The FTC's Rebuke of a PR Agency

The Federal Trade Commission recently issued its first rebuke under new guidelines that prohibit "social media" and "word of mouth" marketers from passing themselves off as ordinary consumers touting a product and that require endorsers to make clear when they have financial connections to sellers. The FTC found that PR agency Reverb had engaged in this sort of "deceptive advertising" by having employees pose as ordinary citizens while posting game reviews online and not disclosing that the reviews came from paid employees working on behalf of the game developers.

"Word of Mouth" executive Ed Keller works through some of the ramifications of this decision in a thoughtful essay.

See Ed Keller, "FTC to Social Marketers: Keep It Real or We'll Take Action," MediaBizBloggers, September 1, 2010.

China Says No to Film Ratings

China's top movie-industry regulator, the State Administration of Radio, Film and Television, has put a lid on the notion of a film classification system. A spokesman said that the government believes such a system is "inappropriate."

At present, censorship is the pathe used to decide about the release of films. "[F]lmmakers in China believe that if the censor's scissors were replaced with a reliable ratings system, helmers and producers could take more risks with content and story. The censorship process also takes a long time, meaning there can often be a hiatus between a pic's international bow and its Chinese preem, giving pirates ample time to flood the market with good DVD copies of the movie for impatient filmgoers."

From Clifford Coonan, "China Says No to Film Ratings," Variety, August 23, 2010.

Are Ringtones a Public Performance?

A finding that consumers infringe the public performance right each time their phones ring in public threatens to stigmatize millions of consumers as lawbreakers.

- Digital rights organizations Electronic Frontier Foundation, Center for Democracy & Technology and Public Knowledge

In Wendy Davis, "ASCAP Strikes Sour Chord With Consumer Advocates," Online Media Daily, July 6, 2009


The Electronic Frontier Foundation, Center for Democracy & Technology and Public Knowledge have together filed papers asking a Federal district court in New York City to rule against the American Society of Composers and Publishers (ASCAP). ASCAP was founded in 1914 to collect money--"licensing fees"--for its members whose copyrighted musical compositions are performed in public, including on radio and in theaters. In recent years, ASCAP has taken the initiative to collect licensing fees in digital media such as the internet. Now the organization is arguing that it is entitled to licensing fees for ringtones because, it says, the playing of ringtones is a "public performance." It wants AT&T to pay the fee for the ringtones it sells to its customers.

The Electronic Frontier Foundation, Center for Democracy & Technology and Public Knowledge reject ASCAP's argument about the public nature of a mobile phone's ring, comparing it to a person playing a CD in a car with the window down. The group notes too, that if the court forces AT&T to pay, the charges will be extended to consumers.

Web Publishers Organize to Demand Ad Revenues From Sites Using Their Material

What we are saying is maybe there is a middle ground If people are taking full copies of your content—why don't you take a revenue share?

Jim Pitkow, CEO of Attributor Corporation

In Jessica E. Vascellaro, "Startup Tries to Rally Publishers With Ad-Sharing Proposal," Wall Street Journal, April 21, 2009

Attributor has technology that identifies copies of its clients' articles and videos that websites take from other sites. Sometimes the sites use full copies, which is a copyright violation. WHen it finds such content, Attributor sends the sites a note requesting that that they the content off the site. Attributor now has a new approach: It wants to allow sites to keep the content up but to share the advertising revenue they generate with the copyright holder. It has organized a group of publishers, called the Fair Syndication Coalition, to go to the advertising networks that serve ads on pages that are full copies of copyrighted material and demand some of the money that the ad networks would send to the sites carrying the material.

This approach is by no means straightforward. It's by no means clear that the ad networks will want to share the money without first getting permission from the websites. Moreover, many sites deal with more than one advertising network. It might be difficult to notify the relevant party of a copyright violation.

A larger question, which the article doesn't discuss, is whether the Fair Syndication Coalition will eventually go beyond wanting cash for full article to wanting cash for use of part of the article-- an activity called scraping. That approach will be sure to raise much controversy among websites.

Broadway Association Pushes Against WIFI's Use of "White Spaces"

We have no interest in standing in the way of progress. We just want to make sure that we are not at a disadvantage.

- Tom Ferrugia, director of government relations for the Broadway League

In Wendy Davis, "Broadcasters, Broadway Appeal FCC's 'White Spaces' Decision," Media Daily News, March 4, 2009

The Broadway League of New York, a trade association for the theater industry, has asked the Second Circuit Court of Appeals to reverse the Federal Communications Commission's November decision on the use of so-called white spaces. White spaces are radio airwaves not used by television broadcasters. The Commission's intent was to open that space to use for wireless internet activities because of that part of the spectrum's capability of going through walls. The wireless internet frequencies used today do not do that, prompting the Republican head of the FCC to support the move as "WIFI on steroids."

