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This Week in Law 256
Denise Howell: (bagandbaggage.com -atdhowell). Next up on This Week in Law, we’ve got Evan Brown, fark’s Drew Curtis, Halley Suitt and me. Does the FCC want net neutrality dead? Will the Authors Guild and to the fair use doctrine? Did the Supreme Court rock AERO? And how does fark use its legal war chest? All this and more on This Week in Law.
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This Week in Law, Evan Brown and Denise Howell, Episode 256, recorded April 25, 2014
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Denise: Hi folks, I’m Denise Howell and you’re joining us for This Week in Law. I’m so excited about today show, we’ve got just an awesome panel for you and great topics in the news and in our panelists’ areas of interests and expertise. First of all, of course joining us, as he does every week. My cohost Evan Brown, hello Evan.
Evan Brown: (InfoLawGroup LLP -@Internet cases). Hi, Denise. How are you doing, happy Friday.
Denise: Happy Friday to you I’m doing wonderfully. Can’t wait for this discussion today. So much has been going on.
Evan: I agree. There have been a couple of interesting things going on this week. Yeah, it should be a good one. I bet it will be fun.
Denise: Yes So, Evan and I have been knocking around the Internet, we’re both getting up there in years, as you might imagine, for a long time. We remember back in the early 90s when fark.com was founded and was the place and continues to this day to be the place you go for your news and information and best links of stuff that’s happening in the world. We are very fortunate to have with us today, the founder of fark.com, Drew Curtis.
Drew Curtis: (fark.com) Hey, how’s it going? Thanks.
Denise: Going great, great to have you on the show. Also joining us returning as a panelist to TWiL, is Halley Suitt Tucker, our author in residence. Hello, Halley.
Halley Suitt Tucker: Hey, how are you guys?
Denise: Doing great, great to have you back.
Halley: Good to be here. I brought my Newt Neutrality, he’s the newt, but he’s a newt, I call him Neutrality for short.
Denise: Well, I think that’s where we should go with the show first since there has been much in the news this week. Probably the most recent breaking policy news has been on that front.
(Webpage – site: Legislation & Policy) (Music playing)
Evan: This is unpacking music.
Denise: (laughter) unpacking music. Yes. Get your newt and unpacking and get him out. So, what has been going on in case you haven’t been paying attention? It appears that a draft of something that was to be forthcoming from FCC Chairman Tom Wheeler's office. The forthcoming open Internet notice of proposed rulemaking, I’m not sure if all or part of it was leaked. I actually never read the full Wall Street journal coverage, because I don’t have a subscription. But there has been much coverage in the wake of it, what I have gleaned; has the whole thing leaked or not? It is definitely on its way to us, I’m a little confused as to why it did not come out yesterday, there was a whole lot of representation that he would. I have not seen it yet, but that has not stopped there being a whole lot of speculation and commentary about what this new proposed rulemaking will mean. Everything, there have been a lot scary headlines such as the Internet has been sold out, the Internet has been Axed Murdered or will be if this goes forward. That last headline courtesy of a great piece by Dan Gillmor really laying out in no uncertain terms that threat to consumers and every Internet user out there, if a truly, how do I put this, lean gated Internet is what we wind up with as a result of these tools. In response FCC Chairman Tom Wheeler yesterday posted something on the FCC blog saying, everyone calm down. We remain behind an open Internet, we remain committed to the fact that anything that is unreasonably noncompetitive is not commercially reasonable that we’re not going to allow that, we remain committed to the fact that and here’s the exact language “that ISP may not act in a commercially unreasonable manner to harm the Internet, including favoring traffic from an affiliated entity.” So, they are paying attention to this concern that Comcast as owner of NBC/Universal should not be given preferential treatment to its own property, for example. And allowing that sort of video stream to have better Internet delivery, then anybody else but what does appear to be on the table is the notion that companies like anybody who wants to have a faster channel through an ISP like Comcast will have the ability to pay for that kind of delivery channel. Mostly what that will apply to is very video intensive sites like Netflix. For example, or NBC/Universal be able to pay to have their delivery to consumers in a faster, more reliable way, then perhaps someone who has not paid for such service. So, why this is so concerning to people it seems to up end the notion to a completely neutral Internet where everything is delivered, as well as it could be based on traffic and the abilities at that time. That certain people will be able to pay for preferential treatment. And that the ISPs are getting paid on both sides, they’re getting paid by the consumers for a certain level of service and they will begin to be paid by the people who want to have really premium service for delivery to consumers. So, there’s much handwringing about this. The FCC wants people to remain calm. But there does seems to be an ability here or non-neutral and less consumer friendly Internet to be the outcome. So, teeing it up. I would love to see what all of you think about this. Evan, let’s start with you.
Evan: No doubt it’s a big lightning rod issue. I think it is a habit of a lot of people to prejudge a lot of these issues, if you’re going into a discussion about net neutrality people formulate for the most part, how they feel about it and anything to the contrary of extreme openness in the network is met with a lot of disdain. And I’m greatly generalizing but it’s a polarizing issue. So, first of all I would say, let’s chill out. We don’t even have anything to look at really here. We just have essentially a pronouncement as you said, Denise. There’s just this indication that something is coming, which really is only going to be an indication of something else coming later. Namely, the rules that actually implement this. So, one who wants to maintain his or her credibility about talking about these things ought not to be using hyperbole and homonyms sort of attacks at this stage. And right now. Let’s just keep our heads about it. With that said, to take on a substantive critique of one who would say anything less than a completely open and completely neutral network is an anathema. Let’s look at why this is even an issue at all, the real heart of it is; is the presence of this fast lane here or the ability for Internet service providers to allow or enter into an arrangement whereby there is a fast lane of traffic to the consumer’s home. If there weren’t at least something good or redeeming about having that ability, it wouldn’t be an issue at all. Truly, if it is actually going to come into reality; if the FCC allows this to happen and there are these sorts of arrangements entered into, and these purchases made. It’s because the consumers want it. It would be pretty awesome to have super high definition Disney content, for example, come into your home. Maybe you have a home theater and you want to watch something in really, really high quality, and high fidelity sound. Think about technology, what it will be 10 years from now, even what’s after 4K, for example. So why not, what is, I don’t want to necessarily sound like I’m advocating I’m just trying to moderate both people sides of this. So why not start from the premise that there could be something, redeeming, something good about a system where if you want to be insured that you are going to get a good experience because you have a paid for premium access to the delivery of content through an enhanced mechanism, why is that necessarily inherently bad. Is the question that I would want to take to the things as we see them unravel or unfold or unravel, however, you have it on this.
Denise: Well, I kind of like that idea where it would sort of have to be an on-demand from the consumer side to initiate. So that unfortunately that would mean that someone like Disney would have to pay for the fast lane anyway. But then it would only be delivered if that is what the consumer asked to have it happen and the consumer was willing to pay for it as well. That’s certainly one way that this could go, I’m kind of skeptical that it would go that way. Halley what is Newt worried about?
Halley: (laughter) (Author, Founders Less Than Three) Well, you know me and Newt we are not lawyers, but Newt is kind of real innovator. And he wants to put a show on, he knows the social media has run a range from it used to be little written blogs may be around in 2000, now we’re seeing more social media events pictures plus words, then we’re seeing a lot less words a lot more pictures and videos. And he knows his show is going to stink. And nobody will watch it, unless it’s got video and he’s really good on video, he’s a real mover and shaker. So the point is, here’s what he says late at night to me. He’s like, do those people actually want to make it fair for everybody? Is this neutrality idea fair to get everybody a chance to communicate with everybody, or is it their business, and do they want to keep their business and keep their business the way it has been? And, he reads. He reads Consumer Reports when he’s not bugging me and he’s read the first consumers (holding up a January, 2014 issue of Consumer Reports). This was January, how to get more, a better deal on your phone and why is that because the phone people, you feel a bit as a consumer you cannot trust them. Then he read in March, there was a consumer on best deal on TV deal, oh, there’s Netflix, Amazon, Hulu, and we’re suddenly got these different choices and who do we trust there. And then by May he read this one and went into a panic (holding of Consumer Reports May, 2014) “Break Free from Cable”. So he’s like, all these people who run this and make these decisions are in businesses where they’re losing their shirts. Not in my house. We got rid of cable. We just have local TV and we have Hulu, Amazon, when we want to watch movies or TV. So everything is changing a lot and as a consumer, but also as a producer of content and communication people. He wants a fair Internet that lets his show get to as many people as fastest speed as possible, but he’s difficult. If you want him to come live at your house. I will send him, he’s getting very annoying.
