Net News

Canada Rejects Music Royalty Plan for Internet

Canada's Supreme Court recently struck a blow to the music industry in ruling that Internet Service Providers (ISPs) do not have to pay royalties for pirated music.

The High Court rejected the music industry's argument that ISPs, such as BCE Inc. and Time Warner Inc.'s AOL, should have to pay royalties to musicians and their publishers to cover music their customers download.

“The capacity of the Internet to disseminate works of the arts and intellect is one of the great innovations of the information age,” Justice Ian Binnie wrote, however acknowledging that “[the Internet's] use should be facilitated rather than discouraged, but this should not be done unfairly at the expense of the creator of the works.”

“It is clear that Parliament did not want copyright disputes between creators and users to be visited on the heads of the Internet intermediaries, whose continued expansion and development is considered vital to national economic growth,” he wrote.

In a related case, the Federal Court of Canada turned down a request that ISPs identify music copyright infringers so that music companies can prosecute them. The Court concluded that ISPs are mere conduits of vast volumes of information, for which monitoring would seem impracticable.

New York authorities recently settled a lawsuit filed against a Colorado-based e-mail marketer for allegedly sending unsolicited and deceptive “spam” in violation of the Can Spam Act of 2003.

New York Attorney General Eliot Spitzer said the marketer, Scott Richter, and his company, OptInRealBig.com, paid $40,000 in penalties and $10,000 in investigative costs under the agreement, which was signed before state Supreme Court Justice Eileen Bransten in Manhattan. The company also agreed to provide Spitzer's office with customer information and all advertisements it sends as well as promising to use proper identifying information when registering domain names.

“This settlement holds Richter and his company to a new standard of accountability in their delivery of e-mails,” Spitzer says. “If he does not fulfill these standards, he will find himself back in court, facing greater penalties.”

When Spitzer filed the civil suit against Richter, OptInRealBig.com and some of the company's clients and other individuals in December 2003, the attorney general said he was seeking $20 million in penalties.

Steve Richter, father and lawyer of Scott Richter, says that the settlement basically involved a “no harm, no foul” situation from Richter's standpoint. The fact the attorney general settled for $50,000, while initially asking for $20 million in damages, “speaks for itself,” Steve Richter says.

OptInRealBig.com said in a statement that as part of the settlement with Spitzer, it agreed to abide by the terms of the 2003 federal Can Spam Act. The Westminster, CO-based company said it has been in compliance with the Act.

When announcing his suit, Spitzer said special Hotmail e-mail accounts set up by his investigators revealed thousands of e-mails in May and June 2003 that carried bogus “from” and “subject” lines, often indicating that the messages were part of ongoing conversations instead of being unsolicited commercial lures.

The Motion Picture Association of America (MPAA) recently published new piracy figures that show the problem of illegal downloads from the Internet has not abated.

According to the findings of the new survey, nