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December 28 2010

16:40

Top 3 New Media Legal Battles of 2010

This year's been a big one. Spain won the World Cup. Lindsay Lohan went to jail. Don Draper married his secretary. And, of course, the federal courts waded into some of the thorniest legal issues affecting new media.

Three cases stand out from the rest of 2010's docket. Each one shook up the law in a significant way. Below are summaries of the major developments, condensed in the spirit of CliffsNotes, with some commentary about the implications for people and organizations using new media.

Viacom v. YouTube

In June, a federal district court judge ruled on Viacom Int'l Inc. v. YouTube, Inc., a case testing the limits of the Digital Millenium Copyright Act. The ruling came after three years of pre-trial litigation. Viacom claimed that thousands of its copyrighted works had been uploaded to YouTube (e.g., clips of "The Daily Show with Jon Stewart"), in violation of the DMCA, which governs online copyright infringement.

At the heart of the case was the DMCA's safe-harbor provision. It allows service providers in certain circumstances to host user-generated content without assuming copyright liability for that content. The key element is a notice-and-takedown scheme that immunizes the provider if it "responds expeditiously" when notified of specific infringements. That notification can come in two forms.

First, the provider could have actual knowledge of an infringement. This occurs when a valid takedown request has been received. Second, the provider could be "aware of facts or circumstances from which infringing activity is apparent." This operates like a red flag, and the idea is that the provider can't claim the safe harbor if it ignored one.

Viacom argued essentially that YouTube ignored a red flag, because it was well known in general that there was a great deal of "infringing activity" on the site. The judge, however, didn't agree. He sided with YouTube and held that the "facts and circumstances" raising the red flag must be "specific and identifiable infringements of particular items." In other words, it was not enough for YouTube to be aware in general that there was "infringing activity" on the site.

Although some have questioned the importance of the decision, it does spell out just how aggressively YouTube and others must police their user-generated content. Among other things, the decision affirms that the burden of identifying and documenting infringing content is on the copyright holder, rather than the service provider, and it makes clear that if the provider is aware only in general that there is infringing activity on the site, then the safe harbor still will be available.

Earlier this month, Viacom appealed [PDF] the case to the U.S. Court of Appeals for the Second Circuit, bringing in Theodore Olson, a former U.S. Solicitor General, to handle the oral argument. This is a sign that Viacom is very serious about winning. YouTube has not yet filed its reply brief.

Barclays v. Theflyonthewall.com

barclays_logo.gifThis case required a federal district court judge to apply the "hot news" misappropriation doctrine, first recognized in 1918, to a news aggregation website. Barclays and two other financial firms produced regular research reports, to be distributed to clients for a fee, about stocks. They often released them before the New York Stock Exchange (NYSE) opened for the day, and although the firms took precautions to ensure the reports went only to paying clients, some did leak out.

Enter Theflyonthewall.com (Fly), an online subscription news service that picked up and published those reports on its own news feed, updated continuously every day between 5 a.m. and 7 p.m. It featured an average of 600 headlines per day, some of them about the research reports.

In 2006, Barclays and two other firms got fed up and filed suit against Fly, claiming that their reports were "hot news" and that the redistribution of them constituted misappropriation, a violation of New York state law. Misappropriation is a fancy way of saying that an organization used your property impermissibly for its own benefit. This is where the old collides with the new.

The "hot news" doctrine, as noted above, was developed in 1918, in the Supreme Court case International News Service v. Associated Press. INS and the AP were competing news services during World War I that transmitted articles by wire to member newspapers. Speed and accuracy got them their daily bread. For various reasons, INS began collecting AP stories that ran on the East Coast and rewriting them for INS subscribers on the West Coast. Finding that the AP had a "quasi-property right" in the news content it gathered, the Supreme Court held that INS's conduct constituted misappropriation. INS was, the Court said, "endeavoring to reap what it had not sewn."

The policy justification anchoring that decision was the same one running through the Barclays decision: The content producer invested substantial time, labor and money in its publication process, and those investments should be protected; because if they're not, the producer loses the economic incentive to continue producing, depriving the public of a valuable benefit.

The judge, accordingly, ruled for Barclays. She issued an injunction requiring Fly to delay its publication of stories about the research reports. Notably, the delay was just long enough to allow Barclays and the other firms to monetize the reports by distributing them to clients before they appeared on any news aggregation site.

Fly quickly countered that decision, however, by asking a federal appeals court to stay the injunction, i.e., to relieve Fly of its obligation to comply with it. The court granted the stay and agreed to expedite its full review of the appeal, which is pending as of this writing.

Comcast v. FCC

Last but not least comes the determination in April by a federal appeals court that the FCC has limited power to regulate the Internet. Comcast Corp. v. FCC [PDF] arose because of complaints in 2008 that Comcast, a service provider, was interfering with its customers' use of peer-to-peer networking applications.

mediashift_legal small.jpg

In response to those complaints, the FCC issued an order concluding that it had jurisdiction over the matter and that Comcast's method of bandwidth management "contravene[d] ... federal policy." Comcast complied with the order, but later asked the appeals court to review it, objecting on three grounds. The court began and ended its inquiry by finding that the FCC failed to establish jurisdiction.

