Friday, December 21, 2012
The Science of Constitutional Rights
Eroding the third trimester standard established in Roe v. Wade in 1973, the Idaho legislature passed the “Pain-Capable Unborn Child Protection Act” in 2011, prohibiting abortions based on neuroscientific findings that pain sentience in fetuses may occur before viability. Roe v. Wade insisted on viability as the critical point where the fetus’s life might outweigh the mother’s right to privacy, but Idaho, along with several other state legislatures, is fighting against the Supreme Court’s standard.
As the basis for the stricter abortion standard, Idaho’s “Pain-Capable Unborn Child Protection Act” cites findings that pain receptors are present throughout “the unborn child’s body no later than sixteen (16) weeks after fertilization” and that “the unborn child reacts to touch” by eight weeks after fertilization. Anti-abortion proponents support the pain-capable fetus protection acts, and former Presidential candidate Mitt Romney has voiced his agreement with such measures: “I will advocate for and support a Pain-Capable Unborn Child Protection Act to protect unborn children who are capable of feeling pain from abortion.”
Unsurprisingly, not everyone is on board with the contraction of abortion rights. In defending an Idaho woman who was arrested for inducing her own abortion and a related suit involving the Pain-Capable Unborn Child Protection Act, attorney Rick Hearn, M.D., questions the government’s use of science to circumscribe the constitutional right to privacy and thus abortion. William Egginton, a philosophy professor and guest columnist for the New York Times, attempts to discern the relationship of pain sentience to personhood for abortion purposes in an entry for the NY Times’s Opinionator blog. Egginton opines that scientific findings are facts that can inform thinking but mere data can neither provide an absolute definition of personhood nor generate an airtight argument for a particular variation of constitutional rights.
Frankly, the Pain-Capable Unborn Child Protection Acts are inconsistent with the standard established by Roe v. Wade. These statutes prioritize the possibility of the fetus’s pain over that of the mother’s right to privacy, a framework the 1973 Supreme Court rejected in favor of valuing the mother’s freedom to choose until viability. Pain sentience is simply not the standard set forth by Roe v. Wade, and the use of pain as a guideline for limits on abortion would greatly limit women’s life choices.
Thursday, December 20, 2012
U.S. Urges Federal Judge Not to Unfreeze Megaupload’s Assets while It Fights to Extradite the Site’s Founder
The U.S. is advising a federal district court judge to reject Megaupload’s attempts to get its assets unfrozen while the site’s founder, Kim Dotcom, fights extradition from New Zealand. Megaupload’s argument is that having its assets frozen is causing it irreparable harm. The U.S. countered by arguing that even if it were to regain control of its assets Megaupload would not be able to resume its business operations. The freezing of Megaupload’s assets raises due process concerns and may lead to the firm going out of business regardless of whether they are found guilty of the charges alleged by the U.S.
Megaupload.com was a 50-petabyte online file storage website. It was a free online storage solution in the “cloud” for files that were too large for email. Megaupload generated about $25 million a year in revenue from ads and $150 million from its paid premium service. At its peak, 50 million people visited Megaupload each day. Megaupload handled about 4 percent of global Internet traffic. The company maintains that it was a legitimate data storage business used by millions of individuals including employees of NASA and the FBI. However, the Department of Justice (“DOJ”) maintains that the legitimate storage business was a front. The real money was made providing a virtual fence for $500 million in pirated material.
The DOJ further maintains that Kim Dotcom, Megaupload’s founder, ran the criminal swap meet with impunity from the safety of his $24 million New Zealand mansion, protected by guards, guns, and CCTV. New Zealand Special Forces carried out Operation Takedown, which was overseen by the FBI via video link. Operation Takedown was a dramatic raiding of the Dotcom Mansion via helicopter. Dotcom was captured by the New Zealand Special Forces in a panic room hidden behind a secret door located in one of the many closets of Dotcom’s mansion. If all goes according to federal prosecutors’ plan Dotcom and his six executives would be extradited to the U.S. to face a Virginia judge and the possibility of 55 years in prison.
Megaupload argues that by freezing its assets the government is subjecting it to ongoing irreparable harm similar to a criminal conviction following full criminal process. The company further argues that because it has not been convicted of anything the freezing of its assets violates its right to due process of law. The U.S. has countered this argument by saying that Megaupload and Dotcom have contradicted each other because Dotcom has stated on several occasions that he has no intention of re-launching Megaupload. Even if Megaupload regained control of its assets the site would have many issues trying to operate with a possible prosecution hanging in the air and would require years to regain the market position it enjoyed prior to the arrest of Dotcom and the freezing of the company’s assets.
