Dale Dietrich
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Posts from — April 2006

Free Software Foundation to Fight DRM

Categories: DRM & TPMsLobbyingOpen Source

Free Software Foundation spokesperson Peter Brown has told ZDNet U.K. that sometime in June, after the second draft of the GPLv3 is released, it will hire a professional campaigner to campaigning for the end of DRM. The campaign will be three-pronged to build awareness among developers, consumers and device manufactures.

Sources: ZDNet UK  |  P2PNet  |  CNet

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Form Letter from Apple’s Legal Department Makes 3rd Grader Cry

Categories: Humour

Form Letter from Apple’s Legal Department Makes 3rd Grader Cry
April 14, 2006
Well, strictly speaking this is not an iMedia law story but I found it amusing. A third grader wrote a letter to Steve Jobs as part of a school project suggesting how Apple could improve its iPod. The family gathered round the response only to see the girl burst into tears and run to her room after reading the form letter response sent by Apple’s legal department warning her not to submit unsolicited product suggestions in the future. Apple’s legal department is now reviewing its policy on how it responds to children! :)

Source: ars technica

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What Lies Ahead for the Canadian Recording Industry Association?

Categories: BigMedia v. P2P UsersPolicy Analysis

Howard Knopf, who acted against CRIA in the recent Canadian file sharing litigation, has written a very good summary of CRIA’s current situation in the context of the contemporary Canadian political environment.

Source: Howard Knopf

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TiVo Wins Patent Infringement Case Against Echostar

Categories: DecisionsPatents

– Jury Verdict Form Part 1
– Jury Verdict Form Part 2
After deliberating for about two hours (including a cigarette break), a Texas jury awarded TiVo $73,991,964 in lost profits and royalty damages. The award was less than the $87M TiVo sought. The jurors thought TiVo had not done everything it could to protect its patent. The patent was granted in 2001, but the jurors calculated the damage award starting in January 2, 2002, when TiVo started clearly marking its products with patent notices. As the jury found Echostar willfully infringed, the judge could treble the damage award. Echostar is vowing to appeal. TiVo has said it will next seek an permanent injunction. TiVo will no doubt be seeking license fees from both PVR manufactures such as Moxi, Microsoft, Cisco/Scientific Atlanta, Motorola and NDS, and U.S.-based cable companies using competitive PVRs such as Time Warner, Cox, Charter and Cablevision.

Sources: Fox News | USA Today (AP) | Bloomberg | CNet | MarketWatch | ars technica | Bloomberg | San Jose Mercury News | Business Week | L.A. Times | TiVo Press Release | Echostar Press Release | Red Herring | Oxford Press | PC Magazine | Link

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MovieBeam Down-Res’s Hi-Def Content When Subscriber Does Not Use HDMI

Categories: BigMedia v NewTechCopy RestrictionsDigital TVHDMI/HDCP/ICT

We’ve all known this was coming but this Disney-backed, MovieBeam service is the first account of a service down-res’ing HD content when the subscriber’s TV does not have an HDMI input. Lesson to be learned: Do NOT buy an HDTV without an HDMI connection or you won’t be watching the HD content you pay for.

Sources: Washington Post (2nd page) | Technology Liberation Front | Freedom to Tinker

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TiVo Case Against EchoStar Headed to Jury

Categories: CasesPatents

The Jury in the TiVo trial is expected to commence deliberations today after opposing lawyers give closing arguments and Judge Folsom gives his final charge to the jury. It is unclear whether they will deliberate at all on Friday (perhaps for a half day as Texas state departments and agencies work a half day on Good Friday). Judge Folsom denied both parties’ last-minute motions for matter-of-law judgments this morning. No settlement has been reported.

Sources: Marshall News Messenger (AP) | San Jose Mercury News (AP) | Grand Forks Herold (AP) | Team 4 News | The Ledger (AP) | Pierceland Herald | Wall St. Journal (Subscription)

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DAY NINE: TiVo-EchoStar Trial – Final Day of Testimony (Tues Apr. 11)

Categories: CasesPatents

The April 12 Marshall News Messenger account of the trial (upon which I am wholly reliant) largely presents a recap of some of earlier testimony. However, it does contain a few new testimony details.