TV broadcasters, though, fear that the unlicensed use of the white spaces will lead to interference with television signals. Broadway performers also worry that WIFI use on the white spaces will interfere with wireless microphones that work on frequencies close to the white spaces. "We feel that we have enough evidence to demonstrate that the order was published without sufficient consideration of some of the technical information that the FCC engineers received," Ferrugia said. The Broadway League and others hope that the Court of Appeals will force the FCC to look more carefully at the issue.

The RIAA's Next Step?

Perhaps we have a chance to rebuild the music business after a period of tremendous looting.

- Rick Carnes, president, songwriters Guild of America

In Greg Sandoval, "Sources: AT&T, Comcast may help RIAA foil piracy," CNet.com, January 28, 2009

Reliable rumors are circulating that AT&T and Comcast, two of the nation's largest Internet service providers, will be among a group of internet service providers (ISPs) that help the Recording Industry Association of Amera (RIAA) to battle illegal file sharing. The RIAA is a lobying group that represents the four largest recording companies. It said last month that it would no longer battle piracy by filing lawsuits against individuals. This approach through the ISPs may represent their new tack.

The approach would involve the RIAA's telling the ISP to send a presumed copyright violator a "take-down notice"--a request that the person stop offering music files for uploading onto the internet. If the person doesn't listen by the third notice, the ISP would stop the person's internet connection. "The entertainment industry has been trying to get laws passed throughout the world that would force ISPs to implement a 'three strikes' policy."

No word has emerged so far about what the music industry would give ISPs in return for their circulation of the notices and for pulling subscription-paying customers off their services. One model may be found in Disney's relation with Verizon. In return for sending the take-down notices, Verizon got permission to transmit twelve Disney TV channels over its broaband (FiOS) network.

Courts Seem to Protect Privacy Over Defamation

...We're beginning to think that a judge might be reluctant to rule as a matter of law that these stzatements aren't capable of a defamatory meaning.

- Sam Bayard, assistant director of Citizen Media Law Project

In Wendy Davis, "Model: I Am Not a Skank," Online Media Daily, January 7, 2009

Model Liskula Gentile Cohen has asked a New York court to force Google to reveal the name of a person who called her "skankiest in NYC," libeling her (she says) as promiscuous. A Google spokesperson said that while the firm sympathesize with victims of "cyberbullying," it also respects the privacy of its users. Whether the judge would consider the word skankiest as libel would depend on whether he considers the word fact rather than opinion. At least one court in California has held that using the term skank against someone is not libel because it is not a factual statement. A New York court also ruled that comments that might be considered factually negative (that a person is a bigot and has "no interest in helping the private school community") were actually opinions and so could remain anonymous. The next hearing in the Cohen case is scheduled for January 26.

Where Will the RIAA Go After Five Years of Lawsuits?

If the goal is to reduce file sharing, it's a failure.

- Fred von Lohmann, a staff attorney with the Electronic Frontier Foundation

In David Kravetz, "File Sharing Lawsuits at a Crossroads, After 5 Years of RIAA Litigation," Wired, September 4, 2008

Lohmann's comments refer to the lawsuit approach pursued by the Recording Industry Association of America (RIAA) against consumers who share copyrighted music with others online. David Kravetz notes that September 8, 2008 marks five years since the RIAA's first lawsuit. He presents an overview of the controversies swirling around the more than 30,000 lawsuits that RIAA instituted during the past half decade. The RIAA says it is continuing its lawsuits to emphasize to individuals that downloading copyrighted content is, in fact, illegal, and to scare people from doing it. Opponents claim that the RIAA's tactics have terrorized people into paying up rather than fighting in the courts, that the company it is using to ferret out wrongdoers is not doing it legally, and that the way the RIAA is trying to prove illegal sharing may also not stand up to court scrutiny.

Kravetz notes that "despite the crackdown, billions of copies of copyrighted songs are now changing hands each year on file sharing services." And he adds that "critics of the RIAA say it's time for the music industry to stop attacking fans, and start looking for alternatives."

Are Game Companies Going Too Far to Protect Their Trademarks?

I'm a college student, and not an affluent one, and I simply do not have the time, energy, or resources to fight this battle right now.

- Noah Witherspoon, developer of the mobile game Tris

In Wendy Davis, "Tris Plays Its Final Round," Daily Online Examinar, August 27, 2008

Witherspoon developed an application for the iPhone which copied the popular game Tetris. The Tetris Company, arguing that Witherspoon violated its copyright and trademark rights, persuaded him to take it offline or else be sued. The same thing happened with the game Scrabulous, an application for Facebook; Habros and Mattel, Scrabble's owners, forced Facebok to pull it from its system.

