Startup Toolbox

Jay Parkhill January 11th, 2007

Recent happenings were just to good not to comment on.

Saddam Hussein Execution Filmed by Phone Camera
And we thought “regular” video cameras let us see things as never before. I am amazed that someone was able to wave a phone around in the execution chamber without being spotted. Nevertheless, this episode gives us a glimpse of the possibilities user-generated content allow in the political sphere. The raucous footage gave the lie to the solemn, sedate image the Iraqi government tried to offer of the execution.

Moreover, the immediate dispersal of the footage shows clearly that once something has been recorded and uploaded somewhere, the cat has not merely been let out of the bag, but instantly cloned and distributed worldwide. Were it not for the fact that just about everyone’s response to the execution was “good riddance” (by contrast, imagine if it had been Moqtada al-Sadr being mocked as the noose tightened), this could have been a disaster for the Iraqi government.

YouTube Blocked by Brazilian ISPs, then Un-blocked Again
On note related by technology though decidedly seamier, a Brazilian court ordered YouTube to completely remove videos of a Brazilian model from its site. YouTube protested that it couldn’t do so selectively and moreover it couldn’t prevent users from re-uploading the video. Since I can’t read Portuguese I can’t verify the chain of orders, but it appears that the court order extended both to YouTube itself and to Brazil’s ISPs. The ISPs, also unable to selectively block one video (or more accurately, many copies of a single piece of footage), instead blocked all of YouTube for several hours until the order was reversed.
The entire episode demonstrates a couple of things. First, courts are wishing for a simpler time when they could just lock the cat away and be done with it. Part of the court’s final order was apparently a request to explain why YouTube and the ISPs were unable to comply with the initial order. Second, this story ended happily for YouTube, but the next one might not. Being at the vanguard of the user-generated content revolution is going to leave some scars for sure.

Apple and Cisco Outdo One Another in Shows of Chutzpah
Apple announces the long-awaited, much-delayed iPhone, only to be promptly sued by Cisco for trademark infringement. Cisco had just released its own iPhone-branded product in December. Word is that negotiations stopped without a signed deal Monday night before Tuesday’s product unveiling and Apple let Cisco know after the announcement that there was no deal after all.

From where I sit, it seems like there is plenty of hubris to go around on all sides here. Sure, Apple’s move is brazen. I imagine their view is that the litigation will serve no one and they are going to make so much money off the device that they can afford to let it drag on for a little while until a deal is made.
Cisco certainly knew what it was doing too. The iPhone name has been used by everyone and his mother to describe Apple’s phone project for at least a couple of years. I am sure the December product announcement was not a case of accidental timing, either, but an attempt to grab the spotlight for a moment as anticipation built toward MacWorld. Moreover, one report I saw said that Cisco’s proposal required interoperability of the two iPhones- Apple has “walled garden” in its DNA, so I can’t imagine how anyone really thought this might fly.

In the end this is really just a game of chicken between tech giants. It’ll be interesting to see who swerves first. On the facts, I give slightly better odds to Cisco. Their Infogear division has used the name since 1996 and Apple has only a weaker “iFamily” claim to the rights. Cisco’s pressure play is to enjoin sale of the product using the iPhone name. Of course, with an expected June delivery date this leaves plenty of time for a deal to emerge. Look for Cisco to lose on the interoperability angle when the dust settles, but pick up a giant cash windfall from licensing rights.

• Intellectual Property , Web , YouTube

Jay Parkhill January 9th, 2007

I recently authored a case study of Grouper Networks, a popular video hosting website acquired last summer by Sony.  You can click here to read the study, which looks at Grouper’s history, launch strategy and important success factors, including its emphasis on copyright-legal videos and its simultaneous pursuit of consumer-facing and white label distribution.

• Copyright , Intellectual Property , Startups

Jay Parkhill January 4th, 2007

I have previously posted on Youtube’s pending overseas problems, as well as the problem with notice-and-takedown rules for copyright violations in the user-generated content world. Apparently, the ex-wife of soccer star Ronaldo was filmed having sex, and copies of the video made it onto YouTube. Reuters reports that the plaintiff, Daniela Ciccarelli, demanded that YouTube remove the video and that YouTube did so, but users promptly re-uploaded it.

The court’s most recent ruling was that YouTube must shut down until it is able to comply with the demand to remove all copies of the video, though Reuters dryly notes that enforcement of the order in US courts could be difficult.

I doubt Google has a great deal of concern that YouTube may actually be forced to shut down. At the same time, it is conceivable that YouTube could face sanctions in Brazil for failing to comply with the order. Add in the Japanese issues and a pattern seems to be in the making. At a certain point the collective weight of overseas litigation seems likely to go from headache-inducing to big trouble. It will definitely be interesting to see how matters unfold.

• Copyright , Google , Intellectual Property , Web , YouTube

Jay Parkhill December 5th, 2006

The AP reports that the Japan Society for Rights of Authors, Composers and Publishers has sent YouTube a request to implement a pre-post (and yes, official news sources also use the oxymoronic term “pre-post”) review process to ensure that no Japanese copyright-infringing material is posted to the video site.

This is interesting for a few reasons. First, the request comes within a month of YouTube’s removal of something like 30,000 Japanese clips at the request of the same organization. A quick search of the site comes up with roughly 40 copies of a Matrix-parody ping pong game from a Japanese TV show (very funny, by the way), suggesting that last month’s takedown may have bailed some of the standing water, but did nothing at all to stem the flow. This is not at all surprising, of course.

