Recently in Law Category

David Bernstein has a Volokh Conspiracy post remarking on the apparent decision by homebuilder Brookfield Homes to collect expectation damages rather than liquidated damages from prospective buyers who walk away from home purchase contracts.

Translated into English: Instead of just taking the earnest money deposit, Brookfield apparently intends to sue buyers in default for the difference between their contract price and the price for which the home actually sells. Is this true? Well, it looks that way from the quote of a certain Mr. Hughes, in a WSJ article I can't access (I don't subscribe), quoted in a post here at The Housing Bubble Blog. But without seeing the actual contract provisions, I can't tell how much leeway Brookfield has given itself.

It wouldn't surprise me to see some changes in homebuilders' marketing and legal strategies as markets fluctuate. But as David Bernstein and the commenters on his post suggest, the market will probably weigh against decisions like Brookfield's, especially if the market softens further and puts even greater competitive pressure on builders.

I haven't yet heard of builders demanding damages greater than the earnest money deposit here in Colorado. Builders may want to respond to softening markets by increasing their earnest money requirements in an effort to encourage buyers to financially commit themselves more strongly to their contracts, but at the same time fewer prospective buyers will be willing to put up larger deposits and assume greater risks. Requiring a big deposit can scare customers away.

Supplement: Bernstein wonders why the builders don't protect themselves against defectors and market price fluctuation by waiting until the house is almost done before finding a buyer. The answer is that a house is worth more to a buyer who can select customized "upgrade" packages for the house, and it's too late for that once construction has gotten far along. For example, if a buyer wants a nine-foot basement instead of an eight-foot basement, the builder needs to know before excavation is done.

Dave Winer regrets not having had a lawyer review a deal.

Get it in writing, and have a lawyer review it. Ask Jason Calacanis, who wisely says if a deal is worth doing, it's worth having a lawyer write it up. If it's not worth that, then don't bother.

Dave writes from the perspective of someone who feels he was taken for a ride, but it's also good to have a lawyer involved even if the people on the other side of the deal have the utmost integrity. Honest misunderstandings happen, and a good lawyer can help avoid them before they happen. No one can avert all possible misunderstandings, but one can reduce the risk and, in the process, increase the likelihood that the agreement between the parties has the intended legal effect.

A three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit rejected the Federal Communication's Commission's "broadcast flag" rule yesterday. [Opinion here.] Ernie Miller is tracking the online press reports.

The "broadcast flag" is a copy protection mechanism for digital TV broadcasts. The FCC's regulations required manufacturers of digital TV receivers to design their products to recognize when a digital TV transmitter had set the "broadcast flag" on a digital TV signal. If the digital TV receiver detected the "broadcast flag," it was required to send the content only to certain digital outputs that would recognize the broadcast flag or to an analog output. It permitted receivers to record the TV broadcast only if they could do so in a way that would make it impossible for another device to copy the recording.

In other words, the rule is designed to prevent people from recording a digital TV transmission on a computer and then sharing it with anyone else or taking clips from it. The rule works by requiring manufacturers to make equipment in a way that honors the demands of TV producers.

The Court of Appeals held that the FCC lacked authority to regulate what equipment does to recordings of transmissions after receiving them. The FCC's job is to regulate how transmissions work, not how people use recordings.

The FCC may continue to press the case, and the intervening Motion Picture Association of America (MPAA) will most likely request en banc review or petition the Supreme Court for certiorari even if the FCC does not. If the courts deny further review or decide against the MPAA and FCC, the MPAA will lobby Congress to extend the FCC's authority. MPAA could ask Congress to codify the broadcast flag regulations in a statute, but it might prefer to have the FCC continue oversight of the rules and retain the ability to change them.

I oppose the notion that the MPAA should dictate how computer equipment is built and how it treats data, and I don't like what I perceive to be a general atmosphere of overreaching at the FCC, so I like the D.C. Circuit's ruling. I also think it's founded on good legal analysis and reached the right conclusion as a matter of law.

The "broadcast flag" regulations appear in the Code of Federal Regulations at 47 C.F.R. 73.9000-73.9009 and 47 C.F.R. 76.1901-76.1909.

See also Susan Crawford's discussion of the ruling and FCC jurisdiction, with a link to her article on the topic.

A programmer named Daniel Wallace has filed a complaint in the U.S. District Court for the Southern District of Indiana claiming that the General Public License violates U.S. antitrust law. Wallace is, for now, acting as his own attorney. My knowledge of antitrust law is a little rusty, but my initial hunch is that Eric Goldman is right that this case is not going to be around for long.

Correction: The post on Eric Goldman's blog is by John Ottaviani, a guest blogger. Sorry, John!

Seth Finkelstein has a commentary on section 202 of the Family Entertainment and Copyright Act.

My summary of Seth's take on the Act: The Act creates an exception that's about as narrow as can be, and the only winners are a lobby of religious conservatives. On the other hand, there are no big losers. But it's too bad that the Act wasn't set up in a way that would have created or codified more freedoms regarding how we use material that's protected by copyright.

[Update: EEJD blog criticizes the tone of Seth's post: "These additional excerpts [from Seth's post] seem to communicate that Seth's problem has more to do with the fact that the bill is aimed at 'religious prudes' than the fact that the bill gives more control to consumers…"]

Section 202, you may or may not recall, makes it clear that people can legally sell equipment and software that "filters" DVD recordings of movies as they're being played. People who want to watch, say, "violence-free," "cursing- and profanity-free," or "sexual content-free" versions of movies can do so without keeping a finger on the fast-forward button, because they can buy these "filters" that will tell their DVD player what parts to skip automatically. The reason this was a potential copyright problem is that it looked like interposing that kind of technology might result in a derivative work of the original — something the copyright law forbids. (I vaguely recall a case in which someone produced "cleaned-up" VHS videotape copies of films, an even-bigger infringement problem because it resulted in an additional copy of most of the videorecording; the new law still doesn't allow that.) The boundaries weren't very clear. The Act eliminates the risk of infringement for a very narrow set of activities.

Ed Felten has a pragmatic censorship & free speech analysis of Sections 201 and 202 of the Family Entertainment and Copyright Act. He concludes that the Act does not promote censorship. Alan Wexelblat (Copyfight) appears to agree, and has other links.

The Act seems tailored to let people choose what they want to watch in a movie, and to make DVDs that will let people easily skip scenes they don't want to watch. It requires that the end-user ultimately make the decision about whether to skip scenes. I like that the law implicitly rejects any "moral rights" of a copyright holder by which the copyright holder could force people who buy a movie to watch the whole thing. That's good because the U.S. copyright system is not based on any moral rights in the copyright holder (there is only one exception to this policy I can think of); U.S. copyright law is only supposed to create economic incentives for creative expression. Under the Family Entertainment and Copyright Act, the copyright holder in a movie still gets paid for the whole movie, which satisfies the policy of the copyright law.

There are still social questions that arise from this kind of law. For example, if people can simply edit out controversial parts of a film, does that not overly allow people to insulate themselves from artistic efforts to address difficult social issues?

I think the answer is, Maybe so, but copyright law doesn't have anything to say about that.

... is that everyone else has it really well covered.

The Mercury News is running an editorial about (Cal.) Superior Court Judge James Kleinberg's ruling in Apple v. Does just over a week ago. [Via Donna Wentworth.]

Let's be careful with the extent to which we call this case a "precedent." It has no authoritative precedential force within the law, because it comes from a trial court. But there is a possibility that an important appellate court could agree with the reasoning, establishing more authoritative precedent. Or, other trial courts could simply find the reasoning persuasive in the absence of other more binding authority.

When should website operators who post information they receive about business activities be able to claim either:

• A privilege not to disclose the identity of their sources?
• An immunity from civil suit or criminal penalties for disclosing information?

I'll call the first of these a "journalistic privilege" and the second "journalistic immunity." In this post I'm just going to talk about privilege, but it helps to remember that we are talking about at least two kinds of protections. Still a different kind of privilege protects publishers from prior restraint in most cases.

Ernest Miller (The Importance Of....) has an idea for an answer to those questions above. It's pretty simple. But it may be too simple, and efforts to refine it tend to lead to some of the more complicated inquiries that I think he'd prefer to leave out of the test.

Mr. Miller argues in this post for a standard that would make it very easy to obtain legal protection for disseminating information one receives from business or government insiders. On Mr. Miller's view, we should not focus on the speaker, the content of the speech, or the medium of communication. See his post for a quite articulate summary of that part of the argument. (Mr. Miller cites Linda Berger, Shielding the Unmedia: Using the Process of Journalism to Protect the Journalist's Privilege in an Infinite Universe of Publication, 39 Hous. L.R. 1371 (2003)). Mr. Miller and Prof. Berger argue for approaches where what counts is whether the speaker is "engaged in the process of journalism."

Miller and Berger argue for different standards. Prof. Berger provides a pragmatic (but still a bit fuzzy) outline of what sorts of behaviors and attributes characterize the "journalistic processes" that law should protect. Mr. Miller argues that Prof. Berger's standard should really be stripped down to just two or three elements. I'm going to focus on his argument below and leave Prof. Berger's aside, mainly because I haven't had time yet to give her article the closer reading it deserves.

Prof. Berger's article also provides a very handy historical summary of journalistic privilege (or its absence) under federal and state law. Note that she and Mr. Miller are arguing for reformulations of privilege law — that's really another way of saying "new law". I'm not "dissing" either's argument, which may be sound and valid from the perspectives of First Amendment values — specifically, the free flow of information — and jurisprudential efficacy. I'm just saying their arguments are not what the courts have been doing so far.

So how should we tell who is "engaged in the process of journalism?" Mr. Miller writes, "The 'press' and journalism boils down to two things: gather information and publish it publicly." So, he asks, "Isn't the only process we need to know about is that information was gathered and then it was publicly published (or there was intent to publicly publish)?"

If I'm reading Mr. Miller's post right, the elements of the journalistic privilege would go like this:

If

• Insider communicates information to Outsider; and
• Outsider
  • publicly publishes the information or
  • intends to publish it publicly;

• Outsider cannot be compelled by law to identify Insider.

It looks simple, but there are still some tricky parts.

For example, there's still some question what it would mean to "publish" information. Assume that any widely disseminated medium counts as publishing — including publicly accessible websites. That does away with the blogger/journalist issue. But the bigger problem word in this test is "publicly." Is it "publicly publishing" if Outsider only shares the secret information with his or her family? What if Outsider puts together a "publication" that consists of a for-profit newsletter distributed only to a trade group? Or only to certain competitors of Insider's employer? When does the further dissemination of the information become a "public" publishing?

Mr. Miller's test also has a subjective element, in that Outsider's subjective intent to publish would qualify Outsider for the privilege. Suppose we have an Outsider who has engaged in some of the more questionable practices described two paragraphs above. When Outsider gets a subpoena (because yet someone else leaked Outsider's newsletters or a copy of Outsider's private website), is it enough for Outsider to say, "I planned to release that information to the public at large next week"?

