Google Books Settlement 2.0: Evaluating Competition

Legal Analysis by Fred von Lohmann

This is the third in a series of posts about the proposed Google Book Search settlement.

Now that we've described the proposed settlement agreement's biggest potential upside for the public—expanded online access to books, particularly out-of-print books—that benefit must be weighed against the potential down-sides. On that score, the settlement's potential impact on competition in the online book market has loomed large. Critics of the settlement have emphasized two principal dangers:

1. The potential for a Google monopoly over orphan and unclaimed books.
2. The potential for monopolistic pricing of the Institutional Subscription Database, particularly for higher education.

The revised Settlement 2.0 made little or no effort to address these concerns, leaving it to Congress or antitrust authorities to fix later.

A Google Monopoly on Orphan & Unclaimed Books?

At the heart of the proposed settlement is a bargain that lets Google (and only Google) leapfrog the problem of "unclaimed works"—books whose copyright owners cannot be found or whose owners can't be bothered to fill out paperwork for a small payment disbursed by the Registry (consider how many "class action" notices you've tossed in the trash unread). Thanks to the magic of the class action process, the settlement solves this problem by resolving the copyright claims of these otherwise unreachable copyright owners and designating all of their works by default as available for "Display Uses" by Google. In other words, so long as no one steps forward to claim these books, Google (and only Google) has a license to make them available in all the ways the settlement allows.

Many who filed objections to the proposed settlement, including the Department of Justice, Microsoft, Amazon.com, the Internet Archive, and Public Knowledge, among others, argued that this could create a de facto Google monopoly over online use of these unclaimed works. And while the revised Settlement 2.0 creates an "Unclaimed Works Fiduciary" (UWF) to act as a guardian on behalf of owners of unclaimed works, neither the UWF nor the Registry has the power to grant a similar license to any other entity that might want to make the same kinds of uses that Google will be entitled to make under the settlement.

Nobody likes this "only-for-Google" aspect of the settlement—in fact, Google has said that it would support orphan works legislation that would empower the Registry to make the same deal (or even a better deal) with others who want to use these unclaimed works. (Where the claimed books are concerned, in contrast, the Registry will likely ask the rightsholders to appoint it to license companies other than Google. But that still leaves all the unclaimed books out.) The settlement agreement even has a provision that makes it clear that the UWF can license others "to the extent permitted by applicable law"—what amounts to an "insert orphan works legislation here" invitation.

But absent some legislative supplement to the revised Settlement 2.0, it still seems that any other company would have to scan these books, get sued, and hope for a class action settlement. That, of course, is the kind of barrier to entry that any monopolist would envy.

This raises a worthy question: if legislation is necessary to fix the competition problem posed by the settlement, then why do we need a class action settlement in the first place? Why not solve what seems like a quintessentially legislative problem with legislation, instead? (As Amazon points out, that's exactly what was done when music publishers brought a class action against the first digital audio tape (DAT) recorders).

Here's where realpolitik enters the equation. Google correctly points out that Congress has been working on orphan works legislation for years, to no avail. And none of the legislative proposals came close to the comprehensive solution embodied in the proposed settlement. So the question boils down to a political one: do you believe that approval of Settlement 2.0 will make orphan works legislation more likely, or less likely? Without a crystal ball, it's hard to know.

Monopoly Pricing of the Institutional Subscription Database?

One of the commercial services that Google is authorized to provide under the proposed settlement is the "Institutional Subscription Database" (aka "ISD"), which will provide "all-you-can-eat" access to the corpus of scanned books. The chief customers for the ISD are likely to be universities (the same folks who are providing Google with the books to be scanned), for whom instant digital access to every word in every book in Google's collection is likely to be very compelling.

The big question is whether, over time, the ISD will become the one database that no university can do without, and the one database with no market substitute (again, because Google will be the only company who can provide a comprehensive corpus without fear of copyright liability, for the reasons explained above). This, of course, is a recipe for monopolistic price gouging, as a group of academic authors led by Prof. Pam Samuelson have pointed out. Over time, universities could face spiraling prices as Google and the Registry conspire to maximize their revenues on the ISD product.

