joegratz.net

As reported here at TTABlog, Leo Stoller, the litigious trademark abuser who has not yet sued me for blogging about him here, has been sanctioned by the Trademark Trial and Appeal Board. He’s filed over 1,800 groundless motions for extensions of time to oppose trademark filings, and apparently uses that time to attempt to extract settlement money from the applicants. The order vacates those extensions and bars Stoller from filing more for two years. Thereafter, Stoller will have to file through an attorney — and it seems likely his filings will have to decrease in number or increase in quality, because attorneys (unlike unrepresented litigants like Stoller) can be disbarred for making groundless filings.

On his blog, Stoller vigorously opposes the sanction order (speaking about himself, as he always does on his blog, in the third person). In an amusing twist, Stoller illustrates his argument that the TTAB’s ruling is unconstitutional with this graphic:

Perceptive readers may have noticed that, rather than being a general illustration about unconsitutionality, this image is the logo of the documentary Unconstitutional, which was made, according to its director Robert Greenwald, “to show Americans the extent to which our civil liberties and our freedoms have been trampled upon by our government since 9/11.” (Incidentally, I have two words for geek readers, and I implore everyone else not to look it up. “Constitutional Goatse.” I’m just sayin’.) The film’s title constitutes use of an ordinary English word as a trademark — use that, according to Stoller’s arguments, deserves absolute protection from infringement (say, by using the logo to promote one’s own product or service on one’s blog, which could arguably be blurring or, in the case of an association with Stoller, tarnishment).

It’s always good to see an IP bully be cut down to size. I look forward to reading the D.C. Circuit’s opinion in the inevitable appeal.

The details of the “compromise” reached between Senator Specter and the Bush Administration have recently come to light, and it’s not too soon to voice opposition. Professor Balkin says it better than I can:

In short, if this bill is passed in its present form, it would seem to give the Executive everything it could possibly dream of– a lax method of oversight and the possibility of ignoring that oversight whenever the President chooses. The NSA can (1) engage in ongoing electronic surveillance within FISA with indefinite 90 day renewals, (2) engage in electronic surveillance without even seeking a court order for a year, and finally (3) under section 801, engage in electronic surveillance outside of FISA under the President’s constitutional authority to collect foreign intelligence surveillance.

Barely two weeks after Hamdan, which appeared to be the most important separation of powers decision in our generation, the Executive is about to get back everything it lost in that decision, and more. In Hamdan, the Supreme Court gave the ball to Congress, hoping for a bit of oversight, and Senator Specter has just punted.

The bill is a sneaky sham that would place the imprimatur of the Congress on the sweeping claims of “inherent” presidential power made by the Bush administration. It purports to expand judicial review of warrantless electronic surveillance of United States citizens, but it places that review in a secret court where, as I read the bill and the existing FISA, Department of Justice lawyers will be allowed to argue in favor of the program’s legality, but all other lawyers will be barred. It’s an outrage.

Jim Chen, an excellent teacher and very smart scholar at the University of Minnesota Law School, has started a blog called Jurisdynamics. I can only hope that the blog will be as entertaining and fulfilling as Professor Chen’s Regulated Industries and Statutory Interpretation classes.

Ed Felten has released this short, sweet paper on the nuts and bolts of network neutrality. It takes less time to read than listening to that silly Ted Stevens “tubes” clip again, and it’ll teach you a lot more about the real issues and the real dilemmas faced by both sides of the debate.

Felten’s paper makes no policy recommendations, except an observation that the status quo — a sword of Damocles hanging over ISPs, ready to fall if they act egregiously — may be the best of all possible regulatory schemes.

Gresham’s Law states that, when all money is legally required to have the same extrinsic value, money with greater intrinsic value will be hoarded, while money with less intrinsic value will be exchanged. So, for example, if legal tender laws force minted coins made of pure silver to be worth the same as minted coins made of 40% silver, people will keep the pure coins (the “good” money) and trade away the debased coins (the “bad” money).

I wrote a few weeks ago about La La, a music trading service. La La lets its users create a “Have List” and a “Want List”; for every CD a user ships from her “Have List,” she receives a CD on her “Want List” after paying La La a small ($1.79) fee. The CDs are (basically) all shipped by other members. Thus, La La effectively enforces a legal tender law on CDs; no CD can be worth more than any other CD.

But some CDs are worth more than other CDs. The new Dresden Dolls CD is simply worth more dollars than a copy of The Sign by Ace of Base. (Older readers, think Sgt. Pepper’s Lonely Hearts Club Band versus Frampton Comes Alive!.) Like legal tender laws in Gresham’s era of debased coinage, La La forces all CDs to have the same extrinsic value when they, in fact, have different intrinsic values.