For its part, the FCC conceded to the court that it did not have express authority to regulate network management practices, but argued that it had ancillary authority under the Communications Act of 1934 [PDF]. It empowered the FCC to "perform any and all acts, make such rules and regulations, and issue such orders ... as may be necessary in the execution of its functions."

The court didn't buy the argument and said the FCC, relying heavily on policy statements and unhelpful statutory provisions, failed to prove that its Comcast order was "reasonably ancillary to the ... effective performance of its statutorily mandated responsibilities."

The decision prompted many commentators to wonder about its implications for Net neutrality, the idea that all online content and applications should be treated equally by service providers. David Post in April summed up the thinking over at the Volokh Conspiracy: "So what does this portend for Net neutrality rules? Can the Commission proceed with its rulemaking efforts ... or does it need some additional statutory authorization from Congress before it can do so?"

Since then, the FCC has been trying to answer those questions. It promulgated last Tuesday a set of rules that functionally creates two classes of Internet access, one for fixed-line providers and one for wireless providers. The rules are tied to the FCC's Section 706 authority, which directs the commission to "encourage on a reasonable and timely basis the deployment of advanced telecommunications services to all Americans," purportedly including broadband services. This means the FCC would have to show that the Net neutrality rules are ancillary to 706's mandate, a difficult task because the FCC itself concluded in the 1990s that that section is not an independent grant of authority.

Despite all the uncertainty, two things are certain: The rules will be challenged in the courts, and they will be challenged by Republicans in Congress.

The Year Ahead

Next year promises to bring big developments in the law affecting new media. A federal appeals court will decide both the Viacom and Barclays appeals, and the Net neutrality rules surely will be challenged. WikiLeaks will continue to dominate the news and very likely will head to court to test the uneasy balance between free speech and national security. And at the Supreme Court, the justices will hand down Schwarzenegger v. Entertainment Merchants Association, which addresses whether the First Amendment permits any limits on offensive content in violent videogames sold to minors.

Jonathan Peters is a lawyer and the Frank Martin Fellow at the Missouri School of Journalism, where he's working on his Ph.D. and specializing in the First Amendment. An award-winning freelancer, he has written on legal issues for a variety of newspapers and magazines. He can be reached at jonathan.w.peters@gmail.com.

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July 02 2010

16:47

June 25 2010

23:03
21:15

This Week in Review: YouTube scores a win over Viacom, Rolling Stone learns and reveals media lessons, iPad resurrects Gourmet

[Every Friday, we sum up the week's top stories about the future of news and the debates that grew up around them. Mark Coddington is off this week. —Josh]

Victory over Viacom for YouTube: This week a U.S. District Court judge sided with Google in a high-profile case that could shape how content (or at least Jon Stewart and SpongeBob clips) get consumed on the web.

In the $1 billion lawsuit, Viacom, which owns MTV, Comedy Central, and Nickelodeon, claimed that YouTube’s business model attracts users who want to see entertainment for free, including its protected material. YouTube claimed it’s not responsible for checking every video before a user uploads to ensure it doesn’t violate copyright law. (Users now post 24 hours of footage to YouTube every minute.) The judge sided with YouTube, citing the “safe harbor” clause of the Digital Millenium Copyright Act, which frees sites from checking user-generated content for legal concerns before posting, noting that simply knowing that users are violating copyright law is not enough to make the site liable.

How are media companies taking the news? Not well. It’s a blow to companies that have been trying to crack down on sites that distribute their content for free. But whether that actually means they are losing out financially is unclear. The Wall Street Journal puts the loss in some perspective, saying “media executives say they expect companies like YouTube will continue to automatically filter for copyrighted content, however, as the companies jockey for licensing agreements with media producers.” The New York Times reports that tensions between Internet companies and television producers has “improved” since the lawsuit was first filed. And Viacom has its own video-sharing site now with its own piracy issues.

Two media stories in one Rolling Stone scoop: The rock magazine’s in-depth profile of Gen. Stanley McChrystal made a splash before it was even published, thanks to a promotional version they sent to outlets like Politico, which hosted a pdf copy, and the Associated Press, which ran its own version. Rolling Stone’s strategy, which allowed other organizations to get the bounce from its work, seemed to hope that by creating online buzz, they’d enjoy a boost at the newsstands. That doesn’t account for how stories spread across the Internet. When the story was already huge (McChrystal had already been summoned to the White House to be fired), they posted the story in full. A day later, only 16 readers had left comments. The delay resulted in the online conversation around the story taking place elsewhere.