Jim Barton returned to the stand to rebut allegations made by EchoStar’s witnesses claims that “trick play” technology elements existed in products prior to TiVo’s May 15, 2001 patent grant. Barton also refuted Ergen’s prior testimony: (i) that the only technology TiVo had to offer was a feature that tracked viewing habits of users; (ii) that these features invaded users privacy; and (iii) that TiVo wanted to sell that information to advertisers and split the proceeds with Echostar. [Dale's Note: This earlier Ergen testimony was not previously reported as far as I know]. Barton testified that this was not true, that as users of TiVo they did not want their privacy violated either, that TiVo’s method of aggregating data in no way personally identified individual users and that the the FTC gave TiVo a clean bill of health saying it obeyed the letter and spirit of all privacy laws. On cross-examination Echostar’s lawyer attempted to refute Barton’s claims that TiVo created a cost-effective DVR by pointing out TiVo’s boiler-plate language in its Jan 31, 2004 10-K where it said: “Consumers may not be willing to pay for our products and services since they are already paying monthly fees for cable and satellite connections.” [Dale's Note: What this gets Echostar I don't understand - this statement was nothing more than a typical boilerplate statement, the likes of which are made in every public company's SEC filings.]

TiVo also called Professor Jim Storer of Brandeise University as a patent ‘validity’ expert to counter Echostar’s ‘invalidity’ expert, Dr. Nathaniel Polish. The essence of Polish’s earlier testimony was that some 50 DVR-related “prior art” patents pre-existed TiVo’s patent, thereby nullifying TiVo’s patent claims. Storer testified that Tivo’s patent is “absolutely” valid: “This is pioneering technology … [s]ure, all these bits and pieces – that were very expensive – existed before, but I have seen no prior system that does all these steps …”. The prior patents dealt with “little pieces of technology … in incremental steps … [t]here’s a big difference between these and the gigantic leap of putting all of them together as is done in the Barton patent”.

Both sides rested their case Tuesday. Judge Folsom is using today (Wednesday) to rule on various issues and to prepare his charge to the jury. He advised the jury to bring a sack lunch on Thursday to start their deliberations.

Sources: Marshal News Messenger

Note: This story is being discussed in this TiVo Community thread.

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Who Owns Culture?

Categories: Big MediaBigMedia v NewTechDMCA-like LawsDRM AnalysisFair Use/Dealing

Lawrence Lessig presents a terrific speech/slide show explaining how promoters/users of each of the player piano, records, broadcast TV, cable TV, the Sony betamax etc. were, in their time, considered pirates and how, ultimately, the law evolved to favored the “pirate”. Laws adapted to changing technology. He points out some of the absurdities taken by the content industry then and now and argues against locking down content in a way that limits people’s creativity and fair uses of content. He argues against laws (such as the DMCA) that limit fair use rights to the 20′th century paradigm (as the RIAA and MPAA argue) and that limit the ability of content purchasers to fairly use content with future technologies. He argues against the rhetoric of the “war on piracy” and advocates that artists start speaking up to bring their thoughts ideas to the debate.

Source: Google Video

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DAY EIGHT: TiVo-EchoStar Trial (Monday Apr. 10)

Categories: CasesPatents

Echostar’s CEO, Charles Ergen, took the stand. Tivo’s lawyer, Sam Baxter, established that Ergen’s ownership in Echostar translates to $7.5 billion. [Dale's Note: Can you hear "David & Goliath in the back of your head?] In an attempt to discredit Echostar’s early claims that TiVo was bringing this case only because it was a loosing money, Baxter asked Ergen if this was fair. He pointed out that Echostar had lost $3.9 billion before it turned a profit. Ergen conceded that losses are to be expected when a company has to do a lot of R&D and customer education. When asked again if this was fair Ergen responded “I’ve seen a lot of criticism (of TiVo) from Wall Street, but I can’t say if it is fair.” When asked if profitability and criticism gives somebody the right to take someone’s IP, Ergen responded “no”, adding he and his company respected others inventions. Baxter attempted to get Ergen to agree that DVR is indispensable to Echostar’s customer retention but Ergen would not directly answer the question when asked several different ways. Baxter net referred to early Echostar comparative advertising copy which read “for people who think the idea behind TiVo is cool, but the price isn’t”. Baxter pointed out how TiVo is a verb and that sportscasters say things like “I wish I had TiVo’d that moment”. He asked Ergen if he had ever heard anyone say “I wish I’d 501′d that moment”. Ergen agreed he had never heard that. Ergen testified that Echostar had no need to steal TiVo technology since it employs its own staff of “the best engineering experts in the world’). [Dale's Note: Whether patented technology is independently developed has no bearing whatever on whether it infringes on someone else's patent claims - innocent infringement is just as much infringement as willful infringement.]

