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Are Internet telephony companies a good investment? Perhaps not–or perhaps just not yet.

Atlanta-based law firm Motley Rice has filed a class action against Vonage, on behalf of shareholders who bought stock in the Internet telephony provider prior to its intial public offering on 24 May, and have already lost a great deal on their investment. Filed on Friday 2 June in the US District Court for the District of New Jersey, the suit alleges that investors were mislead by the company, its officers, and certain underwriters of the IPO, when they were offered shares in the company. (more…)

A few interesting developments on a number of fronts:

The Register has a story panning the trial judge’s decision in the Apple trade secrets vs blogging case. According to the story, “Judge Rushing cites Wikipedia as a source, a mistake which earns students an ‘F’ grade today. He talks about the need to disregard economics and sociology in favor of a ‘memetic marketplace’ – whatever that is – and allows himself some flights of technological rapture.”

ArsTechnica has an interview with the CEO of eMusic. You may not have heard of eMusic, but it is currently the number 2 seller of downloadable music, behind only Apple’s iTunes Music Store. And the interesting part: eMusic does not use DRM. (And its songs cost only about 25c each, from what I can see on its website). I wonder how Napster can complain about this one?

Finally, an interesting post claims that a newly-created lobby group for net neutrality is just a shill for telcos. And according to SourceWatch (run by the nonprofit Center for Media and Democracy) the primary funder of the group is … AT&T.

At lightning speed, following on a 4 April announcement, the Minister for Communications, Information Technology and the Arts, Senator Helen Coonan, has introduced Do Not Call Register legislation.

Unfortunately for small businesses, they are prohibited under the proposed legislation from joining the register. Only private individuals will be able to sign up to the Register, which will make it illegal for telemarketers to solicit them. There will be no charge for individuals wishing to be listed on the Register. Small businesses, including those run by individuals from their homes, will not be eligible. (more…)

It’s famous last words, but the problem is currently under control – one spam comment in the last few days, which is two orders of magnitude less than before. The spammers are using spambots to exploit a weakness in the blogging software for which I don’t think there’s any sure cure given the way it’s currently written. My fixes currently depend on some weaknesses in the spambots, but a smart spammer would be able to circumvent them with some thought.

If you get a “possible spam detected” message when you try to post a comment, please email me and let me know (lawfont at gmail dot com.

One useful tidbit: the spammers have cottoned on to an open redirect script on adobe.com that doesn’t properly check destination (naughty!). This would be an excellent vector for a phishing attack, as the URL would display in an email client as resolving to adobe.com. (example: http://store.adobe.com/cgi-bin/redirect/?http://lawfont.com/) If you get a link to adobe in an email, don’t click it.

Is linking to websites without permission against the law? Generally not. But Apple may not be so far off the mark by demanding that comedy website Something Awful remove a link posted to one of Apple’s own internal service manuals. (The service manual is posted at a third website, which was not authorised to reproduce the manual, and not Something Awful itself.)

However, as pointed out on Out-Law, the truth may be that Apple’s complaint has not put the company in a “tricky and potentially embarrassing situation.” Although in general linking does not violate copyright or other applicable laws, links to infringing material may expose the linking party to contributory copyright infringement. In other words, posting the link, while not a direct infringement of copyright, might be deemed to encourage others to infringe copyright by dowloading the infringing material (in this case, the manual). (more…)

(subtitled: Outcomes of the Fair Use Review Announced).

For the past 12 months, Australia has been going through a major review of its copyright law, and in particular, its exceptions to copyright infringement, with a view to ‘updating’ this material for the digital environment. I note that we are not the only ones: Canada are having an ongoing debate (see Michael Geist on all this), and the UK are having their Gower Review (see here).

Today, the Attorney-General has issued a press release, announcing the results of the review. As yet, the press release does not appear to be online, so I’ll summarise. In essence, the government has decided not to adopt the US ‘fair use’ system – where a broadly worded defence must be assessed on a case-by-case basis. Instead, the government will expand, and amend, existing specific exceptions in Australian law. That makes the amendments complicated, but potentially more certain.

The Attorney-General, Philip Ruddock, is characterising the reforms as:

‘…significant copyright reforms which make our laws fairer for consumers and tougher on copyright pirates.’

According to the AG:

‘These are commonsense amendments which will maintain Australia’s copyright laws as the best in the world for the benefit of our creators and other copyright owners and for hte many Australians who enjoy their creative works.’

