CANADIAN COURT RULES FILE SHARING LEGAL

On March 31st, a Canadian federal court ruled against a motion which would have permitted the music industry to sue music file-swappers on the Internet. Justice Konrad von Finckenstein ruled that the Canadian Recording Industry Association did not prove copyright infringement by 29 "music uploaders." In a far-reaching decision, he also ruled that downloading a song or making files available in shared directories, as facilitated by the popular KaZaA service, does not constitute copyright infringement under Canadian law. "No evidence was presented that the alleged infringers either distributed or authorized the reproduction of sound recordings," von Finckenstein wrote. "They merely placed personal copies into their shared directories which were accessible by other computer users via a P2P service." The judge compared the action to a photocopy machine in a library, saying, "I cannot see a real difference between a library that places a photocopy machine in a room full of copyrighted material and a computer user that places a personal copy on a shared directory linked to a P2P service." The Canadian Recording Industry Association had taken five Internet service providers, including Bell Canada, Rogers Cable and Shaw Communications, to Federal Court last month, trying to force the companies to hand over the names and addresses of 29 people who allegedly shared hundreds of songs with others. The decision has been appealed. The decision in BMG Canada et al v. John Doe et al may be found at http://www.fct-cf.gc.ca/bulletins/whatsnew/T-292-04.pdf

On March 30th, the International Federation of the Phonographic Industry (IFPI), a worldwide recording industry association, announced its initial round of lawsuits against individuals whom it claims illegally share files of copyrighted music. The 247 suits are against alleged file sharers in Denmark and Italy (criminal complaints) as well as Germany and Canada (civil litigation) and are similar to actions brought in the U.S. by the Recording Industry Association of America. The IFPI said it plans to bring additional lawsuits in other countries over the coming months. Further information may be found at http://www.ifpi.org/site-content/press/20040330.html

Are you curious to see how much your neighbors are donating to political candidates? A new web site makes it easy. FundRace 2004 lets you enter any street address and view what people at or near that location have contributed to a presidential candidate, along with their addresses and occupations. The data is based on reports that campaigns regularly file with the Federal Election Commission. You can also look up a person’s name and get the same information. Color-coded maps at the site show which regions lean Republican or Democratic based on their donations, and spotlight the five most generous addresses, by party, in each city. The site may be found at http://www.fundrace.org

On April 1st, the nation’s leading software companies conceded that new government regulations may be needed to strengthen the nation's vital computer networks from online attack, a shift away from their traditional stance against regulation. The recommendations, released by the National Cyber Security Partnership, were intended to answer the Bush administration's challenge to the technology community to develop more secure software products as part of their contribution to the White House's national cybersecurity strategy. Ron Moritz, chairman of the taskforce that released the plan, warned against government rules holding software manufacturers liable for security problems. "[We] don't believe there has been sufficient study of the impact of liability regulation or legislation, and to make that call today would be premature," said Moritz. "We need to better understand the potential impact of new product liability laws, particularly on smaller software makers and open-source providers." The report said that government intervention could be necessary in dealing with software that is responsible for insuring the safety of the nation's critical infrastructures such as the water, power and telecommunications grids. The report primarily calls for an industry-led national accreditation program for software developers, more stringent testing of software patches and broader use of tools that can catch common software flaws. The group also suggested forming a multi-company program to offer rewards for information leading to the conviction of cyber criminals. The group includes executives from Microsoft as well as the Business Software Alliance and Hewlett-Packard, among other companies. The report may be found at http://www.cyberpartnership.org/init-soft.html

On April 19th, the Electronic Frontier Foundation (EFF) launched a campaign to overturn several patents that it said are having a chilling effect on public and consumer interests. In a white paper posted on its website, the civil liberties group targeted 10 patents in particular, including one awarded to Amazon.com for one-click shopping and another awarded to California lawyer Lawrence Lockwood for online credit card payments. The two patents are frequently cited by critics of the U.S. Patent and Trademark Office as examples of how patents can do more harm than good for the software industry. The goal of the new campaign is to prevent questionable patents like these from being used against individuals and small businesses. The EFF will begin its campaign by compiling prior art, or evidence, planning to help prove that each of the targeted patents was wrongly awarded. The organization will also collect data about any negative effects that the patents may have had on individuals and small businesses. The information will then be presented to the Patent Office in requests to re-examine the patents. Further information may be found at http://www.eff.org/Patent/