Echostar’s last witness was Dr. Nathaniel Polish, an inventor of DVR products. He testified that TiVo’s technology was nothing new and that more than 50 DVR-related patents had been granted before TiVo obtained one for its media switch. Among inventions that preceded TiVo’s was the Screamin’ Streamer, an EchoStar product, and the MRx1. On cross-examination Polish acknowledged that the Screamin’ Streamer was only used in-house and never marketed commercially and admitted that the MRx1 was not capable of recording and playing live TV simultaneously. Tivo’s attorney quipped, if the MRX1 was such a good product, “one wonders why they threw it out the door shortly after…” Media Four was purchased by Echostar.

Echostar rested its case and testimony is expected to be completed today (Tuesday the 11th). Judge Folsom told the jury they will have Wednesday off as he prepares his final instructions. As Friday is a holiday for some, the judge left it for the jurors to decide if they wish to deliberate Friday or not.

FYI… the following was posted by MTChamp on the Motley Fool subscription only board:

For those who use PACER, you may have already read some notices by Echostar in response to the courts rulings against Echostar, that testimony by EchoStar’s expert validity expert, Dr. Polish, was not allowed. He was going to argue prior art.

The other notice has to do with a couple of documents or exhibits Echostar wanted to show the jury from the Patent Trade Office as I understand it, to show that TiVo’s patent is being re-examined for validity. I guess the PTO is making sure there was no prior art that would invalidate the TiVo patent. I don’t know the details of why the PTO would do this, however the court would not allow Echostar to talk about it.

TiVo also filed a brief regarding EchoStar’s objections to some demonstatives of a possible prior art invention called Media Streamer. Echostar objected to some slides that TiVo was to show that illustrate how this Media Streamer device could not record a program while watching it and could not store and extract video at the same time. I guess the labeling wasn’t to the courts liking so TiVo has reworded these demonstratives with the language contained in a supplemental claim construction order made in March 2006.

Sources: Marshal News Messenger  |  Motley Fool (Subscription)

Note: This story is being discussed in this TiVo Community thread.

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StreamCast to Slug it Out Against the MPAA/RIAA in the Courts After All

Categories: BigMedia v P2P ProvidersCases

After previously stating it was going to settle its dispute with the RIAA and MPAA, Sreamcast, which is responsible for the file-sharing program Morpheus, has done an about face and is going to take its chances with a jury trial. Lower courts have been kinder to P2P litigants than was the Supreme Court which held Grokster liable for “promoting” and “encouraging” infringement by the users. As with Torrentspy’s decision to fight the MPAA last week, Streamcast will argue that it neither promotes nor encourages infringement by its users and is therefore not responsible for any copyright infringement by its users.

Sources: ars technica | Boston Herald | Business Week | MP3.com | commercialappeal.com | L.A. Times

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CRIA Wants No Further Part in Canadian Blank Media Copy Levy

Categories: CopyrightDMCA-like LawsMedia Levy

In 1999, the Canadian Copyright Act was amended by adding Part VIII, permitting private copying of music for the “private use of the person who makes the copy”. In exchange the Canadian Private Copying Collective (CPCC) was established to collect levies on all recordable media (eg: currently 29 cents per audio cassette, 21 cents per CD-R and CD-RW and 77 cents per CD-R Audio, CD-RW Audio and Minidisk) and to distribute the levies to songwriters, recording artists, music publishers and record companies. The CRIA had spent 15 years lobbying for the levy. Apparently in response to the Canadian Federal Court’s preliminary decision in BMG Canada v. John Doe (since overturned in part), that “the downloading of a song for personal use does not amount to infringement”, the Canadian Recording Industry Association (CRIA) recently changed its tune [pun intended] saying to Billboard “We don’t want a private copying levy that, in effect, sanctions online theft”. Instead the CRIA is now advocating for Canada’s ratification of the controversial WIPO Internet Treaty which lead to the extremely controversial, consumer-unfriendly DMCA-DRM system in the U.S. The compromise reached in the 1999 amendment was, in exchange for the levy, reproductions of musical works for private use would not constitute infringement of copyright. Now as Canadian courts determine that this right may be inclusive of the right to copy music from P2P services, CRIA wants nothing to do with it.

Sources: Billboard | ars technica | Michael Geist | CPCC | .doc version of Billboard Article (from CCFDA) | CRIA | Copyright Act (Canada)

Related CRIA’s Own Study Counters P2P Claims

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Spanish Police Target BitTorrent & eDonkey Sites

Categories: BigMedia v P2P ProvidersPolice Actions

The global campaign against BitTorrent and eDonkey2000 indexing sites continues. In apparently the first Spanish action of its kind, Spanish police arrested 15 administrators/owners related to 17 BitTorrent and eDonkey2000 indexing sites. While the sites themselves are located outside of Spain, the Spanish-resident operators were the target of the arrests.

