This Week in Law 299

Denise Howell: Next up on This Week in Law, law professor Aaron Perzanowski and start-up founder Matt Homann join Sarah Pearson and me. We're going to talk about ownership in the modern age, Bratz dolls, tattoos, invisible boyfriends and girlfriends, and what they can tell us about why the unsullied go to brothels — all next on This Week in Law.

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Denise: This is TWIL, This Week in Law with Denise Howell and Sarah Pearson, episode 299, recorded April 17, 2015:

He Said, She Said

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Hi, folks. Denise Howell here, and you're joining us for This Week in Law. We're so excited that you are because this is really, I think — as far as Sarah and I are concerned, and hopefully for you, too — our favorite time of the week. It's when we get together with really, really smart people at the intersection of technology and law and help understand some of these very thorny issues that we all grapple with each day. They're issues that you may be paying a lot of attention to already, or issues that maybe you should be paying attention to because they can mean a lot to the way you live your life. So I mentioned my co-host Sarah Pearson. She is with us here today. Hello, Sarah.

Sarah Pearson: Hey, Denise. How are you?

Denise: I'm doing great. It's good to see you.

Sarah: Good to see you.

Denise: So Sarah actually suggested that we bring on the show our guest today in the early part of the show. We may have another guest in the later part of the show; we'll talk about him later if and when he joins us. But with us here right now is Aaron Perzanowski. He is a professor at Case Western University Law School and has done a lot of really interesting thinking and writing on the current state of ownership in the digital age. Hello, Aaron.

Aaron Perzanowski: Hey! Good morning, good afternoon.

Denise: Good afternoon to you, too. It's great to have you with us.

Aaron: Yeah, it's great to be here.

Denise: So a lot of your — you have a very sort of wide-ranging array of interests and scholarship. I touched on the fact that you have written and thought a lot about copyright and how it should evolve in the face of the way we use and distribute media these days. You do some work in trademark, telecommunications — anything else I'm leaving out?

Aaron: I am probably the world's foremost expert on copyright issues related to tattoos, which is a distinction that did not require me to compete with very many people.

Denise and Sarah: (Laugh)

Denise: All right. And we definitely should talk about that today as well. Thank you for reminding me. Since we're going to talk about a lot of copyright issues, let's get right into that.

(The intro plays.)

Denise: Okay. Aaron, I teased the fact that you have some new and interesting and innovative ideas about how copyright law should evolve. Can you bring me from my vague generalities there into something more concrete?

Aaron: Yeah, sure. So for the last several years, I've been writing a series of articles with my now frequent co-author Jason Schultz; and what we've been interested is in this kind of transition that we're all living through right now where we're going from a copyright and sort of media economy that, up until ten or twelve years ago, was really based in the transfer of tangible goods — of CDs and DVDs and hardcover books — to a market and a culture where we acquire media primarily through digital means of distribution, whether that's paid downloads, whether that's cloud-based services or streaming services. And what we're really interested in is what the implications are of that transition for kind of the sense of ownership and personal property, right? So when you buy a hardcover book, it's like buying a pair of shoes or new toothbrush. You own it; it's your personal property. You can give it away; you can transfer it; you can lend it; you can resell it — all those sorts of things. And copyright law allows for that through this notion of exhaustion, or the first sale doctrine. That's why we have used bookstores and eBay and all these wonderful secondary markets. That sense of ownership in personal property gets a lot more complicated when we're no longer talking about tangible objects, but we're talking about rights in digital things, digital things that aren't even always in our possession. So people who buy a hardcover book stand in a very different sort of relationship with their purchases than someone who might buy an E-book; and that's something that's not obvious to a lot of consumers. And so we've been writing for a long time about this issue to an academic audience. We've written, I think, four law review articles at this point. And right now we're in the process of trying to translate these ideas into a much more kind of accessible format, so we're writing a book that's aimed at a much more general audience that tries to kind of tell the story in terms of how the law has shifted, how technology has shifted, and how sort of consumer behavior has shifted to lead us into this future where our rights in the things that we buy are far less clear and far more uncertain than they have been in the past.

Denise: Yeah. This has been something that's definitely been developing as media changes and terms of service around things that people "buy" change. And why don't you tell us how you think we should tackle this issue.

Aaron: Well, it's a complicated issue because there are a few different ways in which this story has developed, right? So one story is just about the way that the sort of means of distribution has changed. So we have this shift, right? So go as far back as you want to go. We can go back to the, like, Gutenberg press in 1450. From that point until about twelve years ago, we distributed creative works by making tangible copies. And there are exceptions here and there, right? The movies, we would go and watch them in person. Theater we would watch in person. But the music industry, the publishing industry, most of the major copyright industries were in the business of selling people tangible objects. That starts to change in, like, 2003. We get the iTunes store, which explodes in popularity. Then we get the emergence of cloud-based services. Now we're kind of living in this world where the growth is really happening in streaming services — Netflix and Spotify, those sorts of things — where there's really no argument that consumers own the things that they access. So part of it is about that change in distribution. We also have the rise of mass contracting, of end user license agreements, of terms of service; and one of the few common traits of pretty much every end user license agreement dealing with the purchase, or the seeming purchase, of digital media is that consumers don't own the thing that they have acquired, right? Even though Amazon has that shiny button that says "Buy now with one click," they don't really mean buy, right? They mean acquire a license to use this content under the terms that we lay out. So this is an example that's probably familiar to a number of your viewers; but a few years ago, Amazon gets in a dispute with a publisher about the rights to George Orwell's Nineteen Eighty-Four, and thousands of people who had purchased Orwell's Nineteen Eighty-Four on the Kindle store wake up the next morning and their book is gone. That's not something you can do with people's hardcover books. You can't sneak into their homes in the middle of the night and take their books away.

Sarah: (Laughs)

Aaron: But that is something you can do in the digital environment. You can do it because of the technology, and you can do it in part because the terms of service give the providers — the retailers, in this instance — a lot of leeway and a lot of control over how you experience these works. DRM is another component of that, right? It sort of takes those same sorts of restrictions that we might express in contractual terms, and it implements them in code that actually allows a provider to achieve those ends. So there's a kind of confluence of all of these things happening. In terms of what we do about it, there are some specific recommendations that we've made in our work so far, and I'm happy to talk about those in more detail. But at this point, I think the most important thing is just getting people to understand what's happening because we all have these deeply ingrained notions of personal property and ownership that we've sort of absorbed through our lives as consumers, and they've been pretty consistent for the last few hundred years. And I think it takes a lot of people by surprise once they realized that their relationship with digital content is very different from their relationship with physical media. So I think, at this point, the thing that I'm most focused on is just trying to get people to understand what's happening and kind of understand how we've arrived at this place.

Denise: I do want to get into what you and Jason are proposing as a way to approach this that's different than where we found ourselves now, which is sort of a confusing world where people's expectations are still, I think, on the ownership kind of side of things; whereas, their actual rights to use the media they're consuming are far from that. And I want to get Sarah's take on this, too. Do you think, Sarah, that philosophically, intellectually, people are ready to accept that shift from, Here is the book that I bought, and I own it and I can do anything I want with it. I can cut it up. (Laughs) I can lend it out. It's a physical thing that I own and can completely control and manipulate, to having a series of rights that hopefully gives them all the uses that they need but still are going to have restrictions and limitations that maybe they don't anticipate.

Sarah: No, I guess I don't think that they are. I think that they're unaware because all of this stuff is buried in terms of service that no one reads. So that's why the Nineteen Eighty-Four disappearance came as a surprise to everyone because no one read the terms of service that, I'm sure, allowed for that to happen. So I think it's definitely something that consumers just aren't aware of. I think Aaron's right about that.

Denise: I do think that, Aaron, you and Jason are on to something where — you've used the word "control" a couple of times — where, if the control and the flexibility is sufficiently expansive, the people won't care about the shift away from ownership to simply having a series of usage rights that work for them. But that's a big if, isn't it?

