Amazon compromises on Kindle 2's 'read-to-me' feature; who can blame them?

Amazon'.com's announcement that it will permit authors and publishers to determine, title-by-title, whether to permit the new Kindle 2 to read aloud their books, has been greeted with predictable disdain from the copyleft.

"It's disappointing that the company wasn't at least willing to stand up for its right to offer such a feature without needing permission," says Techdirt. Harvard Law School professor Larry Lessig calls the Authors Guild's objections to the "read-to-me" feature "Corleone-like" and Amazon's move "caving in to bullies." Slashdotters are in high dudgeon.

I can certainly understand those who take issue with the Authors Guild's insistence that the Kindle 2's text-to-speech feature constitutes a violation of copyright law. While I'm hesitant to be too definitive without fully understanding the technical details of this aspect of the device, from what I have been able to glean, I am skeptical that the "read-to-me" feature actually violates any of the copyright holders' exclusive rights.

So should Amazon have boldly "stood up" to the Authors Guild? Well, if you're a blogger or an academic, it's easy to so insist. If, however, you're a licensee of books from authors and publishers, you have other concerns. Remember: Amazon can only offer books via Kindle because it has contracts with authors and/or publishers that permit it to reproduce, display, and distribute their books in digital form. I haven't seen such contracts, but I'm confident they contain myriad deal points: money, term of license, and exquisite detail about what Amazon is actually permitted to do with the digital copies. An author or publisher would be perfectly within his rights to demand a clause like: "Amazon shall not in any manner facilitate through the Kindle 2 the automated conversion of the text of the Book into audible speech that may be heard by the user." (Of course whether the inclusion of such a clause by the licensor would be a wise business decision is a separate question.)

The point is that Amazon and the authors and publishers are bargaining here not just in the shadow of copyright law; they also have an ongoing and (hopefully) future business relationship that neither side wants to destroy over any one issue. If it takes a compromise over one deal point (among many) to preserve that relationship, well, bloggers and academics can race to the barricades, but Amazon, the publishers, and the authors are going to focus on running their respective businesses. I can hardly blame them.

Why the RIAA (and all trade associations) should NOT be focusing on 'business models'

The gloating over recent layoffs at the RIAA presents a good opportunity to knock down some of the common myths about what trade associations like the RIAA and MPAA are and are not -- and what they are allowed to do.

Trade associations exist in virtually every significant industry in the US, from valve manufacturers, to pork producers, to mushroom growers, to travel agents, to refrigerated warehousers, to sign-makers, to frozen food freezers, to . . . yes, the recording and motion picture industries. What do these organizations do? They advocate for their members' interests. They lobby federal and state lawmakers, seeking tax breaks and fighting regulations. They seek to improve their industry's image, through PR and advertising campaigns. They conduct and publish research about industry trends. Sometimes they develop standards, so that, for example, their members' products can interoperate. And they litigate (either in their own or their members' names), pressing common industry goals through the courts or regulatory agencies.

What do trade associations not do? They do not devise new business models, or business strategies. And why is that? Because they're all a bunch of luddites who would rather go around "suing their customers" than innovating? Wrong. How about: because they do not want their employees to be sent to federal prison!

Here's what I mean: one of the first pieces of advice any antitrust lawyer will give to a businessperson is "exercise extreme caution when talking with your competitors." But what are trade associations all about? That's right: talking to your competitors. It's an environment that presents myriad opportunities for (both explicit and well-disguised) price-fixing, market allocation, group boycotts, bid-rigging, and other forms of potential antitrust violations that can result in massive civil judgments and even criminal convictions. So members of an industry cannot meet at their trade association headquarters and discuss on what terms they should distribute their goods, or what territories they should each sell into, or whom they should -- or should not -- do business with. As this helpful presentation on the antitrust implications of trade association activities advises, the following topics are to be avoided at trade association meetings:

• Prices, payment terms, costs, wages or salaries, profit levels
  
• Joint negotiation with customers or vendors
• Business strategy, bidding tactics
• “Announcements” of business strategies
• Market-place reactions to public policy
• Comments on how to react in the market-place
• “Areas of responsibility” like geographic regions, types of customers, or types of products

Of course, these are difficult waters to navigate, and the line between devising litigation strategies and business strategies is not always clear -- which is why major law firms have entire practice groups dedicated to advising trade associations how to stay out of antitrust trouble. So, if you work at a trade association, next time you are admonished to "wake up...and start focusing...on new business models," keep in mind that following such advice could well land you behind bars.

So why, despite antitrust laws, is it perfectly OK for competitors to get together to lobby and to litigate? Because such activity is protected by the First Amendment, the Supreme Court has held in a series of cases known collectively as the Noerr-Pennington doctrine. As the Supreme Court stated in the original Noerr case in 1961, "no violation of the [Sherman Antitrust] Act can be predicated upon mere attempts to influence the passage or enforcement of laws." So RIAA opponents can fulminate all they want that the labels' lawsuits (coordinated by the trade association) are an example of "collusive, cartel-like" activity -- but the courts recognize that these lawsuits are immunized from antitrust attack.