Denise: I’m afraid I can’t guarantee him a fast channel to his subscribers either. Unfortunately. Newt’s going to have to start saving and perhaps have a fund set aside for that, I share your concern, Halley. That small businesses are going to find that a challenge. As someone who runs an eight person shop. Drew what do you think about all of this?
Drew: Yeah, so interestingly, I have even more perspective, than that. My first company was a dial-up Internet server system that I started in 1996. And what happened there, With DSL was very similar to what is going to happen with net neutrality in that, it’s all right for Contac to say we won’t upgrade service, anybody who is capable of pain. We will just let them do it. But the problem that we had with DSL rollout was BellSouth had an Internet site also they would charge the same rates to as everybody else, but at some point, the companies converge at the top and money just flows from one side to the other. So you’re not talking about a serious outlay of cash by your number one competitor. And then they end up pricing the tiering so that as a small ISP, we had at most 3000 customers, in order to get any kind of a margin off of it at all. We had to guarantee that we would sell 150,000 DSL lines in two years. The only company capable of doing that was BellSouth.net and by default they within 2 to 3 years ran every Internet service provider in their region out of business. Simply by moving money from one balance sheet to another, and that’s all it took. Because AT&T CEO and others have gone on record saying that they feel that they should own the Internet, that they should own Google, they should own Amazon. In my own opinion that is just a step in that direction, in the very least, it’s going to be a straight up lockout, unfortunately. So, I think this is really dangerous to the open Internet. If you like the companies that we have running everything and you don’t mind, Disney, Amazon and Google owning it all then there’s nothing to worry about, but me personally.
Denise: Yeah, I think you echoed some of the points that Dan Gillmor makes in his piece. He lays out pretty dramatically the downside of this. And then tries to offer some good responses how we can deal with the problem. He is a big fan of community broadband networks, getting behind those would create more competition. He’s a big fan of requiring the ISPs to share their lines with competing ISPs and points out that other countries do this, then maybe we should give it a try. And then he ends with what he calls the best solution. Taxpayers should pay for a fiber everywhere system and then let competing ISPs use it to compete in genuinely free market. Then he says, don’t hold your breath on that one.
Evan: Wait, wait, it’s a government owned network, but it’s a free market? That’s what he’s proposing?
Denise: Well, he doesn’t say who owns it. Taxpayers should pay a fiber everywhere system, but he is not saying who the taxpayers are paying.
Evan: I’ll have to think that one.
Drew: That idea has been floated for the last 15 years. It came up when the DSL thing was around, and it is not really easy to convince people that they should cough up billions of dollars for no work, that if you think about it all, old people don’t know that it’s there. Those of us that are our age are aware of it as a separate entity, but my kids don’t even know the Internet exists. They know they do stuff that’s connected to it, but they don’t think of it as a separate thing.
Denise: Yeah, that’s an excellent point. All right, so there’s rule-making coming. We do know this. We know it will be out for public comment. We know that once its text is available to be parsed, we will know exactly what the ramifications are there’s a lot of concern about what commercially reasonable or unreasonable means. And hopefully there will be some parameters there. . I do think just based on the reaction to the fact that an Internet fast lane is a possibility that the FCC is going to be getting a lot of pushback and information about this. So, we will just have to see what happens. The funny thing about Dan Gillmor’s piece here is how many times, at least five or six times. (Laughter.) He refers to FCC Chairman Tom Wheeler as former cable and wireless industry lobbyists FCC Chairman Tom Wheeler, so we know what Dan thinks about Wheelers ’affiliation and proclivities. But again, this is just kind of a wait and see thing. The other thing that we haven’t discussed is the possibility as the DC circuit left open in its court decision invalidating the original open Internet rules of reclassifying broadband as a common carrier and going after regulating it that way. Tom Wheeler in his post points out, and of course I already shut that, but he points out that if you reclassify there is still a commercially standard that comes into play there. So we are not really accomplishing much by reclassifying we are still bound by that same sort of amorphous standard so we are going to need to get some clarity on that before, I think people feel good about that, adopting the new open Internet rule. Any final ideas on this, Evan?
Evan: No, other than to just reiterate. As for me I am trying to show restraint about saying too much about it because, it’s way too early in the game and something meaningful has to happen one way or the other. So, before we start during stones without understanding things try to see what actually is being proposed here.
Denise: Halley and Newt anything you want to kick in?
Halley: I wanted to get a definition of commercially reasonable, what is that? You guys are the lawyers, I really find that very confusing.
Denise: Well, I think it’s that safe to say that one thing Tom would consider commercially unreasonable is if Comcast as overarching owner of NBC/Universal were giving its own content network NBC/Universal; some sort of more preferential treatment than anyone else was able to get that. That would I think pretty clearly the commercially unreasonable, but once you get away from one of those clear examples you’re right Halley, it gets a little difficult to pin down. What exactly Tom Wheeler said as reclassifying to the other regulatory scheme is that even Title II regulation, he says, which many have sought, and which remains a clear alternative only bans unjust and unreasonable discrimination, so we are kind of in the same boat, whichever category we put this under. What were you going to say Drew?
Drew: Well, I think the way that it’s currently looking it’s going to be degrading service by default, we will just upgrade anyone who is willing to pay for it and we won’t touch anything else, it ends up being the same thing at the end of the day.
Denise: Yeah, and what I hate is if you’re a wealthy consumer and you can pay for a certain very high level of Internet access, that even then your ability to get everything at a high level of delivery is not going to be to guarantee. And I worry about the non-wealthy consumers who are paying for a base level of Internet access. And I think that that’s where you are really going to see the degradation. But again, we are speculating and should wait to see what’s actually in the proposed rulemaking and we will go from there. One thing again that we are waiting for is the decision in the AERO case. That was argued on Tuesday and it has a great impact on entertainment, television, as we know. So let’s talk about that next.
(This Week in Law: entertainment law website)
Denise: So the Supreme Court heard oral argument for one hour on Tuesday, in the AERO case. And the justices telegraphed some concerns, we can’t really know how they’re going to come out, but we know that it doesn’t seem that any of them, I like to talk about litigants who wear white hats and black hats. Are you coming into court with a fair and just, and good story for the court to try and get their teeth into, can they really get on your side; are you wearing the white hat. I did not come away with the feeling that any of the justices thought that AERO was wearing a white hat here. They spent a lot of time during AERO’s portion of the argument trying to get to why exactly they designed their system with all the little tens of thousands of antennas when one would be more efficient and seemed sort of fixated on the notion that they are driving that antenna farm through a legal loophole. And, who know how much that will shade the court’s analysis, but I always think that white hat, black hat thing plays in. Evan, you very quickly after the argument posted a link to the full transcript. Did you get chance to read through it all?
Evan: I didn’t read through it all, I listened to some of it, but I have relied mostly on commentary from people who have hopefully actually read it. There’s a good article on arc technica, I think it was Joe Mullen, yeah, on the 22nd who summarizes it pretty well. An hour-long hearing is a long time to listen to or a lot to read through on this, but I get a new sense, of course. Hopefully after learning about what the hearing was actually like, sort of a new sense, a new perspective. There seems like there’s this desire on the court’s part to want to, what’s the word I’m looking for, to come out not on the side for AERO or to somehow protect the cloud without coming out on the side of AERO more precisely. Because there has been this tendency in our commentary to say that if AERO loses, the cloud loses or if AERO wins over the air broadcast loses, or something. I hope I’m getting that matrix straight. You know what we’ve been talking about here. There seems to be some legitimate concern on the part of the justices. I know Justice Breyer in particularly in his questioning was very concerned about how to protect the cloud services. Justice Sotomayor was like that, as well. So they see this problem, they certainly recognize that as a real issue here and it certainly is problematic. And I thought it was also very interesting, another thing that sort of struck me by surprise is. This was Justice Sotomayor at the very beginning saying, Why is this AERO not a cable company? That actually gave me, I had lunch with an intellectual property professor here in Chicago and she was saying that maybe that’s going to be the out for the Supreme Court on this. I’ve always said the Supreme Court could do something strange here and not even really get to this question of the analysis under the transmit clause and you got that indication from Justice Sotomayor’s questioning and Justice Breyer’s questioning at the beginning, maybe they’ll just find that it is like a cable company here and remand it on that basis, and then they don’t really have the, ostensibly for the time being, it would ratify the technology, but doesn’t get to the nuances of the way that one is supposed to read the transmit clause, which is really what we are excited to hear about. The analysis under Cablevision in the Second Circuit here. So, it was interesting and surprisingly, there may be Justice Thomas thought that area was okay, he just didn’t speak up on it, yes. But there was no sense that anybody in the room thought that Aero was wearing a white hat in all of this.