Aaron: I think it is a big if. I mean, you're seeing some recognition that these things are important to consumers; Amazon, in a very limited way, for example, has tried to incorporate the concept of lending into the Kindle store. So certain publishers have opted into this lending program that allows you — you download a book; you really like it; you think your sister or your best friend would really love this book. You can lend it to them, in a sense. There are important limitations that make that a very different kind of lending experience than what we're used to in the tangible world. First of all, it's opt-in; so most publishers aren't doing it. Second of all, you can only lend a book one time for two weeks; and once you've lent it out to one person, you can't turn around and lend it to someone else. So there's recognition that consumers do have these expectations; and there's some limited effort, I think, to try to accommodate those expectations. So we're not kind of bumping into those restrictions quite as often as we might be otherwise. But my position is, there's really no substitute for unregulated secondary markets. There's a whole host of reasons that we might be concerned about a system that allows lending but only allows it within one particular technological platform, about lending that depends on publisher permission. And in the end, we might be able to train consumers to accept these sorts of restrictions; and I think that's probably the long-term strategy here if you're a copyright holder or if you're a digital retailer. You want to get people used to living in this world, to the extent that they kind of forget what it was like before, when you could do whatever you wanted with the materials that you purchased. And so that's why I think it's really important to intervene now and to make sure people see this happening. I'm not against consumer choice. If people don't want to own things, they don't have to own things. I don't buy movies, for example. I'm happy to be a Netflix subscriber, to pay my monthly fee and watch what they make available. I don't think there's anything dangerous or wrong about that choice, but it has to be a choice. I have a very different relationship with music, for example. I've never used Spotify. I can see why people would; but I like to own that kind of media, in part because of kind of the value of repeat experience.

So what I'd like to see is a marketplace where consumers have a genuine choice to make; and right now, what we're calling purchases in the digital media space — I think that's a real misnomer and is, in fact, kind of misleading to consumers. So one of the things I'm doing right now is working on a sort of consumer survey/consumer experiment where we try to test the expectations that are embedded in the language of "Buy now," and contrast that with marketing language that is more reflective of what the end user license agreements and the terms of service say. That's still kind of in the early stages, but what I expect that to show is that consumers really do have a problem where they're kind of misperceiving the nature of these transactions, and they think they're getting something that they're not. So part of this, I think, can be clarified just through kind of more accurate, more honest representations of what these transactions actually are.

Denise: Right.

Sarah: Yeah, don't — oh, sorry. I was going to say, it almost seems like you could go the FTC route if you're going to focus on whether or not it's misleading and the notice angle. There's almost, like, an FTC potential claim there.

Aaron: Yeah. And that's sort of the model that we're using in putting this survey together, right? We're testing those same sorts of things that you would be thinking about, either in a false advertising context or sort of deceptive trade practices. One, whether there is a miscommunication happening, whether there are representations being made that are not accurate, whether people are interpreting that marketing language in a way that is inconsistent with the facts; and then secondly, whether that is material to people's decisions to purchase the stuff or not. It might be, Yeah, we think that we get to lend it or resell it. But if it turns out we don't, we're not actually going to behave any differently. That's something that you can test, and I'm really interested. I have a hunch about what this means to consumers, but of course I'm kind of projecting my own values onto the public. And it might turn out I'm wrong, and people understand exactly what's going on, or it just doesn't matter to them. And if that's the case, then that's a useful piece of information. My suspicion is that it does matter to people and that they are, at least a substantial number of them, somewhat confused about what's actually happening.

Denise: It seems like we're assuming not just our own expectations of what the public might think, but also a degree of connectivity that allows everything to stream always. And while we're certainly getting toward that world — and many people are living in that world — others don't, right? And so it's important to them to actually have something saved locally that they can call up and use and manipulate in a more facile manner than you could ever do with a stream. Do you think there's a way to sort of live in that bridge between the two worlds where we are right now, where universal excellent access to broadband does not quite exist?

Aaron: Yeah, I think it's a problem. We are seeing instances where — so far they're limited in number — but where digital distribution is becoming the exclusive means of distribution. I think it was just last week I saw that Fox has announced that future seasons of The Simpsons aren't going to be sold on disc. You can't buy it on BluRay; you can't buy it on DVD anymore. You can get it from Amazon or from iTunes. If we live in a world where some material is only available through connected devices, I think there is a risk that we're excluding some segment of consumers — maybe consumers who live in rural areas, maybe consumers who fall on the lower end of the income distribution, maybe people who just don't like to have constant Internet connectivity. So I think that is a real problem. The other example, I guess, is Adobe's decision to stop selling its Creative suite in a disc-based format and now has kind of moved to the Creative cloud model where you get to pay Adobe a monthly fee as long as you want to use their product. So I am really concerned about that. I mean, on the one hand, digital distribution has a lot to be said for it, right? It's oftentimes much more convenient; it's more cost effective; it's certainly better for the environment in most instances. But there's a tradeoff here that I think we have to be aware of.

Denise: So tell us about the test that you and Jason have proposed to ensure that consumers have enough rights in this world of non-ownership.

Aaron: So there are really two ways that you can go about resolving this problem. You can do it legislatively; and we have a short piece that recently came out in the Berkeley Technology Law Journal in a symposium issue from their Next Great Copyright Act symposium, I think from last spring, where we outline what a legislative solution would look like here, right? So you need two basic things: You need a test to tell you — so first sale and exhaustion apply when someone is an owner of a work. And ownership is sort of a tricky thing to define in this context. What we've seen in the world of software is that courts have been more willing to look at license agreements that say, "This is a license, not a sale" as undermining ownership, and we think that's problematic. And there are a few kind of telltale signs of what is a sale as opposed to the other kinds of transactions that don't lead to transfers of ownership — rental, leasing, lending. So one-time payment and perpetual possession is a pretty strong indicator that what you have here is a sale. So we think that should be the primary thing that courts are looking for in this context. We also think it's important to look at the marketing language to see how these transactions are presented to consumers. If you're going to call it a sale, if you're going to say, Click here to own this thing, then we think that should have some relevance in the analysis. Even if what you have is an owner, you've got to figure out what rights come with that sort of ownership. Even in the sort of world of hardcover books, owning a book gives you some rights. It doesn't give you all rights; you don't get to go out and make photocopies, make a thousand photocopies of the book you just bought and sell them on the street corner. You don't get to adapt the book into a movie just because you bought a copy of it. So what we think exhaustion is focused on is allowing the consumer to sort of extract the value of the thing that they paid for. That means having the right to use it, having the right to enjoy the work, having the right to transfer your interest to another party. Sometimes in the digital world — usually in the digital world — transferring the thing that you purchased is going to require making a copy, one or more copies. So it can't be limited just to distribution. It has to include the reproduction rate. It also has to include, we think, the derivative work right, to the extent that you might want to shift from one format to another — if you buy an Apple iBook, and you want to transfer it to somebody that only uses a Kindle, there might be some arguable derivative work made in that context. So we think exhaustion has to be a little bit broader.

But we're worried about an exhaustion rule that's too broad, that actually undermines incentives for authors; so there might be some things that should be off-limits in ... [audio fades] ... that are not off-limits in the world of tangible goods. Lending, for example, might work very differently. You could imagine kind of a distributed lending platform for E-books where one E-book can effectively be read by hundreds of people. And the E-book, essentially, just never has a down cycle. It's being read by someone all the time. And I think that would be really disruptive for the market for E-books. I don't know that we want the exhaustion rule to go that far. So we urge courts or Congress, whoever's making this decision, to look at the likely impact that applying exhaustion would have in a particular context. So our preferred solution is just to give this work to courts. Courts invented exhaustion and first sale. The first U.S. courts to articulate this principle did so in the 1880s, early 1890s; and it's a doctrine that was really developed at common law and was eventually reflected in the Copyright Act in 1909. But it has these judicial origins, and I think it's the kind of question where the flexibility and the context sensitivity that courts can bring to the table is much more useful than the kind of rigid formulas that we tend to get in statutory exceptions and limitations under copyright law. So I want courts to do this work. They're capable of doing this work, and I think that's probably kind of the ideal solution.

Denise: And I think you just answered a question that we had earlier from one of our listeners in IRC who asked, Do we need Congress to create and pass a law that gives people the same rights of first purchase — I think maybe they mean first sale or exhaustion — on digital goods as we have on physical goods? And you really think the courts are better suited for that?

