YouTube Matures Over Long Seven-Year Litigation Against Viacom

POSTED BY Abner Pinedo

YouTube is an efficient video sharing website owned by Google. It is known as the second largest search engine in the world. It is easy for just about anyone to upload any kind of media online nowadays. People use it for, including but not limited to, streaming music, television shows, tutorials, and news. However, over the past few years YouTube has been struggling in the realm of Copyright law and has fought fiercely.

In the past and currently, YouTube, as an Online Service Provider (OSP), protects itself using the Digital Millennium Copyright Act’s (DMCA) safe harbor provisions found under 17 U.S.C. § 512, which exempts service providers from liability of infringement for a copyrighted work’s transmission. If YouTube is aware of any material on their website that violates a copyright holder’s rights it removes the video. At this point, the subscriber that originally uploaded the “infringing” material has an opportunity to counter YouTube (OSP) and can republish the material, if they so desire. This is were most lawsuits arise in the context of YouTube.

The most recent battle between YouTube and Viacom—owns MTV, Comedy Central, and Nickelodeon—deals with YouTube’s posting of Viacom’s programs on their website without their permission. Google was able to reach licensing agreements with several other entertainment companies, but were unable to reach an agreement with Viacom. Viacom originally sued YouTube back in 2007 for the alleging infringement of 79,000 unauthorized clips. Viacom’s unsuccessfully attempted to narrowly define the Online Service Provider definition in order to oust YouTube from its safe harbor protection. Recently, Viacom and Google have finally reached an undisclosed settlement agreement after a seven-year legal battle.

Over the course of the suit, YouTube has become a well-rounded copyright citizen. Viacom’s aggressive arguments of YouTube knowledgeable awareness of infringement has aided in YouTube’s new stricter take-down policies enabling them to work with more content owners. Through YouTube’s advertisement tactics and monetary opportunities they have created new opportunities for many known and unknown copyright owners. Now that the suit has finished it is only a matter of time before YouTube and Viacom agree to a partnership, increasing YouTube’s popularity and viewership success.

Aspiring Media Creators and a Basic Contractual Pitfall

POSTED BY Micah Kesselman

One of the most important steps, and one where the footing is never as solid as would be hoped, a content creator makes along the journey to putting a product to market is signing with a publisher. Be it game development, music, video, or any other sort of media product, it has to be published. What binds the creator and the publisher will of course be the contract the two entities create—be it verbal, written, or some mixture of the two. Unfortunately, this is also where many content creators, especially independent creators, tend to be weakest.

All too often, creators’ instincts are to look at a contract as a framework outlining fairly intuitive common sense scenarios. One side creates content and the other side (for a split of the pie) will bring it to the attention of the relevant consumers; however, the role of contract as risk allocator is, more often than not, overlooked by content creators—which publishers are keen to take advantage of (as you would expect any self-interested actor to do).

Howard Tsao, CEO and Founder of game developer Muse Game, posted an overview of the contracting issues his company faced when originally signing with a publisher. In his conclusion, he writes that one of “the lessons that we learned through it all [is]: Have an acceptable exit strategy if you are unable to do what you promised to do or if you are not getting what you were asking for.” Another way of saying this is, have a way of folding your hand when it becomes necessary. It is easy to become so infatuated with your own ideas and ambitions that the very thought of them not coming to light as planned is painful to even consider. But it does need to be considered. Contracts are more than simply memorializing an agreement—they are mapping out the geography of risk, benefit, and probability that is about to be traversed and demand a practical and impartial eye.

Even big players fall victim to underestimating the importance of every contractual clause. In a recent (as of the time of this writing) unpublished opinion by the 4th Circuit Court of Appeals, the court held in favor of defendants Epic Games in a suit filed by Silicon Knights claiming, among many other things, fraud.[1] A standard and relatively boilerplate warranty disclaimer proved to be fairly robust protection against a claim of fraud. Had Silicon Knights more thoroughly considered the prospect of Epic Games’ product not being capable of Silicon Knights’ ambitions and that Epic Games might not be inherently interested in remedying the issues of a single, possibly one-off, client, closer attention may have been paid to the disclaimers in the contract.[2]

At the end of the day, in an environment where it is becoming increasingly common to quickly glance over a contract before agreeing to it, it behooves small and upcoming content creators to pay particularly close attention to agreements they enter into. Of course, new situations may arise, but more importantly the central role of contracts in allocating risk in clear and favorable ways merits a central focus when artists, developers, or other content creators sit down and take what is hopefully more than a cursory glance at publishing (or any other, for that matter) contracts they are considering entering into.