The hunt for a description of "public" smells to me like a search for the kinds of journalistic processes that we consider to be more for the benefit of the public at large than for select groups. If we go down that path, it dredges up the questions of disclosure, journalist track-records, and other scrutiny of Outsider that Mr. Miller's proposed test aimed to avoid in the first place.

Even if these questions show up difficulties in Mr. Miller's proposed test, he could quite aptly point out that it's often better to have one hard-to-apply word or element in a law than to have two, five, or ten, especially when that law is designed to protect the flow of information and public discourse. Maybe that's true, or maybe this topic is trickier than it looks so that we may have to put up with more complexity. Based on what I've read so far, I suspect Prof. Berger's approach admits of more of that complexity. On the other hand, her approach may be more difficult to apply, and she may overly favor "established media" outlets.

All that, and we haven't even reached the core policy issues, though I'm trying to illustrate some of them with the hypothetical questions I've asked in the last few paragraphs. You can find more detailed discussions elsewhere (Prof. Berger's article might be a good place to start).

Notice that Insider still gets no special protection. That's the same as in current law. If Insider's employer can identify Insider through other means, Insider is still in trouble unless some kind of "whistleblowing" law applies. Regardless of how we treat the journalist, I don't think the rules that apply to Insider should change. Except in extreme circumstances, no business should be compelled to employ someone who leaks private business information.

If you're interested in the topic and you haven't read Mr. Miller's post already, have a look at it and think about it for a while. If you're really interested in the legal background, also look at Prof. Berger's article.

Peter Burrows, BusinessWeek's Computer department editor, has a column describing why Apple's choice to sue fan-driven websites is a bad business call that "could tarnish the Apple brand." ("Memo to Apple: Lay Off Your Fans")

There's a certain irony to this. Remember the Orwell-inspired ad that ran during the 1984 Super Bowl, that one that depicted Apple as the free-thinking company breaking the Big Brother dogma of the computer industry? Through conscious marketing efforts, Apple has long stood for innovation and creativity, and has been embraced creative sorts like artists and writers -- not people who usually care for big corporations pursuing lawsuits against 19-year-olds. That may vastly oversimplify the nuanced legal issues Apple's lawyers are trying to address, but it could well be the overriding impression that results.

A large QuickTime .mov file of the 1984 advertisement is available here. There are smaller copies floating out around the internet.

By now, everyone who reads law and technology related weblogs is aware that a California court has permitted Apple Computer, Inc. to issue subpoenas to weblog author-editors and ISPs. Apple aims to discover who leaked information about an Apple project called "Asteroid." The court order rejecting the webloggers' motion to quash the subpoenas is here [via EFF].

To comply with the subpoenas and order, the webloggers will have to disclose the sources underlying the articles they published. The webloggers are not currently defendants in the lawsuit — the defendants are the people from whom the webloggers received the information in the first place. Apple might, under the circumstances, be able to join the webloggers as defendants for disseminating trade secret information. But it currently seems that Apple's primary goal is to rout out its employees who leaked the information, firing them and maybe (or maybe not) maintaining its suit against them.

Here's a very non-exclusive list of what some people have had to say about this case in the legal and technical blogosphere since the court released its ruling:

• Denise Howell (Bag and Baggage): Links and information.
• SoCal Law Blog: Brief comment. (I would not normally endorse a weblog so drowned in advertisements that one can scarcely find the text. –tph)
• JMoore (JurisPundit): JMoore was hoping for some analysis on the role of blogger-as-journalist, an issue the judge sidestepped by holding that no journalistic privilege at all applied in the case.
• News release, Electronic Frontier Foundation. The EFF provided legal support to the webloggers.
• Donna Wentworth (Copyfight): Donna criticizes the judge's determination that no First Amendment journalistic privilege applied in the case, and links to—
• An exchange [one] [two] between Susan Crawford and Ernest Miller on the proper scope of First Amendment journalistic privilege.
• Dan Gillmor worries that if this ruling is upheld on appeal (assuming there's an appeal), business reporting will become too dangerous for reporters.
• The Mercury News's Mike Langberg asks Apple to reconsider its legal approach toward enthusiasts because it communicates arrogance and attacks people who love Apple and its products.

It seems to me that the main thing that really bothers Apple enthusiasts about these subpoenas (as well as some other claims Apple has been pursuing against enthusiasts who spread leaked information) is that they convey the impression that Apple wants to punish webloggers who are enthusiastic about its products. This impression relates to Langberg's argument in his editorial. As I've followed the news and commentary, I've been wondering about Apple's business decision to proceed with these lawsuits more than the nuances of the legal doctrines that apply (though the latter are important). I have to admit that my first impression of Apple's lawsuits was that they seemed eager to stifle the very kinds of enthusiasts who provide valuable word-of-mouth marketing for their products — the kind of marketing that you just can't buy.

Apple hasn't even tried to justify its strategy to the public, and if it tried to do so using one of those "we just have to protect our intellectual property in all cases" arguments, I'd be sorely disappointed. Still, I've tried to imagine why Apple might want to pursue these cases knowing that there is some risk that it might alienate some enthusiasts. What might the people in charge of this policy at Apple be thinking? My first impression is that Apple likes word-of-mouth and media hype for its products, but it really wants to be able to control that hype itself. Is that just the symptom of obsession for control, or can one justify the desire for control?

In some circumstances, Apple might want to conceal new product plans because it wants the maximum lead time in the market before competitors could develop a competing product. But this case doesn't look to me like a situation involving intense competition in a particular market space. The secret information at issue in Apple v. Does relates to an improvement to theGarageBand music sequencing software in the iLife software suite.

Maybe there was a major concern about competitive advantage for Apple in this case — I don't pretend to know all about the market for music sequencing software. But it looks to me like Apple is trying to enforce a blanket policy regardless of whether this particular leak is comparatively a "big deal."

Concerns about employee discipline provide one potential justification for pursuing "leakers" even if the leak didn't cause severe damage. Assuming that Apple has a blanket policy of secrecy — and it has had just such a policy since the 1970s — it probably wants to be very sure that it employs only people who can honor that policy, and it probably wants to fire those who don't honor it. It's probably wrong to label such firings "retaliation," since Apple has reasons other than spite for discharging people who break their agreements. For example, distributing certain information about forthcoming Apple products may in fact cause Apple harm if it tips off competitors. Also, leaking information about the company's projects may hurt morale, given that Apple has many employees who do act very cautiously to protect information about its development efforts. They probably don't want to feel that their own co-workers are disseminating the very information that they are trying to protect. I don't know how much of a problem that is because I don't know anyone who works at Apple.

I think Apple should have some right — probably a right with a lot of enforcement leverage — to demand confidentiality from its employees. I also think it should be able to use legal tools to do so. I'm just not sure where the line should be drawn as a policy matter. Maybe those tools should be limited, or maybe they should have a broad reach except in those cases that would classify as "whistleblowing."

I've seen a lot of discussion about whether the webloggers affected by subpoenas in Apple v. Does should be treated as journalists. Most people assumed the court's ruling would focus on that question. But the court concluded that regardless of webloggers' status, disclosures by Apple's employees about Apple's forthcoming products didn't implicate a journalistic First Amendment privilege at all.

That conclusion raises the question, When do communications to a journalist (however that word may be defined) about a company's business or research activities obtain a privilege such the journalist cannot be compelled to identify the source of the information? That question is probably more important than the journalist/weblogger question, and it's the core of a conversation that's started over the weekend (see, e.g., Crawford and Miller), and it's an important one.

I'm not sure where I stand on that issue, and if I have enough time this week I'll play around in this space with some possible arguments related to that question. I don't want a policy under which companies designate everything under the sun as "trade secrets" to prevent dissemination, but I also don't want a policy under which employees can feel free to share whatever company secrets they want as long as they're talking to a journalist.

In the meantime, I'll look forward to reading more arguments about the legal standards that apply and about Apple's policy in particular. I'll be especially curious to read any arguments people might test out in support of Apple's policy, since I didn't exactly work philosophical or rhetorical wonders in its favor earlier in this post. Before we can really evaluate the legal standards that apply, I think we need to try to understand why Apple might want to draw close the cloak of secrecy. If we don't give serious attention to that viewpoint, the perspective of the business that generates the information that it then seeks to protect, our discussion of the legal standards will be under-informed and imbalanced.

Today I attended a lunch meeting of the Real Estate Law Section of the Boulder County Bar Association. I'd been expecting a dreary discussion, but it actually turned out to be an interesting topic that prompted some animated conversation.

Ann Althouse has this interesting this post about the article "Our Godless Constitution," in The Nation. She shows how the article incorporates shoddy scholarship and, more importantly, explains how the article's inflammatory approach will utterly fail to explain the importance of separation of church and state to religious people. There are many arguments, including those adopted by the founders of the United States, that would demonstrate the social and religious importance of the separation of church and state.

Andrew Raff's IPTAblog has an article following up on the controversy that blew up last month when Martin Schwimmer asked Bloglines to remove his Trademark Blog from the Bloglines service. He frames and summarizes the issues well, I think.

My jaw dropped a bit, though, at the Sieblogs site that Andrew linked to. Sieblogs aggregates content from what must be a collection of hundreds of weblogs and mass media sources. It then displays that content by category. There's nothing on the main page or entry page that indicates the original content author. That's a violation all of the Creative Commons attribution licenses, and the sheer copying and re-display of the content is a violation of general copyright law, although it is something many weblog authors would permit if asked. Even though there are no advertisements yet, the utter failure to credit the author and source weblog really surprised me. They at least link to the original article.

Andrew Cohen has this column in the Denver Post today about the demise of Gorsuch Kirgis LLC, one of Denver's oldest law firms. Cohen credits the firm's long history to its earlier successes in maintaining a genuine partnership, one based on personal relationships rather merely "the pursuit of cash collections," its renown as being "one of the more humane places to practice law in town." He blames its impending dissolution on its failure to maintain that kind of workplace. In his story, the firm didn't have control over all of the factors that eventually led to its demise, but it did over some.

JDBliss posted this interview with Ernest Svenson, a/k/a Ernie the Attorney.

Ernie the Attorney's weblog was one of the first that I began reading back in 2002, and I've long admired his efforts to encourage improvement in law practice through better use of technology and other practices. He's looking forward in a business that spends most of its energy looking backward.

Slashdot linked a story by the BBC reporting that the U.S. hosting service The Planet terminated the contract of the Iranian Student News Agency (ISNA).

According to the article, ISNA is "semi-official" and may have some connections to the Iranian government. (If I recall correctly, the fundamentalist revolution in Iran called itself a "student" revolution, which may have some connection to the name of the organization.) Assuming so, the policy concerns, from the perspective of the United States, are different from a termination of a more liberal website.

There may be no effective way for a U.S. ISP to distinguish between the two kinds of websites, though, nor is it at all clear that the U.S. government should systematically engage in content-based discrimination between them. From a practical standpoint, ISP operators can't read Farsi and are unfamilar with the culture and politics of Iran, and can't be expected to make those calls anyway. It's not surprising that some ISPs are taking a bright-line approach and terminating accounts of Iranian entities and Iranians not resident in the United States, even if it silences some voices that the United States would probably like to amplify.

