The Law Developer

     My favorite Florida attorney, Elliot Miller, will be facing a real attorney as opposing counsel. If you recall, Elliot Miller sold a Brevard County man a defective clock. When the man left negative feedback on Miller’s eBay account, Miller sued him. The man ended up spending $7000 in attorney’s fees and when he ran out of money, continued the case pro se. Meanwhile, Miller had his wife represent him. Odd, he seems like the type of person who would have himself as a client.

     But this article brings good news. Tony Hernandez, a local attorney, has agreed to fight Miller pro bono. “I didn’t like the fact that he was being bullyragged into this lawsuit,” Hernandez said. Don’t mess with an attorney who says ‘bullyragged’ in an interview. He is not to be bullyragged. The title of the article says that Hernandez is exploring a countersuit (though the actually article doesn’t mention it) so Miller might be getting bullyragged himself pretty soon. Bullyragged.

     I wish Mr. Hernandez good luck and I hope that he bullyrags the hell out of Elliot Miller. More importantly, I want to thank Mr. Hernandez for introducing me to the word ‘bullyrag’. I am pretty sure it is my new favorite word.

Stephen Burch

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     In the past couple of weeks, three important decisions regarding copyright infringement have been made by various courts. LimeWire, ISOHunt, and RapidShare all involve companies that allow users to share and download files. While there are technical differences as to how each of them work, from a high level, these applications all perform pretty much the same functions. Yet one of these companies, RapidShare, made out okay while the other two will most likely be shut down. So what’s the difference?

     Let’s start with some history. The Grokster case sets the stage for all three of these cases. Grokster provided software that allowed users to share files via a peer-to-peer file sharing network. Normally a company whose products could be used for copyright infringement but have a valid, non-infringing use would not be liable for the infringement of its users. However, in this case the court found that Grokster induced its users into infringing and was thus held liable. This wasn’t too far of a reach for the court, considering that Grokster marketed its application as a way to download copyright infringing content. Ever since, companies have been very careful as to how they market their applications.

     This brings us to LimeWire and ISOHunt. In the former case, the court held (among other things) that LimeWire’s purchase of search terms induced users into downloading copyright infringing material. LimeWire purchased search keywords for the terms “napster”, “kazaa”, and “morpheus”, all popular applications for downloading copyrighted material. The court found that by associating itself with these keywords, LimeWire induced its users into downloading copyrighted material. ISOHunt is in the same boat. The court found that “evidence of Defendants’ intent to induce infringement is overwhelming and beyond reasonable dispute.” These two cases show that courts don’t take kindly to file sharing sites, but then how did RapidShare get so lucky?

     First of all, the RapidShare case is still in the preliminary injunction phase, so the case is far from over. But RapidShare does something different than the others. When RapidShare finds infringing material , instead of just deleting the offending material, it attempts to provide a link that allows users to purchase the material legally. At a time when courts are slapping down file sharing sites, this little action seems to have made a big difference. It shows that RapidShare actively seeks out and removes infringing content.

     RapidShare’s future is still anything but certain, but at least it is starting off on the right foot. Unfortunately for LimeWire and ISOHunt, their fates are pretty much sealed. But maybe the big difference in outcomes just depends on the plaintiff. In RapidShare, the plaintiff is an adult entertainment company as opposed to mainstream movie companies as in the other two cases. Perhaps the courts are alright with being prevented from getting the latest ‘Sex and the City’ movie, but take away their favorite means of downloading porn and well…

Stephen Burch

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     A while back some law professors from Berkley came up with the idea of the Defensive Patent License (DPL). I won’t go into all of the details here, but the general idea is that companies pool all of their patents together and if one member of the pool is sued for patent infringement, that member can use any of the patents in the pool to file a countersuit. The main thrust of this is to allow open-source developers to acquire a patent “war-chest” to protect themselves just like the bigger companies. While this idea sounds great in theory, in reality it won’t work. Besides that fact that the only people that are going to join are going to be people that don’t have patents, or only have a few, this does nothing against patent trolls, people who don’t create a product, just hold the patent and sue companies that infringe.