Lastly, it's always important to keep in mind that trade associations are, ultimately, creatures of their members. While they are separate corporate entities, their members pay the associations' bills, and ultimately control their conduct. Trade associations do not freelance. Trade association execs who defy their members are not long for this world. So Techdirt may say it's "ridiculous" to claim that the RIAA followed a certain strategy because "it's what the labels wanted," but it happens to be the truth. The minute the CEO of the RIAA -- or any trade association -- refuses to do what its members want, she will be out on the street.

Labels again oppose Oppenheim deposition; Nesson still trying to record calls

The record label plaintiffs in the Joel Tenenbaum case have filed a supplemental brief in opposition to Tenenbaum's motion to compel the deposition of Matt Oppenheim, further pressing their case that Tenenbaum's counsel failed to follow the rules for deposing an out-of-state witness -- especially a witness who happens to be the plaintiffs' lawyer.

In case it wasn't clear before, the labels state explicitly that Oppenheim, a long-time recording industry litigator, "is an attorney in private practice in Potomac, Maryland [and] represents Plaintiffs in this case." That he is sometimes referred to as the "client representative" and speaks for the labels at settlement negotiations does not change the fact that he is simply outside counsel -- not a "party," as Tenenbaum claims, or, if you are more conspiratorially-minded, a "mystery man."

But the most interesting part of the brief may be footnote 1 on page 4, where Plaintiffs once again remind the court that Tenenbaum's counsel, Harvard Law Professor Charles Nesson, is refusing to conduct required telephonic "meet and confers" with the plaintiffs' lawyers because they will not permit him to record the calls. And C&C has learned that the latest of Nesson's refusals to meet and confer happened only yesterday, Feb. 26. This is truly astonishing, given that, in her Feb. 23 order, Judge Nancy Gertner specifically admonished Nesson not to tape calls, and told him in no uncertain terms that he had better start obeying the Federal Rules of Civil Procedure and the District of Massachusetts Local Rules. Refusing to participate in meet-and-confers because he can't tape them seems like a sure route to sanctions.

Lastly, just a note for the non-lawyers who may be reading this and thinking, "This is all just typical, boring lawyer stuff." There is nothing typical about any of this. There is nothing typical about attempting to depose the other side's litigation counsel. There is nothing typical about noticing such a deposition for a law school auditorium. There is nothing typical about attempting to record phone calls with opposing counsel. And there is nothing typical about employing these tactics just days after being warned by the judge to knock it off.

Ars Technica says that the case has gotten "seriously funky." Hard to argue with that. Let's hope that Judge Gertner tells her own former counsel to cut out the funk, and follow the rules. I suspect sanctions will be necessary to do the trick.

Searching for the mythical YouTube 'remix' lawsuit

I've made the point before that, while bogus DMCA takedowns on YouTube no doubt occur, the number of such errors (either deliberate or intentional), which get plenty of attention, pale in comparison to the vast numbers of totally legitimate removals that go almost completely unmentioned.

In a post about Warner Music Group's implementation of YouTube's "Content ID" system, EFF further confirms the scope of the "problem" of copyright owners' allegedly hyperaggressive effort to stamp out web-video piracy. How many lawsuits have those overzealous content owners brought over kids (or adults, for that matter) posting mashups, remixes, or other arguable fair uses to YouTube? A thousand? A hundred? Ten? How about zero! Says EFF Staff Attorney Corynne McSherry:

[W]e’re not aware of any content owner ever suing an individual YouTube user over a remix video.

Again, bogus DMCA takedown notices do exist, and all involved should work to minimize them. But bogus copyright lawsuits over amateur YouTube videos? Bigfoot sightings are more common.

Did Joel Tenenbaum's counsel once represent the judge? Judge says 'no'; First Circuit said 'yes'

Little noticed in the Joel Tenenbaum saga was a brief order issued by Federal District Judge Nancy Gertner on January 13, 2009:

Consistent with remarks to counsel this afternoon, the Court has reviewed the details of a previous case in which Judge Gertner and Professor Nesson participated some 25 years ago. See In re Grand Jury Matters, 593 F.Supp. 103 (D.N.H. 1984). As the Court suspected, Professor Nesson did not represent Judge Gertner or her law firm at the time but appeared on behalf of another party to the proceedings, Wall and Cullen. See id. at 104. As a result, the Court sees no issue of relevance for this case. Nonetheless, the Court wanted to bring the matter to the parties' immediate attention, as always in such instances. With respect to the pending motion under Local Rule 83.3, the Court will issue a ruling tomorrow morning. (Gertner, Nancy)

What appears to have happened is that, on a conference call among attorneys and the Court, either Judge Gertner or Joel Tenenbaum's counsel, Harvard Law School Professor Charles Nesson, recalled a mid-1980s case in which they had both participated. The case involved a drug and tax prosecution in which Gertner, then a criminal-defense attorney in private practice, represented one of the defendants. Gernter and other defense attorneys were served with federal grand jury subpoenas seeking information about their fee arrangements with their clients. The defense attorneys moved to quash, and a Federal District Court in New Hampshire granted the motion, in the opinion cited in Judge Gertner's Jan. 13 order.

Understandably, given the passage of 25 years, neither Gertner nor Nesson immediately remembered the details of the case, including whether Nesson had actually represented Gertner in her effort to quash the subpoena. But Judge Gertner felt the matter was significant enough to do some additional research, presumably to make sure that the labels' attorneys had all the facts so that they could determine whether a disqualification motion was merited.