Google and its supporters respond by pointing out that the settlement requires that pricing for the ISD be set with regard to "two objectives: (1) the realization of revenue at market rates for each Book and license on behalf of Rightsholders and (2) the realization of broad access to the Books by the public, including institutions of higher education." The settlement goes on to promise that Google and the BRR "will use the following parameters to determine the price of Institutional Subscriptions: pricing of similar products and services available from third parties, the scope of Books available, the quality of the scan and the features offered as part of the Institutional Subscription."

But Google's own people have reportedly admitted that there might not be any "similar products and services" to the ISD. And the settlement does not give ISD subscribers the right to go to court to enforce these "objectives" and "parameters." Instead, Google has entered into "side agreements" with some of its major library partners (U. of Michigan, U. of Wisconsin—both of which will be receiving subsidies from Google for their ISD fees) that allow only those institutions to challenge pricing, and only under certain circumstances. So what we are left with is a "trust us" from Google, the Registry, and their biggest library partners.

Of course, the chances of this coming to pass are hard to know in advance. As we have pointed out, if many large publishers pull their books out of the ISD database, then perhaps the ISD service won't become indispensable to universities after all. So, ironically, the more successful the ISD proves to be, the more of a danger its pricing mechanism might prove to be for higher education.

Fixing the Competition Problem

Just because the proposed Book Search settlement isn't good for competition doesn't mean it's illegal. There is a robust debate going on (see, e.g., articles by Picker, Elhauge, Fraser, Lemley, and Picker again) about whether the proposed settlement might violate antitrust laws, and the Antitrust Division of the Department of Justice will doubtless continue its investigation.

But we shouldn't be satisfied with antitrust law here. This is not just a simple market transaction between commercial entities. Google is building an enormously important public resource, a task it can only undertake with the blessing of a federal court. The public deserves a solution that is not "barely legal," but that instead encourages real, robust competition. As written, without some modification or legislative adjunct, Settlement 2.0 does not do that.

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Google Books Settlement 2.0: Evaluating Access

Legal Analysis by Fred von Lohmann

This is the second in a series of posts about the proposed Google Book Search settlement.

The Potential Upside: Enhanced Public Access

From the public's point of view, unprecedented public access to books is the chief benefit promised by the revised proposed settlement (aka Settlement 2.0) of the Google Book Search litigation. That's the "upside" against which all the possible "down-sides" will be measured. And when it comes to enhancing public access, the proposed settlement holds great promise. Whether that promise will actually come to pass, however, is harder to predict.

Here's what we know about Google's book scanning efforts so far [revised in light of updated numbers sent by Google Nov. 19]:

• Google has already scanned more than 12 million books (for comparison, U.S. libraries hold an estimated 42 million titles total).
• Roughly 50% are in languages other than English, with more than 100 languages represented. (In the revised settlement proposal, however, the parties have tried to exclude most books published in countries other than the US, UK, Australia, or Canada, so some non-English language books may now be excluded.)
• 2 million are clearly in the public domain (i.e., published pre-1923, government works, etc).
• 2 million have been scanned with the explicit permission of copyright owners as part of Google's partner program.
• That leaves ~7 million scanned volumes that are potentially the subject of the copyright lawsuits and the proposed settlement (given the low rate of copyright renewals for works published between 1923-1963, it is likely that a substantial portion of these 7 million volumes may actually be in the public domain, in which case they would fall outside the settlement).

So how much access will the public have to the scanned books that fall within the scope of the settlement (that's the ~7m already scanned, as well as millions more Google will be scanning in the future)? The answer will vary based on their copyright status, what services Google implements, and the expressed wishes of copyright owners:

Out-of-print, in-copyright books: For these books—principally out-of-print books published after 1923—the settlement envisions Google providing access through four principal mechanisms:

• "Preview Uses" (show up to 20% of the book, for free, in response to search queries);
• "Consumer Purchase" (permanent, full-text, online access on a book-by-book basis for a fee);
• "Institutional Subscription" ("all-you-can-eat" full-text online access on a blanket basis through an institution); and
• "Public Access Service" (at least one free public terminal for public libraries).

