Category Archives: Intellectual Property

MP3 patents return to haunt Microsoft

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Wow! Interesting New York Times report…

Microsoft was ordered by a federal jury yesterday to pay $1.52 billion in a patent dispute over the MP3 format, the technology at the heart of the digital music boom. If upheld on appeal, it would be the largest patent judgment on record.

The ruling, in Federal District Court in San Diego, was a victory for Alcatel-Lucent, the big networking equipment company. Its forebears include Bell Laboratories, which was involved in the development of MP3 almost two decades ago.

At issue is the way the Windows Media Player software from Microsoft plays audio files using MP3, the most common method of distributing music on the Internet. If the ruling stands, Apple and hundreds of other companies that make products that play MP3 files, including portable players, computers and software, could also face demands to pay royalties to Alcatel.

Microsoft and others have licensed MP3 — not from Alcatel-Lucent, but from a consortium led by the Fraunhofer Institute, a large German research organization that was involved, along with the French electronics company Thomson and Bell Labs, in the format’s development.

The current case turns on two patents that Alcatel claims were developed by Bell Labs before it joined with Fraunhofer to develop MP3…

I had always assumed that Fraunhofer owned all the relevant rights.

Suddenly Ogg Vorbis looks more interesting.

Magnatune Records

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John Buckman explains Why I created Magnatune Records…

# Radio is boring: everyone I know is into interesting music, yet good music is rarely played on the air. I’m into everything from Ambient, Industrial, Goth, Metal to Renaissance, Baroque, Tango, Indian Classical and New Age (and many other genres!), and so are many of my friends. Yet, these genres are barely visible in record stores, and totally absent from the airwaves. Radio is mostly about Country, Pop, and Rock, with a little bit of dull, safe classical thrown in.

# CDs cost too much, and artists only get 20 cents to a dollar for each CD sold. If they’re lucky. And, most CDs quickly go out of print: I buy more CDs from EBay than Amazon.

# Online sales (such as over Amazon.com) often cost the artist 50% of their already-pathetic royalty (due to a common record contract provision). International sales and mark-downs often net the artist no royalties.
# Record labels lock their artists into legal agreements that hold them for a decade or more. If it’s not working out, labels don’t print the band’s recordings but nonetheless keep them locked into the contract, forcing them to produce new albums each year. Even hugely successful artists often end up owing their record label money.

# Napster, Gnutella and Kazaa proved that people love music, and they want to share it. Lawsuits may shut Kazaa down (and Kazaa obviously promotes copyright violation), just as Napster was shut down. Clearly there’s a huge public demand for Open Music.

# Using the Internet to listen to music is usually tedious: there are too many ads, too many clicks, and the sound quality is usually bad. It’s too much work, not enough reward. A well run Internet radio station (such as Shoutcast, or Spinner) solves that, but the entrenched record industry wants to kill that too, with onerous licensing terms and odd “rights limited” playback schemes.

# I read this article by Courtney Love six months after starting Magnatune, and was stunned by how much I have in common with her vision and understanding of the music business. And, she’s much more eloquent than I am.

And his solution?

# I thought: why not make a record label that has a clue? That helps artists get exposure, make at least as much money they would make with traditional labels, and help them get fans and concerts.
# Magnatune is my project. The goal is to find a way to run a record label in the Internet Reality: file trading, Internet Radio, musicians’ rights, the whole nine-yards.

Good stuff. Interesting site. Smart guy.

Google does Viacom’s bidding?

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Hmmm… The NYT is reporting that:

In a sign of the growing tension between old-line media and the new Internet behemoths, Viacom, the parent company of MTV and Comedy Central, demanded yesterday that YouTube, the video-sharing Web site owned by Google, remove more than 100,000 clips of its programming.

Viacom, along with other major media companies, including the News Corporation and NBC Universal, has become increasingly frustrated with YouTube as it has amassed a vast library of copyrighted clips, placed on the site by its users.

While such companies regularly ask YouTube to remove their material, Viacom’s demand, which it disclosed in a statement circulated by e-mail, was the most militant and public move of its kind so far.

As it has with the similar request from other companies, Google removed the Viacom clips from the YouTube site yesterday…

So no more clips from Jon Stewart’s Daily Show then? Er, apparently not. For example, a few days ago I blogged Bill Gates’s appearance on the show. I’ve just checked (on Saturday 3 February, 09:55) — and it’s still on YouTube! Maybe Google isn’t quite as efficient as we think.

iPod crippleware

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Nice column by Randall Stross…

STEVE JOBS, Apple’s showman nonpareil, provided the first public glimpse of the iPhone last week — gorgeous, feature-laden and pricey. While following the master magician’s gestures, it was easy to overlook a most disappointing aspect: like its slimmer iPod siblings, the iPhone’s music-playing function will be limited by factory-installed “crippleware.”

If “crippleware” seems an unduly harsh description, it balances the euphemistic names that the industry uses for copy protection. Apple officially calls its own standard “FairPlay,” but fair it is not.

The term “crippleware” comes from the plaintiff in a class-action lawsuit, Melanie Tucker v. Apple Computer Inc., that is making its way through Federal District Court in Northern California. The suit contends that Apple unfairly restricts consumer choice because it does not load onto the iPod the software needed to play music that uses Microsoft’s copy-protection standard, in addition to Apple’s own. Ms. Tucker’s core argument is that the absence of another company’s software on the iPod constitutes “crippleware.”