As her Jan. 13 order indicates, Judge Gertner located the District Court's opinion quashing the subpoenas. The counsel listing in the District Court's opinion was as follows:

W. Hunt Dumont, U.S. Atty. by Robert J. Lynn, Asst. U.S. Atty., Concord, N.H., for plaintiffs. 

Steven M. Gordon, Concord, N.H., Wiggin & Nourie by Richard B. McNamara, Manchester, N.H., Ellis, Fogelnest & Newman, P.C. by Alan Ellis, Philadelphia, Pa., Harry C. Mezer, Albert F. Cullen, Jr., Cullen & Wall, Boston, Mass., Backus, Shea & Meyer by H. Jonathan Meyer, Manchester, N.H., John Reinstein, Andrew Good, John Wall, Silverglate, Gertner, Baker & Fine by Judith H. Mizner, Boston, Mass., for defendants. 

James D. Forsyth, II, Manchester, N.H., for S. Gordon. 

Charles Nesson, Cambridge, Mass., for Wall and Cullen. 

Ray Raimo, Manchester, N.H., for Hodes. 

Judge Gertner's interpretation of the opinion was that "Professor Nesson did not represent Judge Gertner or her law firm at the time but appeared on behalf of another party to the proceedings, Wall and Cullen." It is certainly true that the opinion states that Nesson represented John Wall and Albert Cullen (two other defense attorneys served with subpoenas). But opinion does not definitively prove Judge Gertner's conclusion that "Professor Nesson did not represent Judge Gertner or her law firm at the time." Indeed, for reasons that are not clear (but that I suspect was a simple oversight), the opinion does not identify Gertner's attorney in the proceedings at all.

Judge Gertner's January 13 order cites only the District Court's opinion on the subpoena matter as support for her conclusion that Nesson did not represent her. But her order fails to note that the government appealed the District Court's order quashing the subpoenas, and the First Circuit issued a published opinion. In re Grand Jury Matters, 751 F.2d 13 (1st Cir. 1984) (affirming order quashing subpoenas). And the First Circuit's opinion makes crystal clear that Nesson did in fact represent Gertner:

Charles R. Nesson, Cambridge, Mass., for appellees Nancy Gertner, Albert Cullen, and John Wall.

It is unclear why Judge Gertner (or her clerks) failed to note the First Circuit's opinion, which clearly and directly contradicts the statement in her Jan. 13 order that "Professor Nesson did not represent Judge Gertner or her law firm at the time...."

What are we to make of the apparent error in Judge Gertner's order? First of all, I highly doubt that it was deliberate; given the passage of time, it is not at all surprising that both she and Professor Nesson would have forgotten the details of the case, and it is implausible to believe that she would have intentionally sought to suppress the fact -- as explicitly expressed in a published opinion by the First Circuit -- that he did indeed represent her.

Does Nesson's apparent former representation of Judge Gertner require her recusal, or present grounds for the plaintiffs to seek her disqualification? I highly doubt it. The relationship between the two does not appear to satisfy any of the enumerated grounds for disqualification found in 28 U.S.C. § 455(b). While the statute does have a catch-all provision requiring disqualification where the judge's "impartiality might reasonably be questioned," a 25-year-old representation that neither the judge nor her former attorney can even clearly recall does not seem to rise to that standard.

So it's unlikely that this issue will ultimately have direct legal impact. But it does add to our understanding of the dynamics of the case. Given the long-standing relationship between Judge Gertner and defense counsel, the pro-defendant comments she has made in open court, and the fact that she actively facilitated Nesson's representation of Tenenbaum, the labels' strong resistance to the webcast of motion hearings becomes more understandable. 

Lastly, one is compelled to note the irony of Nesson seeking to compel the deposition of opposing counsel in this case, when 25 years ago he so vociferously -- and successfully -- protested attorneys' efforts to question opposing counsel -- counsel who now happens to be the judge presiding over this very litigation.

Nesson tried to record calls with opposing counsel and judge; refused to participate in meet-and-confers if no taping allowed

Federal District Judge Nancy Gertner, who is presiding over the record labels' case against accused peer-to-peer infringer Joel Tenenbaum, certainly raised a few eyebrows by including in her Feb. 23 scheduling order the following rather cryptic statement:

An issue has arisen with respect to the recording of counsel communications. The parties are advised that any such recording without permission of the participants, as well as the broadcast of such communications, runs afoul of Mass. Gen. L. c. 272 § 99.

Say what? Has someone been secretly recording the attorneys' conversations? If so, that would be a very serious matter; the Massachusetts statute cited by Judge Gertner provides that anyone who records a conversation without the consent of all participants can be sent to state prison for up to five years.

Well, it turns out to be an interesting story, but apparently not one that involves actual surreptitious recording of phone calls. Here's what happened:  the District of Massachusetts Local Rules require that the parties "meet and confer" on various matters, to try to resolve them before involving the court. Typically, this is done over the phone; the parties usually don't agree on much, but they are sometimes able to narrow their differences. These "meet and confers" are private; the judge does not participate, and no court reporter transcribes the conversations. 

