On 2/28/11 the North Carolina Business Court granted summary judgement to the class of plaintiffs suing StubHub on claims under N.C. Gen. Stat. § 75-1.1. The N.C. Business Court found that StubHub was not entitled to claim to immunity under Section 230 of the Communications Decency Act by coming up with a horribly flawed “entire website” apprach. (The opinion of the NCBC can be viewed HERE)
More than a year later this wrong has been righted thanks to the N.C. Court of Appeals. (Full opinion linked in title of this post, summary below)
Defendant StubHub appeals from an order granting summary judgment in favor of Plaintiffs Jeffrey A. and Lisa S. Hill with respect to their claim that Defendant engaged in unfair or deceptive trade practices by violating the provisions of N.C. Gen. Stat. § 14-344. On appeal, Defendant argues that Plaintiffs’ “ticket scalping” claim is barred by 47 U.S.C. § 230 and that Defendant did not violate the “fee” provisions of N.C. Gen. Stat. § 14-344. After careful consideration of Defendant’s challenges to the trial court’s order in light of the record and the applicable law, we conclude that the trial court’s order should be reversed.
Basically the plaintiffs couldn’t get tickets to a Miley Cyrus concert at the point of original sale, so had to go to a secondary market, in this case StubHub. They paid much more than face value for the tickets, which were purchased via StubHub, being sold by some guy in Massachusetts. Though ticket scalping is illegal, the blame needs to be placed on the individual that committed the crime, not StubHub, who provides a useful service for many. If claims like this were allowed to proceed, many sites, other than just StubHub, would be in serious jeopardy.
The statute that StubHub has to rely on for immunity is 47 U.S.C. § 230 which provides that “[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” A short quote from the case is below that uses some language from the statute, the decision dives deep into the case law on this matter from all over, seeing as the Supreme Court, the N.C. Supreme Court, nor the N.C. Court of Appeals have touched the topic of section 230 immunity before.
Defendant was not “responsible, in whole or in part,” for creating or developing the content at issue here, which is the price at which Mr. Holohan sold his tickets, and, for that reason, that Defendant is immune from liability pursuant to 47 U.S.C. § 230 as the result of claims based upon that particular content.
An excellent decision from the N.C. Court of Appeals that will hopefully clear up any section 230 cases that are filed in North Carolina from here on out.
Today Yahoo! filed a lawsuit against Facebook claiming patent infringement. At issue are ten patents, as follows: U.S. Patent No. 6,907,566; U.S. Patent No. 7,100,111; U.S. Patent No. 7,373,599; U.S. Patent No. 7,668,861; U.S. Patent No. 7,269,590; U.S. Patent No. 7,599,935; U.S. Patent No. 7,454,509; U.S. Patent No. 5,983,227; U.S. Patent No. 7,747,648; and U.S. Patent No. 7,406,501.
The whole complaint can be viewed at the end of this post, courtesy of All Things Digital’s post on the topic. I will just be going through the claims Yahoo! makes in connection to each patent, stating what part of Facebook is allegedly infringing on the given patent, and providing some text from the patent.
The underlying language of all the claims is as follows. “Yahoo! claims that Facebook has been infringing the patents by “making, selling, and/or offering to sell in the U.S., or importing into the U.S., products or processes that practice the inventions claimed.”
Infringement of Yahoo!’s Advertising Patents (Counts 1-4)
Count 1: Infringement of the ‘566 Patent (6,907,566)
This claim specifically calls out Facebook Ads.
The ‘566 patent is described as “a method and system for placement of graphical objects on a page to optimize the occurrence of an event associated with such objects.”
Count 2: Infringement of the ‘111 Patent (7,100,111)
This count also calls out Facebook Ads. The ‘111 patent is a divisional of the ‘566, which explains the similarity of the claims and patents themselves for anyone who just saw the similar pictures and language.
Count 3: Infringement of the ‘599 Patent (7,373,599)
More of the same as stated in the first two claims. It calls out Facebook Ads specifically and the ‘599 patent is a divisional of the ‘566.
Count 4: Infringement of the ‘861 Patent (7,668,861)
This count also calls out Facebook Ads but the patent is not a part of the ‘566 family this time.
The ‘861 patent states “a system and method are disclosed for classifying a user interaction on a network.”