All of these "Display Uses" will be enabled by default under the settlement agreement for out-of-print, in-copyright books. This is just a default, however; copyright owners are entitled to change the default by electing to "Remove" or "Exclude" their books from any or all of the Display Uses. Of course, where unclaimed works (books whose copyright owners cannot be located or have not bothered to sign up with the Registry) are concerned, the default will effectively be the rule, which is a good thing for public access to these works.

In-print, in-copyright books: By default "Display Uses" will not be permitted for these books. In other words, if Google scans these books, they will go into the database corpus, but will not be available for Preview, Consumer Purchase, or Institutional Subscription, unless the copyright owner chooses to enable one or more of those uses. In short, no public access unless the copyright owner chooses to allow it.

Google Partner Program books: Under the settlement, copyright owners of both in-print and out-of-print books can elect to pull their books out of Google's database corpus, choosing instead to negotiate a different deal in the Google Partner program, which gives the copyright owner more flexibility to define exactly how the book can be accessed. Some observers anticipate that many, perhaps most, major publishers will take this option and remove their works from the products and services described in the settlement.

The Potential: Unprecedented Online Access

Taken together, these features mean that the Google Books project could potentially provide Americans (and only Americans, as the settlement only authorizes Google to offer Display Uses of in-copyright books to U.S. Internet users) with unprecedented instant access to a large collection of books that previously were available only in research university libraries. In particular, like the Internet before it, Google Books could make specialized resources available to people who otherwise might never be able to access them (see, e.g., Google's agreements to digitize U. of Wisconsin's Native American collection and U. of Texas' Benson Latin American collection).

In addition to enabling search and reading, the products and services envisioned by the settlement could also unleash innovative, transformative new uses for the information inside these books. For example, the availability of all these readily citable books could radically expand and transform Wikipedia, which places a premium on citations to neutral sources to validate edits to its pages. Once every Wikipedian can do full-text searches against the research collections of major university libraries, Wikipedia should see a huge expansion of cited contributions.

The proposed settlement also offers the promise of unprecedented access for the visually impaired. The proposed settlement commits Google to offering screen enlargement, read-aloud, and Braille displays ("Accommodated Service") for the Institutional Subscription product. As the National Federation for the Blind and a coalition of other disability rights groups have pointed out, this will make a "historically unprecedented" number of books accessible to the visually impaired.

In addition, under the terms of the settlement, Google may make two copies of the scanned books database ("Research Corpus") available through university libraries for "nonconsumptive" research (i.e., you can use it to develop your new OCR algorithms, but not to extract and compile every paragraph that mentions zombies to create a "Zombies Through The Ages" book). Although use of the Research Corpus will be subject to a number of restrictions that have drawn fire from academics, the creation of such "Research Corpus" would nevertheless be an important step forward for access. Programmatic access to a large database of books is likely to open new avenues of scholarly inquiry and unleash new innovations, including better search algorithms, optical character recognition techniques, automated language translation breakthrus, and other uses that we haven't yet imagined.

The Uncertainty: Empty Promises, Empty Shelves?

But the promise of what the settlement might accomplish is no guarantee of ultimate results.

First, under the settlement copyright owners can pull their books (see Section 3.5, "Right to Remove or Exclude") out of all the products and services envisioned by the settlement, including full-text search and limited "snippet view" access. This is essentially the "take the money and run" option—the copyright owner collects a per-book payment from Google for books already scanned, but then the public gets no online access to these books unless and until the copyright owners negotiate new deals with Google or other online providers. This effectively gives copyright owners a unilateral right to trump fair use, essentially "unpublishing" their books online. Some observers expect that most major publishers will opt to "take the money and run" for both their in-print and out-of-print titles, leaving gaping holes on the virtual shelves of Google Books. If this takes place, then the settlement would only foster access to orphan and unclaimed works. Still good, but far short of full access to every book in the University of Michigan library.