[1] Silicon Knights, Inc. v. Epic Games, Inc., No. 12-2489 (4th Cir. 2014).

[2] To be fair, fraud was one of a very long list of allegations of the plaintiffs in this case. Furthermore, the case itself was fairly controversial. Epic Games’ infringement counterclaims required considering how much modification of the licensed engine is allowed and how those modified components may be used—a discussion worth its own entry.

A Friendly Beast Named TOR

POSTED BY Rajat Bhardwaj

If we don’t believe in freedom of expression for people we despise, we don’t believe in it at all.”
-Noam Chomsky

Expression is in the nucleus of our being. We require it to exist in a peaceful society, where conflict is handled by dialogue. But this leads to a tragic truth in our current day, that most channels of communication are controlled by an agenda. The Internet, however, provides us with some solace. Social media outlets, Internet forums, and the alike provide a podium and allow the audience to respond.

The Onion Router (TOR) is a browser that equips the user with the veil of anonymity while using the Internet.  By virtue of the technology, one user sacrifices his or her anonymity to facilitate others. This raises concerns regarding the individual rights of the facilitator, in particular the exit node, who remains vulnerable to legal actions. In countries where this technology is completely banned, users face harsher disciplinary actions further limiting expression on the Internet.

The TOR browser works on a layered encryption system, hence the onion analogy. Volunteers create and administer servers called Tor nodes, which collectively make the Tor network. These nodes provide access to the network, which in turn provides anonymity to its user by tunneling the traffic through layers of encryption at every node. Information travels through a minimum circuit of three nodes giving additional protection to the user even from the facilitator. First, the entry node communicates directly with the user passing their request; second, the request reaches the relay node, linking the first and final node; third, the exit node passes communication to its destination. While the exit nodes may be able to read the traffic being handled, they are not able to identify the user.

TOR is a complex process of layering but is handled automatically by the TOR software. Unlike peer-to-peer software like Napster, where information travels through the Internet, information here travels through volunteer nodes. This veil is not welcomed by everyone. It posses a threat to government censorship and digital media owned by entertainment corporations.

In the United States, there is no law currently restricting the use of TOR. These formats are difficult to monitor; however efforts are underway by the government to gain a backdoor to such networks. China provides an example of similar attempts by the government, where TOR is illegal under the Revised Provisional Regulations Governing the Management of Chinese Computer Information Networks Connected to International Networks, which bans Internet users from setting themselves up as or using other access channels for international networking. People in China may only access the Internet through a government-regulated public channel, often referred to as the “Great Firewall of China.” China has achieved this by blocking all TOR entry nodes utilizing its firewall. Users may be still be able to avoid these measure by continuing to build bridge nodes, but at least 80% of the entry nodes have been disabled.

TOR networks also create copyright issues for entertainment studios.  In 2010 massive litigation ensued of tens of thousand of BitTorrent users who shared a copy of the movie Hurt Locker. Internet service providers (ISP) were subpoenaed to release the Internet Protocol (IP) addresses of infringing users to identify them. A similar threat is present to exit nodes who will appear as the source any infringing activity. Considering the sensitive position of the volunteers, their rights as facilitator of free information rather than sources of illegal activity may be worth considering.

The Digital Media Copyright Act s. 512 (a) includes provision giving safe harbor to transitory digital network communication providers. To qualify for these provision the provider must meet two threshold conditions: (1) maintain a termination policy for repeating infringers and (2) comply with “standard technical measures”. As for the first, TOR operators maintain a default exit policy of preventing file sharing and spamming by blocking ports associated with such activity – for example, blocking access to Rapidshare and Megaupload. The second condition translates to “technical measure that are used by copyright owners to identify or protect copyright works.” Although measure such as “geo-blocking” are employed to restrict access to Internet media to certain areas in accordance with licensing agreements, including IP Address Filtering as a copyright protection measure would be overbroad since it would prohibit widespread legal technologies such as virtual provider networks (VPN).