Assume an Iranian national resided legally in the U.S. and used a webpage hosted in the United States to write in favor of the existing Iranian government. Can the ISP terminate the contract because he is an Iranian national? Can the government require the ISP to do so without running afoul of the First Amendment? What if the Iranian national moves back to Iran?

Donna Wentworth posted a link to the book review Righting Copyright: Fair Use and "Digital Environmentalism" by Robert S. Boynton, published by Bookforum. The book review highlights four books on improving the balance in U.S. copyright law between exclusive rights and the public domain.

The review surveys the social and legal context, identifies the problems the books' authors try to address, and tries to explain (in relatively small space) why they are problems. It's a good survey, and from it I can tell that I will need to add some books to my reading list.

The term "digital environmentalism" was new to me, but seems very useful. Rather than explain it clumsily here, I simply refer you to Boynton's articulate introduction to the topic (it's in his 14th paragraph by my count, if you want to try to skip straight to it).

The New York Times (Michael Luo) is reporting that OCLC is suing a New York library-themed hotel because the hotel is arranged (and stocked with books!) according to the Dewey Decimal System.

Or perhaps I should say, The Dewey Decimal System[TM]. Yes, that's right. OCLC, that nonprofit library cooperative that makes interlibrary loan so easy and makes it possible to locate a book or article just about anywhere, claims a trademark on the Dewey Decimal System.

Dewey apparently copyrighted his system, too, though he invented it in 1874, so the copyright should be long expired (at that point in time, if I recall my changes in copyright law correctly, he wouldn't have been able to get more than 14 to 28 years of copyright protection). A trademark, however, can be repeatedly renewed.

No time for analysis right now, except to say that I'm a little skeptical of this case. In any event, the treble profits damages demand strikes me as a little obnoxious, even though I know plenty well that it's customary to ask for maximum damages allowed by law. Still, this seems to me to be one of those situations where the lawsuit to enforce the trademark could tarnish that very trademark.

As for the hotel owners, well, maybe they should use the LC system next time.

The NYT article is available here -- free registration required, as usual.

In response to my post earlier today, Carolyn Elefant remarked, "I haven't read the NY Times article, but I'd be shocked to find that public interest groups have trouble finding attorneys." After all, she explains, there's a lot of competition for those jobs.

She's right that many people compete for public interest jobs, and they're hard to get. The New York Times article focuses on lawyers who have managed to get into those jobs, only to have to leave for higher-paying work because they can't afford to stay in a public interest field. The problem may not be finding lawyers, but keeping them.

I notice that the kinds of salaries the article seemed to be talking about were substantially less than one can usually get for comparable work around here, so I'm sure there are regional differences, too.

A friend of mine works for a legal aid agency in eastern Minnesota. She has to wait tables so that she can pay the bills. It's unfortunate that she may have to leave her legal aid job, because she had a impressive touch with the clients (and a good success rate, too) when we were both in the clinical program at school, and she worked very hard to get that job upon graduation.

As for myself and what I want to do, well, that's a mystery I'm working to solve. You can bet, though, that every time I think about different sorts of paths I might take, those loan bills elbow their way into my thoughts.

The New York Times is running an article by Jonathan D. Glater today under the headline "High Tuition Debts and Low Pay Drain Public Interest Law."

My law debt is presently the bane of my existence, the golden handcuffs that keep me from doing things I want to do. I went to law school to open doors, to expand my opportunities, but the debt has a tendency to close them.

In the last few weeks I've been far too busy to blog or to read blogs, but today I decided to follow up on the issue of the "Super-DMCA" bills floating around in various states including my own, Colorado. I dropped by Ed Felten's Super-DMCA page and found that the Colorado Senate had passed a version of the bill.

I was pleased to find that the Colorado Senate had struck the provisions on "illegal telecommuncations equipment" that threatened to make basic secure communications technologies illegal. However, I then turned the page and found that the anti-circumvention provisions are still around.

The Colorado Senate also added some interesting savings provisions designed to protect "multipurpose devices" with more than limited "commercially significant purpose or use other than as an unlawful access device." The revision also has a paragraph that seems to be intended to make it clear that the legislature does not want anyone to interpret the law to mandate any sort of access protection. I'll have to take a closer look at that later.

But for now, it's back to work for me.

If you happen to know of any really good (by which I mean good to learn from) articles or books on the topic of damages analysis in defective or incomplete construction cases, I'd love to hear from you.

Most people who read this have already heard about the copyright lawsuits that the members of the Recording Industry Association of America have lodged against four college students. FindLaw has made the complaints available here.

Seth Finkelstein points out that the claim of $150,000 in damages per work copied bears no relation to the actual damage that the companies can possibly have suffered. He also accurately mentions that these are "statutory damages." Here's what that means.

The 1976 Copyright Act allows copyright holders to elect to receive "statutory damages" instead of actual damages. For statutory damages, the statute sets out parameters between which the court chooses "a sum... as the court considers just." In these cases, the top line on statutory damages is $150,000 per work copied (not per act of copying). I can't imagine the court granting that kind of damages award for this copying, but the plaintiffs asked for it just because they could. The idea behind this is that since you can't get what you don't ask for, you ask for everything and see what the court will give you.

The statute that applies to money damages for infringement is 17 U.S.C. § 504. For a summary, you can keep reading here.

Well, a lot has happened this week. The U.S. Supreme Court heard oral arguments in the Michigan affirmative action cases, Grutz v. Bollinger and Gratz & Hamacher v. Bollinger. Dahlia Lithwick has her Slate report here, and you can find more on the topic at Howard Bashman's How Appealing.

Ed Felten has created an information center on "Super-DMCA" bills that the MPAA has been pushing in state legislatures. The Colorado bill takes some relatively justifiable regulation of cell phone abuse and adds lots of vague and very overbroad provisions that look like legitimate regulation but potentially render presently legitimate, common, and highly desirable computer security mechanisms illegal. They could also stifle security research. I phoned and wrote to my Colorado Senator on that matter today. I explained my view and concluded that the bill's "only winners are in Hollywood. Its losers are everywhere else." Meanwhile, in other topics, Prof. Felten maintains that the ABA's report on wireless computing is an example of "high-order cluelessness." I haven't read the report, so I'll make no claims... yet.

Meanwhile, the California Supreme Court heard arguments in Intel v. Hamidi, questioning whether Intel could sue Ken Hamidi, a former employee, for sending anti-Intel e-mails to Intel employees' company email accounts. Denise Howell has links to coverage here.

U.S. Court of Appeals Judge Richard Posner spoke on intellectual property topics at the American Bar Association's TechShow conference. Rick Klau took excellent notes -- excellent just like all his other notes on the show. They're at his blog.

The Reporters Committee for the Freedom of the Press has set up a weblog called Behind the Homefront. [via BeSpacific, which you should already be checking regularly.] I haven't given it a close look yet, but it should be interesting.

The Supreme Court today upheld Interest on Lawyers' Trust Account (IOLTA) programs by a five to four vote.

Here's a little background information on lawyer trust accounts. A lawyer may not combine or commingle a client's money with the lawyer's own money. Instead, the lawyer must keep client money in some kind of trust account. For example, imagine that you approach me to handle a legal matter for you, and I ask for a $3000 retainer. After you give me the check, that's still your money -- I haven't earned it yet because I haven't done any work for you yet. (Some lawyers try to get clients to agree that retainers are "earned when received," but some courts take a dim view of that practice and often limit lawyers' ability to do it.) I have to put that money in a trust account, and I can only take money out of it as I earn it. When I do earn that money, I have to send you a bill telling you that I've taken money out of the retainer. If the kind of legal work I'm doing brings in any money for you, I put that in the trust account, too. If I put your money in my accounts or my money in a client trust account, I break the attorney regulation rules, and the courts may discipline me.

I can have many lawyer trust accounts. I can go so far as to set up a separate trust account for each client. That would ensure that each client earns the interest on his or her money, so that would be a very good idea if I were controlling substantial sums of money for long periods of time. But what if I were only holding on to a few thousand dollars for a few weeks at a time? That wouldn't earn much interest at all, certainly not enough to justify the expense of creating and maintaining separate accounts. Then, according to the attorney regulation office, I can and should put the money in my "COLTAF" trust account. COLTAF stands for "Colorado Lawyer Trust Account Foundation." The interest on that account goes to COLTAF, which then uses it to fund legal aid programs. My COLTAF account is a "pooled" account, which means that I can put the money for different clients together in the account, as long as I have an accounting system that keeps track of how much money each client has in the account. Each client's money earns only a tiny amount of interest, so clients don't miss out on much income if I put money in my COLTAF account, and it saves me the trouble of opening a new account for the client or doing the arithmetic to figure out the client's interest on funds in a pooled account. (After all, the interest is a tiny fraction of what it would cost to figure out the client's bill with that interest in it or even to set up a separate bank account.)

Nonetheless, the COLTAF account does take a few cents -- and maybe more -- of what would have become client money and gives it to COLTAF instead. This sort of program in other states led to the case Brown v. Legal Foundation of Washington, No. 01-1325 (Mar. 26, 2003), challenging the State of Washington's IOLTA program. The Court had already held in Phillips v. Legal Foundation of Washington, 524 U.S. 156 (1998) that the interest income on lawyers' trust accounts was the "'private property' of the owner of the [account] principal," the client. Id., at 172, quoted in Brown, slip op. at 1.

Quite a few people have already linked to James Grimmelmann's excellent summary of the Boalt Digital Rights Management Conference. (This is to remind me to go back and read it more closely....)

Late last year, the Creative Commons project announced that it had prepared several form content licenses designed to allow people who publish on the internet and in other media to publicly license their work. The Creative Commons organization aims to increase the amount of creativity that the public can share and draw upon in further creation. "Taking inspiration in part from the Free Software Foundation's GNU General Public License (GNU GPL), Creative Commons has developed a Web application that helps people dedicate their creative works to the public domain -- or retain their copyright while licensing them as free for certain uses, on certain conditions." [link] Nearly four months later, the experiment is still only just beginning both for the Creative Commons organization and for the artists who license their work under Creative Commons licenses.

Robert N. Diotalevi of the Legal Studies program at Florida Gulf Coast University has written an article titled "An Education in Copyright Law: A Primer for Cyberspace." You can find it here.

[via BeSpacific]

LawMeme reports that Pres. Bush has signed the Do-Not-Call Implementation Act into law. It's now P.L. 108-10. The Federal Trade Commission will implement a national do-not-call registry, which will allow people to opt out of receiving telemarketing calls. The Implementation Act gives the FTC authority to collect fees for the registry in order to fund the system.

The FTC has already revised its telemarketing rules at 18 C.F.R. 310.4(b)(1)(iii)(B), stating that

It is an abusive telemarketing act or practice and a violation of this Rule for a telemarketer to engage in, or for a seller to cause a telemarketer to engage in ... [i]initiating any outbound call to a person when... that person's telephone number is on the "do-not-call" registry, maintained by the Commission, of persons who do not wish to receive outbound telephone calls to induce the purchase of goods or services....

