Peer-To-Peer News - The Week In Review - June 25th, '05

[JackSpratts]

"Respondents may now be less likely to report peer-to-peer usage due to the stigma associated with the networks." – Pew research study


"The lack of any concrete numbers at all shows the typical academic hand-wavy 'our asymptotic is good, we don't need to worry about reality' approach. As you've probably figured out by now, I think that [the Avalanche] paper is complete garbage." – Bram Cohen


"There's unlimited business out there for us." - Robert L. Livingston, Washington lobbyist and Republican former chairman of the House Appropriations Committee


"You've got no friends in the Supreme Court watching your back." - Spatula


"We the people have no representative of any kind. It's now the multinationals. They've taken over. It's no different than the 70's, but it's gotten worse. And if you use words like 'impeachment' or 'fascist' you're a nut on a soapbox." – Tom Laughlin






















June 25th, 2005





They Be Yuppies Arrrrhg

Music Pirates Shun Peer-To-Peer For iPod-to-iPod
Jo Best

As legal music downloading takes off as never before, music pirates are shunning peer-to-peer services in favour of using iPods to swap music.

According to a report from the Pew Internet and American Life Project, the number of music downloaders using P2P networks has dropped in recent months. Currently, 21 per cent of downloaders use networks such as Kazaa or Grokster for music or video, compared to the 58 per cent who downloaded music from file-sharing networks in February 2004.

By contrast, other methods of swapping music are gaining favour. Alongside IM, blogs and other sources, iPods are becoming a popular music transfer tool. Eleven per cent of former file-sharers admitted to using iPods or other MP3 players to swap songs in the past, compared to the 15 per cent of downloaders as a whole who currently do.

While Apple's iTunes Music Store allows users to download purchased songs to an unlimited number of iPods, the report states that users are also happy to use complex DRM-cracking software to trade music.

"Digital audio players like the iPod that can store thousands of songs and other files are emerging as an alternative way to access media files and avoid some of the potential risks of peer-to-peer usage," the report adds.

However, the report hints the number of P2P users could in fact be far higher: "Respondents may now be less likely to report peer-to-peer usage due to the stigma associated with the networks."

Broadband, it seems, is likely to encourage criminal behaviour.

"These broadband users who have high-speed access at home and at work represent a leading edge of content consumers and content creators and are among the most likely to have used peer-to-peer services," the report says.

Nevertheless, legal downloading is putting its pirate cousin in the shade in terms of growth. The report found 43 per cent of downloaders have tried legal sites, compared with 24 per cent in 2004.

A small percentage of internet users have fallen out of love with the downloading scene as a whole and now no longer get their music from the net at all. Eleven per cent of all internet users once got music online but don't any more, with 44 per cent of those previously using Kazaa and illegal alternatives and another 25 per cent having lost interest in legal sites like iTunes.

"Among all former music and video downloaders, 28 per cent volunteer that the main reason they stopped was because they were afraid to get in trouble or heard about the RIAA lawsuits," the report concludes.

Fifteen per cent of ex-downloaders said they quit because they were getting too many viruses, pop-up ads and other PC problems as a result of their online music activity.
http://networks.silicon.com/webwatch...9129016,00.htm




'BadApple' Podcasts First in iTunes
John Borland

A new company called BadFruit has anticipated Apple Computer's plans to add podcasting support to iTunes with a software plug-in called "BadApple" that does the trick itself.

As yet, the programmers behind the BadFruit site are remaining anonymous, although several clues point to a corporate identity. Unlike most basement-hacker projects, the software comes with a sophisticated privacy policy and terms of use that may indicate bigger plans for the future.

For now, the plug-in provides seamless access to hundreds of podcasts inside the iTunes shell, with downloads functioning in much the same way that the iTunes music store itself works.

"BadApple is NOT from the Beatles," the bare-bones site reads. "It's also not from Apple Computer Inc. It's definitely not endorsed or approved by Apple. In fact, I'm pretty sure they wouldn't want you to use BadApple."

Podcasting--the practice of recording and distributing MP3 files that can be automatically downloaded and put on digital music players such as the iPod--has in the space of months evolved from a hobbyists' tool to adoption by some of the biggest media companies in the world.

Less than a year old in their current form, podcasts initially were dominated by the often-eccentric recorded ramblings of the high-tech crowd. But they've quickly evolved into a widespread distribution format, with major media companies such as Clear Channel and BusinessWeek jumping onboard.

Apple CEO Steve Jobs announced several weeks ago that the next version of iTunes would have support for creating and distributing podcasts. He demonstrated the capability at the company's developers conference two weeks ago, explaining that the service would let people subscribe to individual broadcasts, and provide a way for podcasters to charge for their productions.

"We see it as the hottest thing going in radio, hotter than anything else in radio," Jobs told the audience of Macintosh developers at that event.

At this point, there is no official indication of BadFruit's origin. But a handful of signs seem to link the site to MP3Tunes.com, the online song store opened a few months ago by MP3.com founder Michael Robertson.

Log files created by the software show that it talks to a server hosted by MP3Tunes. Code inside the software package, once downloaded, also show links to MP3Tunes.

The privacy policies displayed by MP3Tunes.com and BadFruit are also identical in almost every way, with details such as the name of the company and the name of the service changed. BadFruit's terms of use say that any legal actions concerning the software should be taken in San Diego County, where Robertson's companies are based.

An Apple spokeswoman did not immediately return calls for comment.

An MP3Tunes employee said that Robertson was out of the country and unavailable for comment.

Apple is scheduled to add its podcast support in version 4.9 of its iTunes software. Some Web site operators say they're already seeing entries in their logs that indicate test versions of the iTunes 4.9 software are being used to download podcasts.
http://news.com.com/BadApple+podcast...3-5754227.html




Music Labels Look To Corral iPod
Ben Fritz

The approximate 300,000 people who've picked up a copy of the Backstreet Boys' "Never Gone" might not know it, but they're part of a growing skirmish between the record labels and digital music master Apple Computer.

Both Sony BMG and EMI are rapidly increasing the number of copy-protected CDs they release in the U.S. CDs with the protective technology prevent users from posting them on the Internet and allow users to burn only three copies onto other discs, which themselves can't be copied again. Sony BMG is already selling about half its discs with the technology, while EMI releases its first this summer.

But the technology also prevents consumers from transferring songs onto an iPod, the Apple (nasdaq: AAPL - news - people ) digital-music player that currently holds about 80% of the U.S. market.

That's because the technology uses Microsoft's (nasdaq: MSFT - news - people ) Windows Media software, which isn't compatiable with iPods.

Both labels hope to reach a deal with Apple, which will allow users move songs onto iPods. But by launching the copy-protected CDs without iPod compatibility, the labels are raising the stakes in an ongoing conflict between Apple and the rest of the music business, which wants the tech company to open its proprietary iPod and let others sell antipiracy-protected songs that work on the device.

Apple has refused, relying on the thus-far successful strategy of forcing users to buy music from its iTunes Music Store.

IPod owners who buy one of the growing numbers of copy-protected discs are likely to chafe at the incompatibility. The question is, who will they blame?

If it's the labels, Sony BMG and EMI may have to back down. But labels are clearly hoping it's the other way around.

Asked how users should react to the problem, one insider at a major label responded, "Maybe they'll send Steve Jobs an e-mail."
http://www.forbes.com/technology/200...620labels.html




Putting the DMCA On Trial
Declan McCullagh

The U.S. Supreme Court could release its decision on Monday in the much-anticipated Grokster case, which will determine whether file-swapping networks are legal to operate.
Yet another, unrelated lawsuit before a federal appeals court taking place on the same day promises to be just as important.

The 8th Circuit Court of Appeals in St. Louis is set to hear arguments Monday in a case that may decide how the Digital Millennium Copyright Act, or DMCA, applies to computer software and the important practice of reverse engineering.

The text of the law is hardly clear, but it seems reasonable to conclude that...the DMCA should not apply. At issue is what a band of merry programmers did when analyzing video games published by Blizzard Entertainment in a successful bid to make the games work with servers other than Blizzard's official Battle.net. Affected games published by Blizzard, a division of Vivendi Universal, include titles in its "Diablo," "Starcraft" and "Warcraft" lines.

The reasons for the effort include the usual hacker love of tinkering, coupled with the desire to eliminate some of the problems with Battle.net (primarily response time). Eventually the authors, Ross Combs and Rob Crittenden, found their "BnetD" software turning into a SourceForge project, and it's been mirrored in the United Kingdom.

Blizzard won the high score before U.S. District Judge Charles Shaw, who ruled last September that the programmers violated the Digital Millennium Copyright Act and a "click-wrap" license that barred mimicking Battle.net protocols. (A click-wrap agreement is the sort that appears when a user attempts to download or install software; generally the user is shown a page with various restrictions and has to click on a button that says "I agree" or something similar.)

"The users of the Battle.net service have occasionally experienced difficulties with the service," Shaw wrote. "Blizzard has also received complaints about user profanity and users who cheated to win games by modifying Blizzard's software. Although Blizzard has taken actions to correct these difficulties with its Battle.net service, including adding additional server capacity, banning cheaters, and providing for private channels and games, defendants were frustrated by the difficulties."

Still, Shaw concluded, inconvenience and a desire to tinker did not make it legal to develop BnetD: "The court finds that the defendants' actions constitute a circumvention of copyright under the DMCA."

