Music Business Heads Into Virtual World; New York Times; 12/16/09

Brad Stone and Claire Cain Miller, New York Times; Music Business Heads Into Virtual World:

"It seems likely that the idea of music ownership will never go away, and that newer methods of accessing music will exist alongside old ones. Bobby Mohr, a 23-year-old music fan from Brooklyn who has accumulated 100 gigabytes of songs, keeps some of them on free Web-based storage services, so he can download tracks when he travels and burn them onto CDs to play in the car.

But Mr. Mohr is hesitant to abandon the idea of owning music altogether, citing the unreliability of wireless networks and the fact that his collection would be inaccessible at his job at a police oversight agency, where he is not allowed to use the Internet.

“I like having external hard drives that are troves of my music,” he said. “You just collect it, you have this library. You discover new genres every year and you go through it and look at what you have, and that’s nice.”

Bob Lefsetz, who writes an influential music industry newsletter, the Lefsetz Letter, acknowledged that some people bristle at the idea of not owning their music, but he compared them to people who once said they would never rent a videotape.

“If you ask anybody today, they’ll tell you, ‘I need to own it.’ But once you have these services, you get to the point of, ‘Why would I own it, because I have access to everything?’”"

http://www.nytimes.com/2009/12/16/technology/internet/16tune.html?em

‘X-Men’ Piracy Investigation Leads F.B.I. to Arrest Man From the Bronx; New York Times, 12/16/09

Brooks Barnes, New York Times; ‘X-Men’ Piracy Investigation Leads F.B.I. to Arrest Man From the Bronx:

"After a nine-month hunt, Federal Bureau of Investigation agents arrested a Bronx man on Wednesday suspected of posting an unfinished version of the 20th Century Fox movie “X-Men Origins: Wolverine” on the Web before it was released in theaters.

But the investigation into the source of the piracy, to find out who actually took the copy of the movie from the studio, is continuing and more arrests are possible, according to Laura Eimiller, an F.B.I. spokeswoman.

Gilberto Sanchez, 47, was arrested at his home at about 6 a.m., according to Ms. Eimiller. Mr. Sanchez was indicted last Thursday by a federal grand jury in Los Angeles on charges of uploading the unfinished copy of the movie to a Web site, Megaupload.com, last spring.

If convicted, Mr. Sanchez faces three years in prison and a $250,000 fine or twice the gross gain or gross loss attributable to the offense, whichever is greater, according to the United States attorney’s office in Los Angeles. Lisa E. Feldman, an assistant attorney from that office’s Cyber and Intellectual Property Crimes unit will prosecute the case. She said that Mr. Sanchez has been released on bail.

The unfinished version of “Wolverine” — missing many special effects and using temporary sound — was leaked to the Internet on March 31. Within hours, the $150 million movie, set to open on May 1, had been watched by thousands of people online, setting off a panic inside Fox about the potential box office impact.

Ultimately, Fox estimated that the file was downloaded 15 million times."

http://www.nytimes.com/2009/12/17/business/media/17pirate.html?_r=1&hpw

FBI arrests New York man for `Wolverine' piracy; Associated Press, 12/16/09

Associated Press; FBI arrests New York man for `Wolverine' piracy:

"The FBI has arrested a New York man indicted for illegally distributing pirated copies of the movie "X-Men Origins: Wolverine."

FBI spokeswoman Laura Eimiller says in a statement that Gilberto Sanchez was arrested at his Bronx home early Wednesday without incident. The 47-year-old Sanchez was indicted Dec. 10 by a Los Angeles federal grand jury for violation of federal copyright law.

He's expected to appear Wednesday before a U.S. magistrate judge in New York.

The indictment, unsealed after Wednesday's arrest, says Sanchez uploaded the copyrighted "X-Men Origins: Wolverine" to an Internet site last spring. He faces a possible three years in prison and a $250,000 fine, or twice the gross gain or gross loss attributable to the offense, whichever is greater."

http://www.google.com/hostednews/ap/article/ALeqM5jOwTp8ZWeiOljaF5_3FFE_f3s4AQD9CKGLJ80

IT experts call for crackdown on copyright piracy; Daily Star (Lebanon), 12/16/09

Dana Halawi, Daily Star (Lebanon); IT experts call for crackdown on copyright piracy:

"Information Technology (IT) experts gathered on Tuesday at Ramada Hotel in Beirut to tackle challenges facing Lebanon’s IT industry due to lack of Intellectual Property Rights (IPR) protection. “One of the main challenges facing this sector in Lebanon is the absence of effective entities tailored to the protection of IPR. This includes the challenge of issuing laws by the Lebanese government that are compatible with the international agreements signed by Lebanon for its accession to the World Trade Organization,” said Microsoft’s anti-piracy manager for North Africa, Eastern Mediterranean and Pakistan Aly Harakeh.