The U.S.’s seizure of Megaupload’s assets raises fundamental due process issues. Without access to its servers Megaupload cannot maintain a steady cash flow. Companies cannot survive without a constant cash flow. Megaupload will likely not be able to recover from the criminal proceedings even if the company and its executives are acquitted of all criminal charges. Although it is likely possible at this point, regaining its previous market share would take many years for Megaupload as many customers have likely migrated to other file-sharing services and are likely wary of going back to a service that they see as vulnerable to prosecution. This is concerning because it raises the question of what is stopping the government from shutting down other businesses through freezing their assets rather than actually bringing a valid claim against them. The result appears to be the same whether the government can prove its claim or not.
For more information: http://arstechnica.com/tech-policy/2012/10/us-slow-legal-proceedings-are-megauploads-fault-dont-unfreeze-assets/
Tuesday, December 18, 2012
Estate Planning in the Age of the Internet
Have you planned for your “digital estate?” Most people probably haven’t. Did you know it’s the policy of many social media sites to leave your profiles up on their sites after you or a loved one has passed? If this makes you uncomfortable you might want to think about adding a “digital executor” to your estate plan.
According to Facebook’s Frequently Asked Questions Page it is the site’s “[p]olicy to memorialize the account of a deceased person. In order to protect the privacy of the deceased person, we cannot provide login information for the account.” Getting a deceased person’s profile removed from a site isn’t impossible, but it’s certainly not easy either. Both Facebook and Twitter require numerous documents such as birth certificates, death certificates, notarized statements, and government-issued ID to be submitted before the profiles are removed.
A simple way around this headache is to appoint an executor of the “digital estate” and grant them the power of attorney over websites. Beyond just naming an executor of the digital estate, creating a file or document that lists up-to-date login information for accounts you’d like deleted after your death allows the executor to quickly and easily follow your wishes. Some people even choose to appoint executors to leave a final message or post a final video after their passing.
A simple solution to digital estate planning would be for sites like Facebook and Twitter to include privacy options to allow your profiles to be deleted or removed upon your death. I would venture to guess most people don’t know about Facebook’s policy to memorialize your account and it’s likely that not every Facebook user would feel comfortable with that arrangement. Until then, it’s probably a good idea for your estate plan to include a provision for your online presence.
Monday, December 17, 2012
XV Enterprises: Tim Tebow Trademark
NFL quarterback Tim Tebow, as sole shareholder of XV Enterprises, has trademarked “Tebowing” both the term and the pose. The act of Tebowing, which was popularized by Tebow at the end of every touchdown play, is to get on one bended knee head bowed atop a clenched fist. This act quickly became an Internet meme and some have tried to trademark the act themselves. One such person was Jared Kleinstein, a Denver-born Broncos fan living in New York, who started the website www.tebowing.com for the purposes of submitting photos of people Tebowing, while profiting from their acts. However, the trademark office refused Mr. Kleinstein’s request saying that the material “falsely suggests a connection with Tim Tebow.”
The purpose of the trademarking was to keep it from being abused and misconstrued by others. The religious ritual that Tebow did at every touchdown play was something personal, between him and God, and was taken by society and transformed into something called Tebowing. The main reason for the trademarking was not so he could make some extra cash from lawsuits, but to “make sure it is used in the right way.”
If Tebow can trademark his praying, “can the Catholic church trademark the praying-hands . . . the Muslims trademark their traditional poses . . . Buddhists trademark the Buddhist belly?" It appears that these religious groups could trademark these acts, but the trademark office would probably not grant these rights for three reasons. The first is that these acts do not originate from an individual or one particular entity; the second being that these acts are not considered “memes;” and finally, society as a whole does not use these terms as frequently as they do with Tebowing. For these reasons, it is very unlikely that other football players’ signature moves, such as Aaron Rodger’s championship belt, Victor Cruz’s salsa dance, or even Arian Foster’s bow could be trademarked unless these acts were religiously motivated such as Tim’s Tebow.
Saturday, December 15, 2012
Online Impersonation Laws Could Mean Felony Convictions for Unsuspecting Teens
Ever make up a fake email address pretending to be someone else to mess with your friends? Seems like a pretty benign thing to do, but if you live in the state of Texas, you could be headed towards committing a felony. In 2009, Texas passed the Online Impersonation Law, which makes it a felony to pretend to be someone else online with the intent to harm another. Louisiana also passed an online impersonation law, making it a misdemeanor to impersonate another online without permission and with the intent to harm. New York and California both have similar laws.