Now that the case is before the 8th Circuit, the ideological divide highlighted in the Grokster lawsuit is repeating itself. Lined up on one side is the Electronic Frontier Foundation (which is also providing free legal assistance), the Institute of Electrical and Electronics Engineers, the Consumers Union, Public Knowledge, and some law professors. On the other: the Entertainment Software Association, the Recording Industry Association of America, the Motion Picture Association of America, and law professors.

Copyright buffs, of course, may remember that the DMCA includes limited protections for reverse engineering.

The text of the law is hardly clear, but it seems reasonable to conclude that Shaw was wrong and the DMCA should not apply. BnetD was invented to offer people who had bought legal copies of Blizzard games new ways to enjoy them. Besides, any reverse engineering seems to have been done primarily by packet-sniffing rather than more intrusive techniques, and courts have permitted even complete chip disassembly before (see Sega v. Accolade).

Defending Blizzard?
A more difficult question centers on the click-wrap license to which Combs and Crittenden agreed when installing Blizzard's software. It explicitly forbids reverse engineering or doing anything to "emulate or redirect the communication protocols used by Blizzard as part of Battle.net."

The Electronic Frontier Foundation and its ideological allies argue that this kind of license is invalid and unenforceable because of a "fair use" right to reverse engineer. I'm not so sure about that, though.

The real question should be: Would a reasonable person expect to find that kind of restriction in a software license agreement? If the answer is yes, it's a legal contract. (Courts have properly ruled that unexpected fine print in a standard contract, such as a no-alcohol-at-all clause in a car rental agreement, is unenforceable.)

Nobody is forcing Blizzard customers to click "I agree." In fact, they can return the software for a full refund if they don't like the fine print. Or they can continue the reverse-engineering process without the benefit of having the software installed normally--a more difficult task, but not impossible.

That doesn't mean Blizzard is wise to file this lawsuit. Its energy could have been better spent in improving Battle.net or, better yet, offering legal ways for its customers to create their own servers. Suing your customers, especially devoted fans of your games, is rarely the wisest business strategy.

Still, corporations have the right to make mistakes--and, hopefully, learn from them. Just don't be surprised if the 8th Circuit chooses tried-and-true contract law over the hacker ethic.
http://news.com.com/Putting+the+DMCA...3-5753491.html




Showdown Looms Over Patenting Bill
Huw Jones

EU lawmakers are heading for a showdown over new rules on patenting inventions as a key vote next week may struggle to find a consensus, an outcome seen favoring big software developers.

Member states and the European Parliament are looking at a bill on patenting inventions that use software. The legislature's legal affairs committee is due to debate the bill on Monday and vote on Tuesday.

"It's not like a budget where you can cut the pie in two. Either you allow patenting or you do not. It's a political decision," Laurence van de Walle, who advises the Greens on the bill, said on Friday.

The bill's sponsor, French socialist Michel Rocard, has pleased people who want minimal patenting, but liberal and center right parties want a broader scope.

A source in the center-right EPP party bloc, which is the largest grouping on the legal affairs committee, said on Friday that Rocard's version of the legislation is "still largely unacceptable."

Rocard, a former Prime Minister of France, was not immediately available for comment.

Lawmakers have come under intense lobbying, reflecting a politically-charged faultline in the world's software industry.

Those who support open-source or free software say copyrighting is preferable to patenting, and welcome Rocard's stance, saying it will allow developers to enter markets that would otherwise be sealed by patents.

Rocard wants a narrow approach to patenting, to effectively include only "programmable apparatus" or hardware applications such as an ABS braking system or a machine to pump insulin.

But the member state version opted for a broad approach to patenting software-related innovations, pleasing large companies such as Nokia and Microsoft which say this will stop copycat devices from countries like China.

EICTA, which represents 51 major multinational companies, said on Friday that lawmakers should reject Rocard's proposals and back what the member states have agreed.

The Greens back Rocard, but said the vote looked tight. "I am not optimistic. It's a dossier where you don't have a middle way," van de Walle said.

"But we have seen many cases where the result of the vote in the legal affairs committee was demolished in plenary," she said, adding that the Greens were trying to switch the vote back to its original slot on Monday.

Full parliament is due to vote on the bill next month.

What's In A Name?

In his latest version of the bill, Rocard has proposed changing the name of the directive to patentability of 'computer controlled invention' from 'computer implemented inventions'.

"The scope of the directive is thus the one of the patenting of hardware devices that use software in order to control this hardware," Rocard says in his report seen by Reuters.

EICTA said changing the title would alter the scope of the rules and leaves the computer outside the invention, which the group says does not represent reality.

Crucial flashpoints among lawmakers remain how to define 'technical contribution', a key criteria for patenting, and whether data processing should be excluded.

Only a simple majority is needed to adopt the bill in committee, but a qualified majority would be needed in the full parliament, a tricky feat if there is no consensus.

The fear among some MEPs that if the bill fails to get a qualified majority then the member state version of the bill would go ahead unchanged, pleasing big industry players.
http://go.reuters.com/newsArticle.jh...toryID=8824698




Republican Rule Makes Lobbying Big Business

Lobbying Firms Hire More, Pay More, Charge More to Influence Government
Jeffrey H. Birnbaum

To the great growth industries of America such as health care and home building add one more: influence peddling.

The number of registered lobbyists in Washington has more than doubled since 2000 to more than 34,750 while the amount that lobbyists charge their new clients has increased by as much as 100 percent. Only a few other businesses have enjoyed greater prosperity in an otherwise fitful economy.

The lobbying boom has been caused by three factors, experts say: rapid growth in government, Republican control of both the White House and Congress, and wide acceptance among corporations that they need to hire professional lobbyists to secure their share of federal benefits.

"There's unlimited business out there for us," said Robert L. Livingston, a Republican former chairman of the House Appropriations Committee and now president of a thriving six-year-old lobbying firm. "Companies need lobbying help."

Lobbying firms can't hire people fast enough. Starting salaries have risen to about $300,000 a year for the best-connected aides eager to "move downtown" from Capitol Hill or the Bush administration. Once considered a distasteful post-government vocation, big-bucks lobbying is luring nearly half of all lawmakers who return to the private sector when they leave Congress, according to a forthcoming study by Public Citizen's Congress Watch.

Political historians don't see these as positive developments for democracy. "We've got a problem here," said Allan Cigler, a political scientist at the University of Kansas. "The growth of lobbying makes even worse than it is already the balance between those with resources and those without resources."

In the 1990s, lobbying was largely reactive. Corporations had to fend off proposals that would have restricted them or cost them money. But with pro-business officials running the executive and legislative branches, companies are also hiring well-placed lobbyists to go on the offensive and find ways to profit from the many tax breaks, loosened regulations and other government goodies that increasingly are available.

"People in industry are willing to invest money because they see opportunities here," said Patrick J. Griffin, who was President Bill Clinton's top lobbyist and is now in private practice. "They see that they can win things, that there's something to be gained. Washington has become a profit center."

Take the example of Hewlett-Packard Co. The California computer maker nearly doubled its budget for contract lobbyists to $734,000 last year and added the elite lobbying firm of Quinn Gillespie & Associates LLC. Its goal was to pass Republican-backed legislation that would allow the company to bring back to the United States at a dramatically lowered tax rate as much as $14.5 billion in profit from foreign subsidiaries.

The extra lobbying paid off. The legislation was approved and Hewlett-Packard will save millions of dollars in taxes. "We're trying to take advantage of the fact that Republicans control the House, the Senate and the White House," said John D. Hassell, director of government affairs at Hewlett-Packard. "There is an opportunity here for the business community to make its case and be successful."

The Republicans in charge aren't just pro-business, they are also pro-government. Federal outlays increased nearly 30 percent from 2000 to 2004, to $2.29 trillion. And despite the budget deficit, federal spending is set to increase again this year, especially in programs that are prime lobbying targets such as defense, homeland security and medical coverage.

In addition, President Bush has signed into law five major tax-cut bills over the past four years. His administration has also curtailed regulation. Over the past five years, the number of new federal regulations has declined by 5 percent, to 4,100, according to Clyde Wayne Crews Jr., a vice president of the Competitive Enterprise Institute. The number of pending regulations that would cost businesses or local governments $100 million or more a year has declined even more, by 14.5 percent to 135 over the period.

Companies have had to redouble their lobbying merely to keep track of it all. "Much of lobbying today is watching all the change that's going on in Washington," Cigler said. "Companies need more people just to stay apprised of what regulators are doing."

At the same time, government activism has presented potential problems for business. "As government grows, unless you're right there to limit it, it can intrude in just about any industry," Livingston said. "There are agencies that love to do things and acquire new missions. People in industry better have good lobbyists or they're going to get rolled over."

But whether it is to protect themselves against harm or to win more benefits, executives and insiders say they have no choice but to hire lobbyists who are deeply rooted in official Washington and its complexities. "Hiring a lobbyist is part of system these days," said Kent Cooper, co-founder of PoliticalMoneyLine, a nonpartisan compiler of lobbying and campaign-funding information.

Jonas Neihardt, vice president of federal government affairs for Qualcomm Inc., the San Diego technology company, agreed: "Without professional lobbyists I don't see how a company can monitor everything that's going on or provide the inputs that are necessary to explain why rules and laws have to be changed."

The result has been a gold rush on K Street, the lobbyists' boulevard. Quinn Gillespie has added at least 16 clients and six professionals since its co-founder, Edward W. Gillespie, announced last November that he was returning after a stint as chairman of the Republican National Committee. Barbour Griffith & Rogers LLC, another lobbying firm, increased the number of lobbyists to 15, from eight in 2003.