Movie studios, record companies and technology firms are about to tackle copyright piracy on campus networks with a new technology known as the Automated Copyright Notice System (ACNS). The technology promises to make copyright enforcement easier on peer-to-peer networks, saving schools and Internet service providers (ISPs) time and money. ACNS allows the schools to automatically restrict or cut off Internet access for alleged infringers on notice from a record label or movie studio. For example, universities using ACNS could instantly send notices of copyright infringement to students by e-mail and restrict their network access until they have removed the offending file(s). A similar system is now live at the University of California at Los Angeles, one of the nation's largest universities with 37,500 students. Universities have an incentive to cooperate with the technological solutions because they can be held liable in lawsuits charging their students with digital theft. ACNS was jointly designed by Vivendi Universal Entertainment and Universal Music Group in response to an open call for technical solutions regarding peer-to-peer piracy. The two groups are still talking to universities, ISPs and technology companies about offering the technology as a pilot program. Further information may be found at http://zdnet.com.com/2100-1105_2-5194341.html

On April 19th, Microsoft announced that it had reached a settlement with Minnesota consumers to end an antitrust suit alleging that Microsoft had overcharged for its Windows operating system and its Office application software. The settlement terms will remain confidential until they are finalized in early July. The suit originally sought damages of up to $425 million, and it was one of only a handful of state-based claims the company had yet to settle. Further information may be found at http://www.microsoft.com/presspass/press/2004/apr04/04-19MSMinnesotaPR.asp

On April 19th, London based Privacy International, an international privacy rights group, announced it had filed complaints against Google’s free e-mail service known as Gmail in Australia, Canada and 15 European nations. Privacy International alleges that the Gmail service violates privacy laws, both in Europe and in other countries. The complaint identifies a wide range of possible breaches of European Union law. Google says that Gmail, offering 1GB of free storage capacity, complies with data protection laws worldwide. At the heart of the controversy is the fact that Google’s computers would scan e-mail using the Gmail service for keywords to use in sending Gmail users targeted advertisements. It would also keep copies of e-mails even after consumers have deleted them. European law says that data should not be stored longer than necessary and that the "sniffing" of e-mails is allowed only under certain strict conditions. Privacy International argues that the communal nature of e-mail renders the idea that users consent to Google’s sniffing meaningless. "Consent can only be given by a Gmail account holder," the organization said. "Those who send e-mail to a Gmail customer will have no opportunity to consent to having their e-mail read for keywords." A copy of the complaint may be found at http://www.privacyinternational.org/issues/internet/gmail-complaint.pdf

In a 300-page report, the European Commission says the record antitrust fine imposed on Microsoft arose from Microsoft’s longstanding anticompetitive practices. The alleged five-year duration of those practices resulted in a $590 million fine, significantly above what the company would have been charged simply on the basis of its business practices. The document says the gravity and length of the infringement resulted in the huge fine. The EU’s ruling against Microsoft, announced in March, found that the software company had failed to give rivals information that they needed to compete fairly in the market for server software and that competition was also stifled by Microsoft because the Windows operating system was offered on the condition that it come bundled with Windows Media Player. The report may be found at http://europa.eu.int/comm/competition/antitrust/cases/decisions/37792/en.pdf

Portraying itself as the victim of overreaching regulators, Microsoft released a position paper basically arguing that the European Union’s recent antitrust ruling amounts to creating new law that would harm the technology industry as a whole. The seven-page paper, part treatise and part legal brief, cites both the potential damage of the ruling and the alleged legal shortcomings of the decision. "The commission is seeking to make new law that will have an adverse impact on intellectual property rights and the ability of dominant firms to innovate," Microsoft said. "This adverse impact will not be confined to the software industry or to Europe." Microsoft’s position paper may be found at http://download.microsoft.com/download/5/2/7/52794f65-8784-43cf-8651-c7d9e7d34f9 0/Comment%20on%20EC%20%20Microsoft%20Decision.pdf