The first arrest under Texas’s Online Impersonation Law was made in July, 2012 and the defendants were two middle school girls, aged 12 and 13. The girls were purportedly using the persona of the victim on Facebook to cyber bully her. The defendants allegedly made threats towards other students under the name of the victim, which the victim’s mother contends severely socially damaged her and nearly lead to a physical confrontation. The local sheriff described the law as similar to identity theft. Identity thieves pretend to be someone else for financial gain while online impersonators use someone else’s identity “to try and get back at [someone] and ruin them socially.”
While 12 and 13 seem like very young ages for defendants of cyber bullying, an American Civil Liberties Union attorney noted that that there has been a visible increase in the punishment of minors due to infractions relating to social media.
A popular defense to social media infringements is the 1st Amendment’s right to free speech. In 2012, the ACLU began representation of three Indianan students expelled for using their Facebook walls as a conversation space to talk about another classmate. The school found the defendants’ actions to violate a provision of the school student handbook that disallowed bullying, intimidation, and harassment. The ACLU contends that because the conversation did not take place during school hours or cause disruption at school, the defendants are protected by the 1st Amendment’s guarantee to free speech.
Facebook representatives have reported they believe that approximately 83 million Facebook profiles are duplicates or fakes and they are taking action. Facebook announced that it will begin to delete accounts deemed to be fake. A user whose account got deleted would have to obtain special permission from Facebook before being allowed to open a new account. This is not a reaction to the possible illegal nature of the act, but an effort by Facebook to maintain accurate user information for advertising purposes.
As new laws are passed in an effort to regulate uses of social media, attention should be given to the type of defendant that is likely to break the law. Is it appropriate to label an act that is common for school aged children offline, a felony if committed online? Children will probably always engage in bullying. Should the act of moving bullying to an online forum constitute a felony when it is likely many of the defendants will be children? Or does it not matter who the likely defendants will be? In 2006, a Missouri teen took her own life after a MySpace relationship she had with an impersonator unraveled. If the result is suicide, a felony punishment for impersonation seems more acceptable. Creating a punishment that fits the crime will be the job of many state legislatures as the online venue is continually used in ways to harm others. Lawmakers will also have to navigate around the 1st Amendment in order for the laws to withstand Constitutional muster.
Friday, December 14, 2012
Federal Circuit Abolishes “Single-Entity Rule” for Inducement of Patent Infringement in Landmark Akamai Decision
The Federal Circuit, in a controversial 6-5 en banc decision, Akamai v. Limelight, held that an alleged infringer may be liable for inducing infringement of a method claim if it 1) performs some of the steps and induces another party to perform the remaining steps or 2) induces other parties collectively to perform all of the claimed steps. Akamai Techs., Inc. v. Limelight Networks, Inc., 2012 WL 3764695 (Fed. Cir. Aug. 31, 2012). Importantly, the majority held that inducement liability does not require that there be a single induced party that performs all of the claimed steps, or that the induced party is under the direction or control of the inducer.
The Federal Circuit’s decision arose from its en banc rehearing of two cases: Akamai Technologies, Inc. v. Limelight Networks, Inc. and McKesson Technologies, Inc. v. Epic Systems Corp. In Akamai, the owner of a patent claiming a method for delivering web content alleged that a network service provider performed all but one step of the method, and induced content providers to perform the final step. In McKesson, the owner of a patent claiming a method of electronic communication between healthcare providers and their patients alleged that a software company induced healthcare providers to perform some steps of the method, and induced patients to perform the other steps. In each case, a Federal Circuit panel affirmed judgment of non-infringement because the plaintiff failed to show that a single actor performed all of the steps of the claimed method. The en banc court reheard the cases jointly.
The Federal Circuit issued a per curiam opinion on August 31, 2012, reversing judgment of non-infringement in both the Akamai and McKesson cases, and remanding them for further proceedings. The court held that liability for induced infringement does not require that a single entity perform all the steps of a claimed method. Rather, liability for induced infringement arises when a party having the requisite specific intent (including knowledge of the patent) either 1) induces one or more actors to perform all the steps of the claimed method or 2) performs some steps of the claimed method itself and induces one or more actors to perform the remaining steps. The court reasoned that infringement by multiple actors causes the same harm to a patentee as infringement by a single actor, and noted that it would be a bizarre to hold someone liable for inducing another to perform all of the steps of a method claim but to hold harmless one who actually performs some of the steps himself.