Second, Google is not required to offer all the products and services envisioned in the settlement. The settlement only compels Google to offer the following within 5 years (see Sections 3.7(a), 7.2(e)(i), 7.2(g)(ii)(1)):

• Consumer Purchase (not clear what percentage of the scanned books must be made available)
• Institutional Subscription for Higher Education, including Accommodated Service (for at least 85% of books scanned)
• Public Access Service (for at least 85% of books scanned)
• free search services (including Snippet View and Preview, for at least 85% of books scanned)
• Library links that will help you find a library with hard copy (for at least 85% of books scanned)

Notably absent from this list is the Research Corpus described above (in side agreements with its library partners, however, Google has made monetary commitments toward building the Research Corpus). And if Google never gets more than 85% of eligible books online, that would represent still more gaps on the virtual shelves.

Third, the public gets only the kinds of access that Google makes available, only through interfaces that Google chooses to expose. And while this level of access is certainly preferable to no access at all, the "One Interface to Rule Them All" approach is likely to impede innovation, which ultimately means less access. It would be preferable if others had access to the underlying book scans, just as Google had access to the World Wide Web when it built its own search engine. (Google will protest that it spent the money to make the scans, and it's unfair to allow competitors to free-ride on its scanning investment. We already posted our answer to that objection.)

And Don't Forget the Down-Sides

So while the settlement does offer the exciting promise for drastically increasing public access to books, it is hard to predict whether that promise will be fulfilled. And even if the promise of access were fulfilled, there are other down-sides to the settlement, which we will take up in our next posts.

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Google Books Settlement 2.0: Evaluating the Pros and Cons

Legal Analysis by Fred von Lohmann

This is the first in a series of posts evaluating the proposed Google Book Search settlement.

When it announced its Book Search project in 2004, Google set for itself an inspiring and noble goal. In the words of Google CEO Eric Schmidt, "Imagine yourself at your computer and, in less than a second, searching the full text of every book ever written." What started as a dream of universal book search, however, has become something much broader: a class action lawsuit and proposed settlement that hopes to let Americans read, as well as search, millions of books online.

The fate of that more ambitious plan is now before a court in New York. In the face of opposition from many quarters (including EFF and the U.S. Department of Justice), Google and class representatives for authors and publishers recently revised the proposed settlement (aka "Settlement 2.0", 300-page PDF redline posted here). The court is expected to decide whether to approve the revised settlement sometime in the first half of 2010.

Advocates on both sides have had their say, both in court and elsewhere. In a series of posts, we will be evaluating Settlement 2.0 from a variety of angles intended to illuminate whether it is a good deal for the public, including its impact on access, competition, privacy, censorship, innovation, and fair use. Is Settlement 2.0 the best we can do? The most we can reasonably expect? Not good enough? How does it measure up against our aspirations the future of online digital libraries?

Here's a preview of the overall contours of the debate. The chief benefit of the proposed settlement is the increased public access to books (particularly out-of-print books) that it makes possible. Against this important benefit must be balanced concerns about possible detrimental effects on privacy, competition, innovation, and fair use. Complicating the overall analysis are the requirements and limitations of class action litigation, as well as the inherent difficulty in predicting how copyright owners and readers will respond to the new Google products and services contemplated in the proposed settlement.

In the meantime, if you want to keep track of the latest breaking news regarding the proposed settlement, we recommend Prof. James Grimmelmann's blog, The Laboratorium, as well as The Public Index, which includes a handy, linkable, annotatable copy of the entire proposed settlement agreement. For the latest from Google about Google Books, we recommend the Google Book Search blog and Google Public Policy blog.

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Google Book Search Settlement Revised: No Reader Privacy Added

Legal Analysis by Cindy Cohn

Late Friday night the parties to the Google Book Search class action submitted a revised settlement agreement to the federal court in New York that is hearing the case.

Unfortunately, the parties did not add any reader privacy protections. The only nominal change was that they formally confirmed a position they had long taken privately that information will not be freely shared between Google and the Registry. Our partners at the ACLU of Northern California have a blog post describing the changes we, and the authors we represent, have demanded and continuing the call for readers everywhere to let Google CEO Eric Schmidt know that reader privacy should not be left behind as books move into the digital age.