The rule excludes situations where the caller has express written permission, when the caller and person called have an established business relationship and the customer has not expressly refused telemarketing calls, and numerous calls for charitable, political, and other purposes. You can find a press release and sidebar links to the regulations at the FTC web site here.

The Act also directs the Federal Communications Commission to amend its rules in consultation with the FTC.

The GPO doesn't have the new law online yet, but the Library of Congress has the bill text. The drafting of section 2, the main operative section, provides an unfortunate example of why passive voice annoys readers.

When I last wrote about the Creative Commons licenses, I did not go so far as to talk about the sorts of factors that might guide people in making licensing decisions. Here, for your comment, is a draft with some ideas I've sketched out. Right now I've got four categories of considerations. Can you recommend others that I might include? Please note that I'm trying to talk about the factors people consider without myself passing judgment on their merit or appropriateness. That is, I do not want to take the angle, "You should value this consideration and therefore should decide for/against the license." I only want to say, "You might want to ask yourself whether and how much this concept or issue matters to you, because it might affect your decision."

I'll be out of town tonight and tomorrow, but I'll respond to comments on Sunday afternoon.

People make copyright licensing decisions in different ways for different reasons. Only the author can make the final assessment of whom to give permission to copy, display, or perform the author's work and for what reasons. I can only talk in broad terms about some of the reasons people might or might not choose to license works under a Creative Commons license. However, I don't want readers to get the impression that I'm saying that certain categories of people with certain interests should choose a certain license. All I want to do here is to talk about some of the factors authors might weigh against each other, in order to spur the imaginations of readers. If you use this for anything at all, use it as a starting place and not an ending place for your thoughts about licensing.

Let's start by remembering the starting position of licensing: people may not make copies of copyrighted material without permission from the person who holds the copyright. When you publish material on the web, you offer an "implied license" for me to download a copy and display it on my computer screen -- why else would you put it on the internet? -- but you don't give me permission to do anything else with it. Now, why might you give people broader permission to copy and use your work? Why might you not?

Although fair use allows people to copy parts of what you say for the purposes of comment and criticism, you might want to make it clear to readers that you want them to copy all of what you say if they want to. It might mean much more for you to see your creativity passed around from person to person than it would mean to hold out in hopes of obtaining money from a commercial publisher for a more limited, controlled release. The Creative Commons licenses are designed to allow an author to offer his or her works for people to pass around as much as they like, as long as they follow certain rules.

For example, suppose that I have an essay that I'm happy to have people passing around. I only want to make sure that they identify me as the author, that they don't try to add to it or make their own changes to it, and that they don't make money off of the process (because in the unlikely case someone is going to make money off of this work, I want in on the deal). I may well find that the "Attribution-NoDerivs-Noncommercial" Creative Commons license fits very well with my goals. It lets them pass the work around while I retain the legal power to demand that they properly attribute it to me. If I have different goals or fewer concerns, a different Creative Commons license may better fulfill my goals.

Suppose, however, that I want to be able to require people to copy my work only from my own website, and I want to have the legal power to halt further copying if I decide to release a newer edition or retract the essay. First, let's keep in mind that fair use doctrine will still allow people to quote content from my essay, even if I can stop all further licensing of the work. But still, suppose I want to retain whatever control over distribution the law will give me. In that case, the Creative Commons licenses' propagation clause will frustrate my goals. For example, one substantial reason this article is not licensed under a Creative Commons license is that I'm still working on it -- and I may always be. I want to know and control where copies go so that when I rethink something and make major changes, there's less out of date or incorrect material floating around.

I may also want to limit who may use my work and for what purposes. Fpr example, if I am a photographer, I may be very pleased to find my photo displayed on a charitable organization's website, and much less pleased to find it displayed on the website of a racist organization. If I have licensed my photo to all comers for all non-profit purposes, both of these organizations may copy and display it. Only if I have retained the power to grant licenses to people on an individual basis will I be able to choose the charitable organization and exclude the racist one. Is this likely to happen to most people who release their work online? Probably not, but it's still something to consider.

Meanwhile, remember that even restrictive licensing will not prevent people from copying some of the material to the extent that it helps them comment on or criticize the work. Comment and criticism lies close to the heart of fair use. Fair use doctrine includes the idea that people may not copy more than they need in order to make their critical points, but within those vague limits, they will still be able to copy. Restrictive licensing will not allow anyone to "lock down" work against criticism. If someone publishes a scathing weblog entry that turns out to be a frightfully bad idea, fair use will almost certainly let me blockquote at least some (and probably only part) of that content in the context of commenting on it, even if the author decides to retract and delete the entry.

Some writers have chosen to apply the Creative Commons licenses to their webpages and/or weblogs because they believe that it best reflects the prevailing intellectual ethic in their academic community. A Creative Commons license makes it easier for others to copy interesting work and share it with others in the community. When the community places a high value on the sharing of ideas and expression, the Creative Commons license represents a positive gift to the community. Of course, it doesn't hurt in terms of reputational reward, either; the author may take advantage of easy word-of-mouth distribution while the community notices and appreciates it. Fair use doctrine facilitates some scholarly copying, but a Creative Commons license may bypass the question of fair use for many purposes.

Commercial publishers, including the publishers of most academic journals, want to be the first to publish the material they print. In many cases, they also want to be the last. In academic publishing circles, a lot of prestige can come from being first. Academic publishers also tend to demand the author's entire copyright, though they may license rights for certain uses back to the author as part of the copyright transfer agreement. Many academic journals -- especially in the sciences -- have taken to charging astonishingly high prices for print and digital editions. Publishers will not be eager to compete with a free Creative Commons licensed edition of the same article that anyone can download from the author's webpage (or from the webpage of anyone else who holds the Creative Commons license in the work).

Cory Doctorow recently released his novel Down and Out in the Magic Kingdom online under a Creative Commons license as well as in book form through a commercial publisher. We'll never really be able to tell exactly how this decision has affected book sales revenues for Doctorow and his publisher. However, it's almost certain that he dramatically increased the circulation of the book, at least over the short term. The decision also brought him -- to use his own terminology -- substantial amounts of 'whuffie,' reputational reward. The idea of 'whuffie' and discussions about reputational economics probably would not be nearly as popular in online circles if there were no online, Creative Commons licensed edition of Down and Out.

The publisher's requirements issue may be less significant for people who are only contemplating using the Creative Commons license for more casual publications like weblogs. The question may come up only if the author posts drafts of professional articles (or draft chapters of fictional work, or poems that he or she intends to publish, etc.) to the weblog. The topic will certainly come up, though, if the author wants to release the very same material online for free and in print for charge.

If the free online scholarship movement gains steam in the next several years, the face of academic publishing may also become much more friendly to Creative Commons licensing. Meanwhile, authors who depend on commercial publishers for academic reputation building or financial income should keep in mind the rights that their publishers are likely to demand.

A little thinking out loud here-- or rather, thinking in blog:

While rewriting my earlier post analyzing the impact of various Creative Commons license terms, I decided to add a section suggesting that one might resolve the question of how to indicate how much content one wants to license by simply saying so. I thought, perhaps one could just add some text under the license graphic on the main page.

Then I noticed that the Creative Commons license has a very typical merger clause:

This License constitutes the entire agreement between the parties with respect to the Work licensed here. There are no understandings, agreements or representations with respect to the Work not specified here.

Would this exclude a statement outside the the "four corners" of the agreement that indicates how to interpret the term that specifies "the copyrightable work of authorship offered under the terms of this License"? On its face, it appears to, but my hunch is that it doesn't. There's still an ambiguous term to be deciphered, and that term ('the Work') even appears in the merger clause. The "parol evidence" rule only excludes prior or contemporaneous agreements when the parties intend that the agreement be "fully integrated," and it has an exception for using earlier agreements or contemporary statements to explain the final writing. Even though merger clauses are meant to trigger the parol evidence rule, this one probably doesn't -- at least as to the meaning of 'the Work.'

Still, I wonder if there's a risk of disputes.

</thinkinblog>

Now it looks like they may soon have the same kinds of water disputes out east that we've got out here. [NYTimes article] Virginia and Maryland are fighting over the Potomac river, and other eastern states may find themselves arguing about the right to withdraw river water soon, too.

I was intrigued by the fact that the Potomac dispute arises from a 1632 grant of water right by King Charles I. Douglas Jehl's article for the New York Times begins,

In 1632, King Charles I granted Maryland the right to the Potomac River "from shore to shore." For the most basic of reasons, that is something Virginia, on the Potomac's south bank, is now fighting to overturn.

The rest is here. (Free registration required, as usual.)

I've been working on IP licensing issues, and Creative Commons licensing issues in particular, for the last week or so. I'm writing a major revision of my first entry on the topic. However, I want to do more thorough background research. If the roads are in good enough condition tomorrow, I'll go to the law library and pull a few recent books on licensing to see if they help to fill in the gaps that I perceive in the work I've done so far.

Thanks to all for the comments you've sent.

Liz Lawley wonders why people find the propagation potential of the Creative Commons license so alarming.

But the CC licensing does not restrict you from profiting from your works. It allows others to distribute your copyrighted work�typically with attribution, and not for commercial use (that appears to be the version most folks choose).

If my weblog content is broadly distributed, with attribution, it helps me. It extends my reputation, makes me recognizable. And if I later choose to write a book that draws from my weblog material, I think it�s that much more likely to have buyers.

She's got a good point. I don't know what Cory Doctorow's decision to release Down and Out in the Magic Kingdom has done to his and his publisher's sales, but it probably hasn't hurt them, and it may have helped. Meanwhile, it did increase his overall circulation, and bought him -- to use his own concept -- massive whuffie. Would that very idea have had the same circulation had he released the book with ordinary distribution? I doubt it.

I don't fall into any sort of 'camp' as to whether one should or should not select Creative Commons licensing. I'll be adjusting the next revision of my piece on the impact of Creative Commons licensing to reflect that better. I do believe that the licensing decision should not be a casual one, but I believe that for any legal decision. Once the discussion has gone a little further, I also want to add a section discussing the kinds of reasons one might want to choose a Creative Commons license or some other license. Maybe once that's in there I can call it version "1.0."

Liz asks, "Can someone point me to an example of specific harm�past or anticipated�that they see resulting from these licenses?" It's good to remind ourselves that Creative Commons licensing is an experiment. We don't know what the long term effects will be in any case. The very nature of experimenting involves undertaking some degree of risk in order to discover how great the reward may be, and under what circumstances that reward will arise. Some people releasing work under the Creative Commons license will experience a net reward. Some will not. It will often be hard to tell, because a fair proportion of the reward coming from a Creative Commons license will likely be noneconomic, or at least nonmonetary.

Phil notes, "Suppose you write a heartfelt and deeply personal post about the difficulties of academic life. If someone from academic-challenges.com asks to republish it, you would probably say yes. If someone from whiney-pointyheads.com asked, you would probably say no, if it wasn't for the fact that you've already said yes by virtue of your CC license." Right now one can limit those uses for one's own work. Whether that reason alone is a good one to choose not to offer a general license is a matter for separate argument. The fact remains that under ordinary copyright one has a degree of control over that kind of use, while one does not under the Creative Commons license.

