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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.

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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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December 26 2010

23:30

Online Censorship Grows in 2010, Showing Power of Netizens

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Despite some good PR for online freedom this year, online censorship grew and became more subtle in 2010. Online propaganda remains strong within countries like China and Iran, where media censorship is everywhere and the governments have mastered online censorship tools. These countries are as efficient as hacktivists when it comes to controlling information.

China and Vietnam remain among the most repressive countries, with 77 and 16 netizens in jail, respectively (read our recent report on Vietnam here). Thailand is unmerciful when it comes to lese-majeste laws (also read our recent report about how this law is being abused). And a new player, Venezuela, is on the verge of adopting a bill that will introduce Internet filtering and a range of penalties for online media for vaguely worded offenses.

Democracies such as France are also taking further steps to implement a legal framework for online filtering. The French government is working on an ineffective and dangerous online filtering system that could jeopardize the work of journalists and bloggers in the name of fighting child pornography.

Overall, netizens continue to be victims of threats and unfair trials and arrests. In just one example, a 28-year-old Egyptian human rights activist was beaten to death by police in Alexandria on June 6.

But along with the setbacks, 2010 saw a few high profile cases that hinted at an improving state of affairs for online freedom. The positive developments include Egyptian blogger Kareem Amer being set free in November after completing a four-year jail sentence, Turkey ending its two-and-a-half-year ban on YouTube in the spring 2010, and Turkmenistan, which has been called the "European North Korea," began to slowly open up to the Internet.

As of today, 112 netizens are in jail. This is an improvement over the 151 that were arrested in 2009. So does that mean things are getting better?

Netizens and the Public Interest

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Despite the strengthening of online propaganda and the growing expertise being developed by what we at Reporters Without Borders call the Enemies of the Internet, netizens keep finding ways to practice online freedom of expression even in the most repressive countries. In 2010 netizens proved the essential role they play in repressive societies. In China and Russia, netizens denounced corruption by local authorities and made important information available to their fellow citizens.

Overall, the environment, corruption, health care and politics remain the main topics focused on by the netizens defended by Reporters Without Borders. For example, in China, the activist Zhao Lianhai created a website to detail the effect that contaminated milk powder sold from Chinese company Sanluon had on young children. An estimated 300,000 children in China were made ill, 50,000 were hospitalized and at least six newborn babies died as result of consuming the milk powder. One of Lianhai's children was made ill by the milk powder, and he used the website to urge parents to bring a class action suit against those responsible. In the end, Lianhai was sentenced to two-and-a-half years in prison for "inciting social unrest."

Netizens and the Law

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Because the Internet is still a vague legal notion in many of the countries, it has always been easy for repressive regimes to convict netizens on vague charges. As an example, netizens belonging to minorities can be accused of "separatism," and using the Internet and social media can be considered activities aimed at overthrowing the government.

2010 was no stranger to legal absurdity. In Azerbaijan, two well-known bloggers Adnan Hajizade and Emin Mili were released after spending more than a year in jail for "hooliganism." This was because they went to the police to report after they were assaulted in a restaurant by two men. In Egypt, blogger Ahmed Hassan Basiouny will be tried by court martial for creating a Facebook page that offered advice and information to young people thinking of enlisting in the Egyptian army.

Internet Companies: Accomplices?

When Google decided to withdraw its email services from China after being a victim of cyberattacks, the issue of corporate responsibility gained worldwide attention. Later in the year, Research In Motion (RIM), the Canadian manufacturer of the BlackBerry smartphone, was involved in a situation that showed we cannot expect technology companies to respect human rights. The company has been under intense pressure from several governments to allow access to encrypted BlackBerry communications, among other requests. The nature of the agreements made between RIM and these governments remains unclear due to conflicting statements from the parties. Reporters Without Borders has called for more transparency so that users know exactly what's going on.

Compared with the past decade, authorities and governments have never put as much energy into attempts to control online content. But this is good news. It illustrates that online free speech is spreading and netizens are winning. The battle is not lost in advance, but it is still far from being lost.

Photo of tainted milk event by jiruan via Flickr

Note that on December 30 Reporters Without Borders will publish its annual round up for 2010, which presents the number of bloggers attacked, arrested and jailed, as well as the number of countries who practice a form of Internet censorship.

Clothilde Le Coz has been working for Reporters Without Borders in Paris since 2007. She is now the Washington director for this organization, helping to promote press freedom and free speech around the world. In Paris, she was in charge of the Internet Freedom desk and worked especially on China, Iran, Egypt and Thailand. During the time she spent in Paris, she was also updating the "Handbook for Bloggers and Cyberdissidents," published in 2005. Her role is now to get the message out for readers and politicians to be aware of the constant threat journalists are submitted to in many countries.

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December 23 2010

17:16

Special Series: Year in Review 2010

It's holiday time, and that means travel mania, less work and yes, year-end roundups. Yes, they are the lazy way to finish out the year for journalists and bloggers around the world, the ultimate in traffic catnip. But we thought we could take a different approach, doing year-end roundups for each niche we cover at MediaShift, giving our correspondents the space to talk about important trends that happened in 2010, and pointing us toward what we might expect in 2011. And in one case, for the Top 10 MediaShifting moments, we even collaborated with our audience using iEtherPad. Happy reading, and happy holidays!