The owner of a large lobbying shop said that five years ago he could hire veteran Capitol Hill staffers for $200,000 a year or less. Now the going rate is closer to $300,000 a year and the most-sought-after aides can expect even more. In 2002, Susan B. Hirschmann, chief of staff to House Majority Leader Tom DeLay (R-Tex.), had so many lobbying offers that she enlisted Robert B. Barnett, the attorney for Bill Clinton and Sen. Hillary Rodham Clinton (D-N.Y.), to receive and filter them.

For retiring members of Congress and senior administration aides, the bidding from lobbying firms and trade associations can get even more fevered. Well-regarded top officials are in high demand and lately have commanded employment packages worth upward of $2 million a year. Marc F. Racicot, a former Montana governor who chaired the Republican National Committee, will soon collect an annual salary of $1 million-plus as president of the American Insurance Association.

The fees that lobbyists charge clients have also risen substantially. Retainers that had been $10,000 to $15,000 a month for new corporate clients before President Bush took office now are $20,000 to $25,000 a month or more, lobbyists say.

All-Republican lobbying firms have boosted their rates the most. Fierce, Isakowitz & Blalock and the Federalist Group report that at the end of the Clinton administration, $20,000 a month was considered high. Now, they say, retainers of $25,000 to $40,000 a month are customary for new corporate clients, depending on how much work they do.

Such fee inflation is widespread, even by newcomers. Venn Strategies LLC, a bipartisan lobbying firm that opened in 2001, has doubled its retainer for new clients. "When we first started, most of them came in at $7,500 a month or $10,000 a month," said Stephanie E. Silverman, a principal in the firm. "Now retainers are more in the $15,000- and $25,000-a-month range."

Corporate clients accept the extra cost as the price of success in Washington. At the turn of the year, the American Ambulance Association decided to step up its lobbying and switched to Patton Boggs LLP, the Capitol Hill powerhouse, from a smaller lobbying shop across town. In the process it boosted its lobbying budget by about a third, to more than $300,000 a year.

"It is essential we have a very strong presence," said Robert L. Garner, president of the association. "It's pricey, but it's the cost of doing business in the federal environment."
http://www.washingtonpost.com/wp-dyn...062101632.html




Got what they paid for

Copyright Bill Satisfies Recording Industry
Jack Kapica

Copyright holders and Internet service providers are the direct beneficiaries of the revisions to the Copyright Act in a bill tabled in Parliament this afternoon.

The revisions favour the Canadian recording industry, which demands greater protection against sharing digital music files, and the ISPs, who will be exempt from copyright liability for providing Canadians with access to the Internet.

One major point of the bill is that it says explicitly that the "making available" right, which gives the copyright holder the exclusive right to control who gets the material and how, has been extended to cyberspace. The original Copyright Act was not clear on that issue.

Copyright holders are to get new rights, including the right to technological protection measures, rights-management information, the ability to control the first distribution of material in tangible form, new moral rights for performances, performers would get reproduction rights, and an adjustment in the term of protection for sound recordings.

The bill also includes a "notice and notice" system, by which Internet providers would have to notify subscribers of alleged copyright infringements. ISPs have been voluntarily performing similar systems for several years.

They would also have to keep personal information relevant to the allegation for six months. They will also not be required to disclose a subscriber's identity unless ordered by a court to do so.

"The cable industry is pleased that the Government of Canada recognizes that as intermediaries, ISPs have no control over the copyright material that passes over their networks," Canadian Cable Television Association president Michael Hennessy said in a statement.

The recording industry's initial reaction was very positive.

"We are relieved that Canadian Heritage Minister Liza Frulla and Industry Minister David Emerson kept their commitment to introduce revisions to copyright legislation before Parliament recessed for the summer," CRIA President Graham Henderson said. "In doing so, they have advanced Canada's long-standing commitment to ratify international treaties and bring our law in tune with new digital realities."

"We're extremely delighted the government has taken this step," said Richard Pfohl, legal counsel to the Canadian Recording Industry Association. "It's been a long time coming."

In essence, he said, it's a first step to ratifying the World Intellectual Property Organization treaty that Canada signed but has yet to ratify.

Mr. Pfohl said he'd have to take some time to study the bill to decide whether it ratifies the WIPO treaty, and he'll have to wait further to see how the government intends to act on applying the law.

"My immediate impression is that the recording industry is the big winner with an enormous basket of new rights and individual Canadians are the big losers," said University of Ottawa Internet lawyer Michael Geist.

"There is simply no denying that the lobbying efforts of the copyright owners, particularly the music industry, have paid off as they are the big winners in this bill," he said.

The bill, he added, does little to address individual interests.

He noted that technological protection against copying provisions do not cover devices that can be used to infringe, but to people who circumvent the technology whose purpose is copyright infringement or for making a private copy. The bill also targets people who offer services to circumvent these measures — while the circumvention might be lawful, the subsequent use of the copied work might not.

The Canadian Coalition for Fair Digital Access condemned the bill for not including a provision to eliminate the levy that is currently applied to compact discs.

"Canadians are forced to pay a hidden fee on CDs, mini-discs and other blank recording media," said CCFDA representative Fraser Smith. "This antiquated approach was originally designed to compensate musicians for the duplication of their music onto blank audio tapes. Today, however, Canadians must pay the levy even when they use products like CDs to simply store photos, data and other digital files, rather than copy music. This unfairly penalizes Canadian consumers, small business owners and independent musical artists to the tune of tens of millions of dollars every year. "

Copyright lawyer Lesley Ellen Harris was disappointed about the bill's failure to address the scholarly use of copyright material. "Educational use of Internet material was not addressed in the bill," she said, but noted that "will be part of a new public consultation process."

Mr. Pfohl and Mr. Geist agreed that the private copying regime needs to be clarified further. The bill makes it an infringement to knowingly sell, rent, trade, distribute or communicate copies made for private use, but does not alter the right to make a personal copy, such as a download from the Internet.

Other groups, especially photographers, would benefit from the bill. Photographers are to get removal of provisions focusing on their rights in commissioned photographs.

The requirement that Internet providers to send notice to a subscriber if there is a claim of copyright infringement and to retain "records that will allow the identity of the person to whom the electronic location belongs to be determined," is not clear. The bill says nothing about an individual who is identified by the recording industry as a violator of copyright material (such as music on a peer-to-peer network). It says the copyright holder can issue a notice to the Internet provider, who would then pass it on to the subscriber, but not whether that means the copyright holder has the right to sue right away.

Mr. Geist roundly condemned the bill, saying that although it "could have been worse ... and there are some provisions that permit the use of digital works in an electronic and teaching environment ... that is cold comfort to millions of Canadians who find themselves with a bill that does virtually nothing to address their concerns."

Mr. Geist added that the bill did not say anything about the concept of fair use, which had been recommended by a government study more than 20 years ago.

He added that the bill does nothing to reform statutory damages. Under the current system, an infringer who has made 2,000 songs available on a computer, is liable to damages to the industry amounting to $1-million.

But, he said, one welcome part of the bill is that it focuses on the infringers, and does not target the technology, which is a major problem with the U.S. Digital Millennium Copyright Act.

"Those provisions are good, but not good enough," he said, adding that the bill pays little attention to privacy protection, which "suggests that Canadians who circumvent a technology protection measure to avoid automated collection of their personal information will be committing copyright infringement."

Ottawa copyright lawyer Howard Knopf was quick to condemn the bill.

"It might as well have been called the Canadian Recording Industry of America Act," he said.

He noted that the CRIA has more than it needs after a court spelled out how the industry can act against infringers. The record companies "get paid several times" over for the music they own.

"Also, since the CRIA has achieved what it calls 'complete success' in the court case last month, there is no longer any urgency to the bill. The government should do what it can to counterbalance the provisions."
http://globetechnology.com/adsv3/par...20x120_gt.html




One sided? This court isn’t one sided enough!

Intellectual Property Court Likely In Two Years

An Intellectual Property (IP) court to handle cases of infringement could be set up within the next two years.

The Domestic Trade and Consumer Affairs Ministry is lobbying hard for this, Minister Datuk Shafie Apdal said. "The court will have judges and lawyers who specialise in IP so that the rights of owners can be properly represented," he said after his ministry’s annual meeting with the private sector here yesterday.

Shafie said there was a huge backlog of IP cases which was being heard at the Sessions Court "due to the lack of expertise".

"We have looked at various aspects, like capacity and various property legislation."

Shafie said with the specialised court, Malaysia can resolve ongoing issues of piracy, imitation and counterfeit. "Protecting IP rights is necessary for Malaysia to honour its international promises. It also creates a favourable trade and investment environment and improves the quality of the economy."

He said the ministry was stepping up enforcement so that more foreign firms would register their IP and invest here.
http://www.nst.com.my/Current_News/N...le/indexb_html




Spain Arrests Web Code-Cracker "P. Power"
AFP

Spanish police said they had arrested "P. Power", one of the most renowned code-crackers on the Internet, following a nine-month inquiry.