Aaron: I do think that the heavy lifting has to be done by courts. What we ended up proposing most recently was something that looks a fair amount like the way we handle fair use under copyright law. There is a statutory provision that says, Fair use is a thing. It exists. Here are some factors that courts should look into; but leaves the door wide open for courts to engage in the kind of common law reasoning that they are kind of best positioned to do. And that's what we would like to see here. I certainly wouldn't object to Congress saying a digital exhaustion or digital first sale regime is something that we think is appropriate and legitimate. Courts figure it out. I think that is about as far as I want Congress to wade into this issue.

Denise: So we have — sorry, Sarah. Were you going to ask something?

Sarah: Yeah. If you don't mind, I was going to just ask —

Denise: Go ahead.

Sarah: So Aaron, I should say, I read your full law review article yesterday — it was excellent — the latest one. And I had some thoughts. So my takeaway, I guess, was, it seems like your proposal is really about kind of putting the balance back in copyright; and the way that you're going about it is through exhaustion. What I thought was really interesting is, it seems like the way that you've created the test, with the focus on whether or not the person really parted with access, seems like it kind of artificially imposes aspects of the analog world to the digital world because it's kind of dependent upon treating things that are non-rivalrous as if they were rivalrous. And so I just kind of wanted to ask a little bit about that. It's just kind of interesting to me that it feels like it's more of a — like you're trying to apply the rules that apply in the physical world in the digital world; and so it's going to encourage platforms like ReDigi — is that how you pronounce it? I've never actually heard someone say it out loud — where you kind of artificially are destroying the copies that you preserve locally in order to give to someone else which, of course, isn't actually required. That's not the way digital access works, but it's us kind of artificially imposing that.

Aaron: Yeah. So one of the things that we're concerned about is — and this is one of the common critiques that I hear about this proposal — is — and I think it's a legitimate worry. Look, if we create digital exhaustion, it's just giving people permission to buy something and make a hundred copies of it and send those copies to their friends and keep the copy that they originally downloaded for themselves. And so our proposal is one that tries to sort of maintain the one-to-one relationship between items purchased and authorized users or owners of those digital assets. And I hear what you're saying. I mean, in one sense, what we're saying is, Look, we want to keep things the way they were in the physical world, right? I actually think that, even in the physical world, the particular copy that a person owns plays a somewhat different role than we might imagine. So what we talk about is that the copy — the traditional analog copy and the digital copy, really — sort of function as a symbol or as a token, a piece of evidence that says, I'm a person who stands in a special relationship with this work. The copy is the proof that I paid for this thing. And it's not about the inherent physical limitations of the copy itself. We would say that the property right, here — the personal property right — is not a right to a thing. It's not a right to the physical book. It is a right to the intangible, underlying work; but it's a right that is limited to this purchaser who stands in this special relationship with the work itself. And in some ways, I think that idea's a lot easier to translate to the digital environment, right? So I think what we're trying to advocate for, really, is a copyright regime that's actually less focused on accounting for copies, the sort of obsessive copy counting that we see, actually, in a case like ReDigi, where the Court is incredibly concerned with, Wait. Did you make a new copy when this song was uploaded to the used MP3 server, or did you just move a copy from point A to point B? And what we want to say is, that doesn't really matter. What matters is that the rights transfer from one party to another and that you can't, through a single purchase, create rights in multiple owners. And so, in that sense, I think we're actually trying to move away from the physical world — analog — but in a way that kind of preserves that structure of the rights to the intangible work. Does that make sense?

Sarah: Yeah, that makes perfect sense. That makes perfect sense to me. I guess one thing that was also interesting was, you were kind of making the argument there that one reason to do this is that it will give consumers an incentive to participate in legitimate copyright markets and pay for stuff, copyrighted material. And I was a little bit skeptical of that. I guess I wonder whether — do you really think that that is enough to kind of compete with free alternatives, the fact that they would be getting maybe some more legitimate rights to do what they might otherwise be doing anyway?

Aaron: So whether it's sufficient, I can't say for sure, right? But the idea is — so I've recently been talking about this project to an audience that I don't have a whole lot of access to; and that's undergraduate students, people who — not to generalize — are not in the habit of paying for content, or at least paying for ownership of content. Maybe they subscribe to Spotify or Netflix. And what I think I've sort of come away from those conversations understanding is that, from the perspective of those consumers, copyright law is asking them to do something that is remarkable, almost irrational, which is — why don't you pay for this thing that's available for free?

Sarah: Right.

Aaron: Why would someone do that? And there are a couple of reasons that people might do that. One reason is, they're worried about the threat of liability; they're worried about statutory damages; they're worried about having their Internet access shut off — something along those lines. Another reason that they might do it is that they get something of value for their money, in exchange for that payment. What do they get of value? There's a certain degree of clarity and stability and kind of legitimacy of rights when you pay for something and you own it. So to the extent that we present consumers with a choice between, pay $10 for this thing; and we can take it away at any moment without notice, and maybe we'll issue you a refund or maybe we won't, on the one hand. Or pay $10 for this thing. It's yours. You get to keep it forever. If you decide you don't like it and you want to sell it to someone else, you can. If you want to lend it to your friends, you can. And that's a much better value proposition for your $10 than the alternative. I don't know what the marginal difference is going to be in terms of how many consumers we convince to make a purchase under that model rather than the current model; but my sense is, it's going to be a net positive. I don't know how big of a net positive, but I do think there's a class of consumers who expect ownership and are willing to pay or willing to pay a premium for it. But that's, granted, sort of an untested hypothesis.

Denise: I have a couple of thoughts as I've been listening to the conversation unfold here; and the first goes back to our show last week, where we were talking about Vint Cerf's hand-wringing over the potential digital dark age, as we are consigning all of our media and assets and memories and intellect to a digital format that may not be universally readable or comprehensible in the future. And secondly, we got a great comment in IRC from Virgil, who asks, "What would Vincent Price's character, Dr. Robert Morgan, in The Last Man on Earth have to read, listen to, watch, if there were only digital media?" So of course this is not a question that I really expect you to have the answer to, Aaron; but it is interesting to think about as we ponder the move of all of our entertainment and scholarship and everything else into digital form.

And what I'd like to do now is kind of move away from this realm of ideas we've been talking about, about these issues, into something more concrete having to do with Bratz dolls, of all things. But before we do that, we actually have — I mentioned at the top of the show we were going to have another guest join us; and he has. So I want to introduce him and bring him into the conversation; and shortly, we're going to have kind of a changing of the guard because Aaron needs to scoot off. But now we've got Matt with us, so we're going to go on with Matt after Aaron departs. This is Matt Homann, who has just joined us. Matt is an old acquaintance of mine, blogger for a long time, lawyer, very creative thinker — out-of-the-box kind of thinker; and his recent enterprise is, he has launched a couple of apps called Invisible Boyfriend and Invisible Girlfriend that have gotten a lot of attention in the media lately and have raised some issues that I bet, Matt, you'd never thought you'd be considering at this point.

Matt Homann: You know, it's funny — thank you, Denise. It's good to be here. Just had a pitch to a Washington University MBA executive group. And so we keep on hearing issues that are coming up. I have to remind myself we've only been live for less than three months, so bring them on. I don't know if we can answer them all, but we'll give it our best shot.

Denise: All right. Good. We're going to do that a bit later in the show. We're going to wrap things up in the areas that Aaron is quite well versed in. And we've been talking about reusing things that you've purchased; and this is something that just caught my eye in the last week or so that I thought was so funny and cute. And I think the reason that it was making the rounds in social media is — well, let me tell you what it is first. It's an Australian woman who decided, like many parents might decide, that the Bratz dolls that are available to purchase for your child are not necessarily the best representation or the most honest representation or the most role model-worthy representation of femininity that she wanted her family enjoying. And she's also just kind of a doll nut and someone who enjoys working with dolls and quite an artist, too, because what she decided to do was, she would buy, I think, secondhand dolls — often Bratz dolls — in thrift stores and things. Then she'd take them home and fix them a bit, as far as she was concerned. And she took off all the Bratz dolls' makeup and gave them sort of more reasonable-looking eyes and clothing. And she opened up an Etsy shop — originally she was doing it for her own family. And then she opened up an Etsy shop, and she cannot keep it stocked. (Laughs) She's constantly making more of these because there's strong demand for someone who wants a modded doll. And that's what she's doing. And so while my parent friends were sharing this around going, Isn't this cool? Someone's taken this into their own hands and is giving an alternative to these sort of more dramatically made-up and not role model-worthy dolls that are available. And while that seems to be the theme with which this was being shared, I, of course, took a look at it and went, Oh, my gosh, they're modding dolls now. (Laughs) What are the legal ramifications? What is Bratz going to think about this? Aaron, what do you think Bratz is going to think about this?

