Tag Archives: Copyright; Rent Seeking

Righthaven Agonistes

Originally posted 2011-06-21 14:25:26. Republished by Blog Post Promoter

Rainbow over Lake George

Is all this copyright jurisprudence lollipops and rainbows?

Let us reflect a little on what Righthaven has wrought, so far.  Wired weighs in on the latest Righthaven woes:

A federal judge ruled Monday that publishing an entire article without the rights holder’s authorization was a fair use of the work, in yet another blow to newspaper copyright troll Righthaven.

It’s not often that republishing an entire work without permission is deemed fair use. Fair use is an infringement defense when the defendant reproduced a copyrighted work for purposes such as criticism, commentary, teaching and research. The defense is analyzed on a case-by-case basis.

Monday’s ruling dismissed a lawsuit brought by Righthaven, a Las Vegas-based copyright litigation factory jointly owned with newspaper publisher Stephens Media. The venture’s litigation tactics and ethics are being questioned by several judges and attorneys, a factor that also weighed in on U.S. District Judge Philip Pro’s decision Monday.

Not really a big surprise.  One of the points I made at this month’s CSUSA panel on this topic was that when you push too hard on enforcement, someone who matters — either legislators, judges or rampaging mobs — will punish you and leave in a place that is outside what you thought defined the range of outcomes.  In a bad way.

Big IP never wants to hear this until it’s too late.  But there is a sort of rough justice in such an outcome, for it is the mirror-image, by alternative (i.e., judicial) means, of a legislative scheme that says, as the Copyright Act does, “Don’t think your damages are limited to what you would have had to pay if you had not infringed.  There is a big penalty, via attorneys’ fees and statutory damages, for doing it this way.  Cross at the green, not in-between.”  I have argued for some time that the one-sidedness of this equation, which does not account for the welfare detriment caused by abusive and overreaching litigation, is unsustainable.  I have expressed hope for a legislative improvement in copyright policy, though, not a judicial one.  That hope may be vain — and now it may be the exact opposite of what happens.

Was it a foreseeable risk that judges might blow past traditional bounds of fair use to make a point in a situation such as this?  There will be plenty of analysis on the question, as there ought to be, considering the following excerpts from the opinion (the link to which Randazza emailed me during the bleary-eyed hours last night).  Just working off the Wired article, here are some … interesting concepts.

One of them is that the court found a lack of standing, yet went ahead and ruled on the fair use issue anyway, writing, “Assuming Righthaven was found to have standing to bring this action, the Court nonetheless finds Hoehn is entitled to summary judgment on the ground of fair use of the Work.” That is rather unusual, and arguably resulted in a holding that is dictum.  It could also be described as an alternative ground for dismissing the complaint, of course, but, again, the court went the extra mile to make not only a point about fair use, but an arguably controversial one.

Moreover, the finding of fair use was based here on (a) a holding that the use was non-commercial, which (b) militated against applying the traditional rule that copying an entire work is prima facie infringement, or at least that the use of the work has a strong presumption against fair use in light of (c) the fact that there was no cognizable impairment of the economic value of the copyright.  The court makes this seem quite straightforward.  This factor certainly is, as the Media Bloggers Association brief filed in another Righthaven case in Nevada argues, certainly a significant one in the fair use analysis (which we could not urge in full, because the procedural posture was one of default judgment) and must be considered with respect to awarding damages, including statutory damages.  Fine, as far as it goes.

But every pendulum has its amplitude, and then it swings back. Read More…

Best of 2012: Not my money

Blind justice and plaza, Federal courthouse, Newark

Originally posted February 21, 2012.

Last June, blogging about my presentation to the Copyright Society on the Righthaven litigation, I wrote the following:

This brings us to the issue of mass enforcement a la RIAA and MPAA

  • Mass enforcement sweeps
    • Complete de-linking from any concept of blameworthiness, much less intent
  • Disproportionate penalties and fees
  • Results of mass enforcement:
    • Consensus is that it is ineffectual
      • Continual calls for enhancement of procedural and penal “tools”
      • Effects some unknown quantum of in terrorem deterrent
      • Crystallizes an anti-copyright, anti-establishment sensibility among militant downloaders
      • By targeting non-militants who act out of either ignorance or as casual scofflaws, makes anti-copyright, anti-enforcement
      • RIAA supposedly paid its lawyers more than $16,000,000 in 2008 to recover only $391,000*
        • Reminder about motivation for our criticisms here icon wink Massive Attack:  Analyzing mass copyright infringement campaigns

Now, note that asterisk at the hyperlinked bullet point.  The footnote in my blog post said:

* At the conference, a person in the position to know stated in the question-and-answer session that this figure was utterly innaccurate.  I am looking forward to receiving more accurate information.