Sources: Slyck  |  Addict 3D  |  CD Freaks.com  |  Asociacion de Internautus (Spanish)
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DAY SEVEN: TiVo-EchoStar Trial (Friday Apr. 7)

Categories: CasesPatents

- Text of “Multi-Media Time Warping Patent” in Dispute
- Claim Construction Order (August 18, 2005)
Echostar called Stanford Professor Margaret “Maggie” Johnson to refute testimony by TiVo’s witness Dr. Jerry Gibson. By analogy to writing novels she testified that TiVo and Echostar used different approaches to writing software to achieve the same end. [Dale's Note: Frankly, I don't understand the point or substance of this testimony - based on the account in the article linked below!]. Moving on … TiVo next cross-examined Dr. Tom Rhyne. TiVo attempted to discredit Dr. Rhyne by painting him as an expert-for-hire. As Echostar had earlier done with a TiVo expert, Tivo’s lawyers ensured that the court learned that Mr. Rhyne was being paid $495 per hour as an expert witness. Rhyne acknowledged that TiVo inventor Jim Barton “knows more about DVRs” than he. Both Rhyne and Johnson acknowledged that they relied on what they were told by Echostar engineers as the basis for their testimony [Dale's Note: Frankly, I don't understand the point or substance of this testimony - based on the account in the article linked to this story! Please review it yourself to see if you can make heads-or-tails of it.] The last Echostar witness to testify Friday was Dan Landreth, Echostar’s V.P. of Engineering. He testified that in 1997 he and others from his prior company, Media Four, made a “sales pitch” to Echostar about their MRX1 “media stream receiver” invention which he claimed had “time-shifting” capabilities. He demonstrated the MRX1 to the jury. Landreth said that Echostar subsequently purchased Media Four and all of its I.P. Under cross-examination Landreth said that Echostar abandoned the MRX1 and a patent that had been pending for it at the time of the merger. Chu said that in order for a consumer to have a functioning MRX1 receiver it would have cost almost $5,000. [Dale's Note: The article does not indicate whether Landreth agreed with this.] Landreth, however, showed the jury a copy of a check for one of the first sales of the MRX1 receiver in the amount of $60,000. Landreth also admitted that at the time of the buy-out, Media Four’s sales had “dropped to zero.”

Sources: Marshal News Messenger

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TiVo Requests Curative Instructions Re: Improper Claim Construction Testimony

Categories: CasesPatents

- Claim Construction Order (August 18, 2005)
The terms “converts” and “object” were defined by the court in the August 18, 2005 Claim Construction Order. TiVo alleges that Echostar is re-arguing the definitions that the court previously determined for use in this case. TiVo alleges that “EchoStar’s deliberate use of claim construction that was not adopted by the Court is a very serious matter and requests, at a minimum, that the Court provide the jury with a limiting instruction on this issue”. TiVo is asking the court to instruct the jury to disregard testimony that conflicts with the Claim Construction Order.

‘ChuckyBox’ on TiVoCommunity Forum  |  NewsJournal.com

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Geist’s CBC Interview: France Tunes Apple Out: Apple Bites Back

Categories: DRM AnalysisDRM as Market LockFair Use/DealingLegal Reform

In this CBC ‘The Hour’ episode Michael Geist is interviewed about the recent proposed French National Assembly Bill. If passed by the French Senate, the law would require companies such as Apple, Sony and Microsoft to open their DRM/TPM so that competitive media player manufacturers can make their products interoperable. With this law, just as CDs can be played on any CD player, regardless of the manufacture, digital content (eg: movies and music ) purchased online would be playable on any media player. Consumers would be assured that the thousands of dollars spent to purchase music online from, say Apple’s iTunes, will be playable on any competitive media player purchased in the future. Online music consumers would not be locked into using only the hardware provided by the music vendor. Michael argues, as do I, that Canada should consider following the more consumer friendly, ‘fair use’ copyright trends in France, Australia and Denmark rather than the overly restrictive RIAA/MPAA-lobbied-for DMCA/DRM approach adopted by the U.S. and Britain.

Source: CBC’s ‘The Hour’ Show <-- Note: Follow this link and select the first “France Tunes Apple out; Apple Bites Back” segment (dated March 22, 2006) to play the interview in Windows Media Player or Real Player.