Denise: Yeah, Halley?
Halley: I don’t know white hat or black hats. But in terms of innovation and entrepreneurial activity, and in this whole space. It’s going to be incredible. So it’s kind of exciting, I know its very being, all on my 30,000 foot ladder about what’s happening, but these technologies are changing everything that is going on. I love the guy holding up the tiny little, this is your little antenna. (Laughter.) It’s just changing so much, I think it’s going to be hard to, to see lawyers and regulatory chasing after entrepreneurial. It’s one of my favorite things.
Denise: Yeah, and that Joe Mullen piece that Evan mentioned is really a good analysis of the argument. Joe spent some time armchair quarterbacking the lawyers and wondering when they were being telegraphs of concerns for the court why they didn’t follow up and address those concerns. Which is easy to do after the fact and harder to do when you’re standing in front of the justices of the Supreme Court. But he makes some good points on things that could have gone better at argument. Drew, are you following this closely?
Drew: Not super closely, but I’m sort of aware of the issue. I feel like whatever the decision ends up being is going to be on the level of accordance with The, whatever the case was back in the early 80s where the Supreme Court, I think it was the Supreme Court decided to allow people to make personal copies of things on the videotape. Is that right?
Denise: Yes, the Betamax case.
Drew: Yeah, I have a feeling that depending on the how it goes, it could be on the equivalent of allowing or shutting down that capability. So, I think this is an unfortunate area where there making the decision they make, And the basis of this case are going to decide for an entire industry.
Denise: Yeah, no I agree with you and, I’m trying to find? The first link in our rundown, Derek Khanna who we have had on the show before did a very nice analysis, of not so much the argument, I think it was actually written before the argument, but just of the issues in the case.
(Website: Politix: “the supreme court case that will decide the future of television-AREO -billion dollar company or billion dollar liability? Op-ed by Derek Khanna)
Denise: and it goes back into the history of the Sony Betamax and the arguments that were being made. There about how, according to the people that wanted Sony driven out of business, it was going to shut down the motion picture, and television industry altogether. And Jack Valenti, comparing the VCR to the Boston Strangler to a woman at home alone and, I mean, were seeing similar kind of hyperbole here and I think Derek does a really good job of showing how we’re kind of reliving that scenario and that the same kinds of concerns are at issue here. He also points out, and this is the first time I’ve seen anybody make mention of this, if as entertainment industry says in the event of an AERO victory they are going to stop doing free broadcast television. Of the kind, I am assuming that you’re getting at home, Halley. If they actually do shut that down. What a boon that will be for innovation in mobile and telecom, because of all the spectrum that will be freed up.
Halley: Exactly. They should be careful of what they wish for.
Drew: That’s great.
Denise: Yeah, exactly.
Halley: They should be careful. It well, even now, I feel there is something I’m going to call like retro- innovation, where we are going back and using a dusted off VCR player instead of DVR. We’re just doing all these things and messing around with all the choices in ways that are fun and as an entrepreneur, I’m just like , oh my god there’s so much going on in this. So, it’s going to be very exciting.
Denise: Drew, what do you think about the unanticipated availability of spectrum here?
Drew: Yeah, no, that would be amazing. I just don’t believe that they at the level to shut everything down, that seems like, that seems like kind of a bit far to go. That would be awesome, think about all that stuff you could do with all of it. I think they should totally shut down broadcasting TV, that’s a fantastic idea. They never would have considered it before. I’m glad they suggested it, let’s do it.
Denise: Hopefully that will be a policy consideration that the court takes into account.
Evan: Yeah, why couldn’t they have said the same thing in 1984 when, after the VCR, if all the content is going to be infringed because you are taping reruns of, what is it that we talked about, what was popular in 1983 or 1984-you know “Webster”, tape it on Friday night, where’s that it’s going to kill broadcast.
Drew: Greatest American hero, let’s go with that one.
Evan: There you go, Knight Rider, The good old days, Golden age. You can see what happened, yeah, they had this Betamax decision in television broadcasting went downhill from there. In the 1990s,
Drew: They never made any more money ever.
Evan: Right, so, but look at how the VCR helped home entertainment, the home entertainment industry. It gave it a whole new revenue source. It’s cliché to point that out, despite what Jeff Valente said, there were billions and billions of more dollars headed towards to Hollywood because of the VCR. I’m waiting for a smart person to, to tell me, to suggest what it is that suppose AREO wins, the technology is validated by the Supreme Court, broadcast television may or may not go away. But what is it that is going to give the boon to the content industry that nobody is foreseeing now that Jack Valente did not foresee in the days leading up to the argument in the Supreme Court over the technology of the VCR. There could be something really interesting, ready to happen here; that’s going to change the way we consume content. And I have no idea what that is, maybe it’s nothing, maybe there’s, maybe it’s just there’s no room for that innovation for that to be a boon to Hollywood. I am not trying to be a Hollywood lobby here, we have to find something here to support Hollywood, but there very well could be something here and heaven forbid, we might actually enjoy something that comes from big content. So, whatever that is, somebody let me know what that might be.
Denise: Derek makes a couple of other really good points, I just wanted to point out before we leave this discussion. One is that the whole reason that we are in this situation, the whole reason AERO exists is because you should be able to do what AERO gives consumers the ability to do through your cable or satellite television anyway. You should have all that functionality. You should be able to watch TV on demand or live on your mobile devices in a seamless, nice way. And so the reason there is room for AERO to come in and serve that niche is because the satellite and cable provider does have dropped the ball on the innovation. They are trying, but they really haven’t perfected that, I think anybody would agree. And so, they’ve left this door open and now that AERO has driven through it, they are trotting out Boston Strangler type arguments again. But then, the other point that Derek makes is within two years of the endorsements of home recordings in the Betamax case; far from Valenti’s fears of doom and gloom. The content industry actually made more money from home video sales then from in theater sales. And there’s no reason to think that wouldn’t happen here, as long as the satellite and cable companies have allowed another company to scoop them technologically here they are still good and benefit from the broader distribution of all the content. So, I think those are just great points as well, and hopefully the Supreme Court has all of that in mind, as it chews on the case and comes up with a ruling for the end of this term. Any more thoughts on this. Evan?
Evan: No, I don’t think so. It’s intriguing. So something. My percolating as were talking about something else because I do think the way that it applies and the consequences of it clearly could be a harbinger to how other areas of technology laws should be thought about. It’s all good.
Denise: Halley, how are you getting your broadcasts TV? You don’t have cable so do you have an antenna on your roof?
Halley: Yeah, we got rid of it. I bought this nine dollar thing, it’s a receiver thing that’s right next to my TV that brings in all the local channels, and I’ve got tons of local channels. What really happened was my 18-year-old went off to college, so he was the one watching cable. We realized, who cared. We don’t need it. Other friends, every night. We have a dinner party and we’d talk to other people and they said, get rid of it, you don’t need it. And so we have that and we have a ton of, we watch a lot of series in the evening and so. I was just going to add one thing, one of my most interesting things this week I have been reading that I think informs so many decisions about what’s going on, is the Pue research. I think you probably have all read it, the presentation about what’s going on, this is like many of these battles are battles between old boomers getting ready to die and lots of younger, very more colorful and diverse, right, populations, inventing what they need. I mean our ideas of TV and cable they’re old, they are really old. And, I’m very excited, maybe because I have an 18-year-old to see what they come up with. When they’re using Snapshot and they’re using all these other things, they are doing things that we don’t have a clue how to serve the needs of that new set of people in this country. And, I think many discussions are going to be informed by that. If anybody didn’t get a chance to read the Pue Trust thing yet, and one of the great twitter line was “we’re getting grayer and browner, right, older, this is going to be an older population and a diverse population. They are very creative and they hold nothing sacred when it comes to TV or entertainment. Their idea of entertainment is so liquid, it’s just interesting. So, they have Snapshot lasts for 10 seconds, so they have a heckuva great time with that. And that’s all they need, so.