Aaron: Well, first of all, as the father of a three-year-old, I think this is wonderful.

Denise and Sarah: (Laugh)

Aaron: So — I mean, it's a really interesting example of a line that we've been sort of aware of in our writing on these issues about ownership, and that's the line between first sale and fair use. Do we think about this as an exercise of someone's personal property interests in a product that they buy, like reselling might be; or do we think that this is kind of better suited for analysis in terms of the expressive values that I think are inherent in this sort of product? I'm sure Bratz is not happy about this for a few reasons. One, I think, mostly that it opens them up to kind of cultural critique. And to me, that's exactly why this should be analyzed through the lens of fair use. It reminds me of the work of sort of pop action figure artist Sucklord a little bit. I don't know if you're familiar with Sucklord's work, but he makes these really amazing sort of action figures by kind of Frankensteining together bits and pieces of lots of toys and making something new out of them and something that's often sort of subversive and has its own message. And I think this is a similar kind of exercise; and this is, I think, exactly the kind of behavior that fair use should be in the business of protecting. Now, fair use doesn't explicitly take into account personal property rights or ownership; but there are ways that courts kind of bring that into the equation. And here, I think the fact that we have a person who's going out and purchasing these products tell us something, at least, about the impact on the market for Bratz dolls, right? If every one of these critical works involves the purchase of a new Bratz doll, I think that's points in favor of this kind of use from the fair use perspective.

Denise: You know, you pointed out to me, one of the reasons that I do the show — I've done this show for such a long time — is so that we have guests on who will say things like, "I don't know if you're familiar with Sucklord's work." (Laughs)

Sarah: (Laughs)

Denise: So made my day with that one.

Aaron: (Laughs)

Denise: And we're going to go ahead and make "Sucklord" our first MCLE pass phrase for this episode of This Week in Law. We put these phrases in so that if you're listening for continuing legal or other professional credit, you can go ahead and verify that you've listened to the show if your oversight board requires you to do so. So our first phrase this week is "Sucklord."

I know you're going to have to run very, very shortly here, Aaron, and I don't want to let you do it without telling us something about the area in which you are probably the foremost world expert. Tell us about what's going on with athletes and tattoo artists and very, very visible tattoos these days.

Aaron: So I am really interesting and have been for a while about the intellectual properties and locations of tattooing. I wrote an article a few years ago it was in Minnesota Larview. It was based on a bunch a bunch of qualitative interviews I have done. I went around a bunch of tattoo shops around the country and talked to people that work there about their sense about who owns the kind of creations they do when they are collaborating with clients. About how we are going to draw the line about inspiration versus copying. What do they do about it? Tattooing its one of those industries that kind of falls into whats sometimes called the negative spaces of intellectual property law. These realms that are really regulated by informal community norms and not really so much by the legal system. So it's interesting when we see a legal dispute, litigation surrounding tattoos. Its a really, really rare occurrence and typically it involves an professional athlete because there is a sense that there is a lot of money involved. There is a sense that there is some third party, either a shoe company or an advertising company, or video game company who can be sued by the tattooer rather than suing their own client. And so we have seen a number of these disputes in recent years and I think that one of the more interesting things that has happened is EA Electronic Arts has put a program in place where they actually put the onus on the professional athlete for Maddon they tell pro athletes in the NFP, if you want protection in our video games to be accurate with respect to your tattoos, you need to go out and get this release signed by your tattoo artist to clear us from any personal liability. I can see that from a risk management prospective why EA wanted to do that. Having to litigate one of these cases is an expensive proposition. I think in some ways it underestimates the sense that once a client leaves the tattoo shop they do not have or do not want control over what a client does with their own body. In a way tattooing is the assertion of control over your body and it's kind of antithetical to that whole ethos. To then say: “Well I put this image on your body so then I get to control when and where you display yourself.” These cases I think are incredibly rare, but they are a large enough expense that it probably would make sense to be proactive in minimizing that risk.

Denise: Definitely. And I too, understand why the gaming companies would want to make sure that they have taken care of that issue. It's almost just asking for something to kind of invite them down the road if they don't. It's very interesting to think all of the things that you have to bear in mind today because of the way that our copy write laws work and because of the the way people's ideas of ownership come into conflict with the way those laws work. It's been great having you help unpack those issues for us a bit today, Arron. Obviously there's much more to discuss. Folks should go out and read the links we have in our rundown which include Arron's current law review article with Jason Schwartz. And quite a bit more pertinent information. You can see the links that we have been talking about in advance of the the show at www.Delicious.com/thisweekinlaw.299 Arron, anything else you want to let people know about before you sign off?

Arron: I don't think so. I have probably plugged my work as much as I need to. But it's been a lot of fun and I really appreciate the opportunity to talk with all of you today. Thank you so much.

Denise: Thanks for shouting with you too. Thanks for joining us.

Sarah: Thanks Arron.

Denise: Right. Well Matt. Wonderful to have you with us. I think now would be a good time for folks to stretch, take a break and maybe thank one of our sponsors for this episode of This Week in Law. And the first sponsor we are going to thank is Blue Apron. We talk a lot about Blue Apron on the show. And Blue Apron has become a big part of my life. A big part of the way I approach the kitchen and my cooking talents. And putting good food on the table for family and friends. And sharing great food with folks that come to visit. I have given Blue Apron meals for gifts. I have given them to clients at Christmas time. 4953 They are just great! For anyone who knows how to cook. Who doesn't Know How... cook. Who is fairly comfortable in the kitchen but whats to bring their kitchen skills along. Or I think probably the best use of Blue Apron is you just like good food. And you want to have healthy fresh food in your house and you don't always want to be eating out all the time. You want it to be available conveniently for you and readily put together. Blue Apron is just awesome for this. So I know you know a lot about Blue Apron if you have been listening to This Week in Law for some time. I am a huge fan of the service having used it for a while. But one thing I have not highlighted for you yet. You know that they send farm fresh healthy meals with all the ingredients ready to go and east step by step recipes to follow. Right to your home. That things go together really quickly. 25-30 minutes sometimes, and you come out with this great restaurant worthy dish at the end of things. Not just an entree but inevitably a great side dish to vegetables and salads and things that go along. So you know all that. You know that the balanced meals that you are getting from this have just 500-700 calories per serving. And this is all great, great stuff. But what I haven't highlighted yet, if if you are one of those people who wants to increase your skills in the kitchen. Maybe you have never done something like poach an egg before. It's going to give you step by step instructions how to do that in your recipe card. But there are also some great how to videos that are short and sweet and very easily taken in that help you hone in on those specific cooking skills. My son recently decided he loves poached eggs. And I went through some trials and tribulations. You know I had never poached an egg before. I am not really an egg for breakfast kind of person. So it wasn't in my repertoire. Look at this trick that they give you on Blue Apron in this little 42 second video. I would never have thought to swirl the water like this, (you can put vinegar in I think that helps), and it seals the white around the yolk in a way that you. . . I was thinking do I have to buy a contraption or special trays to cook a poached egg? Nope. All you need is a pot, water, bit of vinegar, and these great directions from Blue Apron. And there is our little friend having a very hot float on the top of that boiling water. So you really have to check it out if you haven't tried it yet. Current meals they are offering things that you might get if you get on this quickly. Are things like: Matzoh-Crusted Chicken with Orange, Fennel & Golden Beet Salad. And Miso tofu Shitake noodles. Roasted eggplant and Nistershum leaves. So again, the flavors that they put together are so incredible. They are probably not things you would decided to make spur of the moment while you are grocery shopping. They are probably things that you would only decide to make if you are the kind of person who pours through cookbooks and comes up with great looking dishes. They are doing all that for you and sending then right to you. So, Blue Apron, it's a better way to cook. Check out this weeks menu and get your first two meals free by going to www.blueapron.com/twit. That's right, 2 meals just for going to www.blueapron.com/twit. Thank you so much Blue Apron for helping me out in the kitchen and for your support of This Week in Law.