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DAY SIX: TiVo-EchoStar Trial (Thursday Apr. 6)

Categories: CasesPatents

- Text of “Multi-Media Time Warping Patent” in Dispute
- Claim Construction Order (August 18, 2005)
Echostar called three witnesses. First up, Tom Rhyne, TiVo’s Expert witness – a retired electrical engineering professor from Texas A&M. Rhyne testified that while there were some similarities between TiVo’s patents and Echostar’s products, there were a number of ways the Echostar box differed from the functions outlined in TiVo’s patent. Ryan, [Dale's note: stating the obvious], said EchoStar boxes do not convert analog signals into MPEG streams. He pointed out that Echostar’s boxes do not separate audio and video components, as do TiVo products [Dale's note, since Echostar's product is an all-digital end-to-end, why would it?] and therefore do not reassemble them as the TiVo patent claims [Dale's note, the unstated premise being that this is all the TiVo patent claims]. Since MPEG is already in digital format, there is no need to do the two-step conversation as is needed on TiVo boxes that use analogue inputs. Rhyne said EchoStar products do not have/use a media switch as TiVo alleges.

Next up, Dan Minnick, vice president of software for EchoStar. Minnick also testified that there was no media switch. He also testified that after Echostar’s engineers met with TiVo’s engineers “early on”, they followed-up with Echostar’s inhouse counsel, Kerry Miller and that Miller gave them a verbal legal opinion over the telephone that Echostar did not infringe TiVo’s patent [Dale's note: I wonder if Miller rues the day he gave that opinion?] Minnick said “We know we don’t have a media switch because we broadcast in MPEG, we have no need for software that will convert (television signals) to MPEG. [Dale's Note: Interesting how they are narrowly defining the scope of the patented media switch with this testimony.]. Minnick explained that an in-house e-mail from an EchoStar engineer on the day TiVo’s patent was announced saying “Oh no, tell me it isn’t so?” was a sarcastic e-mail mimicking a clay cartoon character.

Finally, Jason Demas a senior Broadcom director testified that Echostar chose to source a DVR chip from Broadcom whereas TiVo, after being approached by Broadcom to do this on a chip, opted to use software instead. On cross-examination, Demas conceded that Echostar’s boxes are capable of the same “trick play’ features of pausing, re-winding and fast-forwarding live television as outlined in the Barton patent. Demas was not aware, as TiVo’s lawyer put it, that “Echostar has demanded — if they lose this trial — that Broadcom will pay for all the damages this jury may award”.

Tom Rhyne will be cross-examined Friday April 7.

Sources: Marshal News Messenger

Dale’s Comment: It appears that EchoStar’s strategy here is to pick away at the various TiVo patent claims and to argue that because they don’t infringe claim a, b or c, that they don’t infringe the patent. TiVo only needs to convince the jury that Echostar infringed ANY claim, not every claim to succeed. Rhyn’s point that there are a number of ways in which Echostar’s products differ from TiVo’s patent, it seems to me, is beside the point. What is relevant is the way in which Echostar’s products incorporate technologies claimed in TiVo’s patent – not in the relevant or irrelevant ways in which it is different.

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Setback for Net Neutrality

Categories: Legal ReformNet NeutralityPolicy Analysis

The highly charged populist uprising over who owns the Internet lost its first significant battle when a U.S. House of Representatives committee voted down legislation that would block phone companies from establishing an Internet toll system for companies such as Google and Skype. Instead, the committee adopted compromise provisions, authorizing the FCC to investigate violations of network neutrality after the fact and levy fines of up to $500,000 on a case-by-case basis.
Sources: Red Herring  |  ars technica  |  PC Magazine  |  InfoWorld  |  ZDNet  |  CNet  |  TMC Net  |  CIO  |  Beta News  |  SF Chronicle  |  Michael Geist on Canadian “Net Neutrality” Telcom Reform
Dale’s Comment: Few things, it seems to me, are more important to the continued growth of the Internet than ‘net neutrality.

Net neutrality is the concept that Internet users should have unfettered access to all the Internet has to offer, and that network operators should be prohibited from blocking or degrading signals or content traversing their networks. Without ‘net neutrality, carriers such as AT&T could charge companies like Skype, Vonage and Google (or their customers) additional tiered fees to guarantee their services won’t be eroded or blocked when provided to end-user customers like you.

Because the fees charged by telcos such as AT&T, Verizon and Quest for data carriage are not enough to cover their losses from declining voice carriage rates, they are now floating the idea that tiered Internet access fees should be charged for access to specialized Internet services. This is absurd! Consumers already pay higher fees for the bandwidth needed to access broadband-intensive services. Charging additional tiered fees is simply double-dipping.