Denise: Right, and they’re going to need Spectrum. (Laughter.) We’ll just have to see where that goes. Drew any final thoughts on this?
Drew: No, I’m pretty good. I think that’s all I got. I’m sobering up Is the problem.
Denise: Don’t do that, it’s Friday. Well, as Drew alleviates his sobriety problem. It might be a good time to think about having a snack. If you are thinking about having a snack, you really want to hear about our sponsor for this episode of this week in law. And I think I will dedicate this sponsorship segment to everyone who works late at night. I’ve certainly been there done that, starting in college when I used to go study in the wee hours to be able to really focus and get stuff done, and not at all because I have been doing too many other things during the term to stay up on my studies so that I had to cram for exams.
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By going to nature box.com/twit, when you do that you click on the continue button to choose between three different subscription options, then you place your order, once you are a member you can select which snacks you would like in your monthly box and you can have them shipped to right where you might be hanging out in those wee hours of the morning and need to reach for something good to snack on. If you are vegan, you can select that, if you like to eat things that don’t have soy, they’ve got you covered there, if you need to be gluten conscience. They have that as an option, lactose-free, yep, that too nut free and non-GML as well, and you can pick which tastes you like savory sweet or spicy and you can mix that. Then it sends you is great tasting snacks right to your door or your office with free shipping anywhere in the US and then you’ve got healthy and satisfying snacks on hand. Things like barbecue kettle kernels, French toast, granola, chile lime pistachios, oh my gosh I got so hooked on those things. They are definitely a family for me. But I don’t have to feel guilty about it because they are good for you. Here in our house, we have one nature box from the sponsor and this is all I have left, and I have been hiding it. They are the sourdough chatter pretzels, they are delicious. The bag is almost empty, but there is enough to get me through the show here and yet, I love my son and my husband but they are not getting their mitts on the last of these. All this stuff has zero trans-fat, zero high fructose corn syrup and nothing artificial. It’s the snack happy gift that keeps on giving. You can get a 3, 6 or 12 months subscription for yourself or someone special, family member or friend. And don’t forget that swimsuit weathers is almost here, so it’s time snack smarter. Leave that vending machine alone, get in shape with healthy, delicious treats like honey mesquite almond. So remember to give 50% off your first box go to nature box.com/twit stay full stay strong, go to nature box.com/twit. Evan, how are the nature box treats faring in your household?
Evan: Well, I really concern about swimsuit season, I want to look my best so I have been enjoying poppy seed sticks today (holds up a bag of nature box snacks) and it’s about down to here. Also, cranberry almond bites, which I am working on as well (holds up a bag of nature box snacks), but really enjoying them. So I certainly second everything that you said and we’re about ready to actually make the decision to subscribe for ourselves and for some people that we know and love, so yeah, good stuff, good stuff.
Denise: Great. And we thank them so much for their support of This Week in Law. All right, so one of the reasons we asked Drew on this show is; Drew is a famous patent troll warrior. And has successfully gone round the block with the patent trolls. So we want to hear all about that, and since we’re talking about patents. Let’s keep the discussion with our fun little bumper.
(Bumper music playing: It’s Patent Time)
Denise: All right, so, over at fark.com. You guys have various legal concerns that have come up, you say the one patent troll that you’ve come across is the one that you soundly defeated. You gave a great Tech talk on this Drew, so can you sum that up for us.
Drew: Yeah, basically I threw the playbook out on how to deal with patent trolls. What you’re supposed to do is just pay them, and they were coming in at a level where, the problem with the trolls in the first place is, they sue you for an amount of money that’s less than what it will cost you to fight. And they are counting on the fact that you can do basic math and that you’ll would just write them a check and leave. (Website:TED: how I’d be a patent troll) And any other outcome to them is less positive. So. My problem is I’m from Kentucky and I don’t like writing people a check for legalized extortion. It seems wrong. And I like to fight. So I basically, went after the guy instead and everybody told me I was crazy. And honestly, I felt I was crazy, but I not going to say that they were wrong but I did everything in the normal patent troll playbook completely backwards. And lo and behold, it worked.
Denise: So, they claim to have a patent on distributing press releases?
Drew: Yeah, they claim that it was a patent on entering information into a web form, and then an algorithm on their end would compile it into a news release and will email it to people and they said we violated that patent.
Denise: And was there any kind of tie in between that patent and what you do at fark or do you think they were just firing a broad range and seeing what they could shake out?
Drew: So, there’s an interesting end to that question. First of all, there is nothing remotely similar to what we do on the site. But that is when I realize there was a problem with patent law. Because like anybody on this call right now could have been sued under the exacts same circumstances because the way patent law works, you have to prove you don’t infringe. And so, I was flabbergasted because I mean they literally could have gone after anybody and gotten the same result because they were asking for less money. And this is actually what the patent, on scanning documents into emails, owned by a company called MPHJ. It filed off the last count was 16,245, threatening legal notices to all kinds of businesses that scanned documents into emails and ask for $1000 per employee license. And nobody was immune to this kind of activity. They could just fire it off and collected tons of checks doing that, and in my case, they came after me expecting to do the same thing, but I ended up shooting them down. But the reason why they came after me is because they could not lose. There was no way basically if I proved we did not infringe, they would just drop the case, and no problem there, they just get on with it. So, since giving the tech talk, I have come into contact with a number of people who do a much better job of fighting patent trolls than I do, because I’m not an attorney. And one of them in particular is Lee Chang over at NewAg, who develop this strategy for NewAg back around 2006, when he took over their legal affairs; and it is running out of lawsuits to deal with. Every other retail company out there Amazon, Walmart, these guys get sued all day long because they don’t own patents. NewAg does not because they fight every single one of them, and then when they win, they file a counter lawsuit to go after fees and the damages due to fees and go after the attorneys who actually filed the things in the first place. And it turns out that patent trolls just don’t want to put up with this crap, it’s an amazing strategy and it works really, really well. And I’m surprised more people don’t do it.
Denise: Yeah, it’s great to have you on the show. We’ve had Lee on the show and he is, I think, one of our most popular guests ever.
Drew: He’s awesome.
Denise: Because, yeah folks are big fans of not rolling over and actually standing up to these trolls. So in your tech talk, you ask for some screenshots of anything on your site that linked what you were doing to any kind of infringement and that’s what triggered them, you think, just speculating to finely settle.
Drew: Well, yeah, since this is a legal show I can go into the baseball version of this. We got to discovery and refiled first and we asked for two things that I think got me out of it. One was screenshots of actual infringement and the other one was. I dug up the name of five people that I thought were probably involved in this patent troll and then I worked with my good friend Matt Cutts, who is a fellow Kentuckian who has a Google search engine and he dug up five more names for me. So, one of our items was who are these 10 people, what is their ownership at stake, do they benefit financially from this lawsuit and then they missed their deadline to respond to discovery. Which traditionally, you’re not required to, but it’s customary to give them two weeks to respond, but as you probably well know if you miss your discovery response deadline, you can’t strike questions and that’s when these guys rolled over.
Denise: Ah, brilliant. That’s great that worked out for you. What other sort of, I don’t know, what other sort of interesting things happened during the course of pursuing this with them?
Drew: Well, what was interesting was is that I was kind of surprised at how it went because I was sued along with eight other defendants. It was like Yahoo, AOL, DIG was in there, Readit was in there, Condé Nast on. All of these very large companies and you have this first meeting, and we’re going to have joint defense, and we’re going take them to the mat, and then every couple of weeks somebody dropped out like clockwork, and I can’t tell you how many same pattern over and over and over again. And it was brought to my attention by somebody who was a CXO level person, in a large company and I forget which. But they asked a real interesting question that someone who is not an attorney, how I justify to my board that I spent money, more money fighting these guys. Then I would have spent if I just written them a check. And my response has been, we have discovered a pattern in companies that are likely to settle; are likely to get sued by patent trolls because, just like anybody else they can run a LEXIS-NEXIS search and find out how many times things have been just dropped. And so, if I was a patent troll and I had a crappy patent, I would first locate people who were likely to write checks, and just sue them and just collect checks and cash them. So it actually makes you a more likely target. If you think about it, it’s the school bully in the lunch yard. He’s going to go after the people that aren’t going to fight. It’s not that they can’t fight it. They don’t want to because they, they would rather just cash checks, and honestly who wouldn’t, I would.