Armed with a simple modem connection to the World Wide Web, a decrepit computer and standard software "P.Power" broke security codes and hacked his way into costly professional computer programmes, the interior ministry said. Spanish authorities have not released the identity of "P. Power," known only by his Internet pseudonym, but they did say he was a 26-year-old engineer. After meticulously unassembling programmes, analysing their weak points and then stripping them of their protection, the hacker broadcast messages to the Internet saying that he was the unique code-cracker and was sending out the codes for free, according to the interior ministry. The ministry added it was impossible to put a price on the damage caused to firms using the programmes pirated or how many Internet users had downloaded the codes for free. Unlike code "crackers," web "hackers" break into protected programmes of organisations such as NASA, banks or the FBI.
http://uk.news.yahoo.com/050622/323/flr98.html




Experts Handicap Grokster Case

Legal experts say the U.S. Supreme Court is unlikely to give either side exactly what it wants in upcoming Grokster ruling.

Court-watchers say neither the entertainment industry nor peer-to-peer companies are likely to receive a clear victory when the U.S. Supreme Court issues its first
ruling on file-sharing later this month.

“I don’t think either side is going to get five votes for what they argued in court,” said William Patry, a partner at Thelen Reid & Priest in New York City and former copyright counsel to the U.S. House of Representatives Judiciary Committee.

MGM v. Grokster once again pits content creators against the technology industry, but even that’s not so simple. The Business Software Alliance chose the MGM side, and many digital entertainment companies aligned with MGM or took a neutral stance.

The case takes up the 1984 “Sony Betamax” rule, which has become a landmark for the technology industry. In that 5-4 decision, the Court determined that “substantial non-infringing uses” can protect a technology’s creators from being liable for copyright infringement.

After the Ninth Circuit Court of Appeals said that Grokster and Streamcast, the distributor of Morpheus, passed the Sony Betamax test, the Supreme Court took the case as an opportunity to make its first ruling on systems for trading files over the Internet.

The central question is whether the software companies that design those systems are liable for copyright infringements made by their customers. Questions about marketing, business practices, and older versions of the software are still in front of the district court and were not appealed to the Supreme Court.

“They’re going to keep Sony intact,” predicted Beth Noveck, director of New York Law School’s Institute for Information Law and Policy. “There’s inadequate empirical evidence in this case to redesign the Sony test.”

However, she suggested that the Supreme Court’s ruling may not be definitive, leaving the door open for “connecting the business practices and activities of the accused company to unlawful activity.”

Where They Stand
Of the nine justices, only three—Justices Anthony Kennedy, Stephen Breyer, and John Paul Stevens— seem to have tipped their hands.

Justice Kennedy authored the dissent in Sony Betamax, and was noticeably hostile to Grokster’s legal representation.

Justice Stevens wrote Sony Betamax and is seen as the strongest ally of the Grokster side. Justice Breyer joked at the hearing, “For all I know, the monks had a fit when Gutenberg made his press.” But he also seemed concerned that some technologies are simply more prone to infringing uses.

The two were the sole dissenters in the Court’s last two copyright cases: New York Times v. Tasini in 2001 and Eldred v. Ashcroft in 2003. Both rulings increased copyright holders’ rights and made the widespread distribution copyrighted works more difficult.

Justices Sandra Day O’Connor and Ruth Bader Ginsburg seemed most sympathetic to sending the case back to the Ninth Circuit because of their concerns about P2P services actively encouraging infringement.

Justice O’Connor, a deciding vote for Sony Betamax 20 years ago, is seen as more friendly to Grokster. Justice Ginsburg may lean toward giving Congress the leeway to rewrite Sony, considering that she wrote the majority opinion in Eldred.

At the oral arguments, Justice Scalia expressed displeasure with the idea of letting Hollywood control technology. However, he rebuked the Grokster lawyer for oversimplifying the case. Justice Clarence Thomas often sides with Justice Scalia.

The MGM contingent took comfort in one of Justice Souter’s questions for the defense—“Why isn’t this a classic willful-ignorance case?” However, they also had reason to worry about his stated concern for the iPod inventor.

Chief Justice William Rehnquist was a dissenter in the original Sony Betamax decision. He is likely to favor changing the somewhat theoretical ruling to measure the actual usage of a technology, suggested Cathy Kirkman of Wilson, Sonsini, Goodrich, and Rosati in Palo Alto, California. But he was quiet at the oral arguments, making it hard to tell which way he was leaning.

The Court’s Options
The only thing that Grokster watchers agree upon is that the Supreme Court is unlikely to uphold the Ninth Circuit’s ruling without change.

The Court could elect to clarify secondary liability—establishing some kind of knowledge requirement or other measure—or refer the issue back to the Ninth Circuit. It could also push for a move by the U.S. Congress, which could draft new laws.

“The Court has a historical reluctance to tamper with new technologies, deferring to Congress to work out the tough compromises,” said independent copyright expert and former law professor Edward Samuels, citing piano rolls, cable television retransmissions, library photocopying, and Sony Betamax as precedents.

Facing Congress could mean a loss for MGM. “It hasn’t been a good year for the copyright industry on the Hill,” said Cardozo Law School professor Susan Crawford, noting recent movie censorship legislation and cold receptions to broadcast flag proposals.

Last fall, an attempt to incorporate inducement into the Copyright Act—effectively overriding Sony Betamax—died in committee. Ms. Crawford expects a 5-4 decision that affirms the Ninth Circuit ruling but clarifies Sony.

Tim Wu, an associate professor at the University of Virginia School of Law, thinks the Court wants to “try to catch intentional wrongdoers like Kazaa and Grokster— people who premise their business on infringement.” He predicts a 7-2 decision on these grounds, with Justices Stevens and Breyer dissenting.

What’s Next?
The Recording Industry Association of America isn’t betting on Congress or the Supreme Court to defend its products. The RIAA has been especially litigious on behalf of the music industry’s declining sales, slapping the users of Napster and its offspring with 11,700 lawsuits since September 2003.

Despite all these measures, illegal file-sharing is growing. P2P market research firm Big Champagne estimates that over 4 million individuals are on a single popular network at the same time, and that a large portion of all networks’ traded files are under copyright.

“We’re moving toward stabilizing patterns in the P2P wars,” said Mr. Wu. “Some percent of the population—college students—have been lost as a market. But a larger percentage will rely on iTunes and such stores.”
http://www.redherring.com/Article.as...nmentAndMedia#




Supreme Court To Rule On File-Sharing
Kristi Heim

The eyes of the technology and entertainment worlds are on the U.S. Supreme Court this week for a pivotal decision that could determine the future of music on the Internet.

The decision on MGM v. Grokster, which could come as early as tomorrow, tackles the problem of illegal file sharing of songs and video over the Web, but its impact could be much broader.

As more creative content goes digital, the case has far-reaching implications for consumers and companies across the country.

At the heart of the case is a question: Should Grokster and other companies that provide technology be held responsible for the actions of people who use the technology?

Rights holders — from movie studios to Major League Baseball — argue that the manufacturers of the technology should be held liable for protecting copyrights. Technology advocates and civil libertarians argue that manufacturers should not have the burden of controlling how their product will be used.

"There should be some way of prohibiting so-called pirate services so copyright owners don't go bust," said Steve Gordon, an entertainment attorney and consultant who has written extensively on the issue. At the same time, he said, "You don't want to thwart new technologies from growing and expanding and helping the economy."

Companies on both sides of the debate already have started to formulate strategies. For some, the outcome could make or break their business plans.

That's because the technology behind Grokster's software, called peer-to-peer, or P2P, has spread into all kinds of applications.


Lining up on file sharing

MGM v. Grokster has attracted supporting legal briefs from dozens of organizations, corporations and individuals. Here's a selected list.

Supporting the Grokster position

Computer science professors

National Venture Capital Association

Intel

Group of Internet law professors

Consumer Electronics Associations and other industry trade groups

Cellular Telecommunications & Internet Association and other telecom trade groups and corporations

Consumer Federation of America and other consumer-advocacy organizations

Musical artists

American Conservative Union

American Civil Liberties Union

Supporting the MGM position

Progress and Freedom Foundation

U.S. Solicitor General's Office

Business Software Alliance

Law and economics professors

Kids First Coalition, Christian Coalition of America and other groups

Commissioner of Baseball, NBA, NFL and other groups

Napster, Movielink and other Internet companies

American Federation of Musicians and other trade groups

National Academy of Recording Arts & Sciences

National Association of Broadcasters

Neutral position

Digital Media Association, Netcoalition and other industry groups

Sen. Patrick Leahy, D-Vt., and Sen. Orrin Hatch, R- Utah

American Intellectual Property Law Association

Audible Magic and other companies

Source: Electronic Frontier Foundation Web site


Peer-to-peer networks enable files to be transferred directly from one computer to another through a decentralized setup that escapes easy control by a central source. This setup gives P2P enormous power because the software can find and share content — music and video — from one person's computer with the million other PCs on that network.

Kirkland-based Laplink uses the technology in a software product that helps lawyers, doctors and business people share files. Laplink Chief Executive Thomas Koll says some of the arguments in the Grokster case give the useful and promising technology a bad name.

"It's as if, through some of the debate, everyone doing peer-to-peer is criminalized," Koll said. "A lot of business-class peer-to-peer services offer a legitimate way of exchanging files that is very necessary to the world. We are all connected to the Internet, but not to each other. When businesses want to exchange data, the best way to do it is through peer-to-peer."

Although he's watching the case closely, Koll doesn't think the court will restrict the sale of file-sharing products. "Then the printing presses would have to be prohibited because they print illegal material," he said.

Encouraging lawbreakers?

The film studios and recording companies are suing Grokster, which is registered in the West Indies, along with its cousin Morpheus, created by StreamCast Networks of Los Angeles. They claim Grokster's technology encourages illegal sharing of copyrighted works and should be shut down.