In reaching its decision, the court did not reconsider the “single-entity rule” governing liability for direct infringement, which still requires that a single entity perform all the steps of a claimed method. The majority argued that its decision was supported by relevant legislative history, general tort principles, and prior case law. Conversely, the dissenting judges argued that the decision conflicts with Supreme Court precedent and basic principles of statutory interpretation.
The Federal Circuit’s decision simplifies the law of induced infringement. The decision is therefore favorable for patent owners and may give rise to more allegations of patent infringement because inducement liability no longer requires that a single induced actor perform all of the claimed steps. Also, an inducing act is very broadly construed to include acts of causing, urging, encouraging, or aiding. On the other hand, defendants accused of inducing infringement of method claims will have one less defense when multiple actors perform the claimed method. Companies that may be accused of inducing infringement may need to investigate whether their customers or suppliers are performing claimed steps, and if so, whether they may be inducing these steps, for example, by providing instructions to customers. There is also a possibility that the Akamai decision will not stand for long.
Thursday, December 13, 2012
How Secure is Your Connection?
Lawmakers and technology experts agree that better laws are needed regarding the online availability and use of personal information. There always has been, and probably will continue to be, a great tension between legislation that is too restrictive to innovation or is too vague to have significant legal impact.
Many challenges exist when creating such laws; chiefly, around the constant advancement of technology. Passing a law is a lengthy process that involves stakeholder meetings, compromise between many parties, and ultimately enactment and enforcement. Technological progression greatly outpaces legislative oversight. This dilemma is clearly illustrated in the issue of whether unencrypted wireless networks are protected from interception under the federal Wiretap Act (18 U.S.C. § 2511).
Currently, private wireless networks that are password protected, like the one you may have in your home, are protected from gathering information. However, when you use a non-password protected, unencrypted wireless network, that information might not be protected. These unprotected networks can be accessed in public places, such as coffee shops and airport terminals, or in homes that have a non-password protected wireless network.
The federal Wiretap Act prohibits “sniffing” or gathering of contents of communications by a device unless the contents are readily accessible to the general public. Initially, it only covered certain communication frequencies but over the years Congress has amended it to keep up with advancements in technology. For example, it was updated to include protection for cordless phone use in reaction to the expectation of privacy of most cordless phone users.
This issue has recently been discussed in a class action suit against Google, Inc. When Google was completing its Street View project, part of the project was to detect where the wireless access points were, but it also collected a large amount of data from unprotected wireless networks, such as individuals’ emails, passwords, and browser history. The plaintiffs argue that this collection of sensitive data was illegally intercepted because the users had an expectation of privacy. Google argues that it was legally obtained because the data was not secured. The court found in the plaintiffs’ favor stating, “[T]he wireless networks were not readily accessible to the general public as defined by the particular communication system at issue.” (In re Google Inc. St. View Elec. Communs. Litig., 794 F. Supp. 2d 1067, 2011 U.S. Dist. LEXIS 71572 (N.D. Cal. 2011).
This case clearly illustrates the problem of ineffective legislation attempting to solve technological problems. If the legislation is too strict, the fear is that it will stifle progress and innovation. Conversely, without clear, current laws, individuals’ privacy may be compromised. Whether it may be the Do Not Track proposed legislation, the President’s Privacy Bill of Rights, or something yet to come, the issue remains how to create laws that provide adequate safeguards while incorporating a flexible standard to adapt with the changes in technology.
If legislation continues to be ill equipped at dealing with these issues, high technological industry standards could enforce an atmosphere that would place a premium on individuals’ privacy.
Wednesday, December 12, 2012
The Technology Patent System, Stifling Innovation?
In a recent Techdirt blog, when discussing the idea that start up companies should be less open in order to avoid patent trolls, the author opined that “What's stunning -- and depressing -- is that the patent system is supposed to be the thing that encourages innovation. And yet, because it's become totally dysfunctional, one of the recommendations for how to avoid running afoul of it now... is to do the exact thing that holds back and limits innovation. What a shame.”