Female voice: Yeah.
Denise: So one of the things I was interested in Drew and we’re so glad that this worked out for you and that you are not under NDA, and can talk about it. One of the other things out that you pointed out in your tech talk often are people feeding the trolls, but then agreeing as part of their settlement process to keep quiet about it and you just “X” that out of the settlement agreement when it came your way and your lawyer said “oh, that will never fly”, and it did.
Drew: Yeah, it was kind of stunning really because when they called me up, the call was actually sort of scary. They said we have never seen anything like this before, and I was like oh, great, here comes. And they like, they struck the NDA and they signed it, and well okay, let’s sign it and fax it back, and get out of this thing. My goal there was, that I had already spent a lot of money fighting this thing, it sucked, but one thing I could get out of it would be the ability to talk about it to other people and explain what we went through. And the other thing that happened was that there was still one other defendant in the case when we got out for zero dollars and that was a well so I called them up and said, guys, we just got out for zero dollars, I recommend start a settlement right around that number. My problem was, I was at a tossup of is it going to be zero or should I ask them to pay for my legal fees. I went for zero and they didn’t counter, and I lost my legal fees, I will know for the next time.
Denise: Yeah, definitely. Evan do you know if true would have, if that’s a good bargaining tactic for people who find themselves in Drew’s situation, is there a good basis to go after your fees in these cases?
Evan: Well, sure. I mean, a lot of it is going to depend, it’s a little bit harder to get the recovery of your costs, and attorney fees in a patent case, then, in copyright cases. But it’s going to be a very case specific inquiry to be made. What kind of leverage, the string that the other side has or feel that it has, whether they are going to be paying you instead of settling zero dollars. And I guess the observation that I would make on the nondisclosure provision or the lack of confidentiality provision, it kind of goes both ways. Sure, in this case it was a good thing because it was zero dollars, but as you’re talking about Drew, there’s this sort of blood in the water affect that can happen if you do settle these things. Where the troll will see that one party is willing to settle and so the other trolls will come. I guess, I’m mixing metaphors, sharks and trolls, but you get the point, little green people with sharp teeth swimming around in the water.
Female voice: Newts.
Evan: Newts seem so placid, though. They are much more into these socialist issues like that neutrality. (Laughter.)
Drew: I would actually argue that you should always try to recover fees, and it’s not a matter of whether you could get them in the first place are not. It’s more of a deterrent. Trolls really don’t want to fight, and think about it, they hire attorneys on contingency, so they have to pay out-of-pocket for everything other than cashing a check and so you are actually costing them money, you’re burning them up in the process and attorneys are risk averse individuals. No offense. But all you have to do is convince them that they might personally be on the hook, and they will just get the hell out of there, there are plenty of other easy targets out there. And so that is why Lee doesn’t get sued anymore, it works.
Evan: I’m so offended, don’t ever say that.
Denise: Yeah, that is awesome. We had that as a tip on this show earlier, you don’t mess with Lee Chang. I’m curious to unpack Drew as the result of both your statuses. The founder of successful website and also having gone through this go round with a patent troll; if you are anti-patent or anti-troll, and I was wondering if you actually or on behalf of fark have any patents?
Drew: I actually don’t. It turns out, knowing what I know now I could have filed a ton of them, like legitimate ones. The only reason I would have done it in retrospect, go back in time to 1999 would be to prevent stuff like this crap from happening to me basically. But in general, no, I’m not anti-patent, I think the problem is that it’s anti-vague patent where you have the issue of, for example, I been working closely with Adam Coronel on the podcasting troll patent. And, in particular, it looks like the reason this thing got approved in the first place was that there was a slight, but the patent clerk thought was an innovation but it was not what they got sued on. The patent troll is claiming a patent on podcasting, and it turns out that what he says the actual innovation was, this is debatable, because I still say it is a bunch of crap, but that there is a downloadable list component to it that makes it innovative. And I say, not you got to be kidding. I think I’m not anti-software patent necessarily either, but I have yet to see anything that is a complete innovation. And the reason why I am not, it seems to me that certain things that we should protect for example, if I cure cancer. I don’t want Merck to go in deconstruct what I did and just, run with it, it doesn’t seem like that’s a really good idea. Other than that I am not anti-patent, but I don’t think there’s a lot in the world anymore that you could probably say would qualify for one.
Denise: Okay, Halley, any thoughts on patents and patent trolling for we move on?
Halley: I do, I really love the TED talk. It was great. Thanks. Can you mention, you have that great data on how much it costs people and how much terrorism costs people? The comparison.
Denise: Oh, yeah, that was great, that graphic in your TED talk
Drew: That was a Boston College, Boston University study that was online, it is cited in the media quite often. What I did was, I added up the cost of essentially, they racked up how much patent trolls costs and I added that together over the last 20 years, and I looked up what the Iraq war cost, and it turns out that patent trolls have been more expensive than the Iraq. And that is including the damage from 9/11, which you shouldn’t necessarily lumped together, but I did because it is still smaller.
Halley: It was great. That was great. I really liked it, everybody should watch that it was really a good TED talk, it was great.
Drew: Yeah, and I’ve got to say to there is sort of scary things in the works like Intellectual Ventures is going to raise $5,000,000 in capital to essentially to sue more people. Well, here’s the kicker, the company is structured like a venture capital outfit, which means at minimum, the implied investment to investors who invest $5,000,000,000 in this company. You will make 40,000,000 in the next 5 to 10 years. And that’s, IV alone is expecting to extract $40,000,000 out of the economy. So I’ve been talking to friends of mine in the stock market and I’m like if you guys investing these things, you should get out. It’s technically a pyramid scheme, and they say, why is that. And I’m like, well, how much money are these guys going to extract on the US economy before the government’s going to step in and shut all this down. I mean, is it $1,000,000,000,000 because we will get there. Is it to because will get there. Is it five because will get there and you got a pick your number and at any rate, it’s accelerating to the right? And eventually, we were hit whatever that is where the government just throws the brakes on and says okay, we’re going to stop this whole thing and not only should hedge fund investors be worried about that, but people who actually own legitimate patents like Intel and Cisco should be worried about it, or people who pay a lot of money for patents like Google and Microsoft because they are going to be rendered worthless by this activity. And you know, they can let it continue, but it’s pretty clear that at some point it’s going to cross a threshold and it’s going to stop.
Halley: Well, I have two words for that. Commercially unreasonable.
Drew: Yes, there you go.
Denise: (laughter) There you go get the FCC involved in it. All right, one thing that we should do before we go too much further is drop and an MCLE passphrase into this episode of This Week in Law. So that if you are listening for continuing legal education or other professional credit, you can demonstrate that you have actually seen or heard this show and gotten the benefit of all the great insights and legal analysis that we are throwing at you today. So our first MCLE passphrase is going to be, drumroll please, Evan’s Speedo. Going back to our discussion of swimsuit season rapidly approaching (laughter) Sorry Evan, I couldn't resist.
Evan: I did swim in college so there was a time when…
Denise: There we go. And just to compensate for Evan’s Speedo I'm going to let you come up with the next MCLE passphrase and later on in the show you can drop in whatever you like. How about that?
Evan: Sounds good.
Denise: If you need more information about getting MCLE or other professional education credit for listening to the show head on over to the twit wiki at wiki.twit.tv go to the this week in law page and we've got tons of information there for you. Moving on, Drew, as we've been discussing runs this very social website and has had a patent case come up that we've been discussing but there are all kinds of legal issues that impact Fark and the way that it operates so we want to go into some of those and most of them deal with the law of the social web. I love the sound effects Sally. Over on the Wikipedia page for Drew it points out that you take a six dollar a year salary from Fark Drew. I'm curious why six?
Drew: Actually it's 60,000 not six and it's because I live in Kentucky and money goes a long way here. I live like a king let me tell you it is great.
Halley: Is it another planet that they made, like Google made it?
Drew: Just about.
Halley: 6 dollars!
Drew: My Wikipedia page has a lot of errors on it; one of them says I tried to copyright NSFW that's actually true but I did it as a joke. But I think it still says the last time I checked that the application was turned down because I accidentally submitted nude photos of myself and that's not true but had I thought of it I would have done it.
Denise: Or maybe at least Speedo clad photos of yourself… So the balance though is that part accurate; the balance of what you don't take out goes into Fark’s legal war chest?