The parties also asked for truncated notice and a rushed schedule with objections and opt-outs due on January 28, 2010 and a final fairness hearing on February 18, 2010. We'll be posting more about the revised settlement and the procedures going forward.

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New York Court Scores Over Oregon In Recent Email Privacy Opinions

Legal Analysis by Jennifer Granick

Last week, two new district court opinions took opposing views on the question of whether the Fourth Amendment protects stored email. One of the cases easily adopted the prevailing view that the Constitution protects electronic communications, while the other ignored existing U.S. Supreme Court and Ninth Circuit precedent to find consumers have no expectation of privacy in messages stored with third parties. EFF will be watching these developments closely as we continue to press for email privacy rights in the Sixth Circuit Court of Appeals in U.S. v. Warshak and in other matters.

Email -- like letters, telephone calls or documents you keep in a rented locker -- should be fully protected by the Fourth Amendment. As with letters, calls or rented property, your expectation of privacy against the government does not weaken simply because you entrust the document to a third party for delivery or storage. Law enforcement needs a warrant to intercept your phone calls, even though they travel over wires owned by the phone company, or to search your storage locker or hotel room, even though the property owner has the right to enter in some circumstances. The same protections should and must apply to email. It matters not that a third party transports the messages (mail), that they are capable of interception (phone calls), or that they are kept on a third-party server (rented storage).

The government conceded Fourth Amendment protection in one of last week’s opinions and successfully fought against it in the other. In the New York case, United States v. Cioffi, the government wanted to search the defendant’s personal email account for messages showing that he and a confederate knew that they were misleading customers in a financial fraud scheme. The affidavit in support of the warrant asked for copies of messages related to the fraud offense but the warrant itself [more broadly]purported to give the agents permission to obtain all email
through a certain date. The government conceded that the e-mails were Fourth Amendment protected. The disputed issue was whether the warrant satisfied the constitutional requirement that it describe with particularity the place to be searched and the things to be seized. The court held that the warrant was overbroad because it authorized officers to obtain emails other than those for which there was probable cause, and therefore suppressed even the fraud-related messages that were discovered. This New York district court was right. The contents of electronic communications are protected by the Fourth Amendment, and that protection means law enforcement needs a valid warrant, not an obviously overbroad one, to search or seize the messages.

In contrast, the government in the Oregon case, In re: United States, successfully argued that you have no protectable Fourth Amendment rights in your email, at least in part because it is stored with third parties. Agents had applied for a warrant for email under the Stored Communications Act ("SCA"), but did not want to serve post-seizure notice of the return of the warrant on the account holders. After concluding that the SCA only required notice to the ISP, the court then asked whether the Fourth Amendment required notice on the account holder, or whether notice on the ISP was constitutionally adequate. While giving lip service to the idea that email is protected by the Fourth Amendment, the court nevertheless stated that a user has no protected expectation of privacy when she stores her messages with a third party. The court also pointed to email service privacy policies to assert that users are, or should be, aware that their personal information and the contents of their online communications are accessible to the ISP and its employees and thus can be shared with the government "in appropriate circumstances".

In re: United States is wrongly decided. While supposedly starting from the (correct) assumption that the Fourth Amendment protects email, the court then concludes that one has no expectation of privacy in materials stored with a third party. Email uses a store-and-forward transmission protocol; the messages are always transmitted through third parties. Moreover, almost all consumer email is stored at some point with a third party, whether as long term backup or incident to transmission. Thus, the presumption the court says it adopts is essentially meaningless; only those few corporations and individuals that host their own email would be arguably entitled to any constitutional protection the Oregon court says it assumes applies.