Infringement of Yahoo!’s Privacy Patents (Counts 5-6)
Count 5: Infringement of the ‘590 Patent (7,269,590)
Targeted here are the Facebook Privacy Controls.
The ‘590 patent states “a method, apparatus, and system are directed towards managing a view of a social network user’s personal information based, in part, on user-defined criteria.”
Count 6: Infringement of the ‘935 Patent (7,599,935)
Also targeted here are the Facebook Privacy Controls.
The field of art of the patent states “the present invention relates to managing display of content, and more particularly to a method and system for enabling a user to preview content as it would be seen by another social network user.”
Infringement of Yahoo!’s Customization Patents (Counts 7-8)
Count 7: Infringement of the ‘509 Patent (7,454,509)
The target is now Facebook’s News Feed.
The 509’ patent provides for “a method for entertaining individuals according to a community having similar tastes. Information derived from user accounts form the basis of a community and collateral preferences allow other subscribing individuals to enjoy the benefit of wider-ranging tastes according to the preferences expressed by the other members of the community. Additionally, assuming that individuals sharing one preference in common may be likely to share others, the present method allows those who choose to listen to the “fan station” the ability to enjoy similar music or other data streams according to preferences expressed by the fan community as a whole.
Count 8: Infringement of the ‘227 Patent (5,983,227)
In addition to also targeting the Facebook News Feed, this claim mentions the Facebook Wall.
Under background of the invention, for the ‘227 patent, it states “the present invention relates to the field of customized information presentation. More specifically, one embodiment of the invention provides a custom page server which can quickly serve custom pages and is scalable to handle many users simultaneously.”
Infringement of Yahoo!’s Social Network Patent (Count 9)
Count 9: Infringement of the ‘648 Patent (7,747,648)
Targeted in this count are Facebook Pages and Facebook Groups.
The ‘648 patent states the following in the first paragraph in summary of the invention:
“Embodiments of the present invention provide systems and methods for information retrieval and communication using a world model. The world model is made up of interrelated entity models, where each entity model corresponds to an entity (or abstraction) in the real world, such as a person, place, business, other tangible thing, community, event, or thought. Each entity model provides a communication channel via which a user can contact a manager (a real-world person) responsible for that entity model. Entity models also advantageously provide feedback information, enabling users to easily share their experiences and opinions of the corresponding real-world entity.”
Infringement of Yahoo!’s Messaging Patent (Count 10)
Count 10: Infringement of the ‘501 Patent (7,406,501)
The obvious target here is Facebook Messages
The basic description of the patent is as follows: “Systems and methods allowing an instant messaging user to exchange messages with an e-mail user.”
My Quick Take:
Being a huge fan of music and all the innovation taking place in the industry, count 7 scares me the most, and should scare other music start-ups like Pandora, Spotify, and Turntable.fm, to name a few. The title of the patent at issue (‘509) is “Online Playback System With Community Bias” and deals with internet radio, and appears to have been geared toward something called LAUNCHcast. The claims seem to be written broad enough that Yahoo!’s lawyers feel confident they can apply this to the News Feed. If Yahoo! is going to challenge Facebook on this matter, and actually cares about protecting their invention more than just the money Facebook has to offer, then it seems highly probable that the formentioned companies may want to either prepare defenses for a possible suit, or look to band together with Facebook on challenging this particular patent.
All of the patents, while extremely technical, also appear to have many elements in the claims that are just begging to be challenged on basis of obviousness, specifically the ‘501 patent, in my opinion. The filing of the application was in March of 2003, long predating this was an application called ICQ (which dates back to sometime around 1996) which allowed users to communicate in real time (instant messenger fashion) and with offline users (something an application like AOL IM would not let you do at the time). I forget if those offline messages went to e-mail or not, but it certainly raises a question of obviousness. Also, on this patent, Google seems to come into question as a possible defendant, as Google Chat users can send messages to offline users that show up in their e-mail, under a chat tab.
The other thing to note is that it will be interesting to see how Facebook responds. I’m not sure what is in their portfolio of patents, but I venture to guess there is something there that Yahoo! could be claimed to be infringing.