Actually, it was two persons, but I never did get any information.  Still, even as I wrote this I remember acknowledging that the argument itself was flawed, regardless of the empirical truth of the factual claim at its base.  And just because I never got the information, which I was thinking would be an appropriate launching point for me to acknowledge my logical flaw, doesn’t mean I shouldn’t do so anyway.

The flaws are pretty obvious.  The obvious one is that you can get a lot of injunctions for $16 million.  And as we know, it is an axiom of chancery practice that the remedies of equity are typically, and usually when referring to injunctions, utilized in situations where those seeking them “have no remedy at law” — i.e., no money could, in theory, substitute for an order forbidding the complained-of behavior.  Lots of parties spend lots of money suing defendants, and in meritorious causes, where there is no prospect of a concomitant recovery.

The less obvious flaw in my argument flows from the obvious one:  Whether we put a $100 million value on the non-monetary relief obtained by these lawsuits or a $100 value, it’s not our money.  Companies routinely decide on litigation as part of a legal and business strategy which, even in a more general sense than set out above, is not evaluated solely from the point of view or even at all from the point of view of whether it will bring in dollars directly.

Protecting a right, or a perceived right, typically comes at a cost.  If that right enables massive profits, the incurring of massive costs to protect it — whether by recovering damages, achieving cessation of activities that threaten those rights or merely as an in terrorem policy — is entirely rational.

Indeed, I have argued in connection with trademark bullying and in connection with copyright overreaching that the problem is not with litigants or even, unless they act unethically in the performance of their duties, with the lawyers who represent them in pursuing these rational policies:  It is with the judges who fail to ask “what is really going on here?” and a lapdog Congress that, notwithstanding the recent hesitation concerning SOPA, doesn’t even seem to care.

So it may make perfect sense for the RIAA to spend whatever it spends to get whatever its management and members deem worth getting (and at the price they’re getting it).  Who am I to say?  Strike that argument from the bullet points.

Not my money

Blind justice and plaza, Federal courthouse, NewarkLast June, blogging about my presentation to the Copyright Society on the Righthaven litigation, I wrote the following:

This brings us to the issue of mass enforcement a la RIAA and MPAA

  • Mass enforcement sweeps
    • Complete de-linking from any concept of blameworthiness, much less intent
  • Disproportionate penalties and fees
  • Results of mass enforcement:
    • Consensus is that it is ineffectual
      • Continual calls for enhancement of procedural and penal “tools”
      • Effects some unknown quantum of in terrorem deterrent
      • Crystallizes an anti-copyright, anti-establishment sensibility among militant downloaders
      • By targeting non-militants who act out of either ignorance or as casual scofflaws, makes anti-copyright, anti-enforcement
      • RIAA supposedly paid its lawyers more than $16,000,000 in 2008 to recover only $391,000*
        • Reminder about motivation for our criticisms here icon wink Massive Attack:  Analyzing mass copyright infringement campaigns

Now, note that asterisk at the hyperlinked bullet point.  The footnote in my blog post said:

* At the conference, a person in the position to know stated in the question-and-answer session that this figure was utterly innaccurate.  I am looking forward to receiving more accurate information.

Actually, it was two persons, but I never did get any information.  Still, even as I wrote this I remember acknowledging that the argument itself was flawed, regardless of the empirical truth of the factual claim at its base.  And just because I never got the information, which I was thinking would be an appropriate launching point for me to acknowledge my logical flaw, doesn’t mean I shouldn’t do so anyway.

The flaws are pretty obvious.  The obvious one is that you can get a lot of injunctions for $16 million.  And as we know, it is an axiom of chancery practice that the remedies of equity are typically, and usually when referring to injunctions, utilized in situations where those seeking them “have no remedy at law” — i.e., no money could, in theory, substitute for an order forbidding the complained-of behavior.  Lots of parties spend lots of money suing defendants, and in meritorious causes, where there is no prospect of a concomitant recovery.