Liz also points out,

Jonathon, in his post today, says that CC �does a shithouse job of explaining why people might choose not to use their license � But that�s less of an issue, now that Tim Hadley has done the job properly.� But I don�t see that in Tim�s analysis. It�s not a discussion of why you wouldn�t want to use the license�it�s a discussion of what the legal boundaries of that license are.

She's right about that. Like I said, I would like to add a section that can help people organize their own reasons for choosing licenses. Perhaps that would even have to be a different article. But what I wrote on Sunday does not do that, though it may break the deal for some people and close it for others. Before I start writing that new section, I think I want to watch the conversation play out a bit more. The topic might turn out to be too much to try to add to the current piece.

In the end, people will have their own reasons for their licensing decisions. I want simply to explain what I think is the most likely legal interpretation of the license so that people can better imagine how it might or might not work for them. [As always, I have to add the remark that people who have a lot riding on the licensing decision or want to talk about the quirks in a particular licensing scenario should consult an attorney.]

Version 2.6 of the popular Movable Type weblogging software, which I use on this site, introduced code allowing users easily to add a Creative Commons license to their weblogs. While many people think that's a great way to try to popularize the Creative Commons licensing systems, a few writers have worried that people will license their work haphazardly, without realizing that the Creative Commons license brings about an irrevocable commitment. This entry discusses the extent and some of the limitations of that commitment.

CNET is also reporting today that many of the major record labels have sued Bertelsmann because of how it handled its purchase of Napster.

The complaint alleges that Bertelsmann "was fully aware of the critical role its funding played in facilitating infringement by Napster users" and therefore "systematically participated in, facilitated, materially contributed to and encouraged" illegal music file swapping.

The music publishers also charge that Bertelsmann had the ability to halt Napster services but instead kept it "operating in order to preserve Napster's user base for Bertelsmann's own commercial advantage."

The case is in the U.S. District Court for the Southern District of New York. Unfortunately, that court only offers the old dialup version of the Public Access to Court Electronic Records (PACER) system, so I can't get in and look at the docket information.

John Maltbie at actualmalice.com reports that the Supreme Court of Idaho recently decided a case limiting its tort of invasion of privacy on First Amendment grounds. The plaintiff sued the Idaho Statesman, a newspaper, when the newspaper published a historical report on a 1950s homosexuality scandal in which the plaintiff had allegedly been involved. The Court considered two claims: "Invasion of Privacy by Intrusion" and "Invasion of Privacy By Public Disclosure of Embarrasing Private Facts." The plaintiff had withdrawn a "false light invasion of privacy" claim, and the court quickly discarded the plaintiff's "negligent and/or reckless infliction of emotional distress" claim after analyzing the other claims.

With regard to the first claim, the Court held that "The examination of a public court record cannot be the basis of a claim for invasion of privacy by intrusion." Uranga v. Federated Publications, Inc., d/b/a The Idaho Statesman, (Idaho 2003) (slip op. [PDF] at 4). The court explained that the invasion of privacy tort arises not when private facts are exposed to public view, but when there is an objectively offensive intrusion into personal solitude or seclusion, "either as to [one's] person or as to [one's] private affairs or concerns." Id. There is no such thing as solitude or seclusion in a court record.

The second cause of action, "Invasion of Privacy By Public Disclosure of Embarrasing Private Facts," was a little trickier to handle. "The cause of action for public disclosure of embarrassing private facts 'provides for tort liability involving a judgment for damages for publicity given to true statements of fact.'" Id. at 5, quoting Restatement (Second) of Torts § 652(d) special note (1976). This means that yes, someone can in some cases be sued for telling the truth. The question how the First Amendment limits that cause of action. The newspaper had published a statement that was in an open public court record. The Idaho Court relied on the U.S. Supreme Court's ruling in Cox Broadcasting Corporation v. Cohn, 420 U.S. 469 (1975), which had held that neither a state statute forbidding people to publish the name of rape victims nor the tort of invasion of privacy could be used to punish a newspaper that published the name of a victim that had been in the public court record. When information has already found its name into a public record, the privacy interest in that information decreases. What is more, there's a strong public interest in what happens in the courts, regardless of whether the events being reported are current or historical. The First Amendment favors that interest and discussion. When a case poses severe privacy problems, a party can ask the courts to seal the record, and nobody asked for that in this case. Finally, the court said that the fact that the report published the plaintiff's name when it probably didn't have to wasn't relevant. The question whether the article was about a matter of public concern is "based upon the article generally. Each fact included within the article need not be a matter of public significance." Slip op. at 9. The court also held that the First Amendment analysis was the same if the plaintiff tried to cast the complaint as one for infliction of emotional distress.

I wonder how many other states have dealt with questions of invasion of privacy arising from publication of information in court records or other public records after Cox. I also wonder whether invasion of privacy by publication of private and embarrassing facts applies when someone republishes embarrassing facts that have appeared in some form of public but nongovernmental record like a (well-reputed) newspaper. Maybe I'll have a look at the Restatement and the digests while I'm at the law library this afternoon. (On the other hand, maybe not.)

Kevin Heller has posted the following hypothetical and thoughts:

If you enter a password protected/subscription website with a log/pass that is not yours (like generic/generic etc.) could this be a violation of 1201? While I agree that the registration controls access to the work, my thinking was that supplying false information has to be suspected and only if you were to completely bypass registration would it amount to a DMCA violation, whereas, 1715 feels the the language seems broad enough to cover it.

The question is whether supplying false information counts as "circumvention" of a "technological measure that effectively controls access to a work" protected by copyright. We can probably safely assume that the registration system counts as a technological measure under the statute. Given that, we can think of a couple different kind of scenarios in which one might obtain access to the work: (1) A person enters the identifying information of a registered user (a) with or (b) without that user's permission; (2) A person enters information that belongs to no registered user but triggers a (a) legitimate or (b) exploitative back-door to the system; (3) A user bypasses a registration and validation system entirely.

I've been musing a bit on how to interpret 1201(a)(1)(A) in each of these cases, as a matter of statutory text and purpose. I haven't written enough worth posting yet, though. My hunch, like Kevin suggested in his post, is that scenario (3) counts. The others, though, especially the more "innocent" varieties, are the hard cases that provoke more curiosity. Maybe tomorrow or Tuesday I'll have a chance to think about it more.

Eugene Volokh remarked this morning on the debate in the Los Angeles City Council regarding potential war in Iraq. I'm not in LA, or even in California, but there are some municipalities around here that insist on doing this sort of thing as well, and I find it tiresome.

I don't talk about war- and terrorism-related politics on here, so you wouldn't know that I tend toward the dovish side. In the present debate, I'm skeptical of the justifications for military action that the U.S. administration has offered. I'm not writing to talk about that. My question is, why do municipal governments waste their time on these matters?

Municipalities have no authority whatsoever to dictate matters of international policy. The courts have repeatedly rebuked municipalities that have tried, for example, to discourage trade with Myanmar or other admittedly cruel regimes. Municipalities just aren't allowed to muddle in the field of international relations. Neither are states, for that matter. The U.S. Constitution reserves international relations for the federal government.

Although a municipal resolution about an international matter doesn't directly interfere with federal authority, it's still a waste of time and money. I offer a simple principle: Municipalities should handle municipal problems. While it's true that Reserves and National Guard callups could interfere with a municipality's operations, it is not for any City Council to debate the overall wisdom of United States foreign policy. This doesn't mean that Los Angeles doesn't have a voice in U.S. foreign policy-- it does. I'd guess it has a respectable number of U.S. Representatives, and it can probably bend the ears of California's U.S. Senators as well. Perhaps some fear that the U.S. Legislature has too little influence over the course of action the United States will take. If that's true, a resolution is still useless -- I suspect that a resolution from the Los Angeles City Council will mean very little to the decisionmakers in the Executive branch. It would be a far more productive use of time to start making contingency plans in case, say, a lot of Reservists who happen also be police officers get called.

Political debate about how this country handles international matters is a good thing, but city councils that spend their time on these matters in this fashion waste taxpayer money. They should discuss what problems will arise for the city administration depending on what course of action the federal government takes. They should also communicate with their elected representatives and with appropriate people in the executive administration about concerns that they have about foreign relations that directly relate to how they administer the city. But they should not agonize over trying to identify the preferred foreign relations policy of their municipality. They've got more productive things to do with their time.

Kevin Heller over at TechLawAdvisor has made a quiet little posting with potentially big meaning.

Fair use doctrine, Kevin writes (in his entry and in the paper that his entry links), was developed to be applied in cases where the holder of copyright in a work had sued someone who seemed to be unfairly competing with the copyright holder. For example, a publisher might sue when a competitor has quoted so much material from a book that a reader might no longer feel a need to purchase the book. Kevin suggests that fair use doctrine wasn't really designed to address what consumers, people who don't redistribute the work to anyone else, do with their copies of the work. The implied reason for this is that those consumers' non-redistributive uses of the work were presumptively fair. No-- even better, perhaps they were presumptively non-infringing.

Am I on the right track here? This idea suggests that allowing content distributors the power to control what users do with copies of content seems even more unjust and off-balance than we've thought. Perhaps that's just an academic observation -- non-lawyers might say, 'We could have told you that!" -- but for those of us who tend to interpret this matter through the lens of the law, rethinking what that law means and does is a crucial exercise. In this particular case, I suspect that this suggestion is not consistent with the way the cases (notably the Sony case) have analyzed consumer copying for consumer use, but he knows more about this than I do.

The U.S. District Court for the Western District of Kentucky, sitting in diversity, has held that Kentucky law would apply the single publication rule to decide (a) when an action for defamation has accrued and (b) when the statute of limitations starts to run. The case is Mitan v. Davis [Link to opinion in WordPerfect format.]

After a souring in their business dealings with Mitan, the Davises created a website to alert others of Mitan's alleged mischief. Mitan filed suit for defamation, and the Davises responded that nine of the ten allegedly defamatory statements fell on the wrong side of Kentucky's one-year statute of limitations for defamation. Mitan argued that the statute of limitations started running anew each time a new person saw the Davises' website. The court disagreed.

The court explains that at common law, courts treated a defamatory statement as "published" each time it reached a third person. This meant that the statute of limitations ran from when the most recent new person heard or read the defamatory statement. But when mass publication came about, so many people could hear the statement for so long that the statute of limitations might never run. So, courts began to adopt a "single publication rule."

Under the single publication rule, "any one edition of a book or newspaper, or any one radio or television broadcast, exhibition or a motion picture or similar aggregate communication is a single publication." RESTATEMENT (SECOND) OF TORTS § 557 (1977). As a result, the aggregate communication can give rise to only one action in any one jurisdiction where the dissemination occurred, and only one statute of limitations, which begins to run when "the finished product was released by the publisher for sale in accord with trade practice." Zuck v. Interstate Publishing Corp., 314 F.2d 727, 730 (2nd Cir. 1963). A republication occurs when a defamatory article is placed in a new form (paperback as opposed to hardcover) or edited in a new form. Firth v. State of New York, 706 N.Y.S.2d 835, 841 (N.Y. Ct. Cl. 2000).