The First Amendment protects an individual’s rights to receive information and we see its dire need on the world stage. The 2009 Iranian election riots and its subsequent empowering tremors in the Arab Spring illustrate the capacity of the citizen journalist. Here peopled used social media to report events in real time actions of oppressive regimes. TOR curtails censorship by providing the user with nontraceablity essential to free expression.

Anonymous browsing software is not without drawbacks. Online hidden black-markets like the Silk Road and exploitive media content are real concerns. However, the tools of expression that it provides are so fundamental to a balanced exchange of ideas that a conversation about it may be in order.

The Denial of NCAA’s Motion to Dismiss Student-Athletes Name and Likeness Licensing Litigation

POSTED BY Rajat Bhardwaj

The recent denial of Motion to Dismiss of National Collegiate Athletic Association (NCAA) Student-Athlete Name and Likeness Licensing Litigation by District Judge Claudia Wilken marked a drastic change in thought on compensating student athletes. A group of twenty-five current and former college athletes pursued two claims against the NCAA: four pursued a right of publicity claim for misappropriation of their names, images, and likeness; and twenty-one pursued an antitrust claim for NCAA conspiring with Electronic Arts Inc. (EA) and Collegiate Licensing Company (CLC) to restrain competition in the marker for commercial use of their names, images, and likeness. The most recent dismissal only addressed the latter under the Sherman Antitrust Act, 15 U.S.C. §1.

This action stems from May 2011 when the Plaintiff’s filed the second Consolidated Class Action Complaint (2CAC). They alleged that the NCAA required student athletes to sign forms relinquishing all rights to commercial use of their images, including after they graduated and no longer subject to NCAA regulations. NCAA subsequently relied on these “misleading” forms and sold and licensed the student-athletes names, images, and likeness to third parties such as EA and CLC, who then made profit from these agreements. In September 2012, the Plaintiffs narrowed their claims specifying the class of students to include whose names, images, and likeness were featured in game footage or videogames; emphasizing damages from review generated in live television broadcasts; and identifying specific markets: “Division I college education market where colleges and universities compete to recruit the best student-athlete” and the “market for the acquisition of group licensing rights for the use of student-athletes’ names, images and likenesses in the broadcasts or rebroadcasts of Division I basketball and football games and in videogames featuring Division I basketball and football.”

This was followed by a third Consolidated Class Action Complaint (3CAC) which maintained the Plaintiffs’ price fixing and group boycott claims; added the class specification; and included six current NCAA football players to the complaint. In September 2013, EA and CLC agreed to a settlement with Plaintiffs but the NCAA claim remained affective. The court recently denied the motion to dismiss the complaint on three grounds.

First the court recognized the Plaintiffs’ theory alleges that NCAA’s prohibition of monetary compensation on student athletes hinders competition in the market for Division I student-athletes which would otherwise prevail in a competitive market. Although the court recognized tradition of amateurism in college sport, it asserted that this does not bar students from receiving monetary compensation for commercial use of their names, images, and likeness.

Second, considering the allegations in 3CAC most favorable to the Plaintiff, the court suggested that it is plausible broadcast footage, especially stock footage and broadcast footage sold to advertisers, was used primarily for commercial purposes. Thus, the First Amendment does not dismiss Plaintiffs’ claims related to broadcasting.

Finally, NCAA argued that the Copyright Act preempts the application of right of publicity to broadcast college football and basketball games. However the court noted that the right of publicity claims of the Plaintiff was notably different than those protected by Copyright Law since they do not actually own any game footage described in the complaint. On the contrary, the Plaintiffs’ seek the right to license the commercial use of their names, images, and likeness in certain broadcast footage. Furthermore, federal courts have emphasized, “Intellectual Property rights do not confer a privilege to violate the antitrust laws.” Thus, the Copyright Act does not affect the underlying claims because they are based on injury to competition and not on misappropriation.

The Plaintiffs and NCAA have not yet engaged in settlement talks but this case may carry a risk of tens of millions to even billions of dollars. Where one side of the continuum maintains lack of compensation to be essential to maintain integrity of the amateur culture of college sports, the other asserts fairness in providing athletes with compensation, beyond college scholarship, for using the students’ names, images, and likeness. If settlement talks do not commence soon, we are sure to see an energetic debate where tradition clashes with equity.