Lastly, it’s no secret Yahoo! has been fading as of late. The term “patent troll” is a thrown around by many bloggers and others reporting on companies that hoard patents for the sole purpose of suing. If these claims turn out to be without merit Yahoo! is in danger of gaining a lot of bad press and being compared to a patent troll with this lawsuit, which they certainly don’t need.
On January 27th, 2012 the North Carolina State Bar Council adopted an ethics opinion related to cloud computing. The full opinion is linked in the title with a summary below.
Ruling: That a law firm may contract with a vendor of software as a service provided the lawyer uses reasonable care to safeguard confidential client information.
Below is a list of seem key elements of the opinion to take away.
- “This opinion does not set forth specific security requirements because mandatory security measures would create a false sense of security in an environment where the risks are continually changing. Instead, due diligence and frequent and regular education are required.” (Under opinion #2)
- “A lawyer must fulfill the duties to protect confidential client information and to safeguard client files by applying the same diligence and competency to manage the risks of SaaS that the lawyer is required to apply when representing clients.” (Under opinion #1)
Also of importance are the recommended security measures listed under opinion #2 which can provide guidance on making sure proper due diligence is followed along with reasonable care. Most involve making sure proper security language is present in the terms of use, license agreement, and other dealings with the software as a service provider. There are also mentions reviewing the extent to which files are backed up and the law firm’s ability to access the files once the relationship terminates.
If using a software as a service provider it seems vital to keep up-to-date on the relevant technologies involved and be aware of exactly how the data you are storing in the cloud is protected through agreements and different technologies available to the software as a service provider. With cloud computing and storage surely to grow over the coming years this is an important opinion to keep in mind when making decisions for a firm.
Peaking my interest this week was an article at TechDirt, titled “EMI Sneakily Trying To Pretend Many Of Its Artists Can’t Reclaim Their Copyrights”. It raised awareness to a blog post by Michael Robertson, the CEO of MP3Tunes, that is titled “Screwed FOREVER Artist List (Is Your Favorite Artist On It?)”.
The basic summary of the problem addressed in these articles is as follows, as pulled from Michael’s post.
Beginning in 2013, rights of certain songs can revert to the original artist, meaning they’ll get all future royalties instead of the record label they originally signed with. The one big exception is if the song is a “work for hire” - commissioned by an organization and not the independent work of another party. (This is an overly simplified explanation but hopefully you get the point.) Sadly for artists, record labels have fraudulently declared many songs as “works for hire” allowing the labels to keep ownership. Artists in this category will be screwed forever.
This is because in the 1976 Copyright Act content creators have the right to terminate copyright assignments after 35 years. Mr. Robertson goes on to list all the artists whose sound recordings appear to have been registered as works for hire by EMI; while the TechDirt article analyzes the current state of music industry problems, history behind the Copyright Act and some specific language in it, most importantly of which is the definition of a work for hire found in 17 USC §101:
A “work made for hire” is—
(1) a work prepared by an employee within the scope of his or her employment; or
(2) a work specially ordered or commissioned for use as a contribution to a collective work, as a part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a compilation, as an instructional text, as a test, as answer material for a test, or as an atlas, if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire. For the purpose of the foregoing sentence, a “supplementary work” is a work prepared for publication as a secondary adjunct to a work by another author for the purpose of introducing, concluding, illustrating, explaining, revising, commenting upon, or assisting in the use of the other work, such as forewords, afterwords, pictorial illustrations, maps, charts, tables, editorial notes, musical arrangements, answer material for tests, bibliographies, appendixes, and indexes, and an “instructional text” is a literary, pictorial, or graphic work prepared for publication and with the purpose of use in systematic instructional activities.
Option (1) is not the route the industry is trying to take in this fight, instead it is based on the “compilation” language, as summarized by TechDirt.
The RIAA has been trying to claim that any albums are really a “compilation” so they qualify as a “collective work” under the law, which does create a work-for-hire situation. But there are other conditions that need to be met, and it’s unclear if those have been. Plus, the claim that an album is a “collective work” is a pretty weak one all around.