Matt, Matt, Matt! Wonderful to have you on the show! It's been far too long.

Matt Homann: How are you?

Denise: I am doing great! I know that you have been having a good deal of fun lately. 5402

Matt: I have. It has been a little bit crazy the last three months, that is for sure.

Denise: One anecdote I will tell folks before we get into talking about invisible boy friend and invisible girlfriend. Matt is no stranger to having great problem solving ideas. Which is how these apps came about. Matt was recently divorced and had people on his back about "when are you going to get yourself in a relationship again? And he wanted to just, you know, get these people off his back and thought it would be really great if I just show them a bunch of texts from someone so they believed I was in a relationship. So, that's how you decided to go down this path?

Matt: That is correct. That was about 9 almost 10 years ago. 5448 And then probably registered the domains of invisible girlfriend and invisible boyfriend dot come and then didn't do anything with them until November of 2013. 5515

Denise: I don't know. It was probably 8 or 9 years ago that you told me the great trick of your digital business card. Instead of having to carry cards around you or oh my gosh what if you didn't have a card with you? You registered the domain: "I met Matt.com"And just put a card up at that domain. So you can tell people just look at up "I met Matt". And there you go.

Matt: I think I need to go back and see if I still own that domain. That is such a long time ago when we first met.

Denise: I thought that was such a brilliant idea. A great way to make sure that people can always contact you. Alright so what you have wound up doing is getting people thinking about virtual relationships in general and how our robot overlords are going to interact with us when we don't actually have human romantic relationships any more. We'll play our buffer for that sort of topic. I definitely want to be entangled with one of those little robots. Alright, so we teed it up, we gave your original inspiration or what you thought the utility of your apps would be: a just kinda, "get off my back" kind of thing. And it's turned out to be much more than that. Tell us how you decided to have the app interact with the client. Because as I understand it from what I have read and what I have heard about your service, you started out thinking that a chat bot was going to be sufficient and then quickly decided no, that is not going to do the trick.

Matt: That's right Denise. When we went to start-up week here in St. Louis in November 2013, it was really at the last minute that I pitched this idea. Like I said I have had it for a long time. And in the course of that weekend we managed to connect up TWiLlia, which is a text messaging service and a chat bot. And when we went to the start-up weekend we thought this should be pretty easy. We'll just build a better chat bot. We'll find an online service we can use or otherwise connect it and make this really simple text messaging tool. What we realized is that the chatbot just didn't do the trick. Ah, when I talk to Siri sometimes she doesn't even understand what I am saying. And when we realized that 4 year olds can essentially do better natural language processing than sophisticated computers, we started to look for other options. And we just so happened upon a company here in St. Louis, a friend of mine is the COO, called Crowdsource. And what they do is micro tasks for an infinitely scalable workforce. And we talked with them and realized that we could send the text messages from our users through our system into Crowdsource. And we could curate right now a workforce of about 600 plus people. They get the text message they see a bit of the context on the conversation, they can understand a bit of the history of how that person was talking with them and what their personality is supposed to be etc, and they respond. What has surprised us thinking invisible girlfriend and invisible boyfriend were supposed to be proof. It is proof you are in a relationship even when you are not. And more and more of our users are burning through their text messages in a rapid way, beyond what they need to show someone else. And so we found ourselves we've come in this sort of in between relationship model. We are calling it distributive companionship, but it's halfway between what a robot can do and what single person can do. These individuals have created this fictional person, they know it's fictional and they are not being cat-fished by someone else who set them up on the service. And they are talking with them. It is validating. It is interesting to them. And it's been quite a wonderful and interesting experiment over the last 3 months.

Denise: Yea. At first when you launched you got quite a bit of attention. And quite a bit of eyebrows raised and heads shaken. Have we really come to this kind of response. You were featured on Conan O'Brien and I think we might have that cued up so that people can see the sort, I am sure you loved the exposure but it must have been funny to see your product sent up this way.

Matt: For guys who are having trouble dating, the company customizes a person who will call, text, and email you for $24.99 per month. $24.99 a month you get text, emails, phone calls. The creator says the service is going to feel very real. I think maybe too real. Check out their ad.

Conan O'Brien Ad Narrator: Invisible girlfriend has lots of add-ons so your invisible relationship grows just like a real relationship. After 6 months, your invisible girlfriend demands you become Facebook official at an extra $5.00 per month. After 1 year, it moves in with you for an additional $30 per month. After 2 years, an invisible condom breaks, after $500 dollars. Which leads to an invisible shotgun wedding at just $10,000 dollars. Two invisible kids and an invisible terrier mix for just $1,200 a month. After nine years, invisible alienation of affection for just $19 per month. Plus liver damage. An invisible mistress at no additional cost to you. Invisible alimony for 50% of your assets. Invisible girlfriend. Fake love, real sad.

Denise: I just love that. I love that you caught their attention and got quite nicely set up there. Um, so, having got all this attention you have quite a few subscribers now can you share with us your subscriber numbers?

Matt: The subscriber numbers we are keeping a little close to the vest right now. We have had 60,000 people who have created boyfriends and girlfriends from around the world. Roughly half of our users are living overseas. Of those, we have had, only a small percentage I'd say a little over a thousand, 1500 have actually gone through with the service. The finding is that over half of our callers can't use the service yet cause we are only available here in the U.S. And Canada. Yea, we have had some fun. We've been surveying them and finding out why they are using the service. And one thing, (and the Conan O'Brien thing is really funny) but one thing we have tried to take seriously is that: This is a real problem for people. It's easy to be judgmental about isn't it sad that someone needs to have proof. They don't need to have proof for themselves. They need to have proof because in many ways society is demanding that they be in a relationship. Then somehow you are more valid to our society if someone else has said you are okay to hang out with. And so for those people who just want to focus on their jobs, people who are getting hit on at the office. We think there is lots of people who are interested in having this service. And also using it to have a bit of conversation.

Denise: Right. And the proof aspect as to why you went into this but it has sort of morphed into having a relationship with someone. And as you have said, you are not pulling the wool over anyone's eyes. 102 They know it's a relationship that they are paying for. But the folks who have tried it out and written about it often times have been blindsided by how satisfying it was.

Matt: Hey, that kind of caught us by surprise. We always told everyone, we are not trying to build a relationship you can believe in. We are trying to give you proof to others. But even as we were in early beta before we released to the public in January, we started to realize that real people responding to the text messages was pretty compelling. Another thing that has been fascinating to me is when I get a text message from my invisible girlfriend (and I name her invisible girlfriend on my phone so my wife doesn't get jealous), from my invisible girlfriend I feel compelled to respond even though I know what is behind the curtain. So in some was technology has trained us to interact with it in a little bit different way to interact with it than I think we suspect. And certainly those conversations, (well I don't know that they are relationships necessarily) certainly we are trying to figure out exactly what we have built. But it's validating, it's positive, and it is somebody who is always there to prompt you and give you a response and prompt you if they haven't heard from you in a while. So it's been pretty cool.

Denise: It seems like at some point you may have to re-brand or branch out a little bit and offer the service that is less of a pretense of being a romantic relationship and more just a friendship.

Matt: I think that's exactly right Denise. And most start-ups (and this has been for a while a side project of mine) we've got a team, a handful of our original founders continue to work on the project with me as well. Is that most start-up founders would kill for (not just the publicity we have gotten) but the kind of users and ability to get insight. When we launched we were hoping we might get 50 maybe 100 people to use the service for a couple of months so we can learn from them and figure out where we need to go. And that's been the case. We seem like we are solving 2 different things. People really want it for the proof. We have had some amazing testimonials from folks. From a widower who got tired of his kids asking when he was going to be dating. From a woman whose boyfriend broke up with her when she was going through chemo. She is using it not for the proof so much but just to have someone to talk to. So, we think we gotta figure out exactly where they go. When you talk about the relationship piece, I think there are other where that conversation and that relationship are equally valid beyond the romantic one.