The less obvious flaw in my argument flows from the obvious one:  Whether we put a $100 million value on the non-monetary relief obtained by these lawsuits or a $100 value, it’s not our money.  Companies routinely decide on litigation as part of a legal and business strategy which, even in a more general sense than set out above, is not evaluated solely from the point of view or even at all from the point of view of whether it will bring in dollars directly.

Protecting a right, or a perceived right, typically comes at a cost.  If that right enables massive profits, the incurring of massive costs to protect it — whether by recovering damages, achieving cessation of activities that threaten those rights or merely as an in terrorem policy — are entirely rational.  I have argued in connection with trademark bullying and in connection with copyright overreaching that the problem is not with litigants or even, unless they act unethically in the performance of their duties, with the lawyers who represent them in pursuing these rational policies:  It is with the judges who fail to ask “what is really going on here?” and a lapdog Congress that, notwithstanding the recent hesitation concerning SOPA, doesn’t even seem to care.

So it may make perfect sense for the RIAA to spend whatever it spends to get whatever its management and members deem worth getting (and at the price they’re getting it).  Who am I to say?  Strike that argument from the bullet points.

What “Beating Righthaven” means

Supreme Court and U.S. District CourtInstapundit links to Donald Douglas’s blog post, Beating Righthaven.  Excerpt:

Righthaven files “no warning” lawsuits. That is, it gives no advance notification to defendants, which violates the norm of providing “take down notices” to those suspected of copyright violations. By doing this, Righthaven — which made a speciality out of suing small-time bloggers and “mom-and-pop” businesses — was able to scare the bejesus out of its targets, who then would settle out of court generally in the three to five thousand dollar range. Defendants were threatened with the possibility of a $150,000 judgment and the forfeiture of their website’s domain name (URL address). Let me tell you: It’s frightening as hell opening up that letter of service and reading the lawsuit. You can’t even believe you’re being sued, but you can’t ignore it or wish it away. A non-response would result in a default judgment, so there’s no time to dilly-dally. No wonder so many defendants settled out of court rather than attempt a legal defense, especially since obtaining legal counsel and going to trial would probably run into the tens of thousands of dollars on average. I first found out about the lawsuit from Steven Green of the Las Vegas Sun, who left me message on Facebook and then the link to this article mentioning me as a defendant.

Righthaven’s model is entirely predatory, and the company soon earned everlasting enmity by filing lawsuits against folks who were unemployed, on public assistance or disabled. Righthaven, for example, sued cat-blogger Allegra Wong of Boston, who was unemployed and receiving “financial support from a companion.” Righthaven also sued Brian Hill of North Carolina. Hill is autistic and chronically ill and is supported by Social Security disability benefits. My attorney David Kerr successfully defended Hill, whose story was featured in the New York Times, “Enforcing Copyrights Online, for a Profit.”

There’s a lot that’s “frightening as hell” going on out there with IP “enforcement” — a word I didn’t put quotes around when I used to do it for Brands You Must Know, because the kind I used to do didn’t need them.  It was legitimate, based on easy to comprehend ownership rights, consumer protection concerns and, yes, a concept of fair warning even to a lot of defendants who didn’t deserve it all.

Now IP is a racket.  Most of the readers of this blog practice IP law, and know exactly what I mean — because of what they do and, well, because they read this blog, and have surely detected a turn in my attitude toward the topic from years past.

Practical lawyering in an area of law I actually like often disgusts me now.

Look, I “majored” (not really how they designate this where I went to school, but stick with me) in economics — focusing my learning not in money or finance, which I know little about, but the prediction of human behavior when incentives are provided, withdrawn or distorted.  And I “minored” in political science.  So I was not born yesterday.  I have always understood that much of what is happening in IP law is entirely predictable once we understand that the value of the estates in intellectual property has skyrocketed, for any number of reasons, unpredictably.  But from that premise, it is not news that the incentive to capture rent — get as much of the action as possible — will rise concomitantly, leading to a rational increase of investment by stakeholders in making changes in the regime governing the allocation of such rights.  So, yeah, Hollywood and Big Fashion and other major players are going to drop major bucks on whatever is for sale — legal talent, lobbyists, legislators — to “protect their assets” and just keep stacking the deck legislatively in their favor.