The really interesting point is how the Japanese request points toward a conflict between the DMCA’s notice-and-takedown rules and the IP protection rules used in other parts of the world. The DMCA was enacted by the US Congress as part of the US’s accession to two WIPO treaties, the WIPO Copyright Treaty (WCT) and WIPO Performances and Phonograms Treaty (WPPT). Notice and takedown, however, is not part of either treaty. US legislators developed that piece during the process of adding the treaties’ principles to US law.

Japan is one of 60 countries that have signed the WCT and 58 to sign the WPPT. However, as review of the list of signatories shows, just over a third of signing countries have ratified the treaties (never mind codifying the provisions into national law). Japan is conspicuously absent from the list, as is nearly all of Western Europe.

What does this mean for businesses relying on the DMCA’s notice-and-takedown safe harbors? It means that as contentious as that process is within the US (witness Universal Music Group’s lawsuits against Grouper and Bolt, and the latter companies’ vehement defense that they have complied with the DMCA throughout), it pales in comparison to what may happen when copyright-dependent US-based websites start to take off in other countries. Notice and takedown loses its power as an affirmative defense and is reduced to a mere symbol of good faith in trying to protect copyright. Where violations are rampant, as on YouTube, and local tribunals are likely to be sympathetic to home-country plaintiffs, it makes me start to wonder if the ~$200M holdback from the YouTube merger consideration will be enough to cover all claims everywhere.

• DMCA , Intellectual Property , Web , YouTube

Jay Parkhill November 15th, 2006

On re-reading the Summary Judgment ruling in the LA Riots video case, I noticed another gem. The ruling describes one of the issues in the case as whether the notice and take-down remedy in the DMCA is effective. Apparently YouTube did take down the video, only to see it promptly re-posted by numerous other users.
The era of mass user-generated content was merely a gleam in the eyes of a few visionaries when the DMCA was adopted. It will be interesting to see how effective its procedures are at preserving copyright when anyone and everyone can upload their own copies of just about any material.

• Copyright , DMCA , Intellectual Property

Jay Parkhill November 15th, 2006

Youtube is struggling to plug the dike as copyrighted material pours through, as shown by its Summary Judgment motion (posted by Mark Cuban) in the LA Riots video case, and by the cease-and-desist letter sent to Michael Arrington.
Cuban and the court point out a disconnect in YouTube’s policies. In its motion YouTube claims the most obvious and seemingly best defense, that is is a service provider “conduit” under the Digital Millenium Copyright Act and falls within the SMCA’s safe harbor provisions if it promptly takes down copyrighted material on notice that unlicensed material has been posted to its site. On the other hand, YT’s Terms of Use say that users grant YT a license to use, perform, display (etc) video content when users upload the content.

It seems hard to have it both ways- either you are a conduit or a licensee. Being a licensee is well and good when users are posting home video to which they own the rights. YT thus gains the security of knowing that the users have agreed to allow YT to distribute the content for them. If the user doesn’t own the rights though, claiming a license is completely worthless. The LA Riots court even holds out the provision as evidence that YT takes on for itself the “right and ability” (emphasis added) to control infringing activity. This reasoning, if widely followed, would makes the license an actual liability.

Of course, if the user had no ability to grant a license, YT couldn’t take one. Reasonable minds could reach different conclusions as to where the license language puts YT relative to the DMCA’s safe harbor provision, which again is not a great place for YT to find itself.
Mike Arrington professed surprise that YT would take issue with a piece of software that lets YT users download videos to their hard drives. It strikes me that YouTube has no choice but to move against these kinds of activities, though. It needs to portray itself in every possible way as working within the DMCA framework. A tool that lets users make their own copies of videos effectively turns YouTube into Napster, and we all know how that story ended.

The Grokster case says that web site operators may be liable developing software “the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement”. YouTube’s letter to TechCrunch seems designed to shift the burden of proof there by taking public steps to discourage potential copyright violation (without causing YT traffic to suffer!).
The more I think about it, the more Mike’s public response to YouTube’s letter could end up as a PR bonanza for YouTube. There may be dozens of tools for downloading video and YT may be sending letters to the authors of all of them, but in a single stroke it has managed to let hundreds of thousands of readers know that YouTube stands against anything that might facilitate copyright violations.

• Copyright , Intellectual Property , YouTube

Jay Parkhill October 23rd, 2006

The San Jose Mercury News reports on another front in the film industry’s war on piracy. The Los Angeles scouting council has, in conjunction with the MPAA, created an antipiracy patch. The patch shows a film reel, a music CD and the international “C in a circle” copyright symbol.

To get the patch, scouts must learn the basics of copyright law, how to identify five types of copyrighted works and three ways copyrighted materials may be stolen. They must then choose from a list of activities that includes creating anti-piracy public service announcements and visiting a studio.

To me this seems simultaneously brilliant and stupid. Brilliant for thinking to reach out to the audience (13-21 year old boys) whose copyright-piracy beliefs are still in formation, and stupid for the ham-handed execution of the idea. All the teenagers I know are very media-savvy and disdainful of messages so obviously patently propagandist and patronizing (could the PSA become a how-to for budding pirates?).

If the intent is to personalize the effect of piracy, I suggest the patch should be awarded to scouts who create a video or audio recording, give it away DRM-less to their friends, and then manage to collect license fees on the content. Since scouts are trustworthy, loyal and helpful, I am sure the council wouldn’t need to worry about auditing the source of license revenue. Then again, scouts with those characteristics don’t need the MPAA’s message anyway, right?

• Intellectual Property