On April 19th, Open Source Risk Management (OSRM) announced that it would sell Linux users protection against copyright infringement claims such as those made by the SCO Group. The New York-based company is launching the insurance-like offering after a six-month study that compared Linux with several versions of Unix. The evaluation uncovered no copyright problems with versions 2.4 or 2.6 of Linux's heart, or kernel, a finding that contradicts SCO's legal attack on IBM, AutoZone and DaimlerChrysler. OSRM's legal protection is the adaptation of the business world to the arrival of open-source software, a collaborative programming philosophy in which developers cooperate by freely sharing their programs' source code rather than keeping it proprietary. The new offering follows indemnification Novell and Hewlett-Packard provide customers who buy Linux products and a promise by Red Hat to replace any Linux software that a court case finds to infringe copyrights. The legal protection covers only copyright infringement, though OSRM plans to offer patent protection later as well. Also on April 19th, OSRM launched another element of its business: a group of legal experts called the Open Source Legal Defense Center. Companies can pay $100,000 per year, or $250 for individual Linux programmers, to get access to the experts' legal advice. Individuals can get up to $25,000 worth of advice in advance or when dealing with a direct legal threat involving software they wrote. Further information may be found at http://www.osriskmanagement.com/press_release0419042.pdf

On April 22nd, the Department of Justice announced that Operation Fastlink had begun on the preceding day, with a series of raids against website operators suspected of distributing more than $50 million worth of pirated music, movies and software. The Department described Operation Fastlink as the largest-ever crackdown on online piracy. The Justice Department coordinated more than 120 searches in ten countries and 27 U.S. states. The operation targeted "warez" sites operated by sophisticated electronic pirates who specialize in securing and disseminating illegal copies of movies, music and computer programs. Authorities took down the operators' Internet sites, seized their computers and collected evidence against more than 100 suspects. Further information may be found at http://www.usdoj.gov/opa/pr/2004/April/04_crm_263.htm

On April 24th, Forgent Networks announced that it had sued 31 major hardware and software vendors, including Dell and Apple Computers, for allegedly infringing on its claim to an algorithm used in the popular JPEG picture file format. If the suits are successful, they could lead to an increase in prices for tools and software used to create and modify images, or even lead the industry to abandon the JPEG format altogether. In use since the mid-1980s, the JPEG, or Joint Photographic Experts Group, format has become the de facto standard for sharing photo-quality images electronically. Although the most widely used version of the format is in the public domain, Forgent said it believes that a seventeen-year-old patent it acquired through the purchase of Compression Labs in 1997 can be applied to a specific algorithm in the format. Defendants in the lawsuit include Apple, IBM , Kodak and Xerox, all of which use JPEG in their products. Forgent contacted each of the companies over the past year and offered them the chance to license the technology but none of them accepted the offer. Further information may be found at http://www.infoworld.com/article/04/04/23/HNforgentsues_1.html

Strangely enough, it turns out that pizza delivery customer databases are some of the best sources to locate the scofflaws of the world, all of whom seem to enjoy pizza. The Missouri Office of State Courts Administrator has hired a firm (ACS) to handle its fine and debt collections, and the firm relies in part on these databases. As it turns out, when you call to order a pizza, you usually give them your correct name, your correct address and your correct phone number. It is not known which pizza companies' databases might be mined. A representative of Domino's Pizza said the company does not sell its customer information, and other national pizza chains did not respond to inquiries seeking comment. Further information may be found at http://www.usatoday.com/tech/news/internetprivacy/2004-04-27-pizza-no-privacy_x. htm

A state appeals court has rejected the first constitutional challenge to the Florida Computer Pornography and Child Exploitation Prevention Act of 1986. On April 26th, the 1st District Court of Appeal in Tallahassee ruled unanimously that e-mails intended to lure children into illegal sexual activity are not protected by the First Amendment of the U.S. Constitution. The Act, almost two decades old, had been unchallenged until retired U.S. Navy officer Jeffrey L. Cashatt, 50, argued that the law violated his free speech rights. According to the decision, in October 2001, Cashatt went into an Internet chat room specifically designed to help older men meet boys. He invited a detective posing as a 14-year-old boy to meet him in Jacksonville, Florida, for sex. Cashatt pleaded no contest to one felony count of violating the act after Duval Circuit Judge Peter L. Dearing rejected several motions to dismiss by Cashatt's lawyer. Cashatt appealed both his conviction and sentence. The decision in Cashatt v. Florida may be found at http://www.1dca.org/opinion/opinions2004/4-26-04/02-4638.pdf

On April 28th, the Recording Industry Association of America announced that it had filed suit against 477 more alleged music file swappers, 69 of which use college networks. The complaints are all against "John Doe" defendants who are identified only by their Internet protocol addresses. Lawyers will work through the courts to request subpoenas against the universities and some commercial Internet providers to learn the defendants' names. Nearly 2,500 of these lawsuits have been filed by the recording industry since last summer. No cases have gone to trial yet. More than 430 defendants so far have agreed to pay financial penalties. Further information may be found at http://www.riaa.com/news/newsletter/042804.asp