A federal court forced song-trading site Napster to close four years ago, but then new services cropped up to let people share music files directly without going through a central database like the one Napster operated. As a result, millions of people can use Grokster software to download songs free from any other computer with Grokster, bypassing record-industry control.

Courts have rejected MGM's arguments so far, upholding the 20-year-old Sony Betamax standard. Even though people could use the Betamax recorders for making unauthorized copies of movies, they could also use them for legitimate purposes, so a ban was not justified. That decision set the precedent for a host of new consumer-electronics products, from VCRs to personal computers with CD burners.

Serving the industry

In anticipating a court ruling that could change the legal landscape, the head of Seattle-based Loudeye says he's taking a two-pronged approach in promoting and protecting digital files.

Loudeye encodes, stores and distributes music for its clients, including the five major record labels. Loudeye's technology allows third-party companies, such as Microsoft and its MSN Music, to set up their own digital music stores. Meanwhile, Loudeye is working on ways to drive more Web users to those sites, says President and CEO Michael Brochu.

But, he says, "A lot of people are only going to take music if they can get it for free."

Loudeye's other approach is to enhance anti-piracy protection through a separate service it sells to record labels.

"If the court comes out and says P2P networks are legal," Brochu said, "we stay very focused on anti- piracy and shift more emphasis on protecting those files."

Old system "dying"

Record companies blame illegal file sharing over the Internet for decimating CD sales, now in a three- year decline.

But the Internet itself is also forcing a tectonic shift in the way people are listening to music, watching videos and otherwise using media.

The new models threaten the system that record companies have dominated for decades, says Seattle music producer Steve Fisk.

The next album Fisk is helping produce for the band Harvey Danger will be available free on the Internet and later sold as a CD with extra tracks.

"The minute you make a CD, you have to have a building with employees running around trying to sell that CD and trucks to transport the plastic disks all over the world," he said. "That's the system that's dying."

Growing up through the cracks of the old system are new services like Weed, a tool for sharing files legally over peer networks created by Seattle-based Shared Media Licensing.

WeedShare technology embedded in the file lets users download a song and listen to it three times for free. Most songs cost about $1.25 each. The artist earns 50 percent of every sale. When people who buy songs persuade others to buy them, they earn a commission of 20 percent. Weed collects 15 percent of each sale.

Musician Roger Manning Jr. is selling his new album as a Weed file. He has earned $1,000 from sales over the past 2 ½ months, he said. While that amount is still tiny, the approach "puts control back into the hands of artists," he said.

Manning has worked with four record companies over the past 10 years. But he says he makes more money selling music directly over the Internet. With a record contract, he'd have to sell half a million records to cover marketing costs and other expenses.

Creative model

The Weed model proves the value of creative solutions to the entrenched problem of unlicensed file sharing, said John Beezer, president of Shared Media Licensing.

Beezer, a veteran of RealNetworks and Microsoft who ran Maria Cantwell's online senatorial campaign in 2000, started the company three years ago.

Regardless of the Supreme Court decision, Beezer expects his company to endure because it has made friends on all sides. Weed works with P2P sites Morpheus and LimeWire, and it just inked its first deal with a major record label for online sales.

Either way, Beezer thinks the peer-to-peer phenomenon can't be stopped. "You may as well outlaw the tide coming in," he said. "It's going to become much more important in the future, and anything that hampers it would be a huge mistake."
http://seattletimes.nwsource.com/htm...rokster19.html




The Court of Online Opinion Has Its Say on File Sharing
Tom Zeller Jr.

EVER since the Supreme Court agreed in December to hear the entertainment industry's case against the file-sharing software companies Grokster and Streamcast, armchair legal experts have been casually wagering on the outcome. The case pits copyright holders against those who fear a stifling of technological innovation. With the court poised to weigh in, perhaps as early as today, all sides have been getting edgy.

Not surprisingly, technophiles siding with Grokster have been most vocal on Internet forums and Web logs. But among those willing to make predictions, whether authors of Grokster supporting briefs, or mere spectators keeping watch on the case as they download "Batman Begins," pessimism prevails.

Most believe that the Supreme Court will send the case back to the United States Court of Appeals for the Ninth Circuit, which upheld a lower court's decision against MGM and its fellow petitioners last August. Others think that the Supreme Court will side cleanly with the industry. Only a plucky minority said the high court would unequivocally side with the software companies.

If the seers have not already been proved sage or foolish - the Supreme Court typically issues decisions on Mondays at around 10 a.m. - they soon will be. A selection of those bold enough to predict the outcome follows.

The discussion has penetrated some unusual corners of the Internet, including the newsgroup rec.sport.pro-wrestling. That's where Don Del Grande, a civilian computer programmer for the United States Navy, made this pointed observation:

"Grokster, unlike Napster, doesn't use a central database to save information on who has what, which is probably what will make Grokster legal in the end. Besides, even if Grokster was declared illegal, what would be next - banning e-mail because it is possible to send illegally obtained music files as attachments?"

Of course, that slightly mischaracterizes the debate, which hinges not on the legality of peer-to-peer file sharing, but on whether makers of file-sharing software are liable for illegal copying by users. Lower courts have held they are not, but Eric Goldman, a professor of law at Marquette University who maintains a "Technology & Marketing Law Blog" at blog.ericgoldman.org, predicted a reversal of those decisions - and potential legislation:

"What will the court say? We're all on pins and needles!

"I've heard lots of predictions. Predicting Grokster has turned into a modern-day parlor game. I don't have any special insight, but FWIW, here's mine: Supreme Court reverses the Ninth Circuit, but writes a narrow opinion that effectively limits itself to the Grokster facts..."

"Whatever the Supreme Court rules, I further predict that Grokster - and all of us - lose eventually. Either the Supreme Court reverses the Ninth Circuit or I predict that Congress will reverse the Supreme Court statutorily."

Gerald Smith, a lawyer and frequent contributor to the technology forums at ABXZone.com, also wagered on a reversal:

"I believe the Supreme Court will reverse the Ninth Circuit and the case will wind up in the district court for further proceedings. It is important to note that if the court does indeed reverse, that does not mean the plaintiffs have won. It will simply mean that the summary judgment will be vacated and the case will proceed, perhaps to trial."

But last month, on the Volokh Conspiracy Web log (volokh.com), David Post, a professor of law at Temple University and the author of a Grokster supporting brief submitted to the Supreme Court , reversed an earlier prediction he had made for, well, a reversal.

"A few months ago I fearlessly predicted that the Supreme Court would side with the entertainment industry plaintiffs, reverse the Ninth Circuit, and find Grokster liable for inducing copyright infringement (through the distribution of its software). Maybe I've just talked myself into it, but ... I think my initial prediction was wrong.

" ... I don't think the court will be able to reach the question of whether Grokster can be liable for inducement - actively encouraging, through advertising or otherwise, others to infringe copyright. That leaves just the question of whether distribution of its software, alone, can be considered contributory infringement. On that question, I think the court's going to get it right ..."

And a few bold sorts simply predicted a slam-dunk for the Grokster team.

Don Snyder, a student in a course titled Information Technology and the Law at Princeton University, argued on the class Web log that a 1984 Supreme Court decision, which held that the Sony Betamax videocassette recorder had substantial legal uses, even if individual consumers used it to copy movies illegally, provides a compelling precedent; the Grokster lawyers have argued that, too.

"Having reviewed its central contentions, compared it with petitioners' claims and arguments, and balanced it against the weight/direction of Sony and subsequent rulings, I predict, unequivocally, that the court will not side with petitioners."

But Mr. Snyder's instructor at Princeton, Prof. Edward W. Felten, a frequently read blogger, was less enthusiastic. At his Web log, freedom-to-tinker.com, Professor Felton predicted that the court would leave the whole issue muddy.

"The Supreme Court's Grokster decision won't provide us with a broad, clear rule for evaluating future innovations, so the ball will be back in Congress's court."

None of this, of course, will matter to avid downloaders in the end. Peer-to-peer file sharing will rage on, via endless permutations of open source, anonymous, non- profit-seeking software - even in a Groksterless world. That might suit just fine "littlelisa," a file-sharer who reviewed Grokster's product at Download.com earlier this year:

"Pros: It's no longer on my computer.

"Cons: Infected my computer with the most spyware I've ever had. Crashed my computer multiple times and made things so complicated I had to have my whole hard drive wiped clean. I want the creator of Grokster tied down and repeatedly poked with pointy sticks. That is all."
http://www.nytimes.com/2005/06/20/business/20link.html




Local news

Score One for the Corporate Oligarchy
Posted by spatula

The Supreme Court has ruled that a city may use eminent domain to take land from the middle class and the poor and give it to the rich...

Residents in the city of New London, Connecticut are going to lose their homes, thanks in part to a recent Supreme Court decision that cities may use eminent domain to take their land away and give it to wealthy developers, not for a road, bridge, powerline, pipe line, utility, or other obvious public need, but instead so an office complex can be constructed. The Fifth Amendment of the US Constitution says "nor shall private property be taken for public use, without just compensation." Findlaw's annotations provide an excellent explanation and justification for the eminent domain process. But it wasn't until now that "public use" became so broadly defined.

In a strangely-divided 5-4 ruling, Justices Stevens, Kennedy, Souter, Ginsberg and Breyer concluded that cities were well within their rights to sieze property, even in an area that isn't blighted, for private development for the sake of economic growth and increased tax revenue. So conceivably any time a city found itself hurting for money, it can now take a look for some homes to bulldoze so a Wal-Mart can move in. Although I suspect that any city council that authorizes this kind of thing may find itself rapidly kicked out of office, by then the damage will have already been done.