Drew: That is correct and mostly because I learned that on my first company, which wasn't driven out by legal activity - but you always need some kind of war chest and having done this for 15 years now the only things that have been existential threats have been legally based. So it’s one of those deals where if you don't have the war chest to fight this stuff you are kind of hosed.
Denise: Okay let's start – Fark for people who have seen it or use it is a site where community members can submit links and based on their popularity – Drew correct me if I’m wrong; they can get voted up or down. You guys exercise editorial control as well as to what’s highlighted and what’s not but it’s a link site. You’re not hosting any original content there on the sight right?
Drew: That’s right. The shortest version I’ve ever been able to use to explain to anybody what we do is; “what if the daily show ran the – report.
Denise: So one of the things that you mentioned that you deal with frequently is DMCA take down notices. How does that come about?
Drew: So there’s a couple of different ways. One of them is we have a photo shop contest where people who –the original art or photo – somebody who owns that will come to us and say you guys are in violation. You hosted our copyrighted file, which we don’t. We just link to it and then all of the subsequent images that are in the contest are illegal which is not true because it’s parody. They ask to take those down. I’ve developed the strategy of only responding when I get 3 complaints from the same person which rarely happens. It cuts down my work load dramatically.
Denise: There’s some synergy with the fact that you’re using a rule of 3 for your photography contest. That’s a good thing.
Drew: Actually for all of them. For any legal complaint for the most part anybody will file any complaint for any reason and if they do it twice they might still be mad but if they’re doing it 3 times they probably are interested in sticking around. So that’s usually the measurement I use to decide to react. Speaking of DMC complaints though one of the other bizarre versions we’ve gotten and it hasn’t happened too often was – we have little link images of the new sites that we’re linking to. In 1999 I didn’t know anything about intellectual property laws at all and you’ll notice that those are the logos that the companies were linking to. Now technically we can’t do that. It turns out that nobody wants us to not use them because of the traffic they get. They actually send them to us so it kind of works out. But one time a few years ago one of the large media sites we linked to contacted me and said hey you’re using our clients logo, we didn’t give you permission, you need to take it down. I’ve since learned what this probably is. In the motion picture industry particularly and I think my friend Will Weeden was explaining to me it was the early 90’s I think there were law suits from an attorney claiming to represent companies intellectual property from a copy right basis filing lawsuits about movies and getting settlements for showing logos in movies and that’s why everything has got tape on it now and you can’t – cause everything is blurred out. I have a feeling that the people who contacted me were these guys, or they could have represented the company. I don’t know but they said please take it down and I was like well go ask them, because I know you didn’t talk it over first. Go ask them if they want me to take it down and they said well why wouldn’t they? I was like trust me, if you don’t go ask them and I do this you’re getting fired. So they said ok we’ll go ask them but they’re not going to say yes. I never heard from them again.
Denise: Wow. So you get a bunch of bogus DMCA take down requests. Do you ever get legitimate ones where you actually pull something off the site?
Drew: I don’t ever get legitimate DMCA take downs because we’re protected. But interestingly if people would just ask nicely I’ll probably take it down. A lot of the requests come in from 3-4 year old pieces. Sort of an interesting segment – one of the other requests I get is from these reputation defender people where we’re reading through an article and there is one about a judge who got caught multiple times using a penis pump during court and I got an email from the guy asking me to remove the link because he’s trying to clean his reputation up. I was like no, you’re a complete idiot. What are you talking about; but sometimes there will be stuff where if people just go hey look I was dumb and I was in college and it was something mostly harmless and if they’re nice I’ll take it down. What I won’t react to is people who go – something legitimate like, I don’t mind taking stuff down especially if its 10 years old but I do mind if they go “or we’ll sue you and we’re going to take your business and your kids and I’m like you know what – that’s like getting into an argument in a bar over politics with somebody and their first response is to pull a gun on you. I don’t really react to all that.
Denise: Excellent point. Evan, I never thought that we’d have someone on the show – years and years ago we discussed the said judge - when those events happened I never thought we’d have someone on the show that had actually interacted with the judge in the way that Drew has.
Drew: I pretty much live on the internet unfortunately.
Evan: I’d totally forgotten about that. That was a big deal.
Halley: I thought that was what most judges do. There aren’t enough women judges.
Denise: I don’t know, must judges I’ve encountered in court are not smiling so I have to think that’s not going on that much.
Evan: Is it supposed to make you smile? I just don’t know.
Halley: Unless there’s going to be more speedo talk you should stop now.
Evan: I’m not going to say that. I’m just going to leave it at that.
Denise: One of the other things that you’ve had to deal with that are fascinating and that many companies confront but we don’t get to hear about it much because at least in the case of these national security letters you’re not able to talk about it. What sort of government requests for information do you receive Drew?
Drew: I don’t know if people have gotten smarter or not over the years. Just casually looking at YouTube would give the indication that people have not gotten smarter in years but it turns out that the secret service is really good at combing the internet for threats against the president. Guess how I found out about that? What was funny was that the first time this happened it was very unfortunate timing. It happened September 7th of 2001 which was a Friday and somebody threatened the President in a joke and it was fairly clearly a joke but because of what the secret service does, they have to respond to everything. So this was the first time they’d called me and they were like hey Lexington Kentucky branch…we got somebody on there and can you give us the IP information. I said can you give me a subpoena. They had one 10 minutes later. There you go, am I going to do an illegal fight with the secret service. What was reassuring about it was that they were very polite and were like this is probably nothing. We check out thousands of these every week and we know it’s probably some idiot making a joke but we have to check into all of this and if you could just help us out if you don’t mind. I was like yeah sure. That’s about the only time that’s happened. I think occasionally we’ve had FBI requests but again for law suits we’re not involved in and a couple divorces I think. I’m not willing to do anything unless they can provide a subpoena and then if it costs money they have to pay for it and when that’s happened I’ve never had any takers.
Denise: Have you ever had an instance where somebody tried to come after you as the result of comments or threats or any kind of harassing conduct that any of your users were engaged in against another user.
Drew: You’d think it would happen more often, but surprisingly it’s only happened once. It was unfounded and they didn’t file a law suit. They were threatening because that’s what these people do. It’s kind of like they are patent controls without patents. Basically they’re hoping to bully you into rolling over and just doing what they want. I got an email from a guy who actually had his signature that said something like Officer something or other and it was a Connecticut police department just wondering if you’d responded to so and so email and I hadn’t because he’d only written 2 times. I didn’t have 3 letters. I looked it up and he was basically saying that we were in violation of a bunch of stuff and that people were making derogatory comments towards him that were slanderous, that they were making violent comments towards his family and a bunch of other stuff. I decided to check into this since there is a police officer emailing me. I wrote him back and was like I don’t know was any of it illegal, did he talk to you? He was like yeah I talked to him. I said was it illegal and he said it's not my position to decide. So I thought something is going on here because that doesn't make any sense. It would be a sorry thing if something happened to your website so I looked into it and it turns out we were linking to an article which had already been taken down. The article was about a guy whose son played on a high school basketball team and was not getting enough playing time so in response to this he hired a private investigator to follow this guy around and get all the dirt on the coach and the only thing he found was a 2002 YouTube video of this guy and it was really raunchy I guess but apparently with a couple of - that could have been on network TV and submitted this anonymously to the local high school board and the guy got put on leave without pay which was obnoxious so the comments that were slanderous on my website were this guy is a douche bag. So I wrote back and said you know what it is not slander if it's true and you do kind of look like a douche bag. If you would like to sue me for this and have a court ruled that yes you are a douche bag writing in on. You're going to have a bad result. It went around a little like that but finally I decided to have my attorney call and say so why is this police matter? And that is when the backpedaling started. I would have probably gone fully public relations on this guy but they looked the officer up and he actually seemed like a pretty decent guy other than this. So I said forget it I'll just let it drop. The violent stuff was that they said this guy's kids are probably going to get beat up every day in high school as a result of what this guy does. That is speculating that violence might happen but not by the people making speculation. I was clear.
Denise: That’s a fascinating story. Do you do anything - what do you do to maintain civility on the site if anything?