The opinion appears in WordPerfect format here. (BNA Internet Law News remarked on the case in its morning email today, but included a link to the opinion only through its subscription service.)

Kevin Burton reports how SBC tripped all over itself responding to a section 512(c) notification of claimed infringement about material he had posted online.

I disapprove of the Church of Scientology and its affiliates' use of copyright law to keep their activities out of public view and debate, but I think that section 512(c) is a good tool in several respects: It gives a copyright holder some out-of-court remedy before having to dive into full copyright litigation, it gives the alleged infringer an opportunity to respond, and it avoids turning the ISP into a judge for the dispute. However, the system only works fairly if several conditions are satisfied, and one of those is that the ISP must have a good policy for handling the whole matter. Section 512 requires an ISP to take "reasonable" measures to notify the customer of what is going on. Personally, I have a hard time convincing myself that sending an e-mail to the address associated with the account is inherently "unreasonable," but I think that it would be much better business practice to take the further step of trying to call or write to the customer.

The ISP also needs to set up its policy so that it can restore the customer's data quickly. If the customer provides a counter notification under section 512(g), the ISP has to restore the data between 10 and 14 days later unless there is a court order to the contrary. If it doesn't, then it loses its safe harbor from any lawsuit the customer may file (presumably on a breach of contract theory). It's important for the ISP to have its act together all the way through the process. The take-down provisions do not intend for a customer acting in good faith to be completely ignored.

(link via both BoingBoing and Lisa Rein)

Some U.S. Representatives have introduced bills designed to amend the DMCA (17 U.S.C. sect. 1201) explicitly to permit circumvention of copy control technologies to an extent commensurate with fair use of the underlying material. Derek Slater muses on why that kind of amendment might not be good enough actually to preserve fair use of DRM-protected media.

I'm not sure that his point about losing the filesharing culture gets him very far -- filesharing activity usually isn't fair use and remains illegal until either we change the copyright law or copyright holders change the way they license digital material. What I worry is that legalizing some kinds of circumvention won't be good enough if the DRM infrastructure becomes effective enough to make circumvention non-trivial. Fair use might then be legal, but it would also be merely chimerical.

I stumbled on an interesting discussion about copyright going on between the blogs of Jonathan Delacour and Shelley Powers. Both have been working on ideas related to copyright term, moral rights, and control over copying in general. I've got a few thoughts that I want to ramble about here.

Someone, sometime, started tossing around the term "intellectual property," and unfortunately that term stuck. The misfortune is that the term leads us into fallacious reasoning about what patent, copyright, and trademark rights are. The law treats physical property as "bundles of rights" -- for instance, the right to possession that comes from having title in real property. Patent, copyright, and trademark consist in bundles of rights, but they are not the same kinds of rights, and they do not relate to the same kinds of things, so we should not necessarily think about them the same way that we think of physical property.

Everyone has by now witnessed the fallacies that arise when someone tries to analogize physical property law to 'intellectual property' law. They arise whether the proponent of the analogy argues for stronger or weaker copyright protection. Those fallacies arise because the objects of physical property and the objects of copyright are fundamentally different sorts of 'things.' We need to discard the "property" idiom with regard to the fruits of creativity and move instead to discussing the basic social goals that underlie these systems of rights. The real question is, what is this law supposed to accomplish?

First, let's set trademark aside; trademark law falls under the so-called "intellectual property" umbrella, but its justifications differ from the justifications for patent and copyright. Trademark law is designed to allow people to market products and services without having someone else try to trade on the goodwill that comes from one's brand name and marketing materials. It exists as much to protect consumers as to protect sellers, by preventing confusion. Trademark law wasn't created to promote the development of better advertising jingles; it was created to protect sellers and consumers.

Copyright and patent, on the other hand, are both designed to promote society's intellectual and industrial development. The framers of the U.S. Constitution thought scientific and cultural advancement to be so important that they gave Congress a specific enumerated power to make laws promoting scientific and cultural work by granting limited monopolies in those advancements to their creators. Copyright is designed to encourage expression and the flow of ideas by protecting an author's expression -- though not the underlying ideas -- and patent is designed to encourage the design of useful things by giving people limited monopolies to use the things they design.

The questions being debated between Shelley's and Jonathon's weblogs include, "Just what should these copyright bundles of rights include? Regardless of what those bundles of rights include, how should an author choose what rights to exercise at what times?"*

Shelley writes, "I sure would like to hear from those others who believe there is no harm in an artist retaining creative control of their work, and that we can be inspired [by artists] without deriving from them." The question is, how much control should authors have, and for how long? We give authors control over the reproduction of their work not to satiate any sense of moral attachment to their work that they may have, but in order to make it possible for them to collect some remuneration. Copyright law does not exist to satisfy anyone's instinct that "that is my work and I therefore control it," except to the very tiny extent that we protect the 'moral' rights of attribution and integrity (see 17 U.S.C. sect. 106A).

I've got plenty more to say on this, because this is all more complicated than I've allowed here, but I have to stop for now.

* I follow the convention in U.S. copyright law of using the term "author" for the creator of a "work," regardless of whatever kind of work it may be.

BeSpacific notes that the Colorado legislature is considering a bill that would create a no-spam list strongly resembling the Colorado No-Call List for telephone solicitation.

I'm a huge fan of the Colorado No-Call List. I haven't received a telemarketing call since the end of October, except from a company I already do business with (whom the law exempts from its restrictions), and even then only twice. Yet I suspect that doing the same for e-mail would be much harder to police, because the sources of spam email are much more easily faked. It could have different First Amendment free speech clause implications, too, since junk email is arguably less intrusive than the ringing of a telephone during dinner. Even the constitutionality of the No-Call List law has not yet been fully resolved -- at least, not that I've heard.

This CNET article by Declan McCullagh reports that Verizon will appeal to the Court of Appeals for the D.C. Circuit in the wake of the adverse ruling by the District Court there.

The article points out something that I noted in an entry here two days ago. The dispute is not about whether Verizon will have to identify an alleged infringer ever; it's only about whether the RIAA can use the DMCA's accelerated mechanism. Even if Verizon wins, the RIAA can still file a "John Doe" suit against the infringer and then get a subpoena to require Verizon to provide evidence of the infringer's identity. They'd rather not do that, though, because it would be slower and more expensive.

Update: D'ohh. Howard got to the story last night, so most of y'all probably knew this already.

Edward Felten (here and here) and Seth Finkelstein (here and here) have been musing over the efficiency of different enforcement approaches the mass media copyright-holder associations might use to target peer-to-peer file sharers who share copyrighted material. The Recording Industry Association of America (RIAA) has already sued the companies that create, distribute, and operate filesharing software, but recent activities suggest that it intends to expand its attack to target directly file sharers who infringe.

Ed Felten started the conversation here, wondering whether criminal prosecution of infringing file sharers will increase.

In this January 28th post, Seth Finkelstein anticipates that civil copyright enforcement against individual end-users would cost more money than could be obtained in lawsuits against those users, and that suits against users would probably deter few peer-to-peer file sharers. He writes that those users' Internet Service Providers would be the best enforcement mechanisms available to the RIAA. He also doubts that the government would want to allocate much money to criminal copyright infringement prosecution.

The conversation continued here (Ed) and here (Seth).

A Little DMCA Background

Some readers here are less familiar with this part of the Digital Millenium Copyright Act, so I've included this bit to explain the background law a little.

The DMCA governs the relationship between ISPs and copyright holders. RIAA/MPAA generally can't simply sue ISPs for money damages based on users' activities, but they can obtain the help of ISPs to shut down infringers. 17 U.S.C. sect. 512 protects ISPs who do not directly participate in copyright infringement and who follow certain steps to help identify infringers and to prevent their servers from being used to store infringing material for users.

The recently decided RIAA v. Verizon Internet Services (D.D.C., Jan. 21, 2003) [PDF] case provides a good example of one of those section 512 provisions. 17 U.S.C. sect. 512(h) allows copyright holders to obtain subpoenas requiring ISPs to identify alleged infringers. The subpoena must contain enough information to allow the ISP to identify the infringer. So, if a copyright holder has a record indicating that a user at a particular IP address transmitted or received a copyrighted song at 11:33 p.m. on January 29th, the ISP must search its logs to determine what account used that IP address at that time, and it must reveal that customer information to the copyright holder. Judge John D. Bates of the District Court for the District of Columbia decided in the Verizon case that the subpoena provision applies both when the user stores data on ISP servers and when the user only uses the ISP to transmit data directly to or from the user's computer. Verizon, not anxious to respond to a slew of subpoenas for customer information, had argued that 512(h) applied only when the user stored infringing material on ISP servers.

This provision doesn't give copyright holders majestic new powers; instead, it changes the order of events to make it less expensive and burdensome for copyright holders to identify alleged infringers. Without this provision, the copyright holder could still file a civil complaint against a "John Doe" defendant and obtain the very same sort of subpoena. Now, the copyright holder can identify its would-be defendant before filing its complaint instead of afterward.

Other provisions in section 512 require an ISP to remove infringing material when it receives notice from a copyright holder that a user has placed infringing material on the ISP's servers. As long as the ISP didn't already know or have reasons to know that the material was infringing, and the ISP takes down the infringing material quickly, the copyright holder can't sue the ISP claiming infringement.

Back on Topic

Now, back to the topic of Ed Felten's and Seth Finkelstein's discussion. What is the most efficient way for RIAA members to try to clamp down on peer-to-peer file sharers? Legally, they can sue file sharers, but they cannot sue cooperative ISPs for money damages. They can, however, use cooperative ISPs to identify infringing peer-to-peer file sharers, and they can get injunctions forcing ISPs to disconnect users who copy infringing material.

As Seth notes, suing individual file sharers for money damages would probably not be a financial winner of a plan. Although U.S. copyright law allows for many thousands of dollars in statutory damages (see 17 U.S.C. sect. 504(c)) against almost anyone who illegally shares music, it would probably be difficult to obtain that kind of money from most of the potential defendants. Might it still be worthwhile to engage in a flurry of lawsuits against heavy-duty infringers, in order to deter others? I can't pretend to be able to make that economic judgment, but Seth voices some fairly convincing skepticism about how well that would serve RIAA.

I suspect that we will see some RIAA v. John and Jane Filesharer lawsuits, but it would probably take many in order to have any appreciable deterrent effect. We know from the Verizon case that the RIAA is actively seeking the identities of peer-to-peer file sharers. I also read an article several months ago -- I think in Newsweek -- that described massive online tracking projects funded by MPAA and RIAA designed to track down file sharers enough for ISPs to identify the infringing users. Some sort of civil action against the users seems likely, if only in trial cases.