Well, as anyone who has observed Harvard Law Professor Charles Nesson over the past few months knows, little about his litigation tactics are "typical." Believing, based on Nesson having brought his own recording device to Tenenbaum's deposition and taped the proceedings, that he might also record the meet-and-confers, plaintiffs' counsel asked Nesson whether he planned to tape the phone conversations. Nesson said yes, at which point plaintiffs' counsel told him they did not consent to recording. Nesson argued that the meet-and-confers should be recorded as a teaching tool (he is, after all, a professor); plaintiffs' counsel still objected. At which point Nesson refused to go forward with the meet-and-confers.

So how did Judge Gertner get involved in the recording issue? It appears that the issue was first brought to her attention in a brief filed by plaintiffs Dec. 3, 2008, then in a brief filed by Tenenbaum on Dec. 4, 2008 ("Defendant requested Plaintiffs’ consent to record the conference in order to record the discussion. Plaintiffs refused to allow an audio recording of the conference and accordingly the parties did not verbally confer on the substance of Defendant’s discovery plan."). She was reminded again in another brief on Jan. 12, 2009 ("Defendant's counsel has refused to participate in mandatory meet-and-confer sessions unless those conferences can be recorded and presumably revealed on his website."). So during an informal telephone conference with both sides' attorneys, C&C has learned, Judge Gertner inquired whether Nesson planned to record the call. Amazingly, he said he was, and proceeded to argue why he should be permitted to do so. Judge Gertner was unmoved, and told Nesson in no uncertain terms that he was not to record the call -- a sentiment she repeated in her Feb 23 order.

So it does not appear that Nesson actually went ahead and recorded any telephonic conversations with opposing counsel and the judge -- but not for lack of trying.

(Note: I emailed Nesson twice on Feb. 24 seeking comment but have received no response.)

Tenenbaum case: has someone been taping the lawyers?

Lots of action on the Joel Tenenbaum front today:

1) The First Circuit unearthed a 1996 resolution from the First Circuit Judicial Council in which it took an unambiguous anti-cameras-in-the-courtroom stance. The revelation is a bit embarrassing to the attorneys on both sides, the amici, and to District Judge Nancy Gertner -- all of whom appear to have missed the existence of the resolution. The First Circuit gave the parties and amici the opportunity to file additional briefs addressing the 1996 resolution.

2) Tenenbaum filed a reply in support of his motion to compel the deposition of recording industry litigator Matt Oppenheim. Tenenbaum argues that he properly noticed Oppenheim's deposition in Massachusetts because "Oppenheim is himself a plaintiff party to this case." Huh? Oppenheim is not on the caption; he is definitely not a "party." I believe Tenenbaum is trying to say that Oppenheim is an employee of the parties (in which case a simple deposition notice, rather than a third-party subpoena, would be proper). But all that the evidence they cite suggests is that Oppenheim has been acting as an attorney, providing legal advice to the plaintiffs. Whether he ultimately is forced to sit for a deposition or not, virtually all the relevant information he has is likely privileged. (This reply brief is the result of the Tenenbaum legal team's "collaborative lawyering" processs. It doesn't appear to me that anything useful came of it.)

3) Judge Gertner issued a scheduling order addressing the issues raised by the First Circuit's consideration of the labels' efforts to thwart the webcast of an upcoming motion hearing. The court did the following:

• Bifurcated discovery, with the plaintiffs able to proceed with discovery on their copyright claim immediately, but Tenenbaum barred from conducting discovery until it is determined that his counterclaims are viable.
• Agreed with the labels that Tenenbaum's counterclaim alleging that the statutory damages provisions of the Copyright Act are unconstitutional is not actually a "counterclaim," but, rather, is actually a defense that may be pled in a motion to dismiss. The court gave Tenenbaum until March 9 to file such a motion.
• Postponed the hearing on Tenenbaum's motion to amend counterclaims, and the labels' motion to dismiss counterclaims, from Feb. 24 until April 30. This postponement gives the First Circuit the opportunity to first rule on the webcast, though, with the Court of Appeals' oral argument set for April 7, there is no guarantee that it will have issued an opinion by the 30th.
• Said it would decide the following motions on the papers: Defendant's Motion to Compel the Deposition of Matthew Oppenheim; Plaintiffs' Motion for Sanctions Against Attorney Nesson; Defendant's Motion for Protective Order [Relating to Proposed Computer Inspection]; and Plaintiffs' Motion to Compel Discovery Responses from Defendant Joel Tenenbaum
• Vacated the March 30 trial date and said the trial would likely occur in June 2009
• Admonished Tenenbaum's counsel to follow the Federal Rules of Civil Procedure and the Local Rules.  

Lastly, and most intriguingly, the court stated:

An issue has arisen with respect to the recording of counsel communications. The parties are advised that any such recording without permission of the participants, as well as the broadcast of such communications, runs afoul of Mass. Gen. L. c. 272 § 99.

Very interesting! Has someone been taping conversations without getting permission from every party to the conversation? That can get you five years in Massachusetts state prison. I'll try to find out more.

First Circuit: truth is NOT necessarily a defense to libel

If there's one bedrock principle of media law, it's that truth is an absolute defense to a claim of libel.  Everybody knows that, right? Well, not the First Circuit! Hard as it is to believe, the First Circuit has just held in a case called Noonan v. Staples, Inc. that a true statement can form the basis of a libel claim.