Respecting intellectual property rights is one of the basic conditions of joining the World Trade Organization (WTO). Lebanon is a signatory to several international agreements relating to intellectual property rights and started the process for accession to the WTO in 1999, but could not join because of its failure to properly implement the basic required conditions. The country’s accession application is still ongoing, according to the WTO website...

Sectors dependant on intellectual innovations are crucial to the Lebanese economy. Lebanon is on the top of Arab countries when it comes to intellectual innovations and arts, and these sectors can contribute a lot more to our economy than the core industries such as agriculture and manufacturing.

According to a report issued by the Institute of Finance, the industries in Lebanon which copyright applies to contribute 4.74 percent to GDP and 4.54 percent to employment. However, the report said, the core industries contribute 2.53 percent to GDP and 2.11 percent to employment.

The study said that the industries which copyright laws apply to generated $555.52 million of value added, generated from nine sectors including press and literature, music, theatrical productions, opera, motion pictures and video, radio and television, photography, software and databases, visual and graphic arts, advertising and copyright collecting societies.

A report issued by the Business Software Alliance said that the piracy rates in Lebanon reached 74 percent in 2008, while losses incurred from piracy activities reached $49 million in the same year."

http://www.dailystar.com.lb/article.asp?edition_id=1&categ_id=3&article_id=109830

Europe Talks Tough On Piracy and Copyright; eWeek Europe, 12/15/09

Andrew Donoghue, eWeek Europe; Europe Talks Tough On Piracy and Copyright:

"European authorities have outlined plans to combat piracy and counterfeiting which includes plans to protect intellectual property across the region and the ratification of an international law on copyright in development since 1996.

The European Commission and member states met in Stockhom this week to discuss plans around the European Observatory for Counterfeiting and Piracy - an agency established last April. According to European authorities, the Observatory was created to help develp a "databank" of intelligence on how best to combat the threats posed to innovation in the region by piracy and counterfeiting.

"The EU is a world pacesetter for innovation, culture and creativity. It is time to put a stop to organised criminals freeloading on the ingenuity and hard work of the most resourceful businesses in the world. Counterfeiting and piracy is an affliction that is bringing criminality ever closer to our doors," said EC Internal Market and Services commissioner Charlie McCreevy.

McCreevy added that piracy threatens public safety and jobs in Europe."

http://www.eweekeurope.co.uk/news/europe-talks-tough-on-piracy-and-copyright-2773

A Push in Law Schools to Reform Copyright; New York Times, 12/1/09

Nazanin Lankarani, New York Times; A Push in Law Schools to Reform Copyright:

"Since 2007, U.S. university students have been a prime target of a litigation campaign by the Recording Industry Association of America, or R.I.A.A., the music industry trade group that has found university campuses to be hives of file-sharing activity.

“The music industry is acting like a digital police force,” Charles Nesson, a Harvard law professor who defended Mr. Tenenbaum at trial with the assistance of law students, said in a phone interview from Boston. “Academia must get involved, to bring fairness to the process.”...

A report in June by the analysis firm Forrester Research said that 27 percent of peer-to-peer, or P2P, network music sharers in the United States last year were in the 18 to 24 age group and 43 percent in the 25 to 34 age group. File sharing, a largely clandestine activity, is hard to measure, but Forrester said that, based on admitted cases, it estimated the number of file-sharers, as a percentage of all Internet users, to be two to three times greater in Europe than in the United States.

“Downloading is so easy, and there is so much free content on the Internet, it is hard to distinguish between illegal downloading, streaming free content and copying from a friend’s laptop,” said Rana Nader, a recent law graduate of Université Panthéon-Assas, in Paris, who also has a law master’s degree in multimedia and information technology from Kings College in London.

“When the product is digital, it does not feel like stealing,” said Ms. Nader.

In the past decade, peer-to-peer technology companies have mutated endlessly and rapidly in cyberspace, becoming increasingly difficult to police.

In the 10 years since Napster first offered its P2P service, the ability to create, access and swap music in user-friendly MP3 format has revolutionized the music industry for a generation of musicians, producers and consumers.

But along with ease of access has come legal uncertainty and risk.