One would have thought that the Abermoth scandle-ridden Republican-controlled Senate would be less-likely to pander to special interest lobbyists through this mid-term election cycle. But in voting this bill down, they’ve done just that.

Alas, the Democrats appear to stand a fighting chance to take back the Senate this fall. ‘Net neutrality legislation will have to wait until then.
Related Story: Net Neutrality Not An Optional Feature of Internet

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DAY FIVE: TiVo-EchoStar Trial (Wed Apr. 5)

Categories: CasesPatents

Echostar first made routine motions for dismissal (arguing Echostar’s use of non-infringing alternative technology) that were rejected by Judge Folsom. Echostar called its first witness, Dave Kummer, VP of Engineering and Technology. His testimony revolved around the development of EchoStar’s 7100 and 7200 set-top boxes that had a pause feature before PVRs existed. He testified that other features such as rewind, fast-forward and record were added to the 7200 model in December of 1999. He testified that when Barton approached Echostar in 2001 or 2002 about building a set-top box for Echostar, the company already had its own. After meeting with Barton, he says, Echostar determined that its customers did not need the extra features that TiVo was building for DirecTV. TiVo’s attorney Morgan Chu, in his remarks on cross-examination pointed out that “the key is the media switch … and there is a Barton media switch in every one of EchoStar’s products”. “We agree they built their own boxes, but we disagree that they own their own technology”.

Sources: Marshal News Messenger | NewsJournal.com

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How the RIAA Litigation Process Works

Categories: BigMedia v P2P ProvidersBigMedia v. P2P Users

Recording Industry v. the People has a terrific article on the ex-parte cookie-cutter process the RIAA uses to sue its thousands of defendants. As they explain: "at the core of the whole process are: (1) the mass lawsuit against a large number of "John Does"; (2) the "ex-parte" order of discovery; and (3) the subpoenas demanding the names and addresses of the "John Does". The RIAA settlement offer is usually for $3,750, non-negotiable, and contains numerous one-sided provisions. There are several lawsuits challenging this process. Read the linked article for details.

Source: Recording Industry v. The People.

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Sun’s Proposed Open-Source DRM (DReaM) Standard

Categories: DRM AnalysisFair Use/DealingOpen Source

Sun’s DReaM Project Architectural Overview
Sun has worked with Creative Commons to create an open-source, patent-free, royalty-free DRM scheme endorsed by Lawrence Lessig as the lesser of possible DRM evils. DReaM content players/readers would be certified by an independent standards body. DReaM supports fair use by including the means for copyright works to be duplicated for educational purposes, parody, criticism, etc. However, Sun’s ‘fair use’ mechanism is optional for rights holders.

Sources: Sun | Lessig Blog | EFF’s Opposition | Wired | ars technica | The Register I | The Register II (Apr 15, 2006) | Linux Electrons | ZDNet | Yahoo! Finance | eHomeUpgrade | Boing Boing (April 14, 2006)

Dale’s Comment: I am tentatively optimistic about this proposed standard. As regular readers know, my primary concerns with existing DRM schemes are their proprietary nature combined with DMCA-facilitated restrictions on users’ fair use/fair dealing rights.

As Sun is the originator of java, Sun seems well-placed to be the purveyor of a universal, open-source and fair DRM scheme. And, of course, any open-source standard can be scrutinized by the vast open-source community to guard against problems such as the one caused by Sony’s recent root-kit debacle.

This particular scheme tackles the prickly issue of content owners being locked into a particular player/reader or format (eg: Apple’s oxymoronic ‘Fairplay’ scheme). Sun’s proposed open-source DReaM scheme tackles this problem by using a certification process whereby player/reader manufactures can certify their music, video, e-book, video games, etc. player/reader.

Another issue this scheme goes some way to alleviating is the issue of “fair use”. The obvious concern is that Sun’s “fair use” paradigm is currently “optional”. This should be mandatory.

Such a standard may pass muster with France’s proposed new DRM bill. But, it seems at odds with the proposed DRM-free GPL3. If DReaM can ultimately provide a scheme whereby the purchasers of content can: (i) play/access their content on any certified device; (ii) sell, give-away, transfer or otherwise alienate their content; (iii) re-encode their content indefinitely so that their legally purchased content is playable on all future certified devices (ie: not held hostage to the state of the art at the time of purchase); and (iv) otherwise fairly use their purchased content in accordance with evolving fair use/fair dealing standards/jurisprudence; I would heartily endorse such a DReaM scheme. Will the DReaM scheme evolve in such a way that it becomes a DReaM come true? I wouldn’t bank on it!