The opinion is also contrary to binding Supreme Court and Ninth Circuit precedent. In the 1967 cases of Berger and Katz, the U.S. Supreme Court held that the Fourth Amendment strongly protects telephone calls even though they travel over wires owned by the telephone company, or can be intercepted with a listening device on the outside of a telephone booth. The Court confirmed protection for the contents of communications in Smith v. Maryland, when it distinguished Katz from its holding allowing warrantless collection of dialed telephone numbers from the phone company, since the contents of communications were still protected. The Ninth Circuit, in which the Oregon court resides, has further confirmed that the Fourth Amendment protects electronic communications as well as phone calls in Quon v. Arch Wireless. In that case, the Department of Justice argued exactly what it argued in In re United States -- that because email and text messages are stored by third parties with the practical ability to read them, senders and recipients have no expectation of privacy in those messages. The appellate court rejected that view, holding that text messages, and presumably emails, are like letters or packages, and are protected even though the shipper could open them.

The Oregon court also got the analysis of the effect of terms of service and acceptable use policies dead wrong. In Quon, the Ninth Circuit followed its prior ruling in United States v. Heckenkamp, which held that a student did not lose his reasonable expectation of privacy in information stored on his computer, despite a university policy that it could access his computer in limited circumstances while connected to the university’s network. Like hotel rooms or storage lockers, a limited right of access on the part of the facility owner does not defeat all expectation of privacy versus the government. Moreover, the Oregon court itself had to admit that users might expect government access – not in all circumstances, but only "in appropriate circumstances", a situation that users can reasonably expect would involve a warrant based on probable cause.

There is other foolishness in the Oregon opinion, including the hyper-technical assertion that when the government copies your email, they have not seized your data because you still have a copy, so the government collection does not “meaningfully interfere” with your "possessory interest".

What’s even more disturbing, the Ninth Circuit may not get an opportunity to correct the Oregon district court. Since In re United States involved an ex parte proceeding, as of yet there is no real party in interest to appeal the court clearly erroneous opinion. Only if someone gets charged with a crime, and if that defendant becomes aware that the evidence the government intends to use was obtained as a result of a seizure that did not comport with the Fourth Amendment, will there be an opportunity for the affected party to ask for appellate review. This is one reason why EFF’s practice serving as amicus to district courts considering the applicability of the Electronic Communications Privacy Act and the Fourth Amendment to cell phone tracking, email seizures and other pre-indictment investigative techniques is so important – we may have only one chance to get it right before the government barges in without proper cause or authorization.

For other legal analysis of U.S. v. Cioffi and In re United States, please read Orin Kerr's post on The Volokh Conspiracy or Venkat Balasubramani's assessment on Eric Goldman's blog.

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EFF Urges Court to Ensure Fairness in Google Book Search Amendment Process

Legal Analysis by Cindy Cohn

EFF today led a coalition of authors, publishers, companies and nonprofit organizations in sending a letter to the judge overseeing the Google Book Search settlement urging the Court to ensure that those concerned about the settlement receive adequate notice of, and have sufficient time to study and comment on, any amended settlement agreement that Google, the Authors Guild, and the Association of American Publishers present.

Those following the twists and turns of the Google Book Search settlement will recall that the original Fairness Hearing scheduled for October 7, 2009, was put off because of what the Court called: "significant issues, as demonstrated not only by the number of objections, but also by the fact that the objectors include countries, states, non-profit organizations, and prominent authors and law professors." The Court received over 400 submissions about the settlement, including the EFF-led coalition of authors and publishers concerned about reader privacy, as well as significant concerns raised by the Department of Justice.

As a result, the parties have promised the Court that they will submit an amended settlement on November 9, 2009. Today's letter arises from the parties' discussions with the Court in which they have suggested that the amendments to the already complex agreement be subject to limited notice and ability to comment and a truncated schedule ending with a Fairness Hearing in late December or early November. It states: "We signatories raised different specific concerns and issues about this settlement from a number of different vantage points. We are united, however, in our concern that the parties' requests to limit notice and the time and scope of objections will be unfair to us and to other class members."

The Google Book Settlement is simply too important -- and too complex -- to be rushed through the court approval processes without sufficient opportunity for analysis and comment.