Denise: Right, and the other aspect that seems like it might be incredibly useful and a great value at $25 a month, it to have (you brought up) Siri at the beginning of this conversation. A siri that actually worked. Right, if you are crowdsourcing and humans are responding to your queries, it seems like they would be able to understand and deliver you the information you are actually looking for instead of the wrong restaurant in the wrong town as Siri is so fond of giving me.

Matt: That's exactly right.

Denise: Yup. Alright, so I was tweeting earlier this week that you might be the only person other than the unsullied themselves to know game of thrones reference for the show here. If you know why the unsullied visit brothels. There is this sort of human contact support validation thing. Your ah, it would be interesting to have you tell us and it all seems like this is a moving target, but for the time being your crowdsourced responders how are you preparing them to deal with the myriad of things they must be getting from your 60,000 users.

It's funny Denise is that most of the people early on who tried to brake the system, who tried to sext with it, who tried to pick fights or otherwise argue or to use profanity, we realized that most of those were media people writing about the service trying to come up with a unique angle trying to say that I broke my invisible boyfriends will. Really, we're not seeing that. When we look at what our and how are users are using it, it's the mundane that is most commonplace. It's not, our users if they say something inappropriate, our Crowdsource folks can flag that. We've got a handful of flags that we are able to implement. But they are not being used very often. Now that the initial buzz is completely died down. Now that the folks that want to write about it as something bran new have written about it, we are seeing far less of those outlier use cases. Because most people are just enjoying talking to someone, or having those texts, maybe they show their friends but it's been less variability than we expected. And sometimes it's a bit boring. Which is kind of cool in some ways.

Denise: Yea, at some level our chat room thinks this all a bit creepy and weird. Sarah, what do you think?

Sarah: I think it's fascinating especially the fact that it started as something tongue and cheek. It's turning into something more serious. I think it's really interesting. I would love to read your terms of service. Actually I was just thinking I just made a note to myself look at those. That would be interesting. Cause I wonder how often do people start asking for advice, or kind of boarder on things where you are almost getting into like categories of topics where it would be good to have a social worker responding. Have you gotten into that where people are in trouble or suicidal or anything like that?

Matt: We haven't seen any of that yet. In terms of service we talk about it being for entertainment purposes only. Those sort of thing you might imagine. But really, we have had folks who have reached out to us who would love to figure out how we can use this on a mental health standpoint. It is something that we are not prepared for and we certainly aren't making any promises. But the conversation isn't really about maybe I am bummed or I am having a little down day. But it's not at least what we have seen so far or at the extreme either way. We talk to our people and try to figure out why they are using it. We had one user who said that she was practicing her flirting with her invisible boyfriend so she could then use it on a prospect for her. Another guys said he used it to make a woman that he was seeing jealous. Been on a date with her. His text message came through from his invisible girlfriend, left the phone on the table as he went to the restroom and when he came back she was far more intrigued by him than she might have been before. 109 So, it's all of those use cases that we are still trying to sort out. I do think there is multiple avenues for that. We certainly have the capacity at some point in the near future to add mental health professionals, to add nurses, to add other folks who might be more equipped to deal with the outliers comments. We just haven't gotten there yet, we haven't seen any of them that have given us significant moment for pause.

Denise: Well I don't mean to sit here and give you moments for pause, but I tend to look at your adventure here from a bar exam issue spotting kind of perspective. What could happen.

Matt: It comes with the degree a little bit doesn't it Denise?

Denise: It does, unfortunately. Um, so I have been mulling about your secondary liability kinds of exposure and the fact that, well let me ask you. Are you monitoring every single response that every single Crowdsense worker sends out? Or are you just giving them guidelines and turning them loose?

Matt: So, it's a bit of both. One of the things with the number of test messages that we have and we are obviously keeping an archive. One of the things that Crowdsouce does for us is one of the really valuable things of their service is they build an entire quality assurance rigor around the service that they are providing. We've got multiple points of chances to catch things. We haven't really seen them tested yet. I know that somebody is going to come in and test, whether they are a user or a journalist and try and break it or say something that is interesting. It hasn't happened yet. That's one of the things. We are in early Beta, barely been around for 90 days. We can start adding more artificial intelligence and even having an extra set of eyes when necessary. Those are all on the punch list. We are trying to figure out what we how to prioritize and how we do it. So few start-ups get this kind of publicity much less interested from folks all across the traditional start-up crest. So, every bit of advice we get we listen, and figure out how we can act upon it.

Denise: I am less concerned with the journalists trying to work the system and trying to see if they can push it to make the virtual boyfriend break up with them or what have you, as just the boring kind of lull conversations where everyone's not really thinking about the ramifications of what might be going back and forth. Let's just you know, harken back the the earlier part of the show where we are talking about the confusion of people whether they own their digital media or what they can do with their digital media. What if someone is sitting at home with a conundrum, they have clicked to the buy now button on a book, and they want to make some use of it. Or you know, they have purchased HBO's service but they are not at home and they can't watch and they are gonna download Game of Thrones illegally cause they have already bought it, right. They feel good about the fact that they have already paid for it. And they just decide to vet it through their invisible girlfriend. Say, you know I already bought this, I should be able to download it, right? And they go, yea, why not. And there you are: secondary liability inducting infringement with a paper trail.

Matt: So if I asked that of someone while I am sitting at a cocktail party, Denise, and we are sitting and having a cocktail, and they give me that advice. Are they liable as well?

Denise: Yea, but there is not paper trail. I don't know. No, I don't think they necessarily are, but I do think that the whole notion of unauthorized practice of law, as Sarah brought up. Maybe counciling situations.

Matt: From an authorized practice of law thing. I mean, none of us, I am no longer practicing. This is one of those things. This has driven me crazy about the lawyers that I have worked with, my friends, even myself. We see that one out of a thousand handshake deals that go bad. And we tell every single one of our clients you have to paper the heck out of it cause they all seem like they are gonna go bad. At some point, it's interesting and this is from a start-up standpoint, there are all kinds of start-ups out there. You see what they are doing and you wonder what their liability is. But it doesn't always come to fruition. We are trying to figure this stuff out. The moment that we sit down and figure out what are all the things that could possibly go wrong, let's make a long list. No one builds a company. No one starts anything any more.

Denise: Absolutely the issues that occurred to me. And I do not mean to grind you to a halt. And I do not mean to have you guys shut the doors. The other thing that has come up in some of the coverage of the service is the fact that people, you know, whether they are using the service as a cover to demonstrate that they are in a relationship. Or whether they are using their $25 a month as a psychologically validating pseudo relationship, um, they are disclosing personal details about themselves in order to get better feedback from the Crowdsourcers who are responding. I mean, they are telling, the names of people they live with, their pets, maybe where they live, what they are doing. All kinds of things that are considered pretty sensitive information. How are you dealing with that data.

Matt: One of the things that is interesting is the way that the Crowdsource data works for us. It is not the same person that is your boyfriend or girlfriend all the time. So, the king of information that someone might glean from a multi-threaded month long conversation with you, from the Crowdsouce standpoint no one has access as individual workers to that data. They see just enough to get a context, and they don't see any more than that. We also are working to scrub out phone numbers and other personal information and identifying information. But there is not enough of that context going back and forth with the Crowdsouce workers and their not going to be falling in love with our invisible boyfriends and girlfriends or with their real boyfriends and girlfriends. Even though we have a reality shows that want to think that's happening and want to feature us. We have got the privacy policy. We've got the terms of service. It's one of the coolest thing as having the legal background and having built something that is raising some of these concerns far beyond the "Are you seeing someone?" question that we were trying to answer to begin with. We don't know the answers to all of those things and hopefully we'll be able to solve for them even though I don't really see those possibilities short term for us. Knocking on wood under this table just for the record.

Denise: Yea, absolutely. Sarah, what has crossed your legal mind as you have been considering Matt's company?

Sarah: Well one thing that just occurred to me as we were talking is about the differences in potential liability from a platform that would actually just be connecting random users. Ao likt connecting people that are all looking for invisible and having them kind of kind of interact. Versus what you are doing which is the public comes in and you have this quality assurance Crowdsource groups of specified people that are dealing with the public. Now I don't know the answers, this is just off the top of my head. It's interesting to think about the potential differences in liability because of that. Because you are actually exhorting some control or some attempts to control. Does that up your risk at all? I mean, I would hope not but I wonder.