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DAY FOUR: TiVo-EchoStar Trial (Tues Apr. 4)

Categories: CasesPatents

Keith Ugone, an economist, testified that EchoStar caused damages totaling $87 million by selling 4.3 million DVRs that infringe TiVo’s patent. Ugone (factoring in competitive sales) conservatively estimated TiVo would have sold 192,700 more PVRs had Echostar not sold these units representing a loss of $34 million. Estimating a loss of $1.00 per month (the royalty rate paid by DirecTV) for each of the 4.1 million remaining Echostar subscribers, TiVo claims further lost royalties in the amount of $52.95 million. Echostar attorney Harold McElhinny challenged Ugone’s calculations based on the “market penetration rates method”, suggesting that Ugone used this method because he did not have the information needed to calculate damages another (presumably more appropriate) way. On re-direct, Ugone stated that this method was commonly used by economists. When McElhinny pointed out that Echostar had used similar technology as early as 1999 in its Dish-player TV, Ugone pointed out that those products used only ‘primitive’ DVR functionality . When asked, Ugone testified that his fee to TiVo for testifying is $425 per hour and that he will receive about $500,000 for his work on the trial. Stuart West, TiVo’s VP of finance testified that TiVo spent $193 million on research and development. TiVo expects to conclude its opening testimony on Wednesday.

Source: Marshal News Messenger

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Netflix Sues Blockbuster to Shut Online Service

Categories: CasesNew Business ModelsPatents

- Text of Netflix’s Complaint (including patents)
- Netflix’s New Patent 7,024,381 (’381′) (April 4, 2006)
- Netflix’s Patent 6,584,450 (’450′) (June 24, 2003)
On the heals of being granted its new “Approach for Renting Items to Customers” business model patent ’381, Netflix has sued rival Blockbuster for patent infringement, seeking to shut down Blockbuster’s 18-month-old online rental service and award Netflix damages. The complaint, filed in U.S. District Court in San Francisco, alleges that Blockbuster infringed Netflix’s ’381 patent by “copying Netflix’s patented business method, including but not limited to copying Netflix’s dynamic queue; copying Netflix’s method of sending DVDs to subscribers based on ranked order of titles in their queue; and copying Netflix’s method of allowing subscribers to update and reorder their queue”. Netflix alleges that Blockbuster knew of the pending patent application, but “willfully and deliberately” launched an infringing service anyway.

The ’381 patent is a continuation of, and claims benefits of, the Netflix’s earlier patent ’450. The abstracts for each of the (i) new ‘Approach for Renting Items to Customers” patent ’381′ and (ii) ‘Method and Apparatus for Renting Items’ patent ’450, granted earlier on June 24, 2003; are the same, and both read as follows:

According to a computer-implemented approach for renting items to customers, customers specify what items to rent using item selection criteria separate from deciding when to receive the specified items. According to the approach, customers provide item selection criteria to a provider provides the items indicated by the item selection criteria to customer over a delivery channel. The provider may be either centralized or distributed depending upon the requirements of a particular application. A “Max Out” approach allows up to a specified number of items to be rented simultaneously to customers. A “Max Turns” approach allows up to a specified number of item exchanges to occur during a specified period of time. The “Max Out” and “Max Turns” approaches may be used together or separately with a variety of subscription methodologies.

And, FYI, here is the abstract of Netflix’s earlier “Mailing and Response Envelope” patent no. 6,966,484 granted on November 22, 2005:

A mailing and response envelope for conveying an item from a sender to a recipient and back is disclosed. The envelope comprises a base panel, a sender address panel, and a recipient address panel. The sender address panel is affixed to the base panel by an adhesive region. The sender address panel and adhesive region define a pocket sized to accept an item. The adhesive region extends laterally on the base panel in an amount selected to ensure that a postal cancellation is not applied to an area overlying the item. The recipient address panel is joined to the base panel by a detachable joint. In this configuration, a fragile item may be conveyed from the sender to the recipient and from the recipient back to the sender without damage to the item.