The United States patent system is in a state of disarray, some say due to patent trolls, while others point to the large technology companies, such as Apple, Microsoft, and Google, using the system's weaknesses to dominate with overly broad patents. Patent trolls, companies that exist to sue over violations of patents, make it difficult for startup companies to gain access to a patent for their technology without getting sued. Trolls collect patents solely for the purpose of attacking companies, making cases that the company infringes their patent. The trolls bring lawsuits as a course of business and the large technology companies seem to be following suit, creating an arms race in the field of patent law. The number of lawsuits involving patents in the United States District Courts has almost tripled in the last two decades, the number of patent applications has increased more than 50% over the last decade, and it seems most of the money is going to the trolls and the lawyers.
Trolls have become very efficient in pushing their claims through and the data from 2002 to 2009 shows that the median award given to patent trolls is $12.9 million, while awards given to operating patent holders dropped to $3.9 million. This is a drastic contrast from data between 1995 and 2001, where practicing entities were getting higher median awards ($6.3 million) in patent lawsuits than non-practicing entities ($5.2 million). Patent trolls bringing these lawsuits to extort money from economically productive companies ties money up in lawsuits and hinders innovation, especially for smaller companies. Some argue that if this continues companies will start being intentionally vague and less open, which defeats the purpose of innovation. Research has clearly shown that what helps innovation is more openness and sharing, which will lead to economic growth.
Large companies are following suit, using their patents as weapons against their rivals. Billions of dollars are being spent on bringing lawsuits and buying patents that will never amount to anything. Apple has used patents as a defensive tool, specifically for the iPhone, essentially trying to patent every creative idea, even if knowing it would never lead to a patent. Although Apple knew that a patent would never be approved for a specific technology, they would apply anyway, preventing other companies from later trying to patent that idea. Large companies such as Apple have been accused of applying for overly broad patents, and that accusation has merit considering the patent applicant wants to cover every aspect of a new technology. For example, there are multiple ways to write the same computer, so by creating a broad patent by intentionally making the borders undefined it is easier to sue accusing others of encroaching on the patent. These overly broad patents also hinder innovation by giving monopolies on specific technology to certain companies. Most of the large technology companies are in lawsuits with one another spending millions of dollars as well as time battling in court, so the question becomes how far will this go?
Monday, December 10, 2012
The Making of the Next John D. Rockerfeller: Are Vertical Integrations Setting the Stage for Technological Monopoly?
Google has proven its ability to amaze us over and over again with products like Google Earth, Google Voice, Google driverless car and much more. While many are pleased that this continued innovation comes from a socially responsible corporation, others are concerned that its ambitious expansion could turn into a technological monopoly.
Not including the recent false reports on acquisition of WiFi provider ICOA, Google has actually acquired more than one company per week on average since 2010. Google’s rapid growth has triggered a chain of products, acquisitions and partnerships that extends well beyond pure web search engine. Its products range from various applications, Android mobile operating system to Google Chrome OS browser operating system. It owns several websites that top the most visited website list, along with Google, such as YouTube and Blogger. In 2012, Google began to establish its presence in the hardware industry by partnering with major electronics manufacturers on its “Nexus” series and its acquisition of Motorola Mobility. Google also initiated the Google Fiber broadband Internet service project with the construction of fiber-optic infrastructure in Kansas City.
Google has reached the height of vertical integration. It has purchased sufficient vertically integrated companies in its supply and production chain to prevent hold-up problems. Google and its subsidiaries now essentially control the hardware, software, and marketing of its product and possibly even an independent wireless network. It is worth noting that Google is not the only player in the race to vertical integration. Apple controls the design of its iPad and iPhone hardware and software, and sells its own products directly to consumers. Samsung has also thrived by making everything from LCD panels and televisions to processors and smartphones.
Although a vertically integrated company can benefit consumers with improved product quality and reduced production costs, critics argue that Google has subjected itself to scrutiny in light of all the monopoly accusations and FTC investigations. For example, Google could theoretically give Motorola its latest versions of Android exclusively and place other handset makers at a competitive disadvantage. Similarly, Google could use its ownership of YouTube to disadvantage competitors’ search results. One cannot help but wonder, is Google using vertical integration to eliminate its competitors?
Unlike horizontal monopoly, a vertical monopoly is not considered anti-competitive so long as there are opportunities for others to operate in the line of business. Search is the critical gateway by which users navigate the Web and Google already dominates search and search advertising. Google is now broadening its search-dependent products and services, which reinforces its dominance in the field. It is almost impossible for the government to challenge a vertical merger or acquisition between two companies that are not direct rivals. However, consumers can expect to face higher prices and reduced innovations, something that Google once promised would never happen.