Matt: It is interesting Sarah, when you talk about that because at the other end of the spectrum a decision that we had to make at least early on was that there was the potential ability to just connect random users through our service and have one play the role of the invisible boyfriend and have the other play the role of the invisible girlfriend. Kind of an each side of the V, if you look at it that way. And that seemed to be posing far more problems. Because how do you do quality assurance. How do you figure out how to make sure that that invisible and the other person don't live in the same city and have that connection and something terrible happens. So, that is one of the reasons why we went with the Crowdsouce because it gives us an opportunity for a bit of quality assurance or quality control. We can monitor our users if folks are not responsive or not doing the things that we think they should do We can move on and disqualify them from our workforce. I really wonder, well I will turn this back to you. If we had a service that literally Crowdsouce our users on both sides of the boyfriend and girlfriend site. What kind of liability do you see? If we are just providing the tunnel for them to talk with one another?

Sarah: I mean in that case it is similar to like a Craigslist or any other platform where it's really just about what people upload. Other than stuff that's been identified, then they will take down. But they are not proactively, up front doing quality controls. So it seems like it would fall into that category. What do you think, Denise?

Denise: Yea, I think its actually, maybe, better from the corporate standpoint to structure something that way because then you might be able to look to the DMCA or the communications decency act to say: Hey we are just a 3rd party. We are not responsible for what are users do. You take flack for bad situations as Twitter has and you would probably have some anti-harassment steps that would be taken but it seems like when the company is actually providing the responses that is a whole different ball of wax. It takes out of the equation these 3rd party protections that are in place for sites that just allow users to communicate with each other.

Matt: I want to thank you both for the official legal advice rendered to a company here in Missouri. For folks in other jurisdictions, we'll rely upon that till your deathbed.

Sarah: Not at all

Denise: Nothing legal advice flowing here. But a fun conversation. And ah, what else did I want to ask you about. As long as we were talking about Crowdsouce labor. It is an interesting situation you find yourself in. You're not hiring the Crowdsoucers, you are not monitoring the Crowdsoucers. This is a 3rd party site you have handled. But your product and the publicity it has gotten brought some attention to Crowdsouce labor and people thinking about how they are paid, etc. Of course Crowdsouce labor is nothing new anywhere in the world. It exists sort of everywhere universally and anyone who has ever called customer service has had that experience. Do you have any additional insights for us on that front, Matt?

Matt: I think that maybe in a perfect world if we would have built a business and slowly grew it. We might have thought about using our own people to do this. But it was the only way for us if we wanted to use real people to respond to text messages. It was the only way to scale this business up as quickly as we have, to serve the users we have. On our 1st or 2nd day when we were on the Today Show, 3 days after our launch, we sent 20,000 text messages within like a 12 to 14 hour period. So for us it was like this business driving thing to do. Not so much is this the best way to solve this with unlimited resources and unlimited time. And the fact that Crowdsouce is local for us. They are just across the river here. I am in St. Louis Missouri and they are just on the Illinois side. We are probably at least for a while their smallest customer. But we know them and there has been an amazing amount of support for us here in the St. Louis Missouri area. And when we talk with them they have been nothing but a fantastic partner for us.

Denise: So because of the way that this did come out of the gate we can look at it as a virtual romantic relationship. I am sure you do run into situations where users try to get more romantic with your Crowdsouce responders than is permissible. Do you just cancel their account at that point? What is the response when that happens?

Matt: What is amazing is that it happens hardly at all. We don't allow sexting. So if someone were to send that we can flag their account and suspend them for a day or so. If they are a repeat offender we can cancel their account. It is surprising. People don't want to send dirty messages to a stranger. It hasn't been happening. And since the media has stopped writing all the stories it is rare for us to even see one of those inappropriate flags come through from Crowdsouce.

Denise: Right. It's more like kind of an impression that I think people would have from the relationship. It's like in one of the articles we have in the discussion points (and people you should check these out cause there have been some really interesting writing about Matt's service and people musing about it). Someone decided it would be interesting to interview one of the Crowdsoucers and see what it's like to be on that side of the relationship. One of the things that she said was you know, happy to be doing it. She's a female but she plays the boyfriend in the relationship because she feels like she has a good insight into what she would be wanting to hear back from someone in a relationship. And everything is all hunky dory except for her 16 year old son who just kind of goes like this and goes: "Mom, it's like you are working for a 900 number". Do you now what I am talking about? Then another writer characterized it as: "Prostitution without sex". Do you have concerns about that kind of impression. Matt?

Matt: You know, there is a huge amount of judgment an bias that we carry with us. And one of the things we have been very careful and adamant about it from the very beginning is that we are solving something very real for our customers. I think lots of that criticism comes from that judgmental piece. You must be creepy or you must be needy in a strange way to be needing to talk to someone who is positive and validating. Or to have cover from everyone else like me who is judging you because you are not in a relationship. So, it doesn't feel that way to us. And again, one of the things you notice ( and certainly you guys see it in your practices as well) is there is the 1 in a thousand people if it's possible to take it the wrong way they will. It isn't something (and I am feeling like a broken record here) we are seeing our users worrying about. And they are not complaining about it. It's the media who is thinking about the furthest fetched concept that they can come up with. And then say the service is terrible because it will support frankly something that no one is using it for.

Denise: An interesting question from IRC. They are wondering if you have numbers or can share numbers on whether the majority of your users are male or female?

Matt: We've had roughly 60-65% are woman. The other 35% are men. And then about 10 % of our users have chosen same sex partners.

Denise: So that breaks down pretty reflective of our actual population then. That's really interesting.

Matt: One thing that has been interesting though, is that when we looked at folks from other countries who have built their boyfriends or girlfriends but who can't buy the service yet. Different countries seem to have different breakdowns. So, those numbers come from our actual users here in the U.S. And it does, it tracks kind of like what you would expect.

Denise: Did that jive with your expectations when you launched? That you would have more woman users? Than men?

Matt: It did especially after we won the start-up weekend. One of the reasons why we did invisible girlfriend first because we knew we couldn't build both of them in the 54 hours of time that we had to launch and pitch. And most of the judges I think all but one were men, and a fair number of participants in the start-up weekend were men, so we thought we'd have a better shot building a girlfriend than a boyfriend to begin with . But we've always felt that that boyfriend was a more potentially viable service than the other, because there is so much more judgment it seems for woman for lack of a relationship partner than there is for men. Especially the getting hit on at the office the harassment. Those sorts of things. In fact we had a user who said that she had a coworker who was continually making unwanted advances to her. The moment that she signed up for this service, she was able to provide the picture and the text messages and the voice mails and he finally started to leave her alone.

Denise: Wow. That's pretty cool. Ah Sarah, any other things you want to pick Matt's brain on here

Sarah: No, I don't think so. The one thing I wanted to kind of respond to was Matt I completely agree with your point about the judgmental piece. I think thats a really important point. Cause thats easy to kind of be dismissive of "Oh isn't this sad that these people need this kind of companionship. But it's really similar to what we are all doing all the time on social media. Just looking for validation from strangers and or people on Facebook who we maybe knew a million years ago Why is it different? There is a real need for human connection that you are providing. So I think that's an important point.

Matt: Thank you.

Denise: What's your response to some of the people like Lucy Tobin who wrote about your service in The London Evening Standard? Who thinks this is one of the horseman of the apocalypse. You know once we start getting into virtual relationships, everything goes downhill from there. She gives some other extreme examples like: "Will the unemployed soon be offered the chance to pay for a fake boss, to post pretend paychecks and fool their family into thinking they found a new job?". Etc. What is your response to that?

Matt: Well that last one might be about 10th down the list of other services we want to launch. If there are 4 horseman in the apocalypse, then we are bringing up the rear, and we might be at the end. For this to be one of those indicators that the world is coming to an end then I think there are so many more things that we are in serious trouble, we might as well be billionaires, so. It's hard to agree at least with the service we have now. The real thing is that it is easy for people and sometimes for us to forget this is bran new. We thought we might have 100 customers by now 3 months in if we were lucky. And trying to figure out where the pricing fit and how we find those customers. And so, Forbes Magazine even said that this is a shockingly big idea. That, all of that stuff is surprising to us and it's obviously a bit of incentive to figure it out. But if the world is ending because of us, at least that gives me a more interesting epitaph on my gravestone.