On April 27th, Maryland Governor Robert Ehrlick signed an anti-spam law that allows prosecutors to seek jail sentences of up to 10 years for fraudulent e-mail marketers. Spammers who falsify the "from" or "subject" lines in their solicitations could face up to five years in jail, while spammers whose mail contributes to a felony crime could get as much as ten years. Many spam experts don't like the federal Can-Spam law because it preempts tougher state statutes, but the Maryland bill is not preempted because it targets fraudulent spam, which is specifically not preempted under the federal statute. The text of the Act may be found at http://mlis.state.md.us/2004rs/bills/hb/hb1320t.rtf

On March 30th, the 2nd Circuit Court of Appeals ordered a sentencing judge to explore the privacy implications of both computer monitoring and filtering techniques proposed by probation officials who want to ensure that a defendant is prevented from downloading pornographic images of children. The court expressed concern that the sentence may violate the Fourth Amendment. The ruling concerned the so-called special needs exception to the Fourth Amendment's requirement of probable cause to search and seize based on reasonable suspicion that a crime has been, or is about to be, committed. Lifshitz pleaded guilty in 2001 to receiving child pornography on his computer. After hearing from three specialists who had different opinions on his mental state, including one who said he suffered from schizoid personality disorder, the lower court sentenced Lifshitz to three years probation without a prison term. The court ordered the defendant to consent to the installation of systems that allow the Probation Department to monitor and filter his computer use. The court also required that Lifshitz consent to unannounced examination of his computer equipment and the removal of the equipment for a more thorough investigation. Defense counsel objected, saying that probation officials need reasonable suspicion to conduct a search. The court cited U.S. Supreme Court standards, saying that: 1) The government must allege a special need; 2) There must be a diminished expectation of privacy; and 3) The search must seek a minimum of intrusiveness coupled with maximum effectiveness so that the searches "bear a close and substantial relationship" to the government's special needs. The decision in U.S. v. Lifshitz may be found at http://caselaw.findlaw.com/data2/circs/2nd/031221p.pdf

On April 29th, the U.S. Senate voted 93-3 to prohibit, for four more years, the imposition of taxes on Internet access by state and local governments but to allow some states already collecting the levies to continue doing so. The House last fall voted to permanently ban taxes on Internet access, but the permanent ban couldn't win enough support to pass the Senate despite a strong push from the telecommunications industry. Some senators argued the ban amounted to an unnecessary subsidy for telecommunication companies and a drain on state and local revenues. They won multiple changes, such as an exemption for some taxes already in place. The House and Senate have to reconcile their differences before the bill becomes law. Neither version affects sales taxes charged on merchandise purchased using the Internet. Congress first banned taxes on Internet access in 1998. A temporary ban expired nearly six months ago. The bill clarifies that the ban does not affect taxation of Voice Over Internet Protocol, or VoIP, which allows consumers to make telephone calls using the Internet's backbone. Senators voted 59-37 to kill a proposed change that would have let state and local governments continue taxing for four years the high-speed broadband connection known as DSL. The vote left in place language that calls on those states to phase out the taxes in two years. The text of the bill may be found by entering the bill number (S. 150) at http://thomas.loc.gov

Lindows, Inc. announced on April 14th that the company's desktop Linux operating system LindowsOS has been renamed to Linspire. The website www.lindows.com has been replaced by www.linspire.com, which will now be the primary site for consumers who are looking for information, who want to purchase any Lindows, Inc. products, or are looking for support for previously purchased software. A company spokesman stated, "despite our victories in the United States and overseas, a name change is still necessary to counter Microsoft's strategy to sue us in courts around the world. We're hoping that this puts a halt on the international lawsuits." The two-year-old case between Lindows and Microsoft over the trademark "windows" will continue in the United States. Microsoft has appealed to the Ninth Circuit Court of Appeals, but the Court has not yet decided whether it will hear Microsoft's appeal. The name Lindows will still be used in the United States in certain instances and as the corporate name. Further information may be found at http://www.linspire.com/lindows_news_pressreleases_archives.php?id=122