If RIAA and MPAA do attempt direct suits against file sharers, it will probably be only one prong of a multi-pronged strategy. The other prong would probably be to sue ISPs seeking injunctions containing long lists of customers to ban. Those long lists of names would come from the results of identification subpoenas. In that sort of scheme, I wonder if the customer would ever have any opportunity to refute the allegation of infringement. The DMCA expressly gives an ISP's customer the opportunity to refute a section 512(c) 'take-down notification,' see sects. 512(g) and 512(c), but it's not clear that the customer would have an opportunity to contest the facts underlying a request for a 512(j)(1)(A)(ii) or (B)(i) order to cancel the user's account. Could a customer intervene in a lawsuit against the ISP seeking that kind of injunction? Would it ever be economically worthwhile for the customer to intervene, if he or she could?

Meanwhile, for the reasons Seth Finkelstein discussed, I doubt we'll see many criminal prosecutions for infringement. We could be wrong, but I'd be surprised if the Department of Justice suddenly gave high priority to copyright infringement prosecutions. Still, those file sharers whom the RIAA chooses for its civil cases are in for a rather unpleasant time.

Ed Felten suggests that "the RIAA might want ISPs to take care of enforcement [because] whoever does the dirty work will end up looking, well, dirty." I really don't think the RIAA or its members care whether they end up looking dirty. I also suspect that when people's ISPs cooperate with the RIAA, users will know -- or will quickly find out -- who controlled what happened.

According to this News.com.au article, the United States Trade Representative has raised the issue of influencing Australian copyright law to conform to the United States' Digital Millenium Copyright Act. The article mentions the provisions in the DMCA at 17 U.S.C. sect. 512, which give Internet Service Providers safe harbor from suit for users' copyright infringement only if they block access to apparent infringers. Those provisions also give copyright holders the power to subpoena the ISP and order it to identify customers that copyright holders suspect have infringed copyright with practically no judicial review. See 17 U.S.C. sect. 512(h); RIAA v. Verizon Internet Services (D.D.C. 2003) (Verizon must respond to RIAA's subpoena and identify a Kazaa user that RIAA claims downloaded several hundred copyrighted songs in one day); Donna Wentworth's Copyfight entry on the topic.

1998 amendments to Australia's Copyright Act protect ISPs from suit for customer infringement without any parallel safe harbor requirements.

I wonder what other DMCA-like provisions they'll push for. Does Australia have an equivalent to 17 U.S.C. sect. 1201's anti-circumvention provisions? Will that can of worms be on the table, too?

Martin Schwimmer has a fun entry on "Blawg Brands" here.

Freedom to Tinker (Ed Felten) links to reports that the New York State Supreme Court* in Manhattan invalidated a clause in the End User License Agreements (EULAs) under which Network Associates, Inc. (NAI) distributed its software. The pernicious clause forbade users from publishing reviews of NAI software without permission of the company. I like the result, but I worry it may not stand for long.

The court's decision appears to turn on free speech, but I foresee problems with the cause of action; it appears that the New York Attorney General's office had brought the suit claiming that the EULA clause constituted a deceptive practice forbidden by New York law. I don't know the law, but I suspect that an appellate court could reverse that part of the claim, thereby eliminating the Attorney General's standing to bring the suit and leaving it up to a private party to sue or be sued by NAI before giving a definitive holding on the First Amendment question. That's problem one.

I want to see the court's First Amendment analysis that concludes that the clause is clearly unenforceable. The First Amendment question becomes tricky because the First Amendment rarely, if ever, renders part of a private agreement unenforceable. Parties can voluntarily agree to keep silent; this is why parties can agree to non-disclosure agreements and can enforce them. If you really treat this like a run-of-the-mill non-disclosure agreement, there's arguably no First Amendment free speech claim. I think that this could be a huge problem, because we desperately need reliable software reviews in the market for computer software. Numerous EULAs forbid users from publishing benchmark test results of software, and some EULAs, like NAI's, forbid any reviews without permission. If there's no First Amendment claim, how ought contract law treat this sort of provision in End User License Agreements? What about other pernicious clauses that find their way into shrink-wrap or click-wrap agreements?

Peter Suber at FOS News seems to think that this is a fair use/copyright issue, but it's not-- not quite. The EULA clause doesn't say anything about how one can use the software; instead, it controls what one can say about it.

So far, we've been friendly to non-disclosure clauses in business dealings between individuals and companies and between companies. There are good reasons for that, too -- we want companies to be able to develop their ideas in secret, and we want them to be able to protect legitimate trade secrets. Should we be as ready to enforce non-disclosure clauses when they appear in shrink-wrap licenses that govern the licensing relationship between a software publisher and the general public? I don't think so. Now we just need a nice clean legal principle on which to exclude those clauses that doesn't also entirely throw out shrink-wrap and click-wrap licenses (much as I sometimes think I might like that, it won't happen) and that also preserves non-disclosure agreements in technology and business development. Maybe the New York court's got one. We'll see.

* In New York, the "Supreme Court" is a trial court, so Network Associates has several possible stages of appeal open to it.

Prof. Jack M. Balkin muses about whether the First Amendment discussion in Eldred opens up an avenue by which to attack the Digital Millenium Copyright Act's anti-circumvention provisions (17 U.S.C. 1201). (Spotted on Volokh.)

The reason I haven't said anything about the Eldred fiasco here is that there's been no reason to. The blog community coverage of and commentary on the topic has been outstanding.

I was in county court today, observing a counseling session between another attorney and our legal services client (I'm volunteering time while I look for work) followed by a permanent restraining orders hearing for our client, the petitioner in the case. The respondent didn't show, so the judge made the temporary order into a permanent one with little ado. This meant I didn't get to see a contested matter, but I still had the opportunity to see a skillfully conducted client counseling session.

Out of about ten parties in that hearing session, only ours appeared to have an attorney. The others all proceeded pro se. The judge kept a very calm and relaxed demeanor, trying in an impartial manner to explain to all parties the procedural options they had, and to elicit from the parties the kind of evidence he would need to make a decision. That is the reality of civil domestic relations hearings in an area not known for wealth.

Compare the proposals I reported (but which, I should stress, I did not mean to advocate by reporting) in the immediately foregoing post with this report in Larry Lessig's blog about broadband prices in Japan. How much of the difference comes from effective unbundling, and how much comes from the fact that people tend to live closer together in Japan?

Doc wonders whether to be creeped out by this speech by FCC Commissioner Kevin J. Martin. I'm not sure whether people who support fail fast policies should be creeped out, but they probably should not be encouraged.

Commissioner Martin clearly sympathizes with the plight of incumbent carriers who have "stranded costs" -- investments in obsolete equipment that present pricing rules will not allow them to recover. He refers to this plight when he says that "industry conditions cry out for answers. Companies are struggling under too much debt, unable to recoup the past investments they have made. Markets are valuing companies at depressed levels, leaving companies with little capital. Carriers are postponing the purchase of the equipment necessary to deploy competitive local and advanced services, leaving the manufacturers to suffer the consequences." The message: Incumbents are stuck with the costs of legacy equipment. They're so busy trying to cover those costs that they can't buy newer, better equipment. Martin proceeds with his discussion having thus framed the economic scenario.

Commissioner Martin proposes changes to the TELRIC (Total Element Long Run Incremental Cost) computation system for resale rates that would certainly run counter to 'fail fast' policy goals if they were applied to the resale of existing equipment. However, Martin expressly advocates these changes only for "new investment on a going forward basis." It's not clear from this speech that he would give incumbents higher resale rates for services on old equipment as well. With regard to high-speed fiber-optic data services, Martin says, "I believe that incumbents should be given the proper incentives to push fiber deeper into their networks and closer to the American consumer."

Martin appears to think that incumbents will be significant (perhaps the most significant) innovators and deployers of high-speed fiber services. He would not require ILECs to provide open access on new fiber-optic loops, or he would at least limit the bandwidth they are required to provide to the amount that they provide already. This is what he means by saying, "I believe that the Commission should freeze the service capacity level that must be made available on new or upgraded facilities to the service capacity level provided by the ILEC prior to the new investment in an upgraded facility." One can argue that this would do no more than to put ILECs on the same footing as anyone else who might successfully run fiber-to-the-home. I'm not in a position to evaluate that argument right now.

Martin's speech reveals no intent to allow incumbents to fail. This doesn't mean that he doesn't foresee that it could happen. If it is to happen, though, he intends that it be because they truly failed to compete, not because the FCC made it hard for them to invest in new equipment.

I'll summarize Commissioner Martin's proposals below, and leave the economic analysis to someone more able:

The Associated Press reports that Conseco Inc., a major insurance and finance company, has filed for Chapter 11 bankruptcy. Conseco owes massive amounts of debt, and the federal government is investigating its accounting practices.

This is the third largest company (in terms of assets) to file for bankruptcy. It reports $52.3 billion in assets, although if their accounting practices lack credibility that number may be very inaccurate. That puts it behind WorldCom ($104 billion) and Enron ($64 billion), but ahead of Texaco's 1987 bankruptcy ($36 billion).

The company has reached agreements with bondholders of public debt and bank creditors, but it hasn't yet struck a deal with preferred stockholders.

We'll just have to see how messy this one gets, especially as the accounting practices investigation continues.

As David Weinberger points out (by reference to an email from Kevin Marks), Bruce Schneier's latest "Crypto-Gram," written for his security company Counterpane Internet Security, Inc., has some good observations.

On a tangential note, how many layers deep does credit for a link need to go? David credits Kevin, thus so do I, but when does it become okay to draw the line?

I got my first law books for practice outside of law school today. West's Colorado Court Rules-- State and Federal. Of course, they're only updated to the middle of the year, so they're out of date already, but the changes are small enough that I should be able to look them up myself.

Howard Bashman's outstanding blog noted an article in the Milwaukee Journal-Sentinel about Wisconsin's broken public defense system. According to the article, Wisconsin statutes provide that criminal defendants making as little as $250 a month do not qualify for a state-funded public defender. Although judges can still appoint defense attorneys at county expense, they apparently hesitate to do so because of lack of funds. As though that were not astonishing enough, the article states further down that the Wisconsin Legislature requires the public defender's office to demand reimbursement from indigent clients.

This conference on new approaches to radio spectrum regulation will likely be very interesting and potentially important. Unfortunately there's no way in heck I could go, but I'll look forward to reading the news from those who go and blog it.

Spotted on Larry Lessig's blog.

Howard Bashman liked this Posner opinion. He quotes some good parts, but I have to say I liked Posner's quip at the end of his explanation of the facts: "So all that has to be decided is whether Reuters is obligated to furnish the Bridge data service to FutureSource free of charge until the end of time." (p. 4)

Right. One can guess from that how the opinion concluded, but as usual the journey is a good one, for a court opinion. It's short, too, at eight pages.

What lessons have people learned in law practice that surprised them, lessons for which they weren't ready? I wonder about this a lot. I had one lesson that caught me a bit by surprise last year while I was in the clinical program at my law school. I had expected some of the other things I ran into -- clients reluctant to be fully honest (I found the ideas in the Binder and Price client counseling book helpful in that regard), clients who don't get back to you, don't provide the documentation you need, and little things along those lines. But this one snuck up on me just a bit: you can do your best legal work, even the best legal work possible in a situation, but you cannot save a client from him- or herself. In the end, you can only represent and advise.

It seems like common sense when I put it like that. But I was a new student lawyer who really wanted to help my client, and actually feeling what it was like to reach the limits of my ability to help was different from just knowing that those limits existed.