Here's what happened:  Noonan was a salesman for Staples. Staples fired him for filing false travel expense reports (an alleged $1,129 meal at McDonald's does tend to arouse suspicion, though, in fairness, Noonan claimed that the errors in his reports were inadvertant, and that he actually saved Staples money by bending certain rules.) A Staples executive announced Noonan's departure with an email to about 1,500 employees:

It is with sincere regret that I must inform you of the termination of Alan Noonan's employment with Staples. A thorough investigation determined that Alan was not incompliance with our [travel and expenses] policies. As always, our policies are consistently applied to everyone and compliance is mandatory on everyone's part. It is incumbent on all managers to understand Staples['s] policies and to consistently communicate, educate and monitor compliance every single day. Compliance with company policies is not subject to personal discretion and is not optional. In addition to ensuring compliance, the approver's responsibility to monitor and question is a critical factor in effective management of this and all policies.

If you have any questions about Staples['s] policies or Code of Ethics, call the Ethics Hotline . . . or ask your human resources manager.

Noonan sued for libel (among other things). The District Court granted summary judgment for Staples, finding that everything in the email was true. The First Circuit agreed: "there is no triable issue of fact on the question of truth." End of story, no? No!

Here was the First Circuit's reasoning:  under the relevant section of Massachusetts libel law, enacted in 1902, truth is indeed a defense to a libel claim -- "unless actual malice is proved." When libel attorneys read "actual malice," they think of that term as defined in New York Times v. Sullivan: "actual malice" means "knowledge that [the allegedly libelous statement] was false or [made] with reckless disregard of whether it was false or not." In other words, "actual malice" in libel law means something different from what the term means in normal English: spite, ill-will, intent to injure, etc. But the First Circuit held that "actual malice" as used in the Massachusetts statute is not the same as New York Times v. Sullivan "actual malice." Rather, the court held, "actual malice" under Massachusetts law means exactly what every law student is taught "actual malice" does not mean: "malicious intention." So, the First Circuit held, Noonan may have a valid libel claim if he can prove to a jury that the Staples exec sent the email with a "malicious intention" -- even if -- as both the District Court and the Court of Appeals concluded -- every word of it was true.

Why, one may ask, did the First Circuit rely for its definition of "actual malice" on a 1903 Massachusetts Supreme Court decision that predates virtually all First Amendment doctrine, including the strong speech protections embodied in New York Times v. Sullivan? And why did it not even consider whether the First Amendment permits a libel claim premised on a true statement? According to the court (see footnote 7), "this argument is not developed now and was not raised in the initial briefing. Accordingly, we do not consider it at this time." So the court was willing to upend what everyone thought was decades of fundamental, settled First Amendment law because the issue wasn't raised by the parties until late in the game? Seriously ? They couldn't have ordered an additional round of briefing?

Unsurprisingly, the Noonan decision is garnering worse reviews than a triple-feature of Gigli, Ishtar, and Battlefield Earth. Media lawyer Robert Ambrogi calls it "the most dangerous libel decision in decades." The Nieman Journalism Lab says Noonan "threatens to muzzle both news and entertainment media, and could be particularly dangerous to independent bloggers and small startup news organizations." And Attorney Marc Randazza says the decision  "could wind up making Massachusetts the least speech protective jurisdiction in the United States." More good analysis and reaction from the Citizen Media Law Project.

Let's hope the First Circuit fixes this en banc (et tout de suite). And that they are more protective of First Amendment values when deciding another important pending case.

(What's in the water in New England, by the way? Professor Volokh describes a similarly wrongheaded 1995 Rhode Island Supreme Court opinion here.)

Court declines to dismiss Jackson Browne's suit against John McCain

A federal court in Los Angeles has declined to dismiss a lawsuit filed last August by Jackson Browne over use of the song "Running on Empty" in a web video produced by the Ohio Republican Party. Browne sued John McCain, the ORP, and the Republican National Committee for copyright infringement, and for alleged violations of his rights under the Lanham Act and California's common law right of publicity. The court denied McCain's and the RNC's motions to dismiss the copyright and Lanham Act claims, as well as their motions to strike Browne's right of publicity claim. The court did grant the ORP's motion to dismiss on the grounds that the court lacked jurisdiction over the ORP in California. A scheduling conference has been set for April 20.

The McCain campaign released the following statement through its outside counsel Lincoln Bandlow:

The McCain campaign is disappointed that the Court declined to dismiss Jackson Browne's suit about the Ohio Republican Party's political video, despite the fact that the Court found that Browne's claims arise out of protected speech activity under California's Anti-SLAPP statute and that the evidence was undisputed that Senator McCain "played no part in the creation or dissemination" of the video. But it is important to keep in mind that the Court has not yet ruled on the merits of the case, which we will continue to vigorously contest. We intend to seek immediate review of the Court's orders in the Ninth Circuit.

The briefs can be found here. A declaration by the ORP Communications Director explaining the circumstances under which he made and disseminated the video is here.

(Disclosure: I have participated in Senator McCain's defense of this case.)

When Sgt. Friday met the Internet pirates

An affidavit by an FBI agent filed in support of a criminal copyright prosecution provides fascinating insight into how anti-piracy investigators go about tracking their prey. Get past the unintentionally hilarious Dragnet-era deadpan ("Based on my knowledge, training, and experience, and the experience of other law enforcement officers, I have knowledge of the Internet and how it operates. I know that the Internet is a worldwide computer network which connects computers and allows communications and transfer of information and data across state and national boundaries..."), and it's a pretty interesting story.