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Cook County Sheriff Loses Craigslist "Erotic Services" Ads Case

Legal Analysis by Matt Zimmerman

Yesterday, a federal court tossed a lawsuit against craigslist over erotic advertisements. In March, Cook County Sheriff Thomas Dart alleged that craigslist was liable for the illegal ads posted by its users in its "erotic services" (now "adult services") category. As craigslist argued in their motion for judgment on the pleadings, and as EFF and others pointed out at the time, Dart's complaint had virtually no chance of success because Section 230 of the Communications Decency Act plainly immunized Internet intermediaries like craigslist from civil liability for material posted by third parties.

On Tuesday, the District Court for the Northern District of Illinois agreed with craigslist, throwing out Dart's complaint in its entirety, confirming that Section 230 immunized craigslist from the allegation that it constituted a "public nuisance." The court made a number of important observations regarding the attempt to saddle craigslist with responsibility for the behavior of its users:

The phrase "adult," even in conjunction with "services," is not unlawful in and of itself nor does it necessarily call for unlawful content. ... The same is true of subcategories. Plaintiff is simply wrong when he insists that these terms are all synonyms for illegal sexual services.

...

While we accept as true for purposes of this motion plaintiff's allegation that users routinely flout Craigslist's guidelines, it is not because Craigslist has caused them to do so. Or if it has, it is only "in the sense that no one could post [unlawful content] if craigslist did not provide a forum." ... Section 230(c)(1) would serve little if any purpose if companies like Craigslist were found liable for "causing" or "inducing" users to post unlawful content in this fashion.

...

The fact that Craigslist also provides a word-search function does not change the analysis. The word-search function is a "neutral tool" that permits others to search for terms that they select in ads created by others. ... It does not cause or induce anyone to create, post, or search for illegal content.

Most succinctly, and highlighting the policy concerns behind the passage of CDA 230, the court noted:

Intermediaries are not culpable for "aiding and abetting" their customers who misuse their service to commit unlawful acts.

Meritless cases brought by law enforcement officers, amounting to little more than publicity stunts with little to no chance of success, do little to address the officers' underlying concerns. The problem of sex trafficking is indeed a serious one, as pointed out by both Dart and amicus Coalition Against Trafficking in Women, but as the court pointed out in a footnote, that fact "does not shed any light on the legal questions before us."

Service providers are not liable because Congress correctly understood that the soap box should not be held responsible for the speech of others. Just as phone companies are not liable for harassing phone calls, or email software providers for deceptive messages, online message boards like craigslist are in most instances not liable for their users' posts. It is not enough, as both Dart and South Carolina Attorney General Henry McMaster continue to demonstrate, to identify a problem and then stumble into court without a valid argument, pointing at the most prominent (although not legally culpable) target in sight. Hopefully, the District Court's decision will cause Dart, McMaster, and the dozens of other attorneys general who saw the craigslist pile-on as a cheap and easy way to score political points to think carefully before trying again in the future.

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Court Rules That Phones Ringing in Public Don't Infringe Copyright

Legal Analysis by Fred von Lohmann

As we reported in June, ASCAP believes that when your cell phone's musical ringtone sounds in a public place, you're infringing copyright. A federal court yesterday firmly rejected that argument, ruling that "when a ringtone plays on a cellular telephone, even when that occurs in public, the user is exempt from copyright liability, and [the cellular carrier] is not liable either secondarily or directly." This is exactly the outcome urged by EFF, Public Knowledge, and the Center for Democracy & Technology in an amicus brief filed in the case.

The ruling is an important victory for consumers, making it clear that playing music in public, when done without any commercial purpose, does not infringe copyright. That's thanks to Section 110(4) of the Copyright Act, which exempts public performances undertaken "without any purpose of direct or indirect commercial advantage." In the words of the court, "customers do not play ringtones with any expectation of profit." This ruling should also protect consumers who roll down their car windows with the radio on, who take a radio to the beach, or who sing "Happy Birthday" to their children in a public park (remember, ASCAP once demanded royalties from Girl Scouts for singing around the camp fire!).