I wonder, though. The government does appear to have caved on the issue of the ‘flexible exception’ – the ‘catch all’ provision to except uses not foreseen at the time of this legislation. In my submission, I supported such flexibility, and I’m very sorry to see it apparently not there. I wonder whether in a few years time we will be saying what Bill Cornish (not an IP radical or copyleftist, by any stretch of the imagination) said in his Clarendon Lecture:

‘With rapid technical shifts on the scale of the Internet, there must be a case for giving judges some more general power to excuse at the edges, along US lines. After all, at the centre, legislation is rapidly providing the mainstays of control. As one who tried in 1988 to persuade Parliament to introduce a concept of fair use, I feel now even mroe acutely that our failure was a major rebuff. ‘ (Bill Cornish, Intellectual Property: Omnipresent, Distracting, Irrelevant? (OUP 2004) at page 65)

The press release maintains principles which Ruddock has stated a number of times:

• 1. That copyright must keep pace with technology and rapidly changing consumer behaviour;
• 2. that ‘reasonable consumer use of technology to enjoy copyright material’ should be recognised – ‘Australian consumers should not be in a significantly worse position than consumers in similar countries’
• 3. reforms should not ‘unreasonably harm or discourage the development of new digital markets by copyright owners’
• 4. The unique Australian system should be maintained – we are not moving to US-style fair use;
• 5. the law should be updated to tackle rising copyright piracy, and to support the copyright industries.

In summary, the AG has announced:

1. 2 new private use exceptions – time-shifting and format-shifting;
2. new exceptions allowing schools, universities, libraries, and other cultural institutions to use copyright material for non-commercial purposes;
3. new exceptions for people with disabilities;
4. a new exception to allow use of copyright material for parody or satire;
5. new enforcement measures

Over the fold, I summarise the announcements, and offer some commentary. (more…)

Time for some Friday morning links, if you are in a reading mood today:

1. Michael Geist has a column this week on The Legal Limits of Government Tinkering with Technology. It discusses the French legislative proposals to mandate the interoperability of digital products: law which would require Apple to reveal technological specifications to its competitors so that they can design compatible devices, so that iTunes songs would play on anything. Australia makes a particular appearance in the column, with Geist commenting about the TPM Inquiry’s recommendation that the government establish the legal right to break region coding as part of Australia’s new anti-circumvention laws.
2. James Boyle has a column this week too, on documentary films and the clearance culture. A taste:

   This should be the Golden Age of documentary film, and in some senses it is. A profusion of television channels allows programs that cater to smaller and smaller markets. As viewers, we show an insatiable appetite for biographies of the famous – celebrity infomercials disguised as documentaries – but we also show a taste for quirkier material: … There are documentaries about mental illness and spelling bees and Star Trek fandom – though not all in the same film. And the drop in the price of cameras and editing software, together with the availability of internet distribution, potentially puts a million documentarians on the streets.

   But as Larry Lessig and others have pointed out, documentary film is rapidly becoming the latest victim of the explosion of intellectual property rights I have discussed in these pages. Ironically, the problem here is not a broadening of the rights themselves, but a “clearance culture” that demands licenses for the tiniest fragment of copyrighted material caught in the viewfinder or on the soundtrack of the documentary film.

   Boyle is writing from a US/international perspective. But similar issues were noted in Australia in a recent report for SADC, the Council for Documentary Makers (click here for the BIG pdf). The report, released in November 2005, noted that investors such as the FFC and AFC require a legal opinion that all material used in the documentary has been examined for violation of third party copyright and all necessary clearances obtained. Insurance premiums have also increased. It’s a shame that that same report didn’t look at doing what has been done in the US though – producing a ‘Best Practices’ Model for the Industry that reflects a consensus on what uses are and aren’t acceptable without a clearance. For the most part, the Best Practice Model produced by the Centre for Social Media is a very reasonable set of guidelines on when clearance should be obtained. Something similar could be created for Australia.

3. The other story doing the rounds of the blogosphere and media at the moment is the Philips Electronics patent application on technology that could let broadcasters freeze a channel during a commercial, so viewers wouldn’t be able to avoid it. See eg Techdirt. 4 brief comments on this:
   (a) oops bad publicity,
   (b) this is proof of one fundamental truth about intellectual property: that having a right doesn’t mean you have a marketable product. What, people are going to buy this? What, if people don’t want to buy it, governments are going to back the right of content owners to impose this technology on people? Even as they try (as our government is at the moment) to ensure that legitimate uses of legitimately accessed materials are preserved?
   (c) There is a move to parse out all the ‘consumer value’ in content and make it something that can be charged for. You can imagine paying ‘extra’ for the ‘right’ to channel surf. There are rights owners who think that is a legitimate method of doing business. Although see point (b) above.
   (d) Philips have apparently commented that they had no intention of using the technology in their products, but ‘Philips wanted to provide the technology and seek the patent only as part of the broader developments within the industry’. How many ways are there to say ‘patent arsenal’?
4. Remember that story about the chef from Interlude from a couple of weeks ago (you know – chef copies other chefs’ dishes). One of the issues I mentioned there was whether a dish at a top class restaurant could be a ‘work of artistic craftsmanship’. Well, have a look at this opinion piece in the Sydney Morning Herald today on the cake decorators of the Royal Easter Show. Does it change your mind on whether food creations can be works of artistic craftsmanship?