Sources: CNet | ars technica | MSNBC | Reuters | CNN | Red Herring | Hollywood Reporter | CNN Money | Chron | USA Today | San Jose Mercury News | SF Engadget | SF Examiner | SF Gate | Business Week | Blockbuster Press Release

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Music Industry Releases New Wave of Lawsuits

Categories: BigMedia v. P2P UsersCases

The International Federation of the Phonographic Industry (IFPI) is launching nearly 2,000 new legal actions against individuals accused of sharing copyrighted music over P2P services, including FastTrack (Kazaa), Gnutella (BearShare), eDonkey, DirectConnect, BitTorrent, Limewire, WinMX, and SoulSeek. Here we go again.

ars technica  |  Red Herring  |  CNet  |  ZDNet  |  BBC  |  silicon.com  |  The Register  |  PCWorld  |  Fox News  |  PC Pro  |  Reuters  |  PC Magazine  |  Top Tech News  |  ifpi press release
Dale’s Comment: Oh Goody! And we’ve seen how successful the RIAA’s suing thousands of its customers has worked over on this side of the pond now haven’t we?

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Hollywood to Sell (not just rent) Downloaded Movies on Same Day as DVD Release

Categories: Big Media Makes ProgressiVOD/iTVMilestones

Six major studios are starting U.S.-based Internet services to sell movies that buyers can download and keep for watching at any time. New movies will cost about $20 to $30 to download; older titles will cost as little as $10. The downloads will be available on the same day that the DVD is released – quicker than rentals, which are put online about 45 days later and cost $2 to $5. Customers will be able to store movies for as long as they like on computers, as well as transfer them to two other computers and burn them on DVD, but only for copying to the two other PCs. Note: Regrettably, burned DVDs will not be playable on conventional DVD players. These DVD’s will be protected with Microsoft’s Windows Digital Rights Management software.

Sources: Herold Tribune | New York Times | L.A. Times | CNet | BBC | MSNBC | Times Online | Fox News | FT.com | Washington Post | Business Week | USA Today | MovieWeb | Red Herring | MSN Money | ABC News | Forbes | CNN Money | Reuters | Engadget | China Daily | San Jose Mercury News | Hollywood.com | SiliconValley.com | Examiner.com

Dale’s Comment: This is a solid step in the right direction but the Holy Grail of online movie purchase/rentals remains movie downloads to TV-centric devices such as a TiVo, XBox 360 or PS3 where the user calls all up movies via an imdb.com-type interface on their TV (or their PC) for download and ultimate interactive viewing through home networks on their TVs. Given that Windows Media Center functionality is to be built into Vista, and the XBox 360 will be able to access content from Vista-powered PCs, I expect a movie download service announcement from Microsoft around the time Vista is released (in early 07). Selling (rather than renting) first run titles on DVD release dates, is a major shift for Hollywood and they must be given credit for finally making this decision. But, in my opinion, they are making a blunder by not permitting users to burn copies of PURCHASED movies to DVDs for playback by the owner on conventional DVD players.

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What Might Conservative Copyright Look Like?

Categories: CopyrightDMCA-like LawsDRM AnalysisFair Use/DealingLegal ReformPolicy Analysis

What Might Conservative Copyright Look Like?
April 2, 2006
With the new Harper/Conservative Parliamentary session starting in Canada this week, Michael suggests that the new conservative government approach to copyright reform should include the following three elements: (i) enshrined fair dealing/use rights should be illustrative (as in the U.S.) rather than a comprehensive list; (ii) eliminate the stricture of Crown copyrights; and (iii) legal protection for digital locks (ie: technological protection measures (TPMs) and digital rights management (DRM) schemes) should be approached with trepidation to guard against how TPMs are frequently used to limit interoperability of new technologies, impede new market entrants, and foreclose competition”.

Sources: Michael Geist’s Blog | The Hill Times Related Story: Tom Flanagan’s Creators vs. Consumers – Windsor Star

Dale’s Comment: I agree with these proposals and would add the following additional recommendations:

  1. Canada should adopt legislation similar to that currently under consideration in France, whereby consumers of legally purchased content would be explicitly permitted to: (i) circumvent any TPM to make copies of purchased content interoperable with any media player; and (ii) convert digital content into alternative emerging formats for personal use and playback (eg: convert CDs, to MP3s). [See related articles posted on March 21, 2006 and March 22, 2006]
  2. Content providers should be legally required to work with others seeking interoperability to ensure that all content can be played-back using competitive products.
  3. The first-sale doctrine should apply to all digital content marketed to consumers so that such consumers will have the unfettered right to transfer/give-away/sell their legal copy of content (without retaining copies) as can be done with books, records, CDs, DVDs, video games etc. Canadian and U.S. copyright law should explicitly pre-empt any EULA provisions attempting to override such first-sale rights.

Once these measures, the very measures the music industry is fighting, are universally adopted, I believe the first serious dent into online piracy will be made. Treat honest people fairly and they will purchase music online in droves. Treat them like criminals and, well, you know.

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