Here's what happened, according to the affidavit, filed by Special Agent Mark Burnett (no, not that Mark Burnett): Paramount (for reasons unknown) decided to release a "comedy" called The Love Guru on June 20, 2008. Shortly before that date, MPAA cyber-sleuths discovered that someone was offering to upload a copy of the film to a "topsite" known as "PUKKA." The MPAA forwarded this information (including the IP addresses from which the alleged pirate uploaded the file) to the FBI, which took over the investigation.

The FBI took the IP addresses to Cox Communications, the ISP to which the addresses were assigned. Cox then gave the FBI the name and address of the 2 subscribers associated with those IP addresses, who lived next door to each other on Spanish Lace Drive in Irvine, CA. The FBI surmised that the uploader first tried on an unsecured wireless network, but wasn't able to finish; he then used his own secure network to complete the transfer. Special Agent Burnett interviewed the relevant residents, and made some progress.

Separately, Burnett pursued a lead at Los Angeles Duplication & Broadcasting ("LADB"), a company hired by Paramount to make screener copies of The Love Guru. The FBI believed that a copy made by LADB (and intended for Jay Leno) was the source of the upload. Burnett interviewed an employee named Jack Yates, who had made the Leno copy, or, allegedly, 2, the first of which was apparently rejected by Paramount because of its poor quality. Yates' story didn't match with company records, and there was a surveillance video that allegedly showed him making an unauthorized copy and removing it from the facility, but he denied any knowledge of taking a copy or how the movie leaked to the Internet.

Meanwhile, the FBI did a forensic examination of the computer of Mischa, a roommate of one of the Irvine Cox customers, which confirmed the Love Guru upload. Mischa then allegedly told Burnett that "Yates made a copy of The Love Guru at his place of work....Yates gave the copy to his cousin, Erich Blume. Blume then gave the copy to Nick Krieger, who was a former roommate of [Mischa] in Capo Beach. Krieger gave the copy to [Mischa]. [Mischa] uploaded the movie to the FTP site."

All of which led to Yates being charged on February 9 not only with criminal copyright infringement, but also with a violation of 18 USC §1001 for making a false statement to the FBI.

Read the whole thing.

(h/t Wired)

Labels ask that Feb. 24 Tenenbaum hearing proceed without webcast

The plaintiffs in the record labels' suit against accused peer-to-peer infringer Joel Tenenbaum have asked the District Court to proceed with a scheduled February 24 motion hearing, despite the fact that the First Circuit will not by then have ruled whether that hearing may be webcast. District Judge Nancy Gertner has permitted the webcast, but the plaintiffs have appealed, and earlier this week, the First Circuit stayed the webcast order and set a hearing date of April 7.

In their "Request for Hearing" filed today, the plaintiffs point out that there are a total of 6 pending motions in the case, and that there is no reason to delay a hearing on those motions solely because of the webcast issue, which they describe as "collateral." Plaintiffs also complain that Tenenbaum has not complied with numerous pending discovery requests over long periods of time.

UPDATE:  Tenenbaum has now asked the District Court to hear several of the pending motions on Feb. 24 (without the webcast), but to postpone the hearing on his Motion for Leave to File Amended Counterclaim until after the First Circuit has ruled on the webcast issue. 

I think the labels' request that the entire Feb. 24 hearing proceed as scheduled is well taken. I have made clear that I support the webcast. But I agree that the webcast issue is "collateral"; it's minor compared to the basic copyright disputes in the case. And let's remember what is actually at stake here:  if the hearing proceeds without the webcast, it will simply be like virtually all hearings in federal court: completely open to the press and public, only with no recording or broadcasting permitted. It has been reported that the webcast would be the first ever, and, while the webcast would be a helpful way for those of us not in Boston to get a better sense of the oral argument, reading a transcript afterwards would not be the end of the world.

(h/t Recording Industry vs. The People)

More Big Content attorneys to Obama Administration

National Journal's Tech Daily Dose reports that Hogan & Hartson partner Mary Ellen Callahan has been tapped as Chief Privacy Officer at the Department of Homeland Security. Callahan has represented the MPAA in a variety of matters before the Federal Trade Commission on such issues as privacy, spam, and marketing to children. A few examples of Callahan's work can be found here, here, and here. Interestingly, Callahan worked on MPAA matters at Hogan with partner Christine Varney, who has been nominated as Assistant Attorney General in charge of the Justice Department's Antitrust Division.

Wherein the Washington Post reports on my breakfast with Bernie Sanders, Larry King, and an entertainment litigator friend

Take it away, Akers.

FBI probed sex life of MPAA President Valenti

It was 45 years ago, and before Jack Valenti joined the MPAA, but still, quite an amazing story from the Washington Post:

Previously confidential FBI files show that [FBI Director J. Edgar] Hoover's deputies set out to determine whether Valenti, who had married two years earlier, maintained a relationship with a male commercial photographer. Republican Party operatives reportedly were pursuing a parallel investigation with the help of a retired FBI agent, bureau files show. No proof was ever found, but the files, obtained by The Washington Post under the federal Freedom of Information Act, provide further insight into the conduct of the FBI under Hoover, for whom damaging personal information on the powerful was a useful tool in his interactions with presidents from Franklin D. Roosevelt to Richard M. Nixon.