On March 29th, Digital Envoy filed suit against Google, accusing the search engine giant of improperly using its technology to target advertising by geography. The suit, filed in U.S. District Court in Atlanta, accuses Google of misappropriation of trade secrets, unfair competition, and unjust enrichment. It stems from a contract Georgia-based Digital Envoy and Google signed in November, 2000, according to the complaint. In that contract, Digital Envoy licensed to Google its IP-based geo-targeting technology for "limited uses," the plaintiff said. Digital Envoy now accuses Google of overstepping the boundaries of the contract. It wants some of the profits Google has earned through use of that technology. Digital Envoy's product ties IP addresses to their geographical locations, allowing advertisers to target specific parts of the world, or regions within the United States. The suits asks a judge to award Digital Envoy an injunction against Google's use of the technology, along with actual damages, profits, recovery of monies earned, treble damages and court costs. Google filed a countersuit against Digital Envoy, asking for a declaratory judgment that it did not overstep the bounds of its license. The countersuit also asks for a ruling that the suit was wrongly filed in Georgia and must be filed in California, where Google is headquartered. The complaint in Digital Envoy v. Google may be found at http://www.resourceshelf.com/2004/digitalenvoygoogle.pdf

On April 13th, the Federal Trade Commission (FTC) announced that spam containing sexually oriented material must include the warning "SEXUALLY-EXPLICIT: " in the subject line or face fines for violations of federal law. The directive goes into effect on May 19th. The CAN-SPAM Act, passed by Congress in 2003, directed the FTC to adopt a rule requiring a mark or notice to be included in spam that contains sexually oriented material. The purpose of the notice is to inform recipients that a spam message contains sexually oriented material and to make it easier to filter out messages they do not wish to receive. The CAN-SPAM Act required the Commission to prescribe the mark or notice within 120 days after passage of the Act. Further information may be found at http://www.ftc.gov/opa/2004/04/adultlabel.htm

On April 12th, adware giant WhenU took on Utah’s recently enacted Spyware Control Act in court. It filed a motion for a temporary restraining order and preliminary injunction in the Third Judicial Court in Salt Lake County, Utah. WhenU charges that the Utah Act violates the First Amendment and could unfairly harm its business. WhenU’s software allows advertisers to deliver pop-up and pop-under ads to computers connected to the Internet. Utah was the first state to pass a law regulating spyware and other advertising software. Regardless of user consent, the Utah act prohibits companies from installing software that reports users’ online actions, sends any personal data to other companies, or pops up advertisements without permission, with limited exceptions. The Act also bars "context based" tools from triggering unrelated advertisements based on visiting specific web sites. The Utah Act will take effect on May 28th, unless the court rules otherwise. The complaint in WhenU.com v. Utah may be found at http://www.benedelman.org/spyware/whenu-utah/complaint.pdf

On April 13th, the 4th Circuit Court of Appeals upheld a lower court decision finding that the term "freebies" is generic and not entitled to trademark protection. The court therefore concluded that the use of the domain name freebie.com does not violate the AntiCybersquatting Consumer Protection Act. The opinion in Retail Services Inc. v. Freebies Publishing may be found at http://pacer.ca4.uscourts.gov/opinion.pdf/031272.P.pdf

On April 21st, the FCC ruled that AT&T must pay traditional local access charges to complete Internet phone calls, making the long-distance carrier liable for billions of dollars in deferred fees. Telecommunications companies closely watched the FCC decision for its potential impact on VoIP services. VoIP technology employs high-speed Web connections to carry phone calls, which promises to bypass the traditional phone system and save carriers and customers substantial fees. AT&T had argued that it was not required to pay the access fees to local landline companies for completing long-distance calls, when those calls travel partially over the Internet, but the FCC rejected that argument. The FCC order may be found at http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-04-97A1.pdf

On April 20th, the Internet Corporation for Assigned Names and Numbers (ICANN) filed a SLAPP (Strategic Lawsuit Against Public Participation) claim against VeriSign, arguing that portions of VeriSign’s suit against ICANN constitute a strategic lawsuit against public participation designed to chill debate. VeriSign suit alleges that ICANN has become its "de facto regulator" in violations of the terms of the contracts under which VeriSign manages the .com and .net domain name registries. Of particular concern to VeriSign was an incident in October, when ICANN said VeriSign should turn off its controversial Site Finder service. This was interpreted by many as a direct order. ICANN's motion to strike says VeriSign's suit has six claims that "seek to impose liability for simply stating a position." As with previous filings, ICANN does not attempt to dismiss a seventh claim, which is at its heart a contract dispute. The motion may be found at http://www.icann.org/legal/verisign-v-icann/icann-motion-strike-21apr04.pdf