“Internet has helped develop new forms of amateur entertainment,” said Mr. Nesson. “You no longer need a ‘label’ to put out a good song. Soon, we will not be able to tell what is copyrighted and what isn’t. That is why defining the limits of copyright and public right is fundamental to the development of cyberspace.”

Law school teachers are active participants, in classrooms, in the courts and before legislative assemblies, in the debate on how to reform laws often dating from the age of vinyl.

“File sharing is the way music is accessed today,” said Daniel Gervais, professor of international intellectual property law at Vanderbilt University in Nashville, Tennessee. “Our students ask, ‘Why can’t we continue to do it, but pay for it?”’

Last August, Mr. Gervais, who is also affiliated with the University of Ottawa in Canada, received funding from the Ontario Province government to propose changes to Canadian copyright law to meet the needs of users of copyrighted material. Fifteen students are helping him to complete the project.

“We are making ourselves heard by the legislature and the courts,” Mr. Gervais said.

For law students, digital copyright has become a hot topic. “Since 2008, our annual seminar on music and digital copyright has been more than full,” Mr. Gervais said. “Students all file-share; they are all on Facebook and Twitter. Copyright is connected to their own reality.”

One idea under study is to assess a global license fee, to be collected and paid by the Internet service provider, permitting unlimited media usage. This approach “has wide support here,” he said.

The fee would be levied by the service providers as a voluntary flat tax, payable by customers who accessed music online via file-sharing networks, and would be earmarked for artists or other rights holders, replacing royalties. Effectively, that would turn the service providers into the online equivalent of royalty-collection societies like Broadcast Music Inc., a U.S. music performing rights organization, or its British, Dutch, French and German counterparts, which for years have collected fees for artists from radio stations, bars, clubs and other performance venues.

“If you add all the monthly fees collected in all major music markets, you could get a total above $20 billion a year, which added to other revenues from ticket, merchandise and other sales would match or surpass the music industry’s best years,” Mr. Gervais said.

Yet, if some academics and lawmakers are looking at ways to legalize the sharing of copyrighted digital material for noncommercial use, others prefer the opposite tack of more draconian punishment for “music piracy.”

French lawmakers have opted in particular to criminalize music file-sharing.

“To impose a global fee is problematic,” Frédéric Pollaud-Dulian, a professor at University Paris I Panthéon-Sorbonne and a specialist in media law, said in a telephone interview. “Not all Internet users download copyrighted material. Also, to allow open access to copyrighted material deprives the copyright holders of control over their own work.”

The prevailing view in France, Professor Pollaud-Dulian said, remains that existing law should not be overhauled simply because new customs and practices, however widespread, do not fit. So, copyright laws should not be adjusted simply because people are using new technology to access music.

“We teach our students that illegally downloading music is a threat to creativity,” Professor Pollaud-Dulian said. “The work of an artist has monetary value. Being a musician is not a hobby.”

In October, the French Constitutional Council cleared the way for a controversial bill, known as Hadopi II, that empowers French courts to temporarily cut off the Internet access of copyright infringers or of individuals who fail to protect their broadband access line against illegal downloading.

“When you violate driving laws, your car is taken away,” said Mr. Pollaud-Dulian. “If you do not abide by hunting rules, your rifle is taken away. To say that depriving a user of Internet access infringes on a fundamental right is pure fantasy.”

Others view the loss of Internet access rights as an excessively punitive measure that violates a basic right, and a trademark of repressive regimes.

“In a democratic society, you need Internet access to participate in the sociopolitical process,” said Mr. Gervais. “Without it, you have less active and less informed citizens.”

According to Andrew Murray, a reader in law who specializes in cyberregulation and information technology law at the London School of Economics law department, the British government is consulting with law professors on a different version of the “three-strikes law.”

“We are looking at a measure where Internet access would be filtered or the user’s bandwidth cluttered to prevent downloading of copyrighted material,” said Mr. Murray, who also acts as an advisor to Creative Commons, a licensing organization created by Lawrence Lessig, a Stanford Law School professor, that allows copyright holders to extend licenses to users.

Meanwhile, Mr. Nesson and his team of law students are preparing to appeal the judgment against Mr. Tenenbaum. — up to the Supreme Court if need be.

“If you are selling water in the desert and it starts to rain, what do you do? Go to the government and get them to ban rain, or do you sell something else?” Mr. Nesson said."

http://www.nytimes.com/2009/12/02/business/global/02iht-riedmedia.html?scp=1&sq=copyright%20reform&st=cse

Top Author Shifts E-Book Rights to Amazon.com; New York Times, 12/15/09

Brad Stone and Motoko Rich, New York Times; Top Author Shifts E-Book Rights to Amazon.com:

"Ever since electronic books emerged as a major growth market, New York’s largest publishing houses have worried that big-name authors might sign deals directly with e-book retailers or other new ventures, bypassing traditional publishers entirely.