All the Year-End Posts

> The Social Network, Streaming Boom Dominate Film in 2010 by Nick Mendoza

Coming soon

Top 10 MediaShifting Moments by Mark Glaser

The year in magazines by Susan Currie Sivek

The year in online free speech by Clothilde Le Coz

The year in important legal issues by Jonathan Peters

The year in e-books and self-publishing (and some predictions) by Carla King

The year in digital music by Jason Feinberg

*****

What do you think about our series? Did we miss anything? What were your top media moments of 2010 and where do you see things heading in 2011.

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.

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December 22 2010

18:17

'The Social Network,' Streaming Boom Dominate Film in 2010

From Pandora to Palo Alto, digital and social media grabbed movie headlines in 2010.

The year started with a box office record-breaker that captured our 3D imaginations ("Avatar") and is ending with David Fincher's fascinating look at Facebook ("The Social Network") collecting awards for film of the year (American Film Institute, Los Angeles Film Critics, National Board of Review, New York Film Critics, et al). Although, according to Facebook (Top Status Trends of the Year), the most talked about films among its members were actually "Toy Story 3" and "The Twilight Saga: Eclipse." The latter was also the most watched trailer on YouTube this year with 17 million views.

When it came to Twitter, the dream merchants of "Inception" produced a summer blockbuster and the top film-related Twitter trend this year.

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As an overall trend, however, moviegoers continue to explore different platforms to experience films, from streaming and downloading to apps or social networks. As a result, they are disrupting traditional models of distribution and revenue sources (see Blockbuster Files for Bankruptcy After Online Rivals Gain, a report from Bloomberg, for example).

I asked several filmmakers and digital executives for their thoughts on the biggest trends, behavioral shifts and technology developments of 2010. Below are their responses.

Film Trends of 2010

Opening Friday Reviews
"Mobile apps and social media came into their own this year, as one of the most important ways by which moviegoers share their opinions, read reviews and decide which movies they're going to see ... Moviegoers relay their opinions to millions of other people the minute they leave the theater. Opening weekend used to forecast box office -- now, it's opening Friday." -- Steve Polsky, president and COO, Flixster, whose app is used by more than 23 million people

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Multi-Platform Viewing
"Consumer demand for anytime, anywhere access to movies means it's not just about watching in theaters and on television in living rooms, but also about watching on computers and mobile devices like iPads and iPhones. This was the biggest transformation of the movie industry in 2010. Studios are realizing that they need to reach consumers on their terms and that we have an opportunity to reach more people if we embrace what consumers want. The demand for entertaining movies has never been higher; people are watching them in new ways and Hollywood continues to tell stories that captivate audiences around the world." -- Mark Greenberg, president and CEO, EPIX

Internet-connected HDTVs
"Although 3D has been the hot topic this year and received most of the press, I believe the real story was the quiet rollout of consumer HDTVs with Internet capability. Over the last year, I have been testing this exciting new delivery method and have discovered that it is a viable alternative to traditional broadcast to the home. If you understand the power of social networking and direct marketing, it becomes obvious the worldwide potential of this exciting new opportunity." -- Randall P. Dark, president and CEO, Randall Dark Productions

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Streaming Content
"The greatest trend in 2010 was the growth of viewers watching movies and TV over web-enabled streaming devices. Of course, Netflix is leading the charge in streaming content, but other players will emerge in 2011 and I think digital historians will look back on 2010 as the year the streaming wars began and DVD started to assume its place alongside the cassette tape and laser disc." -- Richard Raddon, co-founder, Movieclips.com

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Crowdfunding
"Continuing the trend towards the democratization of filmmaking that began when affordable cameras and editing equipment became available in the past 15 years or so, crowdfunding has opened up new avenues for film financing. IndieGoGo.com and Kickstarter.com offer a simple interface through which fans and investors can help fund film and media projects that often would not meet traditional financing requirements. This revolution enables independent artists to not only get the financial support they need to complete their projects, but also to build a fan base that can later become essential to the marketing and distribution of the project." -- Academy Award-nominated director Roko Belic, Wadi Rum Films (Happy - The Movie)

2011: Transformative Innovations?

With "The Social Network" an early favorite to win the Oscar for Best Picture, 2010 may end up being remembered as the year when our web-connected way of life finally reached a tipping point on the big scren. As Sean Parker stated in the film, "We lived in farms, then we lived in cities, and now we're gonna live on the Internet."

The release of "Tron: Legacy" furthers this theme for 2010, giving moviegoers a new digitally immersive experience, while also spurring conversation on the future of our virtual existence and networked worlds. 2011 is sure to expand upon the trends above and quite possibly introduce some transformative innovations.

Or as Kevin Flynn states, "Now, I kept dreaming...dreaming of this world I thought I'd never see. And then, one day, something happened. Something extraordinary."

*****

What do you think were the extraordinary innovations and trends of 2010? Share your thoughts in the comments.

Nick Mendoza is the director of digital communications at Zeno Group. He advises consumer, entertainment and Web companies on digital and social media engagement. He dreamstreams and is the film correspondent for MediaShift. Follow him on Twitter @NickMendoza.

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