It is clear that NCAA is generating significant revenue, $871 million  in revenue for 2011-2012 with 81 percent from television and marketing rights fees, by utilizing the likeness of their athletes. A duty is owed to these athletes to ensure that at least a certain level of consideration is allotted to them for their service beyond a college scholarship. Not all student athletes are able to ensure a decent standard of living after they graduate and some come from fairly unprivileged backgrounds. It is important to look out for their futures, as it is their hard work and dedication that has provided the NCAA with its level of success.

IBM Alleges Twitter Violated Three of Its Patents

BY Nick Hasenfus

Although Twitter is very popular, it has not yet been profitable.  Because of this, Twitter wants to go public to raise money much like Facebook and Google have.  In the first six months of 2013, Twitter has lost over $69 Million although revenue has more than doubled from 2012 to $253 million with a yearly estimated earning of $650 million.  In Twitter’s statement to the SEC they acknowledged another financial problem they may run into, IBM has alleged that Twitter has infringed on three of its patents.

As reported in a recent CNET story, Twitter has revealed that IMB has alleged three patent infringements by Twitter.  The three patents in question are: U.S. Patent No. 6,957,224: Efficient retrieval of uniform resource locators; U.S. Patent No. 7,072,849: Method for presenting advertising in an interactive service; and U.S. Patent No. 7,099,862: Programmatic discovery of common contacts.   IBM has invited Twitter to try and settle these issues out of court before Twitter goes public.

In Twitter’s SEC filing, which can be read here, Twitter reveals that they are, “involved in a number of intellectual property lawsuits” and that they expect they will continue to be involved in more.  Twitter also states that it is hard for them to tell which intellectual property claims they are violating, but any claims, settled or not, may be expensive and will take time, as well as resources, away from managers.  Furthermore, Twitter cannot say what kind of impact any intellectual property lawsuit rulings may have.

It is going to be difficult for Twitter regardless of their decision to settle or go to court with Microsoft.  Twitter does not have as much money to pay attorneys like Microsoft would.  Further, if Twitter decided to settle with Microsoft, they may have to pay a lot of money in licensing agreements.  It may be best for Twitter to try and settle out of court, and if Microsoft still believes they have infringed on their patents taking Microsoft to court may be less expensive in the long run for Twitter than a hefty licensing agreement especially because Twitter claims in their SEC filing that they have defenses to Microsoft’s claim.

What to Expect with “Minority Report” Technology

POSTED BY Bridget Sarpu

Industrial Technology Research Institute (ITRI) is a nonprofit research and development organization located in Taiwan engaged in applied research and technical services.  Globally, ITRI has 23 international collaborations with major companies like IBM, Nokia, Microsoft, and Motorola.  ITRI has played a vital role in transforming Taiwan’s economy from a labor-intensive industry to a high-tech industry.  ITRI has developed numerous technologies including WIMAX wireless broadband, solar cells, and light electric vehicles.   ITRI has also had extensive involvement with the intellectual property business and is devoted to making Taiwan manufacturing a competitor internationally.  Currently, ITRI holds more than 19,709 patents that they have licensed to companies.  Their newest technological advancement is a floating augmented-reality touch-screen system and ITRI is ready to license the technology to an interested buyer.

The product called i-Air Touch (iAT) Technology is a floating augmented-reality touch-screen system.  Very similar to the computer screens seen in the movie “Minority Report,” the technology basically “projects a virtual touch-based interface outward and within the user’s field of vision.”  Not only does this screen appear to float in the air, but the software can accurately measure the placement of your hands and fingers so it can respond to being “touched.”  Watch a video here: Video of technology in use for a better understanding of how the technology would work.

iAT was officially introduced last week and will receive a 2013 R&D 100 Award in November.  ITRI says the technology is available now          for licensing by mobile companies and anyone else.  Google might have a real interest in trying to acquire a license for the patent considering it could potentially be added software to Google’s upcoming technology of Glass.  Instead of controlling the wearable computer with head movements, voice commands, touching the glasses or entering commands into the app on a smartphone, i-Air Touch users can type on the “floating” keypad, keyboard, mouse or touch panel allowing for flexibility, privacy, and convenience as the user wears them.  So what if Google or any other company wanted to use the technology? What does it take for them to use the invention?  The companies would need to seek to license the patent from ITRI.