Denise: Absolutely. Let's see, I think I have about asked you everything I wanted to ask. I'm just thinks it's so fascinating the journey that you are on here. And ask that maybe you come back on the show 6 months maybe a year from now and tell us what else you have learned from this process. Cause I do think there is a lot to learn here. From the way that people are using your service and responding to your service. And I think it will be interesting to watch it unfold.

Matt: I would love that. And I have known you since about the time before you even started doing this show. I know this isn't 300. When do you officially go into syndication and make all your millions of dollars? Congratulations on episode 300 even if it's an episode early.

Denise: Thank you , so much! Yes, that will be next week. We are gonna give a tip and a resource of the week and get on outta here. Matt, if you have things to do as a busy start-up founder, I give you permission to leave class early. If not, you are more than welcome to stay on with us as we wrap up the show. Just let me know what you need to do.

Matt: I will run. But I want to thank you Denise. As one of the folks that was blogging about just any other lawyer. You are an inspiration to lots of us. And really, my career would not have changed as it has, had I not seen early innovators doing what you do. The non-billable hour doesn't get as much attention as it used to from me. But I can trace approximate type tracing starting blogging everything that I am doing now. And I just want to thank you for your inspiration over the years.

Denise: That is very sweet. Thank you so much. And I have really enjoyed knowing you over the years as well. It been really gratifying to see you embark on this new stage in your career. So, best of luck with it. And we will let you go!

Matt: Bye Bye

Denise: Now we are going to thank our 2nd sponsor for this episode of This Week in Law. And that is Freshbooks. It's amazing how many lawyers I know who spend too much time practicing paperwork instead of them practicing law. On top of their piles of affidavits case files there are billable hours that need tracking, expenses to manage, and client invoices to prepare and send. Freshbooks can make your life a little bit easier. And as a solo practitioner myself I can tell you that Freshbooks literally manages that entire financial piece of my practice for me. The capturing of time. The sending out of invoices. And the keeping track of things when I am on the go. Cause with the Freshbooks app, I can manage time even when I am not sitting at my workstation in my office. I can capture expenses simply by snapping a picture of the receipt and having it incorporated into the invoice. It is the super simple accounting software that is based in the cloud and gives thousands of lawyers like you the tools to save time billing and get paid faster. Freshbooks lets you create and send super slick invoices online in minutes. Tracking your time has never been easier. I mentioned the mobile app. You can track your billable hours from literally anywhere. And let's face it. All of us in today's world are oftentimes working when we are not in our office. Plus Freshbooks mobile apps help you organize receipts when you are running between the office, a client meeting, and the courthouse. If you do have questions, the award winning Freshbooks rock stars are waiting with alive person on the other end of the phone to help. So, go ahead and get started it's very very simple and it's totally free for 30 days with no obligation. God to www.Freshbooks.com/twil and don't forget to enter "twil" in the how did you hear about us section. Start your 30 day free trial today. And we thank Freshbooks for supporting this episode of This Week In Law. Alright, well if Matt's former legal blog doesn't get the attention that it used to, let's make it our 2n MCLE pass phrase for this episode of This Week in Law. And to give it a little more attention it's called: "The Unbillable Hour". And now we've got 2 phrases in the show hurray! We are going to give you a tip and a resource. We are sticking with our theme. Creative commons related tips from Sarah yea! And this week, we have discussed just to recap we have discussed about what creative commons licenses are, how you use them, how you find creative commons licensed work. But we haven't yet touched on why if you were an artist you would want to apply a creative commons license. So Sarah, can you bring us up to speed?

Sarah: So, on the public interest side I think it is obvious why creative commons licensing is a good thing. You know, it gives people this content pool of content that can reuse and remix. But it's interesting from the artist and creator side to think about the reasons why you would do it. And I think some of it, it's interesting to have this follow the discussion with Aaron. What he is talking a little bit about especially in his Law Review Article is how this massive exhertion of control over copyrighted work is kind of decreasing the incentive for people to actually pay for content. (pay for copyrighted works) Because also there is this availability of so much that is free. So CC licensing is a way to combat that. It enables you to have your content move around the web freely without any copyright concerns while also retaining rights over your work. So it's a way of giving people what they want but still retaining ownership. I think it was Cory Doctorow that said his biggest problem as an artist isn't piracy it's obscurity. And so that's another reason why you might look to CC licensing.

Denise: Alright. Thanks so much. We are going to continue on helping you understand CC licensing and their use and how they can benefit you as a person who wants to reuse others material. It's a great resource that we love to give attention to. And more understanding. And our resource of the week. We are talking about Matt's terms of service and how important they are that they be tailored to what they are doing there at invisible boyfriend and invisible girlfriend. And I think that's a very concrete example of why copying someone else s terms of service and privacy policy and everything else is a really bad idea. And it happens all the time despite what a bad idea it is. Resource of the week is by Lila Bailey, who has a great medium piece in very digestible terms. She gives 5 good reasons why you don't want to do this. I think having our discussion today with Matt, should be added in as a 6th that different companies do different things and have all kinds of considerations that they might want to be taking care of or addressing in their terms of use and privacy policy. And you simply can't adopt on companies (even if they are a similar company) to the one that you are operating and use it as your own. It is not unusual to find terms of use on people's sites (sometimes people's fairly well know sites) that you can tell have been cut and pasted because someone didn't quite get out the last companies name for example in terms of service when they decided to adopt them as their own. Some of the things that Lyla highlights are the bad PR you could get if someone figures out oops you just copied that from Yahoo that's not a good thing. Um, also not only bad PR to the public but your investors or others who are involved in your business might very rightly think that if you are copying other people's terms of service, you know, what other short cuts are you taking? Really, and this is an important one. She says a good policy can be an asset. It's an opportunity to distinguish your company from the competition. Really, you can head off a lot of potential problems with these things if they are drafted properly. Bare that in mind too. Examples too, if you make them easy to read and a little bit funny, as Lyla points out, people appreciate that, nobody likes to read these things. But sometimes it's important to do so. And if you can make that something that is positively representation of your company, that's a great way to go. She also points out it's illegal. You know we talk a lot about copyright on this show. If you are wholesale adopting something that someone else has drafted, we could argue a little bit about terms of service and privacy policy qualify as a creative work. But I think that you would find if push came to shove that you would have some copyright problems if someone decided to get nasty with you over it. And if you have the other thing to bear in mind is that different jurisdictions have different requirements. Again, you are not really taking into account those issues if you are just copying and pasting. And if you have an invalid term, it could make it so all of your terms of service are invalid. And then you are worse off than you were when you started. A great thing to bear in mind and a great piece by Lila Bailey. On that front, Sarah this has been such a fun show. I am so glad that we got the chance to chat with these guys.

Sarah: Yea, me too. It was good one.

Denise: And next week we are gonna have our 300th episode. You know, it's just another episode it's not really gonna be a big deal or anything. But it is fun to hit that milestone and we are hoping that you join us for that. If you do so, you will be doing that at 11 o'clock pacific time, 1800 UTC, that's when we record the show live. If you can't join us live don't worry about it. All the shows are available in on demand form at twit.tv/twil. Also, we have a YouTube channel if that's easier for you. www.youtube.com/thisweekinlaw . We have various social media presences you can find us on Facebook, on Google-plus, Sarah and I individually are on Twitter. There is a Twitter account for the show but it's a bot. I don't really monitor it. It just puts out the new episodes of the show as they are available. So if you are just looking for where the episodes are and you want a quick link, then you can go to twitter.com/thisweekinlaw cause that is what you are going to find there. Otherwise, I am dhowell on twitter and Sarah is shpearson there. That is a great way to let us know things that are on your mind about what we have talked about, guests you think we should invite on, companys you think we should pay attention to, whatever you think is a great thing to have on our radar. You can hit us up there, or an email. Sarah is Sarahp@twit.tv and I am dhowell@twit.tv and with that we will go ahead and wrap up the show. We have had a lot of fun. Thank you so much, Matt Holman and Aaron Perzanowski. Thank you so much for joining us today. And we will see you next week on This Week in Law! Take care.