Justice O'Connor issued an angry dissent, saying in part, "Any property may now be taken for the benefit of another private party, but the fallout from this decision will not be random. The beneficiaries are likely to be those citizens with disproportionate influence and power in the political process, including large corporations and development firms." In other words, those with more money will be able to lobby the local governments to get siezed land at a discount price for their own benefit. It's Robin Hood in reverse: stealing from the poor (and middle class) to give to the rich. O'Connor was joined by justices Rehnquist, Scalia and Thomas, with whom I find myself in rare agreement.

If you think this is the sort of thing that happens infrequently, think again. According to the Institute for Justice, over 10,000 properties were threatened with eminent domain in the recent past.

New London city officials plan to sweep away Victorian-era homes and businesses for a commercial development to attract tourists and businesses, joining a nearby Pfizer research center and including a Coast Guard museum.

The majority decision seems to hinge on the notion that the city had a plan for the use of the siezed property:

The city has carefully formulated a development plan that it believes will provide appreciable benefits to the community, including, but not limited to, new jobs and increased tax revenue. As with other exercises in urban planning and development, the city is trying to coordinate a variety of commercial, residential, and recreational land uses, with the hope that they will form a whole greater than the sum of its parts. ... Because that plan unquestionably serves a public purpose, the takings challenged here satisfy the Fifth Amendment.

But the existence of the plan isn't at issue. The issue is whether the city has a right to develop plans to take private property for private commercial development at all. Any city council with dollar signs in its eyes can come up with a comprehensive plan for redevelopment of private homes into larger-tax-revenue-producing business parks.

To their credit, the majority did make it clear that cities must have a legitimate purpose in mind:

the City would no doubt be forbidden from taking petitioners' land for the purpose of conferring a private benefit on a particular private party. ... Nor would the City be allowed to take property under the mere pretext of a public purpose, when its actual purpose was to bestow a private benefit. The takings before us, however, would be executed pursuant to a "carefully considered" development plan. The trial judge and all the members of the Supreme Court of Connecticut agreed that there was no evidence of an illegitimate purpose in this case. [citations omitted]

Nonetheless, the court leaves it to the cities to decide:

Just as we decline to second-guess the City's considered judgments about the efficacy of its development plan, we also decline to second-guess the City's determinations as to what lands it needs to acquire in order to effectuate the project.

The majority opinion also indicates that states may introduce more strict requirements of eminent domain than what the Supreme Court finds Constitutionally necessary. Maybe this is a hint to state legislatures (or private property advocates)?

In her dissent, justice O'Connor pointed out the obvious problem with this broad interpretation of the Fifth Amendment:

Today the Court abandons this long-held, basic limitation on government power. Under the banner of economic development, all private property is now vulnerable to being taken and transferred to another private owner, so long as it might be upgraded i.e., given to an owner who will use it in a way that the legislature deems more beneficial to the public in the process. To reason, as the Court does, that the incidental public benefits resulting from the subsequent ordinary use of private property render economic development takings "for public use" is to wash out any distinction between private and public use of property and thereby effectively to delete the words "for public use" from the Takings Clause of the Fifth Amendment.

O'Connor favors a more narrow interpretation of the clause: "Government may compel an individual to forfeit her property for the public's use, but not for the benefit of another private person. This requirement promotes fairness as well as security."

O'Connor also takes exception to giving local authorities a free hand in deciding what constitutes "public use," saying "But were the political branches the sole arbiters of the public-private distinction, the Public Use Clause would amount to little more than hortatory fluff. An external, judicial check on how the public use requirement is interpreted, however limited, is necessary if this constraint on government power is to retain any meaning." In other words, if you leave it to the cities to decide what constitutes "public use" then there's nothing to stop any city from arbitrarily deciding that anything and everything could be "public use" with no checks.

So do you think you can compete with Wal-Mart when it comes to property tax revenue and job creation? If not, you'd better make sure you elect people you can trust to your city council. And if you don't think you can trust your city council, it's going to be up to your state to restrict eminent domain to real public use; you've got no friends in the Supreme Court watching your back. After all, you're just a person, not a wealthy corporation.
http://web.morons.org/article.jsp?sectionid=2&id=6348




Microsoft Extends IP Protection For Partners

Microsoft Corp. said on Thursday it is strengthening the intellectual property protection it provides to PC manufacturers as it tries to fend off competition from Linux rivals.

Linux, a freely available operating system, has gained popularity among cost-conscious companies. But there are lingering intellectual property concerns as illustrated by software company SCO Group Inc.'s numerous lawsuits against large companies claiming ownership technology used in Linux.

The Microsoft protection package provided to large partners such as Dell Inc. and an array of small resellers shields them from exposure to legal costs and damage claims. It also covers some software companies such as Citrix Systems, which provides secure Internet access products.

It includes protection for patent, copyright, trade secret and trademark and the coverage extends to current and future versions of software such as the Windows Server System, Microsoft Office System, and Windows client software.

Linux distributors also offer some protection for the users.

Microsoft shares were up 20 cents, or less than 1 percent, to $25.27 in early morning trade.
http://today.reuters.com/News/TechSt...CROSOFT-DC.XML




Gates, Vietnamese Prime Minister Talk Piracy

Vietnamese Prime Minister Phan Van Khai pledged to combat software piracy during talks with Microsoft Chairman Bill Gates on Monday as he became the most senior official of the communist state to visit the United States since the Vietnam War ended 30 years ago.

Khai signed two agreements committing Vietnam to work with Microsoft in curbing theft of intellectual-property rights and removing licensing barriers for used computers donated to schools, said Microsoft spokeswoman Tami Begasse.

The Business Software Alliance, a Washington-based lobby group, estimates that 92 percent of the software used in Vietnam in 2004 was pirated, the highest rate in the world.

Gates said users in Vietnam had downloaded a Vietnamese language package to work on Windows XP and Office 2003 more than 18,000 times since its introduction in March--something he said made Microsoft rededicate its commitment to Vietnam.

Khai's stop in Seattle was the first in a four-city tour that includes a meeting on Tuesday with President Bush in Washington.

In Washington, the White House said the United States was eager to advance Vietnam's bid to join the World Trade Organization. Hanoi's goal is to join the WTO at the group's next ministerial meeting in December in Hong Kong.

"The United States strongly supports Vietnam's integration into the world economic community and its bid to join the World Trade Organization," White House spokesman Scott McClellan said.

Since Washington and Hanoi restored diplomatic links in 1995, two-way trade has rocketed from just $451 million to $6.4 billion in 2004. The United States became Vietnam's most important commercial partner after the signing of a bilateral trade pact in 2001.

Hundreds of demonstrators rallied in Seattle against Khai's visit Sunday to protest against Vietnam's human rights record. Vietnamese exiles, religious activists and ethnic minority opponents of Hanoi also plan rallies in Washington.

Microsoft spokeswoman Begasse said there were no protests at the software maker's campus.

Khai will also travel to Boston and New York on a trip that coincides with the 10th anniversary of the normalization of diplomatic ties frozen after the end of "The American War," as it is known to Vietnamese.

Vietnam is also expected to sign a contract to buy four Boeing 787 "Dreamliner" planes, worth about $500 million, during Khai's visit.

Despite growing commercial ties, differences remain between the two nations, in particular over U.S. criticism of Vietnam's record on human rights and religious freedom, and Washington's refusal to compensate thousands of Vietnamese victims of wartime chemical weapons such as Agent Orange.
http://news.com.com/Gates%2C+Vietnam...3-5755247.html




Lost Credit Data Improperly Kept, Company Admits
Eric Dash

The chief of the credit card processing company whose computer system was penetrated by data thieves, exposing 40 million cardholders to a risk of fraud, acknowledged yesterday that the company should not have been retaining those records.

The official, John M. Perry, chief executive of CardSystems Solutions, indicated that the records known to have been stolen covered roughly 200,000 of the 40 million compromised credit card accounts, from Visa, MasterCard and other card issuers. He said the data was in a file being stored for "research purposes" to determine why certain transactions had registered as unauthorized or uncompleted.

"We should not have been doing that," Mr. Perry said. "That, however, has been remediated." As for the sensitive data, he added, "We no longer store it on files."

Under rules established by Visa and MasterCard, processors are not allowed to retain cardholder information including names, account numbers, expiration dates and security codes after a transaction is handled.

"CardSystems provides services and is supposed to pass that information on to the banks and not keep it," said Joshua Peirez, a MasterCard senior vice president who has been involved with the investigation. "They were keeping it."

The security breach was first reported Friday when MasterCard International said a lapse at CardSystems had allowed the installation of a rogue computer program that could extract data from the system, potentially compromising 40 million accounts of various credit cards.

MasterCard said Saturday that 68,000 of its own account numbers were especially at risk because they were in a file found to have actually been "exported from the system." CardSystems said yesterday that the file also contained data from other cards in proportion to the volume of business it handles from each company. That would translate to about 100,000 Visa accounts and roughly 30,000 others.

It is not clear whether those numbers could yet grow.

The details about CardSystems' handling of the data raised new questions about the effectiveness and enforcement of the standards established by the card companies for data protection and storage.