[President] Johnson initially blocked the FBI from obtaining a sworn statement from Valenti or approaching the photographer, asserting that Valenti was "attracted to the women and not to the men," files show. But under FBI pressure, the president relented and approved an investigation of his close friend.

Read the whole thing.

Court rejects arguments that MediaSentry's work for record labels taints lawsuits against accused infringers

It has long been an article of faith among opponents of the record labels' lawsuits against accused individual peer-to-peer infringers that the plaintiffs' evidence is tainted because it was obtained by a firm called MediaSentry in alleged violation of state private-investigator licensing regulations. Indeed, anti-label litigators have railed against MediaSentry and urged state authorities to take action against the group. Some background here, here, here, and here.

The attack on MediaSentry for its activities in support of the record labels' litigation is a red herring for several reasons, chief among them:

1) MediaSentry simply accesses open peer-to-peer networks, where users have no reasonable expectation of privacy. It basically surfs the web looking for information, albeit with more sophisticated software than the average browser. See here for an explanation. MediaSentry does not act as a "private investigator" under any reasonable definition of that term.

2) Even if MediaSentry's activities are somehow covered by broadly-worded state private investigator regulations, that's not relevant to the quality of the evidence it presents in the labels' lawsuits. I am aware of no legal authority for the proposition that evidence is rendered inadmissible in a civil suit merely because it was obtained in violation of the law; indeed the law is to the contrary (i.e., criminal law's exclusionary rule generally does not apply in civil litigation). For some background, see this article.

Well, those two arguments have now been tested in court. And they carried the day. Here's what happened: the record labels used MediaSentry to identify the IP addresses of alleged infringers at the State University of New York at Albany. The labels filed a Doe lawsuit and served a subpoena on SUNYA, seeking disclosure of the names linked to the IP addresses. The Does moved to quash the subpoena, arguing (among other things) that MediaSentry had failed to register as a private investigator under New York law (see page 19 of the Does' brief). The labels opposed the motion to quash.

In an opinion issued today, the federal magistrate judge hearing the case denied the motion to quash, and along the way flatly rejected the Does' arguments regarding MediaSentry:

MediaSentry was retained by RIAA to assist in investigating those who may have infringed their members’ copyrighted recordings. MediaSentry, as we also know, entered into various P2P networks in order to follow a trail to certain or specific IP addresses to determine if the addressee had downloaded and distributed protected materials via the P2P network. We further know that MediaSentry visited at least sixteen SUNYA IP addresses, looked within shared files posted at these IP addresses, and uploaded [ed.: I believe the court meant "downloaded"] those files to determine if the musical recordings were copyrighted and owned by RIAA’s members. The result of the investigation is reflected in Exhibit A of the Complaint.

The Doe Defendants complain that MediaSentry is not a New York State licensed investigator, a fact MediaSentry concedes. Because MediaSentry is unlicensed, the Doe Defendants suggest that MediaSentry may have violated New York law and committed a Class B Misdemeanor, GEN. BUS. L. § 70(4), and further intimate that any evidence MediaSentry may have gathered should not be admissible. Because of the questionable admissibility of the evidence, Defendants contend that the Subpoena should be quashed.

The Court respectfully disagrees with the Doe Defendants that this information was illegally obtained on several accounts. Although we are uncertain of the impact General Business Law § 70 has on what MediaSentry actually did or may have done, by placing recordings into a shared file for the entire world to visit and capture, without the permission of the rightful owners, the Doe Defendants are hardly in a position to claim trespass, force, or fraud by MediaSentry. They are not in the position of even arguing that they had an expectation of privacy. If the allegation that the Doe Defendants placed copyrighted recording into index files for others to take at will and hereby trampled upon the exclusive owner’s copyright domain are true, they have forfeited any expectation of privacy they may have had. Even if the information was illegally obtained, this does not necessarily foretell its inadmissibility during a civil trial. Other than an errant citation to a United States Supreme Court case [which the court forcefully distinguishes in a footnote], the Doe Defendants do not proffer any other precedent to uphold this notion that illegally obtained evidence is somehow excluded from a civil trial, and this Court has been unable to unearth any case to confirm this novel concept. Moreover, General Business Law § 170 does not have a provision that espouses an exclusionary rule. Lastly, any discussion about admissibility at trial is evidently premature and not a matter for us to consider at this initial stage of the litigation. Thus, the Court does not accept the Doe Defendants’ invitation to determine that MediaSentry'’s investigation was illegal nor that an illegality of this nature is purposeful grounds for quashing a subpoena.

(footnotes omitted). I don't expect this decision to dissuade those battling the labels' lawsuits from continuing to press their anti-MediaSentry arguments. But at least now one federal court has seen them for the red herrings that they are.

UPDATE: The magistrate judge's opinion has been upheld by the District Court.

Nesson admits: Tenenbaum 'downloaded music for...own enjoyment'

Harvard Law School Professor Charles Nesson has conceded in a letter to the US Department of Justice that his client, accused peer-to-peer infringer Joel Tenenbaum, "downloaded music for [his] own enjoyment." That admission will certainly help the record label plaintiffs prove their affirmative case against Tenenbaum; paragraph 13 of the labels' complaint alleges that he "download[ed]" songs in violation of their exlcusive rights to reproduce and distribute the songs at issue. And courts have made clear that unauthorized downloading by means of p2p software constitutes copyright infringement. See, e.g., BMG Music v. Gonzalez, 430 F.3d 888 (7th Cir. 2005) ("people who post or download music files are primary infringers."); In re Aimster Copyright Litigation, 334 F.3d 643 (7th Cir. 2003), A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (9th Cir. 2001). Nesson's concesssion also appears to contradict his client's own Answer, which states in paragraph 13:

Defendant denies that he used or continued to use an online media distribution system to download the Copyrighted Recordings...