     So when Slashdot pointed me to this article about how to make the DPL viable, my intrest was aroused. His idea involves using the patents in the pool offensively, suing anyone who infringes and is not a part of the pool, creating what he calls a “Fair Troll”. He believes that this tactic will force companies to join the pool or risk being sued. I should have known that Mr. Mueller’s ideas wouldn’t have been well thought out or intelligent. Does he not realize the point of Mutually Assured Destruction? If the pool starts suing companies for patent violations, those companies are going to retaliate with infringement suits of their own. And to make things worse, these companies have the entire pool of DPL members to pick from (and they could pick more than one). Why would these companies, who are trying to avoid patent litigation, open themselves up to it?

     I understand that software patents are not popular and that the patent system needs revamping, but the DPL and Fair Trolls are not the answer. Like it or not, software patents are probably not going to go away (though the Bilski decision should be coming soon) and developers need to learn to deal in a world with software patents.Taking a bunch of companies that have little or no patent power and joining them together will create a pool of people with little or no patent power. But at least in the defensive it’s better than going alone. Taking that same group and going on an offensive campaign is just suicide.

Stephen Burch

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     I have previously written about the Viacom v. YouTube case here and here. Ben Sheffner has an update that points to the Washington Legal Foundation amicus brief in the case. This brief, unlike the other brief mentioned in the article, deals not with the facts in this case, but rather with whether sites like YouTube should be afforded DMCA Safe Harbor protection at all. The brief is incredibly misleading, even for a Washington-based company.

     My biggest problem with its brief is the assertion that if Google is given safe harbor protection, then all of the onus of preventing copyright infringement falls on the copyright holder. The DMCA requires that service providers remove content that they know to be infringing. Google has incredibly sophisticated software to determine the copyright holder of videos uploaded to its site. The problem that Google has is that almost every video that is uploaded is protected by copyright. Most of those uploading the videos own the copyright and want their videos to appear on YouTube. There is no practical way for Google to know whether the person who uploaded the video owns the copyright or not. What makes this so hypocritical is that Viacom isn’t even sure what videos it owns the copyright to and has issued bogus DMCA takedowns for innocent videos. Yet the Washington Legal Foundation thinks that YouTube should be liable when users upload infringing content? How could YouTube possibly be able to find all unwanted content when the content creators don’t even know what content is theirs?

     To be fair, if some of the allegations made in the Viacom case are true, Google may be liable for videos YouTube founders purposely pirated. However, now Google goes above and beyond the legal requirements to ensure that copyright owners know when their videos are on YouTube. They then give the owners the option to make money off of the video or have it removed.
But this isn’t enough for Viacom and other television networks, as YouTube is allowing everyday users to create entertaining content. This content competes with the networks, and they don’t like that. So instead, networks would rather shut down one of the most popular sites on the Internet. That’s what I like about legal action, it’s easier than competing, and it helps improve my future job prospects.

Stephen Burch

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     California’s 6th District Court of Appeals recently ruled that Intel is not liable for using purchased software that contained trade secrets. Basically what happened is Circuit Semantics allegedly stole Silvaco Data System’s trade secrets and used them to make software, software that Intel then purchased and used. Intel did this despite despite knowing Circuit Semantics was being sued for stealing of Silvaco’s trade secrets. One of the things that makes this case great is the analogy the court uses to describe the situation.

“One who eats the pie does not, by virtue of that act alone, make ‘use’ of the recipe in any ordinary sense… This is true even if the baker is accused of stealing the recipe from a competitor, and the diner knows of the accusation.”

     That is the nicest thing the court said about the plaintiff’s case. “[S]trained is too small a word to describe Silvaco’s argument.” Ouch. But honestly, Silvaco should have seen this coming. The appendix for its case was over 8,000 pages. If you force a judge to read something that generates an appendix that large, he’s probably not going to be happy when he’s done. The court’s comment on the size of the case: “[s]eldom have so many trees died for so little.” It can’t feel good to have your hard work described like that in a public opinion. To Silvaco’s credit, it did have a good reply: “[w]e always appreciate guidance from the court in terms of its expectations.” Wait, sorry, that wasn’t a good reply. Seriously, how could it not have thought something was wrong when it amassed that many documents. No one is going to read that much information. When the appendix is so big you need another appendix just to navigate it, you need to rethink your strategy. Maybe next time it can try bribing the judge with some sweet, warm apple pie baked just like Mom used to: from a stolen Sarah Lee recipe.

via TechDirt

Stephen Burch

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     Eric Goldman at the Technology & Marketing Blog writes about an interesting case involving Section 230 of the Communications Decency Act and comment moderators. The case held that website owners are liable for the defamatory postings of their moderators. Mr. Goldman believes this is a mistake, but I’m not so sure. Before I talk about this case, I would like to take a minute to discuss the reasons for Section 230 and what exactly moderators are.