The court also found that cell phone carriers do not publicly perform when they download a ringtone to a phone (the carriers already pay 24 cents in royalties for the reproduction of the ringtone, but ASCAP was hoping to double dip by charging a public performance royalty on top of that). This is another important ruling, expanding on a 2007 ruling that also concluded that a download is not a public performance. The court reasoned that because the download was transmitted to just one person, it was not a "public" performance.

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It's My Browser, and I'll Auto-Click if I Want To

Legal Analysis by Fred von Lohmann

Free file hosting provider MediaFire seems to think that, when you follow a link to download a file from its service, it has the right to control your browser. This is yet another example of a web site owner forgetting that it's your computer, and it's none of their business how you choose to experience their web pages.

This latest spat involves SkipScreen, a Firefox plug-in that automates the process of downloading from free hosting sites like RapidShare, zShare, MegaUpload, and others (including, until recently, MediaFire). Some of these ad-supported download sites try to force downloaders to sit through a "waiting period" before revealing the actual download link— a "feature" that these sites doubtless tout to advertisers in order to get premium ad rates. SkipScreen automates this waiting-and-clicking for you. Simply put, it does nothing you couldn't accomplish just as well by hiring a human to browse for you.

MediaFire has responded by sending a lawyer letter to Mozilla, which hosts the SkipScreen plug-in, along with thousands of other Firefox add-ons. EFF has taken SkipScreen's creators as clients, and has sent a letter to Mozilla explaining why MediaFire doesn't have a leg to stand on.

Here's the short version: it's my browser, and I can ignore your ads if I want to.

MediaFire's arguments to the contrary are entirely misguided. First, they suggest that SkipScreen somehow lets users "steal bandwidth." That's wrong on the facts: SkipScreen just automates the exact process that the user would otherwise have to do themselves in order download a file. No "extra downloads," no additional bandwidth for MediaFire. Second, MediaFire argues that the use of SkipScreen violates MediaFire's "acceptable use policy." That's wrong on the law: users who follow a link to a MediaFire download never click-through or otherwise agree to any "acceptable use policy," so there's no contract here that prohibits a user from using whatever browser she likes (including whatever plug-ins she likes) to download a file.

Sure, MediaFire probably would prefer that we all sit, transfixed, while they display ads for us, just like certain Hollywood executives wish we would never leave the couch or hit FFWD when commercials run during our favorite TV shows, and certain websites wish they could ban Firefox ad-blockers. Fortunately, there's nothing in the law that says that by simply visiting a website, I give up the right to control my desktop.

OCTOBER 9, 2009 UPDATE: Mozilla has announced it will continue to support our client SkipScreen in its add-on library. Good news for browser users everywhere!

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In re Bilski: The Supreme Court Takes on Business Method Patents

Legal Analysis by Fred von Lohmann

Today, EFF joined an amicus brief in Bilski v. Kappos, a closely-watched case that will be decided by the Supreme Court later this year. At stake is whether the Supreme Court will limit the patentability of "business methods."

Just over ten years ago, the Federal Circuit Court of Appeals handed down State Street Bank & Trust Co. v. Signature Financial Group, opening the doors to patents for novel methods of doing business. That ruling knocked patent law loose from its historical moorings and injected patents into business areas where they were neither needed nor wanted. The results have been nothing short of disastrous: a flood of patent applications for services like arbitration, tax-planning, legal counseling, charity fundraising, and even novel-writing.

Later this year, the Supreme Court will have the opportunity to resurrect sensible limits on patentability. EFF believes that patents should only be granted for technological processes. Congress never intended the strong protections of the patent monopoly to be available for mere services and methods of doing business. There is already plenty of incentive for innovation in those areas without the need for patents, driven by a variety of forces, such as establishing and maintaining first-mover advantages and establishing reputational capital that cannot be "stolen" by competitors.

It's always worth remembering that granting patent protection where it is not needed comes at a steep price, making it difficult for new players to enter the market. Moreover, expanding patents to business methods has tied up PTO and judicial resources that could be better spent on the kinds of patents that have historically been at the heart of the patent system.

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