(I’m not even getting into how that plays into patents, patent reform… not here, not now….)

Trademark lawyer Ron ColemanTen years ago, though, I was — with no pricks of conscience — personally walking through the corridors of the House and Senate with other members of an IACC task force to make damned sure that eBay would not be able to secure a legislative extension of Section 230 of the DMCA to trademark law, even as judges were beginning to toy with inventing just such an extension themselves.  That seemed like the thing to worry about at that the time, and indeed I have never changed my views that eBay got away with murder, albeit less so now, by enabling and profiting from the sale of counterfeit merchandise, and that the Tiffany case was sloppy work.  But.

We’ve got a bigger problem now.  A few.  But I will focus only on the copyright / Righthaven angle right here:

IP has become, as economics predicts, a commodity, and a monetized one.   Read More…

Massive Attack: Analyzing mass copyright infringement campaigns

Lake George -- Bolton, New YorkI am about to give my presentation on a panel at the annual meeting of the Copyright Society of the USA at the Sagamore resort in lovely Bolton’s Landing, New York bearing this title.

Here is the outline of my presentation.  Who knows where it’s really going to go.

  • Let us not be motivated to criticism by lawyer resentment over those who know how to make real money
    • Especially when it is other lawyers
  • Bloggers understand or are charged to understand that copyright infringement is still copyright infringement even if (a) one is a blogger and (b) one is publishing on the Internet
  • Overreaching in both the trademark and copyright areas has created a situation that was only waiting for a judicial and public backlash
    • Judicial – trademark – slower in coming but increased skepticism regarding the fallacious doctrine of IIC and use of trademarks in anticompetitive, anti-consumer claims
    • Cultural – copyright – well known.  There is little or no respect or effect on behavior among the broader population for legal rules concerning downloading of copyright-protected content
    • Judicial – copyright
      • new rulings expanding or at least going to the furthest known bounds of fair use – Righthaven v. Jama (“CIO Case”)
      • increased judicial focus, including in cases discussed in the last panel on recent developments in copyright, on the market-loss prong of fair use analysis
      • arguably a change in what had been a fairly warm reception in the courts to copyright claims
    • This brings us to the issue of mass enforcement a la RIAA and MPAA

All you need is what he’s got

Originally posted 2007-03-06 19:11:50. Republished by Blog Post Promoter

Randy Barnett, enjoying a new authorized remix of a bunch of Beatles music, frets that we can’t have more of the same because of bad old “intellectual property”:

IP is supposed to create incentives for innovation. Here, as elsewhere, it is suppressing innovation. I know the counter arguments: The Beatles songs would not exist in the first place if not for IP; nor would this mix. And they deserve recompense. And they should be able to control the quality of derivative uses lest the value of their property be diminished, etc. I know the drill.

I also know the responses. The Beatles would not have created music unless compensated untold millions? Cirque Du Soleil would not have need a sound track for their show? Unlikely. They would not have created music unless their decendents were made millionaires many times over? Hardly. They deserve to control all derivative uses? What about the writer of the poster on which “For The Benefit of Mr. [Kite]” was based and his or her deserving descendants?

He then goes on to criticize the abuse of IP, especially copyright, with which I certainly agree. But he doesn’t really wrestle with what the right to make derivative works really is all about.

Barnett also puts himself in the position of “price second-guesser” as to what he thinks the proper price for owners of original works “should be” before they authorize the creation of derivative works. I suppose his rationale for that is that intellectual property isn’t “really” “property” at all, and perhaps he’s right.

I don’t believe, however, that this means the price mechanism is to be uncoupled merely so we can innovate utilizing other peoples’ creative works. Perhaps the Beatles wouldn’t have needed untold millions to write their brilliant music; but perhaps they would have, before, for example, making the massive investment, for its time, that the production of the Sgt. Pepper’s Lonely Heart’s Club Band album entailed. Where do we draw that line? And since we’re asking how much the Beatles really “need” in order to be the Beatles, how much do we “need” in order to listen to remixes of “Good Day Sunshine”?