiguous as to whether it is binding or not). Furthermore, in the case of L'Estrange, it was held that someone who signs a contract without reading it, is still bound by the contract as they are presumed to have read it (of course, this is subject to defenses such as non est factum, duress, unconscionability etc). So it does appear that they are binding (unless a software developer is in the business of sending out representatives to hold you at gun point unless you sign, but considering the general public don't even bother to read it and click "I agree" of their own free will, I think they figured it was probably a poor investment).
So keeping this in mind, it appears that many companies have failed to read their own EULA's! Recently, Adobe have released Photoshop Express, which is a free web based photo editing, organising and sharing service. In its EULA, it states that Adobe is free to do what it likes with any photos uploaded for use on this service eg. using a photo for its own advertising, without royalties or credit for the image. It is possible that they copy and pasted this EULA, and simply forgot to change it to suit their own needs. According to Adobe:
We've heard your concerns about the terms of service for Photoshop Express beta. We reviewed the terms in context of your comments - and we agree that it currently implies things we would never do with the content. Therefore, our legal team is making it a priority to post revised terms that are more appropriate for Photoshop Express users. We will alert you once we have posted new terms. Thank you for your feedback on Photoshop Express beta and we appreciate your input. - quoted from Ars Technica article.
According to the same article, Apple also doesn't appear to have read their own EULA for Safari, in stating that it is only to be run on Apple machines, when it has been released for other Operating Systems for non-Apple machines for almost a year now!
So keeping this in mind, it appears that many companies have failed to read their own EULA's! Recently, Adobe have released Photoshop Express, which is a free web based photo editing, organising and sharing service. In its EULA, it states that Adobe is free to do what it likes with any photos uploaded for use on this service eg. using a photo for its own advertising, without royalties or credit for the image. It is possible that they copy and pasted this EULA, and simply forgot to change it to suit their own needs. According to Adobe:
We've heard your concerns about the terms of service for Photoshop Express beta. We reviewed the terms in context of your comments - and we agree that it currently implies things we would never do with the content. Therefore, our legal team is making it a priority to post revised terms that are more appropriate for Photoshop Express users. We will alert you once we have posted new terms. Thank you for your feedback on Photoshop Express beta and we appreciate your input. - quoted from Ars Technica article.
According to the same article, Apple also doesn't appear to have read their own EULA for Safari, in stating that it is only to be run on Apple machines, when it has been released for other Operating Systems for non-Apple machines for almost a year now!
Friday, March 21, 2008
Stealing 'wireless internet' bill: Oh Noes Someone is Stealing my Gigabytes!
Don't you love how those with the least expertise and knowledge of techonology are the ones making the laws which govern the use of it!
In yet another misguided view of technology crimes and how they occur, Delegate LeRy E. Myers Jr. presented a bill to the Maryland House of Delegates that would criminalise purposely surfing the Internet on someone else's wireless connection. In a Slashdot.org article:
"A bill presented by Delegate LeRoy E. Myers Jr. to the Maryland House of Delegates would criminalize purposely surfing the Internet on someone else's wireless connection. The bill would make intentional unauthorized access to another person's computer, network, database, or software a misdemeanor with a penalty up to three years imprisonment and a fine of up to $1,000. The Maryland public defender's office has submitted written testimony opposing the specific ban and penalty suggested in Myers' bill. Noting that wireless connections are becoming common in neighborhoods, the written testimony says: 'A more effective way to prevent unauthorized access would be for owners to secure their wireless networks with assistance where necessary from Internet service providers or vendors.'"
The full Herald Mail article can be accessed here.
Not only would this law, if passed, would be almost impossible to police, it would be completely over the top and totally miss the point of what it is supposed to be deterring! I think the point of the bill is to stop users from entering onto a wireless connection without the permission of the owner of the wireless router, but honestly there is a MUCH simpler solution then wacking a $1,000.00 fine and up to three years imprisonment - how about educating those who buy wireless routers as to how they can secure their connection to ensure no one has access to their connection in the first place?
Furthermore, shouldn't the harm be comparable to the punishment? I think in most instances of using someone else's wirless connection, there is probably no intent to do harm to them. In most cases, it is probably accidental (as some users may be unaware that they are using a 'stolen' internet connection, or their computer automatically searches for the first available internet connection). Of course there are the 1% who do actually intend to do harm, but aren't there laws already in place for computer hacking (check out s408E Criminal Code 1899 (QLD)). And what about the users who still think that internet explorer is "The Internet", and have no grasp of how or why it works, but they know that clicking on a big blue "e" allows them to access this wondrous thing called the world wide web? I would envision that most such users would just use the first connection which pops up. Would such a bill allow the prosecution of such users (just take a look at the prosecutions against computer illiterate users (click here and here for ridiculous RIAA suits). It is possible that a similar chain of events may emerge where such a law would be used inappropriately against the technologically challenged.