So, one would expect La La users to put only intrinsically valulable CDs on their Want Lists and trade away only less intrinsically valuable CDs. The system grinds to a halt, right?

Well, no. There are, as far as I’ve thought it through, two mechanisms lubricating the exchanges, each of which manifests itself in more than one way.

The first mechanism is taste. There actually are people who would trade a copy of Sgt. Pepper’s Lonely Hearts Club Band for a copy of Frampton Comes Alive!. An economist who was also a record snob might call this information asymmetry, but the rest of us can just rehearse bromides about “one man’s trash”. I don’t have any data about what the variance of intrinsic value is for CDs, but I suspect there’s enough taste variance in the population of La La users that only few consensus gems will tend to be hoarded, and only few consensus dross will be offered at an unusually high rate. Users will tend to queue to receive consensus gems, and will tend to queue to get rid of consensus dross. The queues move when users with unusual tastes come along. My informal observation in my La La trades has been consistent with this model; my new releases are always requested for shipping, and the CDs I receive tend to be the least consensus-desirable titles on the list. This effect is ameliorated by La La’s strong encouragement of very large Want Lists; I suppose, as a user’s Want List grows, the chances he’ll name something that someone else thinks is dross increases.

The second mechanism is the rip-and-trade. While the service officially discourages it, many users probably make copies of the CDs they receive for personal use, then swap the CDs away again. In this situation, the analogy to debased coin becomes pretty stretched; we’d have to model a CD as a magical coin, most of whose value can be retained after it’s traded away. This difference between money and CDs may be what’s really keeping La La lubricated. Except for the liner notes — which many people don’t pay attention to anyway — a lossless copy of a CD in a user’s iTunes library is just about as good as a CD on the shelf. So a user might be willing to trade a CD with a higher intrinsic value for one with a lower intrinsic value, if that user already had a personal copy of the high-value CD (and really wanted to listen to “Don’t Turn Around” for old time’s sake).

There are some other pretty cool issues raised by the La La economy which I’d like to explore more. First, there’s a whole maelstrom surrounding liner notes. Initially, sending them was entirely optional and in fact cost the sender extra postage, but the system’s been changed, and it’ll be interesting to see whether I get more or fewer CDs with notes now that the system’s changed. And second, there are some factors involved in La La that bring out things that certainly look like altruism. It’s just fun to make someone’s day by including the liner notes, or by shipping them a CD they’ve been awaiting for weeks, or by writing little notes on the shipping envelopes.

Adding up the effects of taste, non-rivalrousness, and the pleasure of sharing art with others, maybe CD trading isn’t much like the exchange of legal tender after all.

Judge Richard P. Matsch of the United States District Court for the District of Colorado on Wednesday filed this opinion granting partial summary judgment in favor of the movie studios, finding that CleanFlicks infringes copyright. This is not a terribly surprising result; CleanFlicks’ business involves selling edited DVD-Rs of Hollywood movies, buying and warehousing one authorized DVD of the movie for each edited copy it sells.

Trouble is — according to Judge Matsch — that’s infringement. While the First Sale Doctrine protects resellers from copyright liability, CleanFlicks is doing more than reselling. They’re making unauthorized copies. Maybe otherwise-infringing copies should be legal if one authorized copy is warehoused or destroyed for each unauthorized copy made, but that’s not the current state of the law. (If it were, there would be pretty nasty proof problems involved in keeping copiers from playing with their numbers.)

Judge Matsch also marched through the fair use factors, properly recognizing that they represent only a part of the Fair Use Doctrine. His transformativity analysis was rather unsatisfying; it seems that, in Judge Matsch’s view, only additions of content, not deletions, can be transformative. I agree that these particular deletions were not transformative, but the opinion’s language is overly broad.

The EFF filed submitted an amicus brief seeking to rebut the studios’ argument that “the intermediate hard drive copies allegedly [used] to create [CleanFlicks’] final products violate a copyright holder’s exclusive right of reproduction[.]” The brief was successful; the court focused on the DVD-R copies CleanFlicks made, ignoring the intermediate copying in its infringement analysis. [Derek points out in the comments that the MPAA conceded the intermediate copying issue when the EFF moved to file its amicus brief, so the motion was denied as moot. Same outcome, different back-story.]
It’s notable that the injunction is based entirely on the infringement of the studios’ section 106(1) right of reproduction and the section 106(3) right of distribution; the court denied the studios’ summary judgment motion on their section 106(2) claim that CleanFlicks had created infringing derivative works. Sadly, this holding isn’t discussed much.

CleanFlicks has argued that an injunction like the one granted here will put it out of business. It remains to be seen whether they will be around to appeal.