I disagree. It is Apple’s own copy-protection software itself that cripples the device…

Cisco launches iSuit

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And so it goes on. Mercury News reports that,

Cisco Systems sued Apple Wednesday over the trademark to the name “”iPhone,” setting up a legal battle between two of Silicon Valley’s biggest companies.

Cisco claims that Apple deliberately infringed its rights to use the brand when Steve Jobs introduced Apple’s iPhone, a long-anticipated gadget that combines a cell phone and a video and music player, at Macworld in San Francisco Tuesday, allegedly without Cisco’s permission.

The suit seeks an injunction to stop Apple’s use of the name.

“We’ve been in intensive discussions with Apple for several weeks regarding arrangements to share the brand,” said Mark Chandler, Cisco senior vice president and general counsel.

Cisco expected Apple to quickly sign an agreement sent over late Monday to use the name, but Apple never did.

Apple did not back down. Calling Cisco’s suit “”silly,” company spokeswoman Natalie Kerris noted that “”several companies” other than Cisco had already been using the iPhone name for voice over Internet protocol (VoIP) phones…

Gates on the future of DRM

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From Techcrunch…

Microsoft convened a small group of bloggers today at their Redmond headquarters to discuss the upcoming Mix Conference in Las Vegas. Highlights of the day included:

  • The receipt of a Zune as a gift (the third I’ve received from Microsoft – I now have all three colors)
  • Seeing the look on Gates’ face when he walked into the room and every single one of us had a Mac open on the desk in front of us – Niall Kennedy had also set up a makeshift wifi network using an Airport
  • An hour-long anything goes Q&A session with Gates

    One of the questions that I asked was his opinion on the long term viability of DRM. I don’t hide the fact that I think DRM isn’t workable, and actively support DRM-free music alternatives such as eMusic and Amie Street. The rise of illegal or quasi-legal options like AllofMP3 and BitTorrent ensure that users have plenty of options when it comes to DRM-free digital music.

    Gates didn’t get into what could replace DRM, but he did give some reasonably candid insights suggesting that he thinks DRM is as lame as the rest of us.

    Gates said that no one is satisfied with the current state of DRM, which “causes too much pain for legitmate buyers” while trying to distinguish between legal and illegal uses. He says no one has done it right, yet. There are “huge problems” with DRM, he says, and “we need more flexible models, such as the ability to “buy an artist out for life” (not sure what he means). He also criticized DRM schemes that try to install intelligence in each copy so that it is device specific.

    His short term advice: “People should just buy a cd and rip it. You are legal then.”

    He ended by saying “DRM is not where it should be, but you won’t get me to say that there should be usage models and different payment models for usage. At the end of the day, incentive systems do make a difference, but we don’t have it right with incentives or interoperability.”

    These quotes are rough – I was typing fast but it was not an exact transcript. Still, it is interesting insight from a man who is in a position to shape the future of digital music models.

    • There’s a nice picture of the assembled bloggers and their host here.

    Andrew Gowers interview

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    Becky Hogge has published an interesting interview on openDemocracy.net with Andrew Gowers, who chaired the Treasury review of intellectual property. Sample:

    “[The report is] not radical in the sense that it does not throw into question the fundaments of the IP system”, explains Gowers. “But it is kind of radical in the sense that it doesn’t take anything for granted. My view is that for far too long intellectual property has been a priesthood on the one hand and a lobbyists’ playground on the other. A priesthood in the sense that it is enacted by these quite funny men of a certain age in legal chambers, dusty files all around them and so forth. And a lobbyists’ playground in the sense that the people who are IP holders, the people who say more IP protection is good are well-organised and well-focussed, articulate and well-financed. And the people who actually pay for it, in terms of consumers, are diffuse. So up until now it’s been a one way argument.”

    The Gowers Report

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    This morning’s Observer column…

    So far, IP lawmaking has been an evidence-free area. In virtually every other area of public policy, lawmakers seek evidence from interested parties before legislating and try to assess where the public interest lies. But IP law has traditionally been made simply by conceding the demands of content owners for ever-greater extensions of their rights, leading to the absurd duration of copyright protection. Every time Mickey Mouse is about to run out of copyright, Disney & Co go to Congress and get an extension – ‘infinity on the instalment plan’, as one wag dubs it. Europe follows suit, and the world marches to the beat of the Disney drum.

    Given this background, Tuesday’s publication of the Gowers Report on Intellectual Property is a truly memorable event. Andrew Gowers – the former FT editor I quoted earlier – was asked by Gordon Brown to conduct ‘an independent review into the UK Intellectual Property Framework’, and he has done better than most of us expected. It’s available online and should be a set text for legislators…

    Novell’s Faustian bargain

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    Very good openDemocracy piece by Felix Cohen and Becky Hogge on the implications of the deal between Microsoft and Novell (memorably summarised by Dana Gardner at ZDNet in the headline “Fox marries chicken, both move into henhouse”)…

    On 2 November, Novell and Microsoft announced a “broad collaboration on Windows and Linux interoperability and support”. The main aim was to provide reassurance and support to companies that required Linux and Windows to operate on the same hardware, in so-called “virtualisation” environments. But the small print revealed a patent licensing agreement and mutual covenant not to sue over patent infringements. This, many feared, would give Microsoft vital fresh ammunition for its steady fire of unsubstantiated claims that Linux infringes Microsoft’s patents. In effect, Microsoft had asked Novell the classic loaded question “when did you stop beating your wife?”, and Novell had unwisely attempted an answer…