Drew: So interestingly I have a whole separate set of discussions I can have on maintaining online communities because as it turns out online communities are like five-year-olds. You can't just let them decide what they want to do because then they are going to eat chocolate cake for every meal and terror of the house. It turns out if you do just a little bit of discipline in the early days when you start the side it gets baked into the DNA. One major thing and this strangely solves 90% of problems is you're allowed to say something isn't cool and you don't like it but you have to say why. So if you save this article sucks we will believe that but if you save this article sucks because of blah, blah, blah, we'll leave it up and oddly that circumvents most of the problems that you will ever have on the site and the other 10% was something only recently - we have a much longer anti-misogyny moderation rule and interestingly once we put into play it got rid of a bunch of people who had been causing problems for years. It was by accident we had no idea that was going to happen. So if you do those two things you're pretty much good to go.
Denise: Do you get low back on any of those policies or stances that you are bridging people's rights of expression in any way or do you care?
Drew: All the time but no I don't care. Colin Calvert says on ESPN radio you have a right to speak speech but not without repercussions.
Denise: Good for you I think our chat room is applauding everything you say here and at least one person wants you to run for president in 2016. Bear that in mind.
Drew: I'm thinking about running for governor in Kentucky in 2015, so keep your eyes open for that one.
Denise: There you go.
Drew: Because why not?
Denise: Evan, anything you want to fire at Drew about his legal war chest and what it's used for?
Evan: No I just really enjoyed hearing about the stories about the dispute you got - the people who were in a dispute using your site and tried to involve you with that. You would think that that would happen a lot more especially with the sort of stuff that Fark brings to the world and that's a good thing obviously. Just to make the observation that it's really interesting how local politics and local issues really get people stirred up into this frenzy that you don't necessarily see when they are talking about larger big issues. Who is the governor of Kentucky now?
Drew: Steve Brashear but he's not running next time around. It's a bunch of random guys and I figure I can get very least be less incompetent than them.
Evan: You should at least be a Kentucky Col. if you are not already.
Drew: I am as it turns out.
Evan: Right on. Good luck.
Denise: To really build your base you're going to have to work on your accent.
Drew: Well I was born and raised here so… My parents are from Maine and they've burned it out of me. My kids have accents though so I'm set.
Denise: Halley we haven't heard from you in a while, any comments or thoughts on the hazards and legal ups and downs of running a site like Fark.
Halley: I'm just enjoying it I haven’t read it a lot so it's really fun to read about the guys stealing a $4000 electric bicycle. It runs out of power and he calls the guy who is stolen from for information on how to recharge it. I was like excuse me! It's good it's better than fiction and I write fiction. I like it.
Drew: Actually we couldn't make this stuff up that's not only a figure of speech but it would just be unbelievable and sound stupid if it wasn't real. Thank God for Florida. That's all I can say.
Denise: Yes in so many ways. Evan you want to drop that other MCLE passphrase into the show?
Evan: Baked into the DNA. That was something intriguing that Drew said. I thought that was interesting. There were a couple of things I was going to try to embarrass you but I'll just save that till later.
Denise: Aw you are such a sweetie. Let's move on to picking our resident author’s brain on copyright and fair use.
Evan: Thank goodness for Florida says the guy from Kentucky…
Drew: I am as surprised as you are honestly.
Denise: Halley, are you a member of the authors Guild?
Halley: I’m not. I'm an e-publishing kind of freak and love all things so publishing and that has already stirred up the whole authors and publishing world enough. The authors Guild they've been in this suit against Google since 2005. Don't they know what to do next? We just found out this morning that Google plus is probably going to disappear. Really Google has a whole lot of disappearing products it seems and that has been more interesting of late. Maybe the authors Guild can just wait until the so-called library project disappears. I'm being facetious. Do you want to explain a bit about where we started? You are the lawyer lady. I know now they are trying to appeal.
Denise: Yes this is something we have been watching for a very long time here at this week in law - the suit against Google and others by the authors Guild and others. There are some complicated legal frameworks going on here. For simplicity sake the authors Guild against Google - the authors Guild loss a big case against Google; it tried to pursue and lost at the trial level on fair use grounds. The trial court found that the uses that Google is making of the books in its library project are fair use. That it is not destroying the market for those works. That the uses of the works are small enough that they fall within fair use doctrine and that Google can forge ahead with this. The authors Guild is appealing this and on appeal we now know what the arguments will be. That appeal is going forward. Personally I don't have a whole lot of faith that the author Guild is going to get anywhere. I think that the trial court's decision was well reasoned and well written and that the appellate court will wind up agreeing with the trial court. But you just never know. This can go sideways or unexpected things can happen on appeal. So that's why we're watching the case and the authors Guild just filed a brief. Interesting that they made reference to Amazon’s “search inside the book” function and tried to tee up the Google book search project as some sort of competitive response to that. I want to go back and check the dates but it seems to me like search inside the book came along well after the Google book search project was underway. I don't know that they have their time line exactly right here. So I want to just pick your brain about what you think about books being scanned and whether this is harming authors but before I let you answer that question, what do you mean Google plus is going away? I know Vic Gundotra is leaving. Is that why you think the whole thing would go up in smoke?
Halley: I'm reading articles this morning saying it may well be another - how many products have we used - other Google products that just… opps we’re not going to do that anymore. So apparently it may go away. I don't know do you use it a lot?
Denise: Yes I use it. I was hoping it would become my Facebook replacement when it came back - when it was initially launched and had its enormous growth. I think it's very popular among people globally. That sort of my anecdotal impression based on who interacts with me on Google plus but all of my friends and family are still on Facebook. So it really hasn't got the mainstream attraction here in the US that I had hoped that it would. So it has not been able to replace Facebook for me. I do think it is a great tool and they did some really innovative things and I'm sad that Vic Gundotra is leaving but are people speculating it would go away simply because he's departing Halley?
Halley: Maybe that's why, I'm not sure why they are saying it but it doesn't have the uptake they thought it would. My experience with it goes two ways. I was actually very much involved in writing the book “What the plus – Google Plus for the rest of us, with Guy Kawasaki who was a big promoter of it but my personal use is like yours; I find Facebook when I go on to Facebook I feel like I know where my homepage is and I know my living room, I can welcome people into it. My sense on Google plus has always been that it's a little homeless. I'm never sure even where my page is. I feel like the interface was designed for engineers by engineers and it's not as friendly. I even hate to say it but it almost seems a little very female Facebook happiness scenario versus very Geeky we can be alone here and talk alone guy male engineers happening at Google plus. But anyway we'll see what happens. I don't know but it's there is a lot of talk. I think you guys know to how you thought you were using Google on IM that turned into Google hangouts. Things just keep turning around as where from a branding point of view I feel like Google is teaching us not to trust anything they do and that any product you start to like it is like somebody makes a new shampoo and then you go to buy it again and it's gone. It's off the shelves so I can't even understand why they think that is a good idea? It must be something - I'm married to a programmer maybe there is something heroic about throwing out what she did and starting again but from a consumer point of view it is a nightmare. You must've had 50 shows about finding very use by getting ready for 550 more because I think what's happening with e-books and authors joining the ranks and in many ways it’s the very well-known authors who work with the traditional publishers then there are 1 million of the rest of us E book people who are coming in publishing really quickly doing lots of interesting things and are mashing up a lot of texts and have a feeling like independent music people about using texts any old way we want to and quoting lyrics which is a traditional copyright issue with most novels in writing and quoting other pieces of books. I feel like authors Guild have their little teacups and they have a feeling for me of being like 1000 years old. It feels like not what is actually happening which is an amazing storm very turbulent in e-books right now. They are changing and I also got some work with Guy Kawasaki on his book Author Publisher Entrepreneur – APE which is a great book if you're interested in self-publishing. He and I sat down to dinner and he’s like I'm going crazy with my publisher and need to do something else. This was two years ago and I’m like dump them and start publishing on your own. There's just so much more going on and I doubt with all the trouble Google has gone to, to create this library project and whether it's copyright infringement on a massive scale as the authors Guild says or whether as judge Denny Chin says it is basically a good thing. It is a sharing of good information and provides significant public benefit. We'll see but I think it's like a war, a small war in a place where there's a gigantic - battles all around –small battles and a big bidding war going on all around them about how people are publishing and how we will share our ideas. Fair use seems something that people now in e-publishing are pretty casual about. When you are writing fan fiction taking somebody's characters changing or using the plot of another book that is a pretty interesting way to think about copyrighted material.