Some lawyers believe that games such as Scrabble and maybe even Tetris are not copyrightable because they were were simply rearrangements of old game ideas. Trademark laws may apply because the new games look very much like the trademarked ones, but attorneys suggest it's fairly easy to make cosmetic changes to get around those restrictions. Wendy Davis wonders if zealous owners are too quick to demand removal: "Legal questions aside, it seems obvious that Scrabulous is the best thing to happen to Scrabble in decades. Before the shutdown, the application drew 500,000 people a day -- some of whom became so enamored of the game that they purchased the physical version. One has to wonder whether Hasbro/Mattel and the Tetris Company have really thought through the ramifications of removing programs that serve to increase the popularity of their games."

The Tyranny of Prime Time

Forcing all the "big" events to a time-shifted-to-prime-time model isn't holding the entire audience, and any U.S. network planning to buy Olympic rights will be confronted with more and more audience bleed as viewers find ways to see events as they happen.

Cyndy Aleo-Carreira, writer for The Industry Standard

In Cyndy Aleo-Carreira, "Users run circles around NBC's Great Olympics Firewall ," The Industry Standard, August 11, 2008

NBC-Universal estimates that during the first four days of the Olympic games 157 million Americans, or more than half the U.S. population, viewed some part of the Olympics on NBC properties (for example, the NBC-TV, USA, MSNBC, and Oxygen TV networks and their online counterparts). Nevertheless, as Aleo Carreira suggests, some US viewers are annoyed because NBC-U has held back broadcasting certain games live or right after they happen because the network wants to reserve them to attract a potentially huge (and therefore lucrative) prime time audience.

Because of NBC's fierce protection of its rights, getting videos of certain Olympic events right after the happen is not easy on the US internet. "A quick search of YouTube shows that Google has pulled down copyright-infringing clips of the opening ceremony from NBC, but coverage from Chinese network CCTV is easy to find. As for the events themselves, NBC and BBC Olympic videos seem to appear and disappear frequently, so it's clear YouTube is having trouble keeping up with the uploads." All these cat-and-mouse games are offending many viewers, says Aleo-Carreira. She suggests that audience pressures should lead future firms that control Olympic exhibition not to be wedded to the concept of prime time.

Appeals Court Ruling May Mark "A Seismic Shift"

This is a real opportunity to transform television.

-Tom Rutledge, chief operating officer of Cablevision

In Chad Bray, and Vishesh Kumar, "Cablevision Wins Appeal on RS-DVR," Wall Street Journal, August 5, 2008

The 2nd Circuit Court of Appeals ruled on Monday, August 4, that that a lower court judge was wrong last year in ruling that Cablevision would violate copyright laws if it created a remote-storage digital-video-recorder (DVR) system. With a remote-storage DVR system, customers would not need DVRs in their home. They would to simply click through to their area on the cable company's DVR and record or access their shows. This approach benefits cable firms because they wouldn't have to spend lots of money to order, store, deliver and repair home DVRs. Broadcast and cable networks and the companies that supply them with programs are against this activity, though, because the lower DVR costs would entice even more consumers than now to record shows and then skip the commercials while watching them. Media firms might appeal the ruling to the Supreme Court, but if it holds, said one Wall Street analyst, it is "a seismic shift" for the media industry.

Federal Court Rules Fair Use Applies to Radio Commentary

It seems to be relatively self-evident that you can take small snippets of somebody's content in order to criticize it. But it's a whole lot nicer to have a federal district court saying it.

-Sam Bayard, assistant director of the Citizen Media Law Project at Harvard's Berkman Center for Internet & Society

In Wendy Davis, "Court Rules Fair Use, Dismisses Radio Host's Suit," Online Media Daily, June 29, 2008.

Federal judge Susan Illston in San Francisco dismissed popular radio host Michael Savage's copyright infringement lawsuit against the Counsel on American-Islamic Relations (CAIR). The organization has posted four minutes of clips (of a two-hour program) in which Savage asserted that "The Quran is a document of slavery and chattel," and that Islam is "a religion that teaches convert or kill, a religion that says oppress women, kill homosexuals."

Savage's suit argued that CAIR took his statements out of context in order ruin his image and raise funds. Illston said that even if the contention were true, use of the material still constituted fair use. "Plaintiff's allegation that defendants repackaged the original, misportraying its meaning and message, creates a presumption that the work is transformative," she wrote. US law typically considers material copied for transformative purposes, such as critiques or explanation, is generally considered fair use.

Savage's lawyer said that he is considering an appeal.