Monday, December 03, 2012
A Look At the Internet Radio Fairness Act… and the Royal Mess That is the Copyright Royalties System That It Attempts to Address
Categories: Computers, Entertainment, Internet, Legislation, Licensing, Patent
On September 21, 2012 Rep. Jason Chaffetz (R-UT) introduced the Internet Radio Fairness Act of 2012 which would alter 17 U.S.C. §801, the statute which establishes the Copyright Royalty Board composed of Copyright Royalty Judges. Under the statute, the Librarian of Congress, as head of a freestanding entity, appoints this panel of judges who set default royalty rates and terms for webcasting digitally recorded music. While the Act enjoys five cosponsors, its senate counterpart has none thus far.
The Act proposes to make the appointment of Copyright Royalty Judges the province of the President with the advice and consent of the Senate, rather than that of the Librarian of Congress as is currently the case. The D.C. Circuit in 2011 held that the since the Librarian is restricted in the ability to remove Copyright Royalty Judges, Congress’s vesting appointment in the Librarian as head of a Department rather than the President makes limiting language of §802(i) unconstitutional as a violation of the Appointments Clause.
The Act would put the burden of proof on the party requesting a royalty to show that such royalty is reasonable. It would change the way rate proceedings are conducted by, for instance, removing the precedential effect of past royalty proceedings. Currently, rates for noninteractive broadcasting are based on interactive broadcasting rates. Much of these are based on extrapolations by expert witnesses testifying about which rates should be adjusted, using regression analysis to remove the effect of interactivity of broadcasting on precedent deals in the interactive market to guide rates to be set in non-interactive broadcasting—as in webcasting services like Pandora. Proponents argue this is problematic as a highly subjective and speculative analysis. Someone will be paying a rate based on fundamentally different market conditions from their own because of the inherent difficulty in trying to project what the non-interactive market actually is (See broadcastlawblog).
Currently, Sirius XM Satellite Radio pays about 8% of its revenue in sound recording royalties under the 801(b) standard while Pandora Internet Radio pays about 50% of its revenue in such royalties under the willing buyer/willing seller standard.
Are the uses that satellite radio makes of artists’ and producers’ copyrighted content so different from the uses used by internet radio services like Pandora as to justify such a large discrepancy in the royalties each one is to pay? SoundExchange is a non-profit tasked with collecting and distributing royalties on behalf of recording artists and master rights owners, that is, owners of recorded works. Its president is among the chorus against the Pandora-backed Act for its potential to reduce record label and musicians’ royalties. Analysts have said the bill seeks to create parity in royalties among internet, satellite, and cable TV services as a share of revenue instead of a flat rate per recording, currently at $.0011 per performance (each play of a song) per listener for an internet radio service.
Proponents of the bill argue that it would establish a fairer approach by using the 801(b) approach for all of these platforms. In theory this would close the gap between internet radio and satellite radio. It would also not allow standard AM/FM radio to pay much lower royalties than internet and satellite counterparts.
Opponents of the bill side with the willing buyer/willing seller approach. Among them is Congressman Jerry Nadler (D-NY) who has circulated a discussion draft of the Interim FIRST Act, touted as a promoting fair compensation for artists. MusicFIRST, a coalition of organizations representing musicians, performers, and producers, whose founding members include the Recording Industry Association of America (RIAA), criticizes Pandora’s lobbying against fair pay for playing authors’ works and seeking to raise profits since going public in mid-2011 when it was valued at over $3 billion at $16 per share. It is currently at $9.44 a share and has made $103 million in the second quarter of its fiscal 2013. Pandora’s opponents have suggested that it could generate more revenue with more ads on its site rather than trimming royalties on content it streams. Recording artists and musicians endorsing MusicFirst range from Jay-Z to Bonnie Raitt to Tom Waits. Which serves to better level the playing field here? Are these platforms even similarly situated? What is actually equitable here?
Proponents of the willing buyer/willing seller approach argue its approach makes an attempt to mirror the marketplace itself, while the 801(b) standard allows Copyright Royalty Judges the discretion to set rates that minimize any disruptive impact on the structure of the industries involved and on generally prevailing industry practices. It is unclear which approach ultimately provides a more equitable balance of the royalties to authors and master rights owners and revenues generated by companies using their content. The Internet Radio Fairness Act does appear to take a subtler approach to updating the current royalty system, which its proponents argue will promote greater innovation and growth in the industry by extending 801(b)’s benefits to all non-interactive broadcasters rather than a select few. The outcome will likely be more based on whose lobbying efforts prove stronger on Capitol Hill.
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