An album should not be classified as a “collective work” by the artist/band that is commissioned to deliver it. Most record deals are for a certain number of albums to be released on a particular label. The label is not interested in an album’s songs individually until it comes time to pick a single. Furthermore, when a band/artist goes into the studio pursuant to a deal, they know full well they are putting together a whole album, not just one individual song after the other. They want the songs to flow well and the album as a whole to sound good when played from front to back. Generally, a band’s/artist’s sound will evolve over time. When you hear a song for a particular artist, you can probably tell what era it was during (based on the albums they have released).
Furthermore, ignore any of the legal implications and look at this solely from a business perspective. The record label has had 35 years to build up a good relationship with the artist in regards to the albums they commissioned. One would think that if the record label is doing all they can for the artist and still generating some revenue after that much time, the artist may not even consider exercising this right they have. If the record label has proceeded to do nothing in those 35 years for the artist, why must they try and impede the ability of an artist to exercise this right to reacquire their copyright? Especially if there’s questions of royalties being paid out, which many major labels are facing accusations of lately. This is just one more thing for bands and artists to take into consideration when choosing who they do business with.
As an aside, this really peaked my interest because of four of the bands listed on Mr. Robertson’s list: Anberlin, Over It, The Red Jumpsuit Apparatus, and Yellowcard. Three of the four (Anberlin, Red Jumpsuit, and Yellowcard) are from Florida, and there aren’t many shows of theirs I missed dating back to the early days of each. Over It happens to be one of the first bands I ever saw live (opening for Rufio, Motion City Soundtrack, and Northstar — amazing show). These bands all work (worked in the case of Over It) hard for what they love to do, and that is make music. It would be an absolute shame if any of them (and any of the artists on EMI) were unable to exercise the right they have after 35 years to reclaim their works, especially if the business relationship just hadn’t worked out.
I have seen a few articles making the rounds on Twitter and Facebook involving the terms of use for the website Pinterest and what it means to those who are registered there. Disagreement always ensues in the comments and who knows what is actually the case. Instead of taking that route I just want to draw attention to some language that could be problematic and, in turn, affect how one uses the website.
*Note - the Terms of Use referenced below are dated March 29, 2011*
In reference to “member content” which is defined in the Terms of Use as “all Content that a Member posts, uploads, publishes, submits or transmits to be made available through the Site, Application or Services.”
Member Content
We may, in our sole discretion, permit Members to post, upload, publish, submit or transmit Member Content. By making available any Member Content through the Site, Application or Services, you hereby grant to Cold Brew Labs a worldwide, irrevocable, perpetual, non-exclusive, transferable, royalty-free license, with the right to sublicense, to use, copy, adapt, modify, distribute, license, sell, transfer, publicly display, publicly perform, transmit, stream, broadcast, access, view, and otherwise exploit such Member Content only on, through or by means of the Site, Application or Services. Cold Brew Labs does not claim any ownership rights in any such Member Content and nothing in these Terms will be deemed to restrict any rights that you may have to use and exploit any such Member Content.
I have highlighted the text that stands out in this section. The section goes on to make the member represent they own or have the rights for what they are uploading; But the notable point here is that by uploading content you have given Pinterest a worldwide, irrevocable, perpetual, non-exclusive, transferable, royalty-free license, with a ton of rights on top of that. Pinterest users better make sure they are comfortable with this before they submit “member content”. Especially with the addition of the gifts section, where items are on sale, it seems like it will only be a matter of time before Pinterest capitalizes off the sale of items for their own benefit, to the detriment of the creator. Also, this should make users really question just how broadly “Site, Application, or Services” could be interpreted, especially when dealing with a high-tech website based start-up (just look at how many changes Facebook and Twitter have gone through).
In addition to being weary of what materials users upload that they do own, users should also be careful when they are uploading “member content” that they don’t have the intellectual property rights for, because of the following.
General Prohibitions
You agree not to do any of the following:
Post, upload, publish, submit, provide access to or transmit any Content that: (i) infringes, misappropriates or violates a third party’s patent, copyright, trademark, trade secret, moral rights or other intellectual property rights, or rights of publicity or privacy; (ii) violates, or encourages any conduct that would violate, any applicable law or regulation or would give rise to civil liability; (iii) is fraudulent, false, misleading or deceptive; (iv) is defamatory, obscene, pornographic, vulgar or offensive; (v) promotes discrimination, bigotry, racism, hatred, harassment or harm against any individual or group; (vi) is violent or threatening or promotes violence or actions that are threatening to any other person; or (vii) promotes illegal or harmful activities or substances.