     Section 230 was passed in response to a New York court case, Stratton Oakmont, Inc. v. Prodigy Services Co., that held that websites that tried to moderate comments were liable for the defamation of any of the comments posted. The court used a book publisher/library analogy and applied it to the Internet. They were then able to use existing defamation law to hold that if a website does takes some active effort in moderating its messages, then it is like a publishing editor and therefore liable for any defamatory material. The problem with this holding is obvious. Why would anyone make the effort to moderate any material if they would become liable for everything? This would only lead to an increase in defamation on the Internet and prevent websites from using moderators to keep discussions both on topic and civil. Section 230 allows websites to be proactive in moderating content without exposing themselves to liability.

     So what are moderators? Moderators, in the context of the Internet, are people selected by the site owner to patrol the message boards. They have the power to delete, modify, and relocate other members’ postings. Basically, they have the same powers as the site owner as it relates to the board. They also usually have the word ‘Moderator’ under their name whenever they post to signify that he has been selected by the site owner to help control the board.

     I told you all of that to tell you this: Mr. Goldman believes that the court is wrong in applying an agency theory to this type of situation and that doing so will cause site owners to forgo having moderators and administrators so as to not expose themselves to liability. First, Mr. Goldman tries to define the moderators as independent contractors, while the court defines them as agents (the site owner would be liable if they are agents, not liable if they are independent contractors). I may have to agree with the court on this one. Every time a moderator posts to the message board, the other users can see that he is a moderator for the site and they know that he is acting on behalf of the site’s owner. This display distinguishes him from that of an independent contractor. Mr. Goldman also tries to paint this case as an outlier. Of the cases he linked to though, only two had facts similar to the present case. The first case, Higher Balance, LLC v. Quantum Future Group, Inc., didn’t actually hold that moderators weren’t agents, it just held that the plaintiff didn’t present enough evidence to support that theory. The second case, Columbia Pictures Industries, Inc., v. Fung, held that moderators were agents (he didn’t agree with this case either). Based upon these findings, I don’t think this ruling is an outlier. To be sure though, the differences between an independent contractor and an agent are sometimes very difficult to determine and hinge on the specific facts of the case. But would a holding that moderators are agents cause site owners to abandon third-party moderation?

     The whole point of Section 230 is to encourage site owners to moderate and filter user generated content without fear of becoming liable for the content if they missed something. It wasn’t intended to protect owners if their moderators were the ones doing the defamatory posting. And this ruling will not stop site owners from using moderators. Moderators add value to message boards. Unmoderated boards are full of off-topic posts and spam. Without moderators, most people wouldn’t visit the message board, thus depriving the owner of the money generated by the site. Most moderators are picked because of their ability to keep a post on topic and keep trolls and spam out. I don’t think site owners are going to give up making money based on the fear that one of their moderators will post defamatory comments, especially given the fact that they were picked as moderators for their ability to filter comments that might give rise to liability.

     While I disagree with Mr. Goldman on whether moderators are agents or independent contractors, I most definitely agree with him about the best part of the case. Apparently, the alleged defamatory comments involved calling the plaintiff “Cornholio.” This led to a court discussion regarding whether or not calling someone “Cornholio” is defamatory. Better yet, Mr. Goldman found that this is not the first time the courts have had a discussion about “Cornholio”. He cites another case, State v. Lane, that also contained a discussion of “Cornholio.” In fact, the main reason I wrote about his post was so I could use a Beavis and Butthead reference in my title.

Stephen Burch

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     Sorry for the lack of posting, but exams have been killer. One more exam today and then I’m done for the summer! While you wait with bated breath for my next post, I thought I would point you to this post on Slashdot that says that Apple is facing an antitrust inquiry from the DOJ. While other people were claiming that Adobe was going to sue Apple because of its new developer license, I stated that Adobe didn’t really have a claim, but that this new license might be enough to get the DOJ looking into antitrust issues over at Apple. Just like I suspected, people at major corporations, as well as the government, look to this site to determine the best legal course of action.

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