Oh yes, little flurry in the blogosphere over a story about Telstra buying Ads on Google so that Telstra’s ads would appear when someone searched for their broadband rival AAPT. As usual, the story attracted attention (see the IPKat, the Trademark Blog, Warwick Rothnie, Search Engine Watch Blog, Young PR, and Joshua Gans).

Only Gans points out that this is common practice (with examples! Go have a look). But is it legal? (more…)

The great thing about being an IP professor is that you get to comment on the pressing information technology and information freedom issues of the day.

Like, oh, chefs copying other chefs’ creations. (blogpost here)

And, oh, the BIG issue: will elvis impersonators still have a livelihood in the future? Last night, if you watched closely, you might have seen me spouting forth on ABC news on the issue of whether transactions recently occurring over the Elvis Estate in the US would lead to Elvis impersonators losing their jobs (short version of the story here). Apparently, a new majority holder in Elvis Enterprises is threatening to crack down on ‘unauthorised’ Elvis impersonators. ABC News called me to comment (on my day off!!! Nothing like taking time out from a heavy shopping expedition to do a quick media interview. And nothing like taking a quick stop by the Myer make-up counters to get ready…).

Frankly, I can’t see that there will be a legal issue for the impersonators here. Far more important issues were being ventilated by Cory Doctorow last night in Melbourne (and tonight in Sydney – go if you can!) (more…)

I’ve blogged here, and more extensively here, about a case before the Copyright Tribunal, in which CAL and the Schools are seeking a determination on how much schools should pay for ‘electronic uses’ of copyright material. I’ve been concerned (amazed, appalled) by one of the arguments being made in the case: that where a teacher tells a student to view a website (yes, a freely available, open access website) there should be a payment to copyright owners. I’ve pointed out at length why I think this is a simply unsustainable argument. Now we have a Tribunal decision on what should be done pending determination of that argument. (more…)

Yochai Benkler has followed a trend set by such people as Larry Lessig and Michael Geist, and made his new book, The Wealth of Networks, available under a Creative Commons License. He’s gone further than Lessig or Geist, I think, and has put the ideas in the book – which are all about commons-based and cooperative production – to the test in the real world. It will be of interest to anyone who thinks the whole concept of the Commons, Creative Commons, and ‘social production’ are interesting. Comments on this method of publication, and the book itself, over the fold. (more…)

A colleague asked me the other day: if a US company decides to offer its TV shows for free online, but limits the downloads to US internet users only (blocking out us poor sucker Aussies), are they doing anything illegal?

The question stemmed from Wall Street Journal reports that Disney plans to offer popular tv shows like Lost and Desperate Housewives for free online (see also Michael Geist on this)

I couldn’t think of anything that would make this illegal. Possibly stupid, given the reported levels of TV-show downloading in Australia, but not illegal. But then I thought, well, in recent times, people commenting on this blog, and more particularly on Weatherall’s Law have proven the old blog adage that the comments generated by a post are often more interesting than the post itself – and that commenters collectively are smarter than the blogger.

So help me out here guys. Is there anything illegal going on in that scenario?

As reported elsewhere, the Electronic Frontiers Foundation (EFF) have issued the latest update of their ‘Unintended Consequences’ paper. This one is version 4, and entitled ‘Unintended Consequences: Seven Years under the DMCA‘. (Version 3, issued September 2003, reflected the stories from 5 years). The paper is the output of an ongoing project of the EFF, which:

collects a number of reported cases where the anti-circumvention provisions of the DMCA are been invoked not against pirates, but against consumers, scientists, and legitimate competitors.

The paper was cited in a number of submissions in Australia’s own inquiry into TPM laws and exceptions, and in the final report of the House of Reps Standing Committee on Legal and Constitutional Affairs that did the inquiry.

The report of course details all the well-known stories of use and abuse of the DMCA: the Ed Felten ‘squishing research’ story, the Sklyarov arrest, Lexmark printer cartridges. But more important and more interesting is what’s new, in the last approx 2.5 years? (more…)

Australian Minister of Communications Helen Coonan today announced the formation of a National Do Not Call Register. The Register, which is due to be up and running by early 2007, will allow individuals and small businesses to opt out of receiving unsolicited telemarketing calls. There will be no cost for listing in the Register.

Enforcement of the Register, which will apply to all telemarketers operating in Australia (and overseas telemarketers representing Australian companies), will include warnings, fines, formal directions, and financial penalties. The Register will not apply to organisations that may have public interest objectives (ie, charity groups and persons undertaking social research), nor to companies with an existing commercial relationship with the individual or small business.

The cost of setting up the Register is estimated to be A$33 million, with the Government providing A$17.2 million, and the remainder to be provided by industry.

Is Internet filtering ever justified?

Australian Labor party leader Kim Beazley has been pushing for Internet filtering at the ISP level, to provide a “clean feed” for Australian families. The idea would be for ISPs to blacklist particular websites that are known to have pornographic content, so that children will not be exposed to objectionable content. (more…)