Licensing occurs when the owner of a patent grants exploitation rights over a patent to an interested third party.  A license is a legal contract, and so it contains terms the licensee must comply with.  Because ITRI wants to license their iAT Technology, they are looking to form a contract, seeking royalties as a repayment.     With Google Glass ready to be released in Spring 2014, with users directing the wearable computer with head nods and vocal commands, Google might be interested in a license agreement with ITRI.  If Glass could work with the ITRI technology, they debatably would revolutionize the wearable computer and continue to change how society will function.  ITRI could benefit off the license because although the technology is amazing in its own right, the glasses they advertise with are too big and bulky, unlike Google Glass sleek and trim glass model.  Google Glass is ready to be worn for every day use.

What we can expect within the month is the iAT floating augmented-reality touch-screen system to make a statement in the intellectual property world.  With the R&D 100 Award and the company ready to license, who knows what major technological company will try to use ITRI’s software for the latest industry.  Within the IP world, in the near future, I am sure we will see valid licensing of the ITRI patent, along with some intense patent infringement litigation.  With this advancement in technology, like the reaction with Google Glass, legislatures and lawmakers will want founded policy on all issues relating to the technology: privacy law, bans in certain places, driving safety, etc.  We can also assume to see this technology sooner rather than later and then we all may be living  “Minority Report.”


What’s Left for Nokia? Patents, Patents, Patents!

POSTED BY Bridget Sarpu

Earlier this month Microsoft and Nokia struck a deal unlike any other.  Microsoft will obtain Nokia’s devices and services unit and license the company’s mapping services in a deal worth $7.2 billion.  Specifically, the two-part transaction included Microsoft spending $5 billion on Nokia’s mobile phones unit, in hopes to compete with companies like Google and Apple in the smartphone market, and then it spent another $2.18 billion to license Nokia’s patent portfolio.  What is included in that patent portfolio?  The deal gives Microsoft use of more than 8,500 Nokia design patents, as well as a 10-year license to around 30,000 feature patents and patent applications, intellectual property that is estimated to be worth about $6 billion.  So what is left for Nokia?

For years, patents have been a vital part of the technology business.  A patent is an intellectual property right granted to an inventor “to exclude others from making, using, offering for sale, or selling the invention.”  Patents allow companies to protect ideas, however, companies are also able to buy and sell patents to other companies, as well as profit by licensing them out to others for use.  Patents have recently become hot topics since big tech companies like Apple and Samsung continually sue one another for billions of dollars over the technologies found in smartphones, computers, tablets, and other gadgets.  With the rights of licensing patents, persons or companies can enforce patent rights against accused infringers who do not acquire the necessary patent license.  Unfortunately, some companies dedicate all of their resources to enforce patent rights in order to collect licensing fees, however they do not manufacture products or supply services based on the patent in question.  These companies, known as patent trolls or patent assertion entities, exist solely to exploit and intimidate competitors by threatening litigation for overly broad patents.  This in turn hurts businesses and stifles innovation.

So what is left for Nokia? To be clear, Nokia is keeping most of its patent portfolio.  All Microsoft is gaining are the design patents, along with licenses to the patent portfolio, not complete ownership of the portfolio.  Selling Microsoft its smartphone business could make way for Nokia to enforce its patents more aggressively.  Having sold all their physical devices and equipment, Nokia is now free to pursue any company they feel is “infringing” their patents.  Best of all they can threaten litigation on infringers without worrying about counter attacks against their own technologies (they have no real technologies that could be violating other patents).  This setup leaves Nokia as potentially an unlikable patent troll, most likely seeking to pursue infringers who rival Microsoft.

Because the patent licenses are nonexclusive, Nokia can use them any way it wishes and they will presumably use them as a profit center.  For example, Nokia is the holder of the only patents known to read Goggle’s video compression format software (VP8).   Nokia has already made clear that it has no intention of licensing to Google to use its patent thus leaving Google with a blocked technology with little hope to progress.  In the past, Google could retaliate by attacking Nokia’s infringement of its own patents.  However, because all of Nokia’s products belong to Microsoft, that line of defense is no longer available.  Nokia can now analyze EVERYONE’S business and identify and challenge all potential infringements.  With access to a substantial budget, Nokia can afford lengthy litigation and seek substantial fees from any industry that competes with Microsoft.

In sum, Nokia has ample opportunity to join the patent troll business, threatening not only big competitors like Apple, Google, and Samsung, but also threatening the progression of all future innovations.  For a company that seemed to be on the downfall for selling the majority of their products, Nokia now has a newfound and concerning power in the tech world.