Now, one well-known author is doing just that.

Stephen R. Covey, one of the most successful business authors of the last two decades, has moved e-book rights for two of his best-selling books from his print publisher, Simon & Schuster, a division of the CBS Corporation, to a digital publisher that will sell the e-books to Amazon.com for one year.

Amazon, maker of the popular Kindle e-reader and one of the biggest book retailers in the country, will have the exclusive rights to sell electronic editions of “The 7 Habits of Highly Effective People,” and a later work, “Principle-Centered Leadership.” Mr. Covey also plans to gradually make other e-books available exclusively to Amazon, which will promote them on its Web site.

The move promises to raise the already high anxiety level among publishers about the economics of digital publishing and could offer authors a way to earn more profits from their works than they do under the traditional system.

Mr. Covey is making his books available to Amazon through RosettaBooks, an electronic book publisher that primarily traffics in the older works of authors like Kurt Vonnegut and Virginia Woolf.

Arthur Klebanoff, chief executive of RosettaBooks, said that Mr. Covey would receive more than half of the net proceeds that RosettaBooks took in from Amazon on these e-book sales. In contrast, the standard digital royalty from mainstream publishers is 25 percent of net proceeds...

His move comes as publishers ratchet up their efforts to secure the digital rights to so-called backlist titles — books published many years, if not decades, ago. These books can be vitally important to publishing houses because they are reprinted year after year and provide a stream of guaranteed revenue without much extra marketing effort.

“The 7 Habits of Highly Effective People,” originally published in hardcover in 1989, is a steady seller for Simon & Schuster. This year alone, it has sold 136,000 copies in paperback, according to Nielsen BookScan, which generally tracks about 70 percent of sales.

Many authors and agents say that because the contracts for older books do not explicitly spell out electronic rights, they reside with the author. Big publishing houses argue that clauses like “in book form” or phrases that prohibit “competitive editions” preclude authors from publishing e-books through other parties.

Adam Rothberg, a spokesman for Simon & Schuster, declined to comment directly on Mr. Covey’s moves, but said, “Our position is that electronic editions of our backlist titles belong in the Simon & Schuster catalog, and we intend to protect our interests in those publications.”

Other publishers have moved to stake their claim on e-book rights for older titles. On Friday, Random House sent a letter to dozens of literary agents stating that on all backlist books, it retained “the exclusive right to publish in electronic book publishing formats.”...

The skirmish over e-books is part of a larger multidimensional chess match being played among publishers, authors, agents and book retailers. The big publishing houses hate the uniform e-book price of $9.99 that Amazon and others have set for newer titles. Although the retailers are subsidizing that price, executives say they believe that such pricing harms the market for more expensive hardcovers, and some publishers have reacted by announcing they will delay the publication of certain e-books by several months after they are made available in hardcover.

Last week, Simon & Schuster said it would delay by four months the e-book versions of 35 titles being published in hardcover from January to April. Both the Hachette Book Group and HarperCollins Publishers Worldwide have also indicated they will delay e-book editions.

Reacting to that move, Drew Herdener, an Amazon spokesman, directly criticized Simon & Schuster and its chief executive, Carolyn Reidy.

“Simon & Schuster is backward-leaning,” Mr. Herdener said. “Carolyn wants to corral readers, force them to buy what they wouldn’t buy if they had a choice. It won’t work. The better approach is to embrace the evolution of the book and give customers what they want. Forward-leaning publishers are going to clean up.”

Mr. Rothberg, the Simon & Schuster spokesman, said that his company wasn’t trying to upset anyone. “The notion that we have done anything other than wholeheartedly embrace the digital revolution, whether it be for e-books, new formats, reaching out to our readers wherever they may be, and every other opportunity provided in the new digital era, is patently absurd,” he said.

He added, however, “We understand that there’s a lot at stake and we look forward to further discussions with Amazon about how to grow this business without making our discussions of a personal nature.”

Mike Shatzkin, the chief executive of Idea Logical, which advises publishers on digital strategy, said that publishers were trying to minimize Amazon’s outsize influence in the book business and preserve their own. “Publishers are trying to herd Amazon back into their corner and keep it there,” he said. “But I think that this is going to be a very difficult situation for the big publishers to control.”"

http://www.nytimes.com/2009/12/15/technology/companies/15amazon.html?scp=1&sq=covey&st=cse