To protect cardholders, Visa and MasterCard have long-established policies for the merchants and processors that handle transactions on their payment network. They require their processors, for example, to hire a certified outside assessor to do an annual security assessment. Processors must also conduct a quarterly self-evaluation and scans for network vulnerabilities.

The card associations have also spent millions of dollars to upgrade their own computer systems with sophisticated fraud-detection software. Over the last two years, they have sent out teams to processor and merchant sites to review compliance.

But one kink in this chain - one processor that fails to comply - can put untold numbers of cardholders at risk of fraud.

"The standards themselves are very effectively written," said Tom Arnold, a partner at Payment Software Company, a consulting firm in San Francisco that advises and provides security assessments for merchants and processors. "The challenge in the industry can be when people don't fully comply or try to cut corners."

Avivah Litan, an industry analyst at Gartner Inc., agreed. "If they are really serious about these programs, they should pay attention to how the processors are guarding the data, and they are not," she said. After the disclosure of the security breach at CardSystems, varying accounts were offered about the company's compliance with card association standards.

Jessica Antle, a MasterCard spokeswoman, said that CardSystems had never demonstrated compliance with MasterCard's standards. "They were in violation of our rules," she said.

It is not clear whether or when MasterCard intervened with the company in the past to insure compliance, but MasterCard said Friday that it had now given CardSystems "a limited amount of time" to do so.

Asked about compliance with Visa's standards, a Visa spokeswoman, Rosetta Jones, said, "This particular processor was not following Visa's security requirements when we found out there was a potential data compromise."

Earlier, Mr. Perry of CardSystems said his company had been audited in December 2003 by an unspecified independent assessor and had received a seal of approval from the Visa payment associations in June 2004.

CardSystems, based in Tucson, processes more than $15 billion in payments for small to midsize merchants and financial institutions each year.

MasterCard said that it had detected atypical levels of fraudulent charges on its cards as early as mid-April and, joined by Visa and an unspecified bank in mid-May, had requested that CardSystems allow its independent forensics team, Ubizen, to investigate. It was not until May 22 that the security specialists identified the rogue computer program as the source, MasterCard said.

CardSystems said it contacted the F.B.I. offices in Tucson and Atlanta on May 23. The F.B.I. said Friday that its investigation was continuing.

Only MasterCard affirmed that it knew of specific instances of fraud against its customers traced to the CardSystems breach. Visa said it was monitoring the situation but had yet to detect any fraud traceable to the case. Those companies, along with American Express and Discover, said their cardholders would not be liable for fraudulent charges on their accounts.

Cardholders' concerns were largely referred to the card-issuing banks. Citigroup said the risk of identity theft to its cardholders was low but said it would closely monitor accounts. Chase Cards said that if cardholders spotted suspicious activity on their monthly or online statements, they should contact their bank. In such a case, identity theft experts said, it would be prudent to cancel the account.

CardSystems is one of hundreds of processors that provide terminals to merchants and help banks process millions of transactions a day, electronically relaying cardholders' names, account numbers and security codes so that once a card is swiped, the sale will be authorized, the merchant will be paid and the customer will be billed.

The processors area also a point in the matrix exposed to Internet traffic and possible intrusion.

"They typically have a Web site where merchants sign on with and then the merchants can look at the daily transactions, the balance in their account," Edward Lawrence, a managing associate at the Auriemma Consulting Group in Westbury, N.Y., which advises credit card merchants and processors. "My guess is that a hacker would get into the Web site and somehow find their way past a firewall and through the passwords and encroach onto the programming system."

Mr. Peirez of MasterCard said that the data inappropriately retained by CardSystems was particularly sensitive because it included cardholders' three- and four-digit security codes, making it more attractive to potential thieves because it can double or triple the black-market value of a cardholder's account. Ms. Litan of Gartner said there was no reason for a processor to store security codes. "It's probably just laziness or they don't know the rules," she added.

In addition, the data lost in the CardSystems case was apparently not encrypted. "If it was encrypted, the hacker would have gotten data but would not have known how to read it," said Mr. Lawrence of Auriemma Consulting.

The 40 million accounts that passed through CardSystems during the period in question may be the largest case of exposed data to date.

"There is going to be a lot of finger-pointing," said Susan Crawford, a professor of Internet law at Cardozo Law School. "It's a very complex situation, and we'll wind up for calls for very heavy-handed government regulation of data transmission."

Yet, there may be little incentive for processors to change. Visa and MasterCard have said that payment processors that violate their rules must pay a penalty, but they do not disclose the amounts of those fines. And it is typically the merchant that bears the cost of data fraud.

Zero liability for customers means that fraudulent charges come out of a bank or store's coffers in the form of higher merchant transaction fees. "The retailers will pay for it and the issuing banks will get rich off it," Ms. Litan said. "It's just another revenue stream."

"What is the incentive?" she added. "Staying out of the newspapers."
http://www.nytimes.com/2005/06/20/te...ZJZQT/uv4lICXg




Ubiquitous Technology, Bad Practices Drive Up Data Theft
Jonathan Krim

Call 2005 the year of the data breach.

One day, tapes with the Social Security numbers of 1.2 million federal workers are reported missing. Another day it's hackers gaining access to private information on 120,000 alumni at Boston College. Then, last Friday, comes word that 40 million credit card numbers fell prey to computer criminals.

Collectively, nearly 50 million accounts have been exposed to the possibility of identity fraud since the beginning of the year, a significant increase from last year.

Security experts, law enforcement officials and privacy advocates agree that while computer crime is on the rise, it is hardly new.

So why the apparent escalation?

In part, organizations are telling their customers or employees about incidents more than they used to, many complying with a California notification law that is being considered as the basis of possible federal legislation.

After data broker ChoicePoint Inc. reported in February that it was infiltrated by identity thieves posing as legitimate customers, the company received a second black eye when reports surfaced that it did not notify consumers about a previous breach, before California's law took effect. Now, most organizations are choosing to notify potential victims.

Experts see other factors contributing to the data-theft siege.

A boom in data collection has created a marketplace of valuable information stored on computers in thousands of places, many with weak security.

"The current fiascos in cyber-security have been occurring for the past 10 years," said Tom Kellermann, who recently left his position as senior data risk management specialist for the World Bank.

Kellermann and others blame poorly designed software, inattention to data security and an underappreciation of the problem by top management in corporations and other institutions.

"We've used weak practices for some time," said Chuck Wade, an Internet security and commerce consultant. "The vulnerabilities are well known, and we have not been improving the security measures . . . as we should have been."

At the same time, some hackers who used to get their kicks merely being disruptive are pooling efforts with organized criminals, said Jonathan J. Rusch, a special counsel in the fraud section of the Justice Department.

"The motivation now is money," Rusch said. In addition to using stolen data for credit card or other financial fraud, a thriving black market for the stolen data itself exists online, run in large part from Eastern Europe.

Among the most extreme examples of data for sale are offerings known in the online underground as "fulls." These reports include not only Social Security and credit card numbers, but also account passwords for Web sites that a consumer might use, such as eBay or a bank.

"There's so much information that has been leaked out over the years, it may be that there are, outside of the country, criminal elements with huge databases on American consumers," Wade said.

With more and more people getting high-speed Internet connections, and participating in online commerce and banking, the targets of opportunity for criminals only grow.

Wade and others argue that many industry players have not responded aggressively enough because they are insulated from the financial consequences of breaches.

Banks and credit card companies, for example, pay nothing when a criminal uses someone's credit card for a fraudulent charge. The same is true for credit card processing companies such as CardSystems Solutions Inc., which announced last week that it housed the 40 million credit card numbers that hackers may have obtained.

Payment processors and banks collect fees for charges that are reversed.

"They are making money on fraudulent transactions," said Brian Mortensen, head of a New Jersey company that sells telecommunications equipment. "They should not be allowed to do that."

Mortensen said that as a result of fraudulent purchases, his firm has lost $12,000 to $15,000 on equipment that will never be recovered and owes several thousand dollars more in various fees.

Although consumers generally don't have to pay for fraudulent charges on their credit cards, if their identity has been compromised it can take years and thousands of dollars to restore good credit.

Some security experts say many financial companies have been slow to adopt multiple layers of customer verification, such as requiring a password and a second identification number. Many companies also are not encrypting stored data.

But many firms argue that while data protection is a top priority, such measures could make online commerce too inconvenient for consumers without adding appreciably to security. And security already is a large business expense.

Companies must monitor their computer networks and "patch" vulnerabilities in software that are discovered regularly.

That can be especially complex when firms merge and one company's system needs to be incorporated into another's, said David Thomas, head of the FBI's computer intrusion section.

"It's very, very difficult to stay on top of it," Thomas said.

Moreover, said Mark Rasch, a former federal prosecutor who works for an Internet security firm, "The company has to try to protect against every kind of attack. The intruder only needs to find one."

Some breaches, such as mortgage data from General Motors Acceptance Corp. that was stored on a laptop stolen from a car, leave consumers wondering how seriously companies take information security.

Sen. Dianne Feinstein (D-Calif.), one of several on Capitol Hill sponsoring identity theft legislation, said the CardSystems incident last week "is a clear sign that industry's efforts to self-regulate when it comes to protecting consumers' sensitive personal data are failing."

Thomas F. Holt Jr., an attorney who represents companies involved in breach cases, said he expects things to change when large class-action suits begin to get filed against firms for improperly protecting information.