Then there was the matter of beat reporter vs. freelancer on access. Freelance journalist Michael Hastings wrote the piece for Rolling Stone, a fact Politico said meant the Pentagon should have “considered a bigger risk to be given unfettered access, compared with a beat reporter, who would not risk burning bridges by publishing many of McChrystal’s remarks.” First CJR and then Jay Rosen caught the line, with Rosen using it to highlight an underlying media truth: “Think about what the Politico is saying: an experienced beat reporter is less of a risk for a powerful figure like McChrystal because an experienced beat reporter would probably not want to ‘burn bridges’ with key sources by telling the world what happens when those sources let their guard down.” A Politico editor later pulled that part of the story, saying it was just an edit, nothing more. More broadly, cable news picked up on the same issue (freelancer vs. beat reporter), which earned them a segment on Viacom’s The Daily Show.

Magazines and the iPad: The promise of the iPad was in full swing this week, with two announcements from Condé Nast that it’s planning apps for two of its titles. (Its Wired app has surpassed newsstand sales, although we’ll see whether that can survive or whether it’s a one-time bounce for people eager to try out the app.) For one of the apps, Condé Nast is resurrecting the brand of Gourmet, the magazine it shuttered last year. Ex-editor Ruth Reichl didn’t think much of it. Condé Nast is also planning an app for The New Yorker, using Adobe’s Digital Magazine Studio, the route Adobe has taken to get around Apple’s restrictions on Adobe’s Flash. Sports Illustrated had iPad news this week, too, unveiling its app. SI will charge readers $4.99 for each weekly issue, the same as the newsstand price. Will charging newsstand prices instead of home-subscriber prices work for the iPad? We’ll see.

Link roundup: This week we’re going newsy. First up, this thing called the iPhone 4 came out. Many, many people (estimated 1.5 million) purchased one on the first day it went on sale. But is it great? Gizmodo crowdsourced its reviews and focused on isolated reports of problems; the site’s Apple coverage has taken a markedly negative turn since Apple pursued the site legally for Gizmodo’s purchase of a stolen iPhone prototype.

It’s long been rumored that CNN was setting itself up to operate without the help of the AP wire service. This week it announced the official break, though it’ll keep a Reuters contract. The question is: Is CNN making a purely financial decision to operate without AP, or is it a bigger move to actually compete with it?

The last story I’ll note is today’s resignation of blogger-reporter Dave Weigel from The Washington Post after some negative remarks about conservatives that he sent to an off-the-record listserv surfaced online. [Full disclosure: I used to be Dave's boss at The Washington Independent and am his friend.] We’ll see lots of conversation about this in the coming days, but it’s already raising questions. Is there a safe space journalists can be allowed to express their opinions? Do the old rules about journalists not having opinions — or at least not sharing them — still make sense in an online age? Does a newspaper like the Post, which has recently hired three reporter-bloggers, have room for people who can report but also have a point of view? And if newspapers define themselves as having the view from nowhere, will they be able to compete with all the online outlets that don’t feel bound by those same rules?

March 06 2010

00:36

4 Minute Roundup: Viacom Yanks Shows from Hulu; FT's Pay Model

This episode of 4MR is brought to you by GoDaddy, helping you set up your own website in a snap with domain name registration, web hosting and 24/7 support. Visit GoDaddy to learn more.

Here's the latest 4MR audio report from MediaShift. In this week's edition, I look at the recent move by Viacom to pull "The Daily Show" and "Colbert Report" from Hulu, and run them on their own sites. Plus, the Financial Times said it would start charging for day passes and weekly passes to augment its metered pay system online. And I asked Just One Question to PEJ's Tom Rosenstiel about their recent report on the interactive news consumer.

Check it out:

4mrbareaudio3510.mp3

>>> Subscribe to 4MR <<<

>>> Subscribe to 4MR via iTunes <<<

Listen to my entire interview with Tom Rosenstiel:

Background music is "What the World Needs" by the The Ukelele Hipster Kings via PodSafe Music Network.

Here are some links to related sites and stories mentioned in the podcast:

Why the Daily Show Left Hulu by Andrew Baron

Viacom Will Take 'Daily Show,' 'Colbert' Off Hulu at NYT Media Decoder

Viacom's departure from Hulu comes with a bite at CNET

Hulu loses shows in pricing clash at FT

Hulu, Colbert, And The Recentralization Of Video On The Web at TechCrunch

Loss of Daily Show, Colbert puts more pressure on Hulu at Yahoo Tech blog

FT CEO says improving ad trend continues at Reuters

Financial Times Website Turns To PayPal at Fishbowl NY

FT to use PayPal for daily, weekly online access at Editors Weblog

FT Will Use PayPal For Daily, Weekly Payments at PaidContent

Understanding the Participatory News Consumer at Pew Internet

Also, be sure to vote in our poll about how you plan to experience the Oscars:




How will you experience the Oscars?answers

Mark Glaser is executive editor of MediaShift and Idea Lab. He also writes the bi-weekly OPA Intelligence Report email newsletter for the Online Publishers Association. He lives in San Francisco with his son Julian. You can follow him on Twitter @mediatwit.

This episode of 4MR is brought to you by GoDaddy, helping you set up your own website in a snap with domain name registration, web hosting and 24/7 support. Visit GoDaddy to learn more.

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