I also find it incredibly hypocritical to apply different standards to circumstances which occur in regards to technology and circumstances in the 'real' world. The Australian Road Rules 1999 states the following:
213 Making a motor vehicle secure
(1) This rule applies to the driver of a motor vehicle who stops and leaves the vehicle on a road (except to pay a fee for parking the vehicle) so the driver is over 3 metres from the closest part of the vehicle if there is nobody 16 years old, or older, in the
vehicle.
Note Motor vehicle is defined in the dictionary.
(2) Before leaving the motor vehicle, the driver must comply with this rule, except so far as the driver is exempt from this rule under another law of this jurisdiction.
Offence provision.
(3) The driver must:
(a) switch off the engine; and
(b) apply the parking brake effectively or, if weather conditions (for example, snow) would prevent the effective operation of the parking brake, effectively restrain the motor vehicle’s movement in another way.
(4) If there is nobody in the motor vehicle, the driver must:
(a) remove the ignition key; and
(b) if the doors of the vehicle can be locked — lock the doors.
Therefore, if it is an offense to leave your car unlocked, why should it not be an offense to leave something like a wireless router unlocked? In this case, there is the opportunity to protect your own interests, so why should there be any recourse to the courts where you simply failed to take the necessary precautions? Of course, in the case of malicious intent to cause damage to your computer, then yes the full extent of the law should apply. But in the case of using someone else's wireless internet connection, you are not causing any major harm and the owner of the router should take the responsibility of protecting it if they do not wish for someone to access it.
In yet another misguided view of technology crimes and how they occur, Delegate LeRy E. Myers Jr. presented a bill to the Maryland House of Delegates that would criminalise purposely surfing the Internet on someone else's wireless connection. In a Slashdot.org article:
"A bill presented by Delegate LeRoy E. Myers Jr. to the Maryland House of Delegates would criminalize purposely surfing the Internet on someone else's wireless connection. The bill would make intentional unauthorized access to another person's computer, network, database, or software a misdemeanor with a penalty up to three years imprisonment and a fine of up to $1,000. The Maryland public defender's office has submitted written testimony opposing the specific ban and penalty suggested in Myers' bill. Noting that wireless connections are becoming common in neighborhoods, the written testimony says: 'A more effective way to prevent unauthorized access would be for owners to secure their wireless networks with assistance where necessary from Internet service providers or vendors.'"
The full Herald Mail article can be accessed here.
Not only would this law, if passed, would be almost impossible to police, it would be completely over the top and totally miss the point of what it is supposed to be deterring! I think the point of the bill is to stop users from entering onto a wireless connection without the permission of the owner of the wireless router, but honestly there is a MUCH simpler solution then wacking a $1,000.00 fine and up to three years imprisonment - how about educating those who buy wireless routers as to how they can secure their connection to ensure no one has access to their connection in the first place?
Furthermore, shouldn't the harm be comparable to the punishment? I think in most instances of using someone else's wirless connection, there is probably no intent to do harm to them. In most cases, it is probably accidental (as some users may be unaware that they are using a 'stolen' internet connection, or their computer automatically searches for the first available internet connection). Of course there are the 1% who do actually intend to do harm, but aren't there laws already in place for computer hacking (check out s408E Criminal Code 1899 (QLD)). And what about the users who still think that internet explorer is "The Internet", and have no grasp of how or why it works, but they know that clicking on a big blue "e" allows them to access this wondrous thing called the world wide web? I would envision that most such users would just use the first connection which pops up. Would such a bill allow the prosecution of such users (just take a look at the prosecutions against computer illiterate users (click here and here for ridiculous RIAA suits). It is possible that a similar chain of events may emerge where such a law would be used inappropriately against the technologically challenged.
I also find it incredibly hypocritical to apply different standards to circumstances which occur in regards to technology and circumstances in the 'real' world. The Australian Road Rules 1999 states the following:
213 Making a motor vehicle secure
(1) This rule applies to the driver of a motor vehicle who stops and leaves the vehicle on a road (except to pay a fee for parking the vehicle) so the driver is over 3 metres from the closest part of the vehicle if there is nobody 16 years old, or older, in the
vehicle.
Note Motor vehicle is defined in the dictionary.
(2) Before leaving the motor vehicle, the driver must comply with this rule, except so far as the driver is exempt from this rule under another law of this jurisdiction.
Offence provision.
(3) The driver must:
(a) switch off the engine; and
(b) apply the parking brake effectively or, if weather conditions (for example, snow) would prevent the effective operation of the parking brake, effectively restrain the motor vehicle’s movement in another way.
(4) If there is nobody in the motor vehicle, the driver must:
(a) remove the ignition key; and
(b) if the doors of the vehicle can be locked — lock the doors.
Therefore, if it is an offense to leave your car unlocked, why should it not be an offense to leave something like a wireless router unlocked? In this case, there is the opportunity to protect your own interests, so why should there be any recourse to the courts where you simply failed to take the necessary precautions? Of course, in the case of malicious intent to cause damage to your computer, then yes the full extent of the law should apply. But in the case of using someone else's wireless internet connection, you are not causing any major harm and the owner of the router should take the responsibility of protecting it if they do not wish for someone to access it.
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