I suppose Tenenbaum can still attempt to deny that KaZaA or the Internet are "online media distribution system[s]," or that whatever he downloaded were the "Copyrighted Recordings" alleged in the complaint, but his attorney has now clearly conceded the "download" part.

The main purpose of Nesson's letter, though, was not to help the plaintiffs prove their case. Rather, it was to ask DOJ to

intervene in Joel's case on behalf of the people of the United States of America to save the Constitutionality of Section 504(c) by interpreting its damage provision for willful infringement to apply only to commercial infringers. If applied to an individual such as Joel, who has made no commercial use of plaintiffs' copyrights, the statute violates the Constitution.

Even anti-label litigator Ray Beckerman thinks Nesson has taken the wrong approach in his letter. Writes Beckerman:

For the life of me, I can't understand why the letter is limited to "willful" infringement. That is like conceding that $750 to $30,000 is OK. (!!!???) A letter like that could do more harm than good.

In any event, it's exceedingly unlikely that DOJ will intervene to concede the unconstitutionality of any part of the statutory damages scheme. If anything, DOJ would intervene to defend the statute. In late 2007, DOJ filed a brief in the Capitol v. Thomas case that constituted a strong defense of statutory damages against a constitutional challenge:

Under the constitutional test adopted by the Supreme Court, an award of statutory damages satisfies the demands of the Due Process Clause as long as it is not “so severe and oppressive as to be wholly disproportioned to the offense or obviously unreasonable.” St. Louis, I.M. & S. Ry. Co. v. Williams, 251 U.S. 63, 67 (1919). Accordingly, given the standard articulated by the Supreme Court, the statutory damages provision for copyright infringements easily withstands constitutional scrutiny. Statutory damages for copyright infringements have existed in some form dating back to before the ratification of the Constitution. Congress acted reasonably in crafting the current incarnation by ensuring that it serves both a compensatory and deterrent purpose. Congress established a damages range that provides compensation for copyright owners in a regime in which actual damages are hard to quantify. Furthermore, in establishing that range, Congress also took into account the need to deter the millions of users of new media from infringing copyrights in an environment where many violators believe that they will go unnoticed. Accordingly, the statutory range specified by Congress for a copyright infringement satisfies due process.

As I recently wrote, "Administrations of all political persuasions defend the constitutionality of all federal statutes, unless there is no plausible legal argument for doing so -- a principle President Obama's choice for Solicitor General [Nesson's former boss Elena Kagan] recentlyembraced with enthusiasm. Even if one disagrees with the availability or amount of statutory damages, to assert that there is no plausible legal argument in their constitutional defense is frivolous." I highly doubt Nesson's letter will change this calculus.

First Circuit sets April 7 oral argument on Tenenbaum webcast

The First Circuit has set oral argument for April 7 in the appeal of District Judge Nancy Gertner's order permitting the webcast of an upcoming motions hearing in the case of accused peer-to-peer infringer Joel Tenenbaum.

That date complicates matters in the District Court, which had set the potentially-webcast motion hearing for Feb. 24 and the trial date for March 30. Of course, the First Circuit's decision on the webcast order would be moot if the District Court proceeded with those dates. Recognizing that, the First Circuit stated:

We stay the district court's order of January 14, 2009 (already temporarily stayed by the district court) permitting narrowcasting, pending disposition of this mandamus petition or further order of this court, whichever first occurs. We recognize that a hearing is currently scheduled in the district court for February 24, 2009 and that trial is scheduled to commence on March 30, 2009. The district court may either stay its proceedings pending our decision on the petition or it may permit the presently scheduled hearing and/or other proceedings in the case to go forward, but without being narrowcast.

In other words, the First Circuit has told Judge Gertner: you may keep to your current schedule if you'd like, but you may not permit the webcast unless and until we tell you it's OK.

I may be reading too much into this procedural order, but it does not strike me as particularly good news for those of us who favor the webcast. It seems to me that the First Circuit thinks there is at least some reasonable chance that it will overturn Judge Gertner's webcast order, and it doesn't want her to proceed with the webcast before it has the chance to stop it in its tracks. The interesting question is whether Judge Gertner will now stick to her schedule, or push it back for several months, all over the webcast issue. While I do favor the webcast, I must concede that it's an ancillary issue, and that the Court's primary focus should be on resolving the substantive legal issues at hand. The worst that can happen is that the oral argument proceeds in an open courtroom, where anyone is allowed to attend, only with no webcast -- in other words, exactly like every other hearing in federal court. Not exactly what I want, but not the end of the world, either.

(Recording Industry vs. The People characterizes the First Circuit's order as a stay of "proceedings," but that's not right. The First Circuit merely stayed the District Court's webcast order, the proceedings may...proceed; it's just that they can't be webcast unless and until the court of appeals gives its go-ahead.)

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