So, what have you learned about law during a case when you didn't expect to?

I decided to do some reading in the telecom regulation area. A lot more of this rides on the FCC than I'd made it appear below, because the 1996 Telecommunications Act allows the FCC simply to forbear from regulating in most (but not all) areas.

There would still be statutory and administrative law burdens applying to any FCC decision not to regulate. Also, it can't forbear from applying sections 251(c) (interconnection obligations specific to ILECs) and 271 (requiring the BOCs to open competition in their own territories before they can provide interLATA long distance service) of the Act.

I get the impression that much of the push from the new technology sector and its theorists would involve the FCC choosing to forbear from regulating or choosing much more relaxed regulations.

I'll be doing more detailed reading in this area, but I don't think I'll talk about it here. It's not really what I came here to talk about.

David Weinberger and David Isenberg kindly emailed me to talk about my concerns about the letter to the FCC at their The Paradox of the Best Network site. David I. gently pointed out that they had indeed highlighted continuity of service as a special concern for any transition away from traditional circuit-switched telephone technologies. David W. voiced the hope that universal service (that is, rural and inner-city service to people who can't pay the fully distributed costs or the competitive equilibrium prices of their service) would be plausible with new technologies at least as effectively as with the current network. Both re-emphasized the point that they believe that incumbent networks are failing irretrievably, so that the proper question to ask is not whether we should get rid of the old network technologies and business models, but how we can least painfully deal with the obsolescence of those technologies, the failure of those business models, and the imminent insolvency of the companies that have employed them.

It will take more than the FCC to change the legal rules of the telecom market. A vast body of legislation and regulation depends upon and assumes the existence of the architecture of the traditional telephone system. For example, the IXC/ILEC-BOC/CLEC/wireless/cable industry structure plays a substantial role in the way the Telecommunications Act of 1996 is put together. That Act was designed to encourage competition, but it was designed to do so within the architecture of the existing wireline system. The FCC has to work within the structure set by the Telecommunications Act and other telecom-related legislation. Every state also regulates the carriers with its jurisdiction, so there are state legislative and regulatory questions to be resolved as well. The drafting of the 1996 Act was a vast process in which the RBOCs/ILECs, would-be CLECs, IXCs, wireless and cable operators, state regulators, and the FCC all went to Congress and tried to strike compromises. (Since then, of course, ILECs have been rather unsatisfied with some of the ways the FCC has administered the Act -- see, for example, the network element lease rate case, Verizon Communications v. FCC, 535 U.S. ____ (2002), and we also haven't been successful in broadly creating economically sustainable wireline CLECs with good service.) So my first thought is that this is not merely a FCC matter. It's also a legislative matter, and Congress is probably going to have to be involved at some point. It may involve itself regardless of whether anyone wants it to do so, but it's more likely that the industry and public will have to drag Congress back into telecom policy discussions.

My former regulated industries professor made another point from the legal perspective that I want to emphasize: Right now, we (academic and practicing lawyers, others in government or public policy who genuinely desire more optimal telecommunications systems, and to a certain extent the FCC) need to be educated about the 'hardcore questions of technological feasibility' of new network ideas, especially technologies designed to enable widespread packet-switched voice communication. I would like to add that we will also need hardcore discussions of economic sustainability of businesses based around new technologies. By "educated" I do not mean "lobbied." We need serious technological and economic analysis. This is partly because we want policymakers to make the best, most informed decisions possible. It's also because most of us in the legal field are intensely critical thinkers and really want to get this as right as we can. We're just better at law than at technology. Another important reason to accumulate hard evidence of technological and economic feasibility, though, is that at some point the FCC will have to make enforceable decisions about these matters. If those decisions are to hold up in court, they will have to be based on 'substantial evidence,' and its rulings will have to address and respond to the objections of those who oppose the proposed rule. It will also need to be acting within authority derived from the telecommuniations laws and not contrary to any of the laws on the books. If those laws must be changed, only Congress can change them.

My hunch, based on what little I know about regulation, is that a revolution away from traditional circuit-switched telephony is probably not imminent in the next few years. The mechanisms of regulatory and broader legal change do not usually move that quickly, and they will probably buy time -- with lots of dollars in regulatory or bankruptcy wealth-shifting if that's what it takes. But if big change is going to happen, we should start getting as many smart and involved minds in on it as we can. Technology developers alone can't solve all these problems. The amount of social policy, existing legal 'infrastructure,' and, frankly, money that is involved demands the involvement of legal specialists* and economists. We really need to do all we can to get this right.

The question I want to ask now is, where does the research and communication among technology specialists, policy and law specialists, and economists need to go from today? I'll keep thinking about that question, and maybe write more here on that later. I also want to hear your thoughts. I deeply appreciate comments by email (tph at tph-lex dot com) or here on the weblog. Please indicate in email if you do not wish to be quoted publicly.

//

References: Telecommunications Act of 1996, Feb. 8, 1996, P.L. 104-104, codified throughout Title 47, U.S. Code, available at http://thomas.loc.gov/cgi-bin/bdquery/z?d104:SN00652:|TOM:/bss/d104query.html
Title 47 of the U.S. Code is available at http://www4.law.cornell.edu/uscode/47/
Verizon Communications v. FCC, 535 U.S. ____ (2002), available
at the U.S. Supreme Court (PDF) or Cornell Law Information Institute (HTML).
And, of course, the FCC.

* I've been avoiding using the word "lawyers" because a lot of people in
legal academia no longer practice law.

I received today a special edition of David Weinberger's JOHO newsletter [here] which in turn directed me to the open letter to FCC Chairman Michael Powell on this page.

The letter's argument turns on several points. (1) "[B]alance-sheet weakness, long-haul overcapacity, and even the recent speculative bubble[] are effects, not causes," of the apparently pending collapse of the telephony industry as we know it (ILEC, IXC, and CLEC providers). (2) Though none of them to admit it, the infrastructure that these providers have invested in is largely obsolete. (3) The best result is to let the current providers fail and to encourage new companies to enter the market using newer technologies, resulting in more widely available broadband and other next-generation technologies.

Here are some of my tentative initial thoughts on the matter. I may think rather differently after I've had a chance to talk to my former regulated industries professor.

One legal and practical problem that I expect the FCC will face in considering this letter is its mandate to try to provide universal service. Ranchers in Sterling, CO pay the same or almost the same price for residential telephone service that I pay in the Denver suburbs, even though it costs a great deal more to provide them with that service. Few rural residents could afford telephone service if they had to pay the fully distributed costs of that service. Federal and state telephony laws mandate a scheme of cross-subsidies to make service to the poor and distant possible. The FCC, under Congressional mandate, has sought to maintain some form of Universal Service even in the context of competitive local service and the mishmash of regulated and unregulated services that one finds in present-day telephone service. If I recall correctly, current law and FCC regulations impose an access fee that goes into a pooled fund; most LECs explicitly pass that fee on to the consumer as a consumer charge (look for the "universal service fees" and other government access charges on your bill). The FCC cannot simply choose to ignore the fact that the demise of telephony as we know it could leave a lot of people without any form of service.

If Qwest were to shut down operations tomorrow, I would still have my Sprint PCS cellphone, though I'd disappear from the internet because I can afford no more than my dialup modem for internet access, and nobody provides broadband service to my apartment for a startup cost of less than several hundred dollars. Many people outside the Denver and Colorado Springs areas would be left entirely in the cold. Some of them might be lucky enough to receive cellular service, if they can afford it. Most in rural areas would be without any form of voice telephone service, let alone data.

The FCC can let the RBOC/ILECs fail only when someone has shown them how those rural services can be replaced, unless Congress removes the universal service mandate. Universal service is the unwanted stepchild of regulation, for only the people who receive subsidized service like it. LECs don't like to have to shuffle around the money to pay for it or to invest in miles of telephone line on which they reap no profit. Unsubsdized customers don't like to pay the fee. It's a subsidy that prevents accurate cost distribution, but it has important social goals. The law requires the FCC to devise and enforce universal service mechanisms. It cannot legally decide to allow current telephony systems to collapse without explaining how it plans to try to provide universal service in the future.

Another problem is that we are so dependent on telephones that a cataclysmic collapse of the CLEC/ILEC/IXC structure even for a few days would have horrendous costs. This raises all kinds of questions. What exactly do proponents of allowing complete failure have in mind when they talk about that failure? Who is to be left without service for days, weeks, or months? Can there be some sort of massive bankruptcy phaseout of existing systems, or do we just starve them and see how long it takes them to turn off the power to the central offices? Who will be there at that very moment to provide reliable interconnection between everyone who has service the day before?

I wish I had rhetorical answers to these rhetorical but serious questions. They are questions the FCC must ask and must try to answer. I have no doubt that we need to migrate to new technologies and new ways of providing communications services. The problem is how to minimize the costs of that transition. Anyone have any ideas? The FCC can act legally only on the basis of substantial evidence in the record and consistent with the requirements of federal telecommunications law.

I'm very excited to be able to say that I passed the July 2002 Colorado Bar Exam! I will swear in as a Colorado attorney at the mass swearing-in ceremony on October 29th.

I wasn't panicked about the exam, but the suspense of not knowing was still starting to get to me. It's very nice, especially in the middle of a job search, to know for sure that I passed.

I refer you to this (free registration required) and then to this.

It probably goes without saying that I agree with Mr. Miller.

The Financial Times is running a short commentary by Harvard economist Jeffrey Frankel on the seeming lack of success that Republican administrations have had in prodding the economy. Frankel suggests that Republican presidents have too easily given in to disparate business interest groups. These interest groups desire economic policies that favor their businesses but disfavor economic growth on the whole -- for example, tariffs in favor of domestic manufacturing sectors and lax enforcement of antitrust competition laws.

Brad DeLong has added his own remarks and quoted the article.

If you're not familiar with this sort of argument, think of it this way. We can raise tariffs on steel. The steel industry in the eastern United States may see somewhat higher revenues. The reason that sector will have higher revenues is that they can raise prices; domestic steel refiners can put higher prices on their goods, pricing up to the after-tariff price of competing imported steel. They might even be able to pull off underpricing the after-tariff price of the competing steel. Still, the market price of steel for purchasers within the United States rises. Therefore, the costs increase for any new construction, heavy machinery, and other domestic manufacturing that require steel. (Meanwhile, costs for comparable manufacturing overseas do not increase.) Also, in certain economic conditions, less steel will be produced, and we end up paying more for less. In any event, the only winners are the domestic steel manufacturers.

Tariffs are wealth transfers to the protected domestic industry. The wealth is transferred both from the targeted foreign industry, who cannot sell as much here, and from the domestic purchasers of the goods, who forego otherwise efficient construction or manufacturing that they might have undertaken, or who undertake it at greater cost.

I'm pretty sure I learned that in introductory microeconomics. I feel like my econ classes were a long time ago, so someone more skilled can tell me if I'm off base here.

LawMeme reported that The National Journal has an article on the history of the battle -- dare I say war? -- between the technology and media industries on copyright.

The article is pretty well put together, and you can find it here.