"When that game is afoot . . . companies will begin to redouble their security efforts and reexamine a lot of assumptions they have regarding the gathering and storing of sensitive data," Holt said.
http://www.washingtonpost.com/wp-dyn...062101615.html




Fewer choices, more giants

AMC, Loews Theater Chains Merge
Anjali Athavaley

AMC Entertainment Inc., the second-largest movie theater chain in the United States, is buying Loews Cineplex Entertainment Corp., the companies said yesterday, banding together to keep once-loyal customers from staying at home and waiting for the DVD.

Once, theater owners could put huge multiplexes in the suburbs and watch customers flock to the summer blockbusters. But this year, Hollywood hasn't come through with those big, irresistible movies. And too many movie lovers are settling into their easy chairs and watching films in their living rooms on their new flat-screen TVs rather than heading out to the theaters.

"It's a durable business, not a growth business," said Matthew Harrigan, managing director at Janco Partners Inc., an investment banking firm that follows the telecommunications industry. "We're going through a dry patch at the box office."

Those dry patches mean less revenue for the theaters, which pay for movies upfront, meaning the longer they run, the more money they make.

AMC did not say how much it was paying for Loews, the third-largest theater chain in the country. The new company, AMC Entertainment Inc., will have its headquarters in Kansas City, Mo. It will operate or have interest in about 450 theaters with 5,900 screens worldwide. The new chain will remain second-largest behind Regal Entertainment Group, which operates more than 6,000 screens.

AMC said it is too soon to tell whether it will close any theaters. It has eight theaters in the D.C. area; Loews has 12.

Peter C. Brown, chairman, chief executive and president of AMC, said in a written statement that the merger would give AMC the opportunity to "blend the best practices of two remarkable organizations as we create an extraordinary company."

Both companies are privately owned. AMC is owned by Marquee Holdings Inc., which is controlled by affiliates of J.P. Morgan Partners LLC and Apollo Management LP.

Loews is owned by LCE Holdings Inc., which includes affiliates of Bain Capital Partners, the Carlyle Group and Spectrum Equity Investors.

After the merger, which is expected to close in six to nine months, Marquee will be the holding company for the new theater chain, and LCE will hold about 40 percent of the stock.

Some analysts say mergers are the way for movie theater chains to stay more competitive in a fragmented industry. The AMC and Loews merger will give the new company a greater market share and lower overhead.

But it will still have to fight to draw moviegoers. Fewer people are willing to shell out $8 to see the weekend's newest release in the theater when they can wait for it to come out on DVD. Attendance at movie theaters has declined for the past 17 weekends in a row, Harrigan said. "This has been a disappointing summer," he said.

One thing keeping moviegoers at home is the comfort of their home theaters, Harrigan said. As more consumers invest in flashy home-viewing systems equipped with big-screen TVs, they decide they'd rather watch a movie from their couch.

"People still want to go to movies, but HDTV and DVR and DVDs have siphoned off customers somewhat," Harrigan said.

The movie theater industry needs to scale up theaters by adding new technology, such as more Imax films, he said. "It'd be nice to have a new toy, because there's a lot of competition for viewers out there."

At the same time, movies don't stay in theaters as long. Analysts say more of them are opening big but then fading away shortly afterward, preventing theater owners from reaping much profit once they've paid for the movie.

The ideal movie would bring in a steady stream of viewers over a few weeks. Harrigan listed "Titanic" and "The Passion of the Christ" as examples of the kinds of movies that keep the people coming and the cash registers filled.

Business has been declining since a peak in 2002, when movies such as "My Big Fat Greek Wedding" and "Harry Potter and the Chamber of Secrets" just kept on going.

Although nothing this summer has quite measured up, there is still time for a box-office hit to turn the year around, said Tom Adams, president of Adams Media Research, which follows the entertainment industry.

The merger comes after both AMC and Loews were bought out by groups of private investors in 2004, and both deals were paid for largely with debt. AMC's holding company, Marquee Holdings, has more than $1.3 billion in debt.

Last year, Marquee Holdings reported a loss of $93.6 million on revenue of $1.8 billion for the year ended March 31.

In 2004, Loews lost $14.5 million on revenue of $923 million.
http://www.washingtonpost.com/wp-dyn...062100520.html




Billy Jack Is Ready to Fight the Good Fight Again
Sharon Waxman

It has been more than 30 years, but Billy Jack is still plenty ticked off.

Back then, it was bigotry against Native Americans, trouble with the nuclear power industry and big bad government that made this screen hero explode in karate-fueled rage. At the time, the unlikely combination of rugged-loner heroics - all in defense of society's downtrodden and forgotten - and rough-edged filmmaking sparked a pop culture and box-office phenomenon.

Now the man who created and personified Billy Jack, Tom Laughlin - the writer, director, producer and actor - is determined to take on the establishment again, and his concerns are not so terribly different. Mr. Laughlin (and therefore Billy Jack) is angry about the war in Iraq and about the influence of big business in politics. And he still has a thing for the nuclear power industry.

"I'm going to say a lot of egregious things," Mr. Laughlin, 73, announced at the start of an interview at his home here in the rolling horse country east of Los Angeles. His face is creased with deep lines, his hair a bleached gray, but he is still entirely recognizable as the handsome Billy Jack.

"We despise both political parties, really loathe them," he said. ("We" might be Mr. Laughlin and his alter ego, or it might include his wife, Delores Taylor, who played Billy Jack's pacifist partner, Jean; but one doesn't interrupt the man lightly.)

"We the people have no representative of any kind," he continued. "It's now the multinationals. They've taken over. It's no different than the 70's, but it's gotten worse. And if you use words like 'impeachment' or 'fascist' you're a nut on a soapbox."

So Mr. Laughlin and Ms. Taylor are planning to bring their characters back to the big screen with a new $12 million sequel, raising money from individuals just as they did to make their films three decades ago.

In this new film, they say, they will take on social scourges like drugs, and power players like the religious right. They say they will also outline a way to end the current war and launch a political campaign for a third-party presidential candidate.

They have already formed a 527 nonprofit committee with the aim of ending the war, and say they will run full-page ads in major newspapers beginning next month explaining their plan to withdraw from Iraq. (Money raised for that committee is separate from the film project.)

"We both have our reasons for doing this," said Ms. Taylor, who joined the conversation midway through. "Mine is for our children - we have three - and four grandchildren. I feel right now America is in a big, big problem. I feel America is falling apart."

"We're not delusional," Mr. Laughlin added. "We'd disappeared from the business. We devoted our time to psychology and religion, teaching and lecturing. We're not wealthy retired people. We're surviving, we're fine."

Still, at least one industry veteran who worked briefly with Mr. Laughlin said he thought the filmmaker would not be successful.

" 'Billy Jack' had a huge impact on me," said Gavin Polone, a television producer who made "Revelations," on NBC this past season, and who approached Mr. Laughlin years ago about making a sequel to his trademark film. But, he said, Mr. Laughlin was unwilling to work within the Hollywood system, and his new project would probably suffer as a result.

"You can work inside the business and try to figure it out, get good writers, build your career," Mr. Polone said. "Or you can say: 'I'm smarter than everyone else. I'll make my own movies, finance them' - and you're never heard from again."

But three decades ago Mr. Laughlin defied the odds and made his mark on movie history with his homegrown tale "Billy Jack" and the sequel "The Trial of Billy Jack." The films unexpectedly connected with audiences during the social miasma of Vietnam and Watergate, but also had an impact on Hollywood marketing and distribution techniques.

"He was the model for Rambo, for 'Walking Tall,' " said Robert Sklar, professor of cinema studies at New York University. "When you think of what 'Rocky' meant for the culture - Laughlin was ahead of all that. He represented the indomitable outsider, and he was the first one in that era. It was also true in the sense in which he fought to make the film, and fought to get it distributed with this terrific idea of self-releasing."

Because exhibitors were reluctant to gamble on "Billy Jack" in 1971, Mr. Laughlin pioneered what is known as four-walling a theater: renting space from theater owners and collecting the box-office profits. He said he hired Mormons all around the country to work the ticket booths, figuring they could be trusted with the cash, and the film took in an astonishing $32.5 million.

With the sequel in 1974, Mr. Laughlin spent $3 million, then a huge sum, on advertising to promote the film. He demanded cash upfront from exhibitors for the right to show it, and opened in 1,000 theaters, defying industry conventions of the time. The first week of box-office sales resulted in a banner headline in Variety: "Billy's Sequel's Grand $11 Mil Preem; Tom Laughlin Stuns Old Film Biz Pros."

After that, he suffered some setbacks. He sank millions into a film distribution company that became a money pit. A second sequel, "Billy Jack Goes to Washington," about corruption in the nuclear industry, was made in 1976 but never made it into theaters. Mr. Laughlin said the film was blackballed under pressure from politicians involved with nuclear power.

Another sequel, this one about child pornography, had to be shut down during production when Mr. Laughlin was injured on the shoot and unable to finish filming. Later he developed tongue cancer, now in remission.

Then in 2002 Mr. Laughlin made a deal with the film company Intermedia for the rights to make yet another sequel. That endeavor ended in a lawsuit, though he eventually got the rights back in 2004. After that experience, Mr. Laughlin says he is done with the Hollywood studios, and back where he is most comfortable: as an outsider. When the new film is finished, which will be early next year if financing materializes, he will seek an independent or major distributor to release it, as with "The Passion of the Christ."

Ms. Taylor said: "This is something we have to do. We don't know if it will be successful, but we're committed. We have to do it. Just like 'Billy Jack.' "
http://www.nytimes.com/2005/06/20/movies/20jack.html