Protecting Trademarks from Birthday-Party Thefts

But I told her, 'You can't have the real Dora. If you want the real Dora, call Nickelodeon.'

-Elvira Grau, owner of Space Odyssey USA, a party location

In Kathy Roseman, "Why Dora the Explorer Can't Come to Your Kid's Birthday Party," Wall Street Journal, July 22, 2008.

These comments came in response to a parent whose child-partyers were terribly disappointed that Grau's Dora-like costume was not close enough to the real thing. But Grau's semi-Dora-like appearance resulted from a fear of lawsuits. It seems that entertainment companies are increasingly trying to protect their trademarks even in the realm of children's parties. The firms claim they are worried that costumed characters may act badly and hurt the brand, or the free use may dilute the company's right to own the character. As a result, "companies that include Marvel Entertainment Inc., Scholastic Inc., and HIT Entertainment, have sent cease-and-desist letters, threatened lawsuits and in some cases received settlements from companies that market unauthorized character impersonators."

In our brand-saturated society, children often expect not generic clowns but characters that firms have cultivated in their minds for years. "But to sustain live-entertainment and theme-park revenues, most companies that own rights won't offer licensed, authentic costumes that can be worn by professional birthday-party entertainers. That has left parents out of luck." HIT Entertainment, which owns Barneyand Thomas the Tank Engine, says that it regularly monitoring birthday-party planning Web sites and parenting blogs with the aim of making sure that no one steals its trademarks. What if parents don't want to disappoint children who hope the party will be visited by Thomas? According to a company representative, there is still a way: buy paper plates and decorations at Hallmark, which is the authorized provider of paper products featuring Thomas and other of the company's licenced characters.

Does eBay Court Victory Portend Other Website Wins?

The ruling confirms that eBay acted reasonably and has adequate procedures in place to effectively address counterfeiting

- eBay spokesperson Nicola Sharpe

We are shocked and deeply disappointed in the district court's erroneous reading of the law. The ruling allows sellers of counterfeit goods on eBay to victimize consumers.

- Tiffany & Company spokesperson Mark Aaron

In Wendy Davis, "Tiffany Loses Trademark Infringement Case Against EBay," Online Media Daily, July 15, 2008

The ruling by federal judge Richard Sullivan in New York spoke to two controversy issues relating to intellectual property on the web. Tiffany had sued eBay in 2004 because it said it feared that people were auctioning fake Tiffany goods. The jeweler stated that eBay should prohibit its sellers from listing five or more Tiffany items. eBay replied that it removed counterfeits when it discovered they were fake, but could not see the justification fo prohibiting the sale of Tiffany goods without that knowledge.

The judge agreed, saying that eBay's practice of removing items from its site in response to notices from Tiffany was enough to prevent being liable. The judge also refused to accept an additional argument by Tiffany that because its name is trademarked eBay should be stopped from using the Tiffany name in eBay's advertising on search engines. The judge stated that eBay needed to use the Tiffany to describe certain products and that this activity was "fair use" according to trademark law.

Judge Posner's decision might inflence the outcome of Viacom's lawsuit against Google, alleging that Google should have done more to stop people from placing Viacom's copyrighted programs on its site. "Although Tiffany alleged trademark infringement, its arguments were comparable to those in Viacom's copyright infringement lawsuit against Google's YouTube. Viacom, like Tiffany, wants to hold a site liable for material placed on it by users. And like Tiffany, Viacom argues that Google should be required to police the site for intellectual property infringement."

Judge's Order Confirms Some Privacy Advocates' Fears

It is an 'I told you so' moment.

-Marc Rotenberg, executive director of the Electronic Privacy Information Center

In Miguel Helft, "Google Told to Turn Over User Data of YouTube," New York Times, July 4, 2008

Rotenberg was referrring to a federal judge's order to Google that it had to turn over to Viacom IP addresses and login names of users who watched which videos on YouTube, the Web's largest video site, which is owned by Google. Viacom is suing Google and YouTube, arguing that the firms' executives have been aware that a dominant activity on YouTube is the piracy of materials copyrighted by Viacom and other media firms.

Judge Louis L. Stanton of the Southern District of New York, who is presiding over the lawsuit used Google's past statements on I.P. addresses to conclude that its ''privacy concerns are speculative.'' Many privacy advocates strenuously disagree, and Google says it is working with Viacom to try to anonymize the data before turning them over. Moreover, Viacom states that only lawyers connected to the case will see the data. Nevertheless, privacy advocates point to the New York Times' ability to piece together the name of someone among AOL's supposedly anonymous data. And Rotenberg and others see this court decision as an example of what they have long feared: ways that supposedly secure data held by companies can become vulnerable to outside uses.