Cold Brew Labs will have the right to investigate and prosecute violations of any of the above to the fullest extent of the law. Cold Brew Labs may involve and cooperate with law enforcement authorities in prosecuting users who violate these Terms.
The general prohibitions go on to list a lot more no-no’s for Pinterest users, but relevant to the submission of “member content” is what is above. Pinterest has the right to investigate and prosecute and violations, and may bring in other law enforcement/authorities to handle any situation. Note that this isn’t just on content that you upload yourself, but that you post, publish, submit, provide access to, or transit. Thus, be weary not just of the items you upload, but what you pin to your boards from other users or share on your own website, Facebook, Twitter, etc. I would like to think an investigation would only follow the original poster of the copyrighted material, but this section is written so broadly that users need to be aware of what could happen in a worst case scenario.
And… Just for fun… Maybe someone can help make some sense out of this?
Copyright Policy
Cold Brew Labs copyright law and expects its users to do the same. Cold Brew Labs has adopted and implemented a policy that provides for the termination in appropriate circumstances of registered users or other account holders who repeatedly infringe or are believed to be repeatedly infringing the rights of copyright holders. Please see Cold Brew Labs’ Copyright Policy at http://pinterest.com/about/terms.html, for further information.
Cold Brew Labs ________ copyright law and expects its users to do the same. There’s clearly a word missing there… I suspect it is respect, but the possibilities are endless.
On Monday a Federal Judge refused to shut down “used” .mp3 retailer ReDigi at the request of Capitol Records and the two parties could be heading to a trial.
ReDigi is an interesting concept where users can sell their purchased music from iTunes to other users for a discounted price, with ReDigi taking a cut. I haven’t checked out ReDigi, nor am I sure I want too, but it is a novel idea for those looking to save a few cents on their purchase of individual songs or make some quick money. One does have to wonder how well the technology actually works to prevent the original purchaser from having access to the song, especially if it has been burned to a CD already.
At issue in the case, among many other things, will be the first-sale doctrine which has been getting a lot of attention lately thanks to Redbox fighting back against movie studios looking to delay the availability of their new releases even more than is already the case. For more information on that check out an article on Techdirt by clicking HERE.
Today marks the release date for Hit The Lights’ latest full length - Invicta. I highly recommend it, but if you don’t want to take my word for it (and have Spotify) check out the following link to stream the entire album: Hit The Lights – Invicta. The song streaming from here is titled “Earthquake” and is the first single from Invicta.
Yesterday (1/27/11) tickets went on sale for three Bruce Springsteen shows in New York and New Jersey. Ticketmaster was the website to purchase tickets at, but numerous fans received error messages and could not receive tickets. Tickets for these shows can be found on eBay, Stubhub, and other secondary broker sites for hundreds of dollars more than face value. This has resulted in Rep. Bill Pascrell Jr. (D., N.J.) promising to reintroduce the “BOSS Act” (Better Oversight of Secondary Sales and Accountability in Concert Ticketing). Full text of the bill can be viewed HERE. In general, it would prohibit the purchase of tickets by brokers for the first 48 hours of the primary sale, along with requiring more reporting by the ticket seller on how many tickets are available, the distribution of all the tickets, and some additional restrictions on secondary brokers and employees or other “insiders” who may acquire tickets.
The music industry has been slow to adjust to the age of the internet. What could have been a cash cow now and for years to come for the music industry has become it’s biggest fear (as evident by the overwhelming support from music industry executives and the RIAA in the battle for SOPA and PIPA).
While the BOSS Act doesn’t directly address these intellectual property issues, it does address another issue — what exactly is the business acumen of these label executives? These tickets are going for hundreds of dollars more on resell and, most importantly, people are buying them. If the labels are going to make extreme claims of how piracy effects them (I don’t doubt that piracy hurts the artists and labels, but some of the claims made by the RIAA seem far reaching) they should realize the opportunity to make more money on ticket sales when it exists. They are undervaluing their product by hundreds of dollars and that is their prerogative. It’s also their choice to use Ticketmaster as opposed to another ticketing service or another means that assures the tickets end up in the fan’s hands and not a broker.