Denise: Yes it sure is and I think you're raising some great points Hallie that we are going to see some wild, wild, West kind of developments in that area going forward as more people like you use E publishing platforms. I know the Amazon has its own create space which allows people to self-publish there. My dad just went through that process and the authors have to make all kinds of representations about the originality of their work but I don't think they’re really probably reading those representations very closely although Amazon is trying to cover its own hiney I think the authors might find themselves on the wrong end of lawsuit if they are not careful about those traditional rights clearance kinds of things. Evan do you think this is going to be a big deal? The fact that authors like Halley may have sort of a laissez-faire kind of like musicians doing mash ups and pulling things in and not having the resources or even the knowledge to know that we should get a lawyer before we go ahead and release this into the public. So there are going to be a lot of potential copyright infringements going on that someone is going to want to sue over.
Evan: it's going to depend on the sensibilities of the plaintiffs obviously. If there is a lots of stuff going on there's going to be different ways of approaching it and different attitudes and different points beyond which conduct is not tolerable it's a great thing about copyrighted to give the incentive to create that really - that somehow works in ways which you don't always expect or in ways that are intended. As far as it relates if we can kind of try to tie this back to the Google book search the whole posturing of that, clearly there are new things happening with fair use that have happened over the last decade. The Google print project started and became Google books search and then we had this protracted litigation over that. I see those both as sort of separate issues because with the Google books search situation what's really the hallmark of that is the transformative use in as much as making the contents available for use or electronic access electronic searching. Then it sounds like what you're talking about Halley there is this greater ability to create and those seem like separate things but the fair use analysis are going to be different. The Authors Guild is trying to bring up, drive home the point commerciality as to why Google books search decision is not correct whereas there's a transformative use of what's going on in the searches there seems to be something that - maybe this is just my own sentiment about this but I get the sense that really the tide has turned and that’s well established copyright law that what Google has done acceptable just like we don't really dispute - going back to what we were talking about with Sony in 1984. We don't dispute anymore that time shifting is a valid fair use. We don't debate that anymore it's been the law for 30 years now and I think we’re going to see that aspect of the digitizing and making searchable of books to be something that just we’ll not debate much anymore but that is what gives the premise for all these other innovative crazy things that will spur the new kinds of disputes because E-publishing will become so much more robust in that environment.
Denise: That reminds me Evan that in the UK - this is sorry he had on last week's rundown that we never got around to - they just now got around to and the US has never gotten around to specifying in the law that is legal to rip a CD. That's now made express under UK copyright law but has never been made express here. You used to get people arguing that point in court. I think it came up in the Napster case that there was some big admission by one of the lawyers that it might be fair use to rip a CD and that was never a concession that have been made before. These things that we take for granted might eventually become actual concrete specified law like this one did in the UK. Let's move on to our resource and two of the week and then get on out of here and let you guys enjoy your weekends. Our resource of the week is for those who might be thinking about going to law school or interested in the state of law school. I'm on the wrong page. I jumped over to last week's show so I can refer to the UK. This is from Noodle.org, it’s a info graphic on the current state of law school and it gives you all kinds of information on the job market for new law school graduates so that's something that is intriguing to you, you should check this out, it tells you about law school sizes and how they've been cut, what sort of tuition you have to pay and the debt you might go into and then what sort of job you have to look forward to after the fact. It is all kind of dismal and bleak so it is something good to go on and check out and understand the information if you are thinking about embarking on a legal career and then arts and of the week comes from Drew from the battle with the patent troll that we discussed earlier in the show. He's come up with a loss of good and perhaps counterintuitive ways that you should approach a patent troll strategically. Drew what was the most important point that you took out of the experience?
Drew: When people tried to fight patent troll they usually try to go after patents because they’re really usually badly worded and vague. It turns out that there is also something else you can do which is what I did which is instead of attacking a path directly you can deny that you infringe it and the reason why this matters is because we are talking about a fairly vaguely worded patent and the judge is much more likely to agree with that than they are to overturn the patent. It's a fairly easy thing to do in my case it was show me screenshots where we actually infringe but it's even more interesting because I was working with the podcast troll as I went into earlier and it turns out that what the patent clerk thought was novel about that patent was that there was a list that was downloaded into a device and it turns out that the - doesn't even indirectly infringe on that because there is no list that gets downloaded into any device. So I recommended that they go ahead and claim they don't infringe based on that. They may not have to because EFF filed a re-exam and it was granted today or yesterday I think. At any rate they may be out of the woods but step two is going to be to deny infringement and make them prove it.
Denise: That’s a really good tip I hope folks will bear that in mind and we hope that you will bear in mind that we record the show each and every Friday by at 11 o'clock Pacific time 1800 UTC. That's when you can jump in and have fun with us as we record the show live you can go into our IRC and chat with us there if you can't do any of that don't worry though because the show is going to show up for you on demand in many different ways hopefully via and very reliable and non-priced out Internet connection. You can find us at twit.tv/twil you can also find it at Youtube.com/thisweekinlaw. So see YouTube pays for the net neutrality fast lane at least you'll be able to get the show fast there. Of course those sorts of costs will get passed along to the YouTube users. So we have to bear that in mind when we're thinking about all the net neutrality policy considerations. Where else can you find the show? You can find it on iTunes, you can find it on ROKU, you can find it all kinds of different places where podcast contents shows up and you can also subscribe in any kind of pod catcher that you like. More information on that over at twit.tv/twil. We love to hear from you between the shows, you can e-mail me I am Denise@twit.tv or Evan, he is Evan@twit.tv or hit us up on Google plus where we continue to have a page and where we get a lot of interaction in our community over there. We’ve got Facebook.com/thisweekinlaw where we love to hear from you about what's on your mind as we prepare for the shows and feedback about the shows that we've are done. Evan anything else?
Evan: No that wraps it up. That's really good we're out there in lots of places.
Denise: Halley it's been great having you back on the show thank you so much for joining us.
Halley: Thank you for the invitation and I'll have to go get the snacks they sound great.
Denise: yes they do and they would go very well as someone was reading your book Founders less than 3 or Does this start up make me look fat; your other Kindle book. Do you have any new books in progress we should be looking forward to?
Halley: I am going to write a follow-up. It's funny the book I wrote – Founders is about a tech stars experience in the accelerator program here in Boston and there's one team I talked about - fiction it's not quite real but it's based on a team that we just found out yesterday they sold their company after two years - just compared to California a small $10 million but you could read all about the experience what it was like for them to start their company here in Boston. It's got a real life happy ending. So I am writing a second book about not that the whole the woman entrepreneur and her next adventure.
Denise: That’s awesome. I'm really looking forward to that. Your books are always funny and entertaining and educational. I'm glad you're still at it. Drew it's been so fun chatting with you today you are such an interesting fellow and have had great experiences and tangles on the legal side that I think have been really illuminating for everyone joining us today.
Drew: Thanks a lot. By the way speaking of healthy stuff this is what I am feeding my kids for dinner. It is a peep cake. It's not very healthy. It's not corn syrup free.
Denise: That is awesome. Not at all in the slightest but they are peeps and what could be better than that. I think Newt likes peeps right Halley?
Halley: Oh eight can't get enough. But there are never enough Green ones. They are all pink and blue. So what are you going to do?
Denise: Have him keep the crumbs off your keyboard.
Halley: He likes the green ones; he’s got green sugar on him.
Denise: It’s been great chatting with you and Newt and Evan it's been great as usual getting together with you at the end of the week. I feel like I’ve gotten Aereo and net neutrality and all of our other topics out of my system now and can move on to other things.
Evan: Yes I'm sure there'll be something great talk about next week and I look forward to it. Drew awesome talking to you; I grew up in Indiana so we told jokes about people from Kentucky so today all stereotypes have been completely done away with.
Drew: No they are still true, don't worry about that.
Evan: Halley great talking with you. I really enjoyed catching up.
Halley: It was good. Have a good weekend.
Evan: Thank you talk to you all later.
Denise: We’re coming up on summer and we do have an intern San Doe who is continuing to work with us. He will eventually someday move on and consult that states of the law school chart and find himself something that needs to occupy him, hopefully not into the wee hours of the night to often. We never would have even thought of having someone assist with the show and then Franklin Graves got in touch with us a few summers back and was our very first in a long, long, line of illustrious in terns. So this is something that you think you might want to help out with we love to hear from you. San has been helping us primarily with bookings, Franklin did the great bumpers that we have in the show to distinguish the different topics from one another. There are all kinds of ways that you could help with the show so if you have ideas on how that might come about get in touch. We'd love to hear from you. And with that we will see you next week on This Week in Law! Take care!