Sure, the BOSS Act is supposed to be a way to protect the consumers and ensure they get tickets at a fair price but it’s hard for me to feel bad for the fan when it is the label putting them in this situation, and they don’t ever seem to care about the fan. Representative Pascrell’s insistence on reintroducing this Act only goes to show how the music industry, in large part, has failed to adjust from 2009 to now (the bill was originally introduced in 2009, due to another failure by Ticketmaster in selling Springsteen tickets). If the music industry truly cared about the fans this would have been fixed by each individual label, Ticketmaster, and everyone involved in the ticketing process.
There are numerous options that could have led to more fans getting tickets for this show, or any other shows where this has been an issue. First, why not reserve more tickets for a set presale, where the fans provide the label with their e-mail address, and in return get a user specific link to purchase up to 5 or so tickets? The label gets an e-mail to add to their list, and they make sure these particular fans won’t be complaining about not being able to receive a ticket. Second, make the face value of the tickets reflective of what they are actually worth. If fans are going to pay more money than you are charging, it’s time to raise the price. You’re only encouraging these secondary ticket brokers to purchase mass quantities of tickets when you charge under what the customer perceives as the fair market value. These are just a couple of ideas to solve the problem without enacting legislation that shouldn’t be needed in the first place.
I personally would be much more interested in seeing an antitrust investigation launched against Live Nation & Ticketmaster than seeing Congress waste their time on this Act, when there are far more important matters to take up.
Digital Music News (DMN), a popular website for the music industry, was recently served with a subpoena in relation to an ongoing lawsuit against Grooveshark dealing with copyright infringement (they also face a claim of failure to pay royalties). You can read more about the Grooveshark lawsuit via the New York Times HERE. DMN’s response is the linked article at the top of the page, in which they refuse to comply with the subpoena.
This all stems from an anonymous comment that accused Grooveshark employees of uploading music they did not have a license for, to the Grooveshark service. The problem here is two fold… I haven’t read the lawsuit against Grooveshark, but if the main evidence of impropriety is an anonymous comment on a website, then I think anyone that leaves comments on articles they read online needs to be a little concerned. The other side is obviously that if Grooveshark is actually partaking in this practice, using their executives/staff to uploading music they don’t hold a license too, it’s a prime example of why there is a tension between the major record labels and technology — it can be abused far too easily.
It will be interesting to see Grooveshark’s next move and how this gets resolved, as Grooveshark’s livelihood is likely at stake with their infringement and royalty lawsuits. Just recently Grooveshark had to close their German operations due to the high licensing cost GEMA, Germany’s performing rights organization, requested.
More updates as they come. A .pdf of Grooveshark’s subpoena of DMN can be found below in the source article.
Recently on one of my go to sites for music news (absolutepunk.net) a discussion was started regarding people’s favorite EPs (extended play). I thought this was an interesting topic to ponder, as well as a great way to listen to some of my music catalog that I hadn’t in some time. I have decided to post my list of favorite EPs below, in no particular order, for those who would like to try some new bands out. And yes, I did get a little carried away… There are just so many good EPs it turns out. Most of these EPs were released before a full length (LP) and really got me interested in the particular band, others were just a supplement to an already impressive catalog of releases. I’m sure I have left out numerous EPs that I also enjoyed, these are just some of the first that came to mind. (There are links to the EPs on Spotify where available, just click on the album name)
Go Radio - Do Overs and Second Chances
Cartel - The Ransom EP
JamisonParker - Notes & Photographs
Something Corporate - Audioboxer EP
Punchline - The Rewind EP
The Starting Line - Make Yourself At Home EP
Acceptance - Black Lines to Battlefields
Mayday Parade - Tales Told By Dead Friends
Woodale - Finish What You Start
The Morning Light - The Sounds of Love
Yellowcard - Underdog EP
The Early November - For All of This
The Dangerous Summer - If You Could Only Keep Me Alive
The Format - EP
Late Night Habit - The Single Life
Parade The Day - To Keep Us Moving
E For Explosion - Hold Grudges Not Hands
Hit The Lights - Until We Get Caught
Dear You - Journals
Mercy Mercedes - 1.21 Giggawatts
And a special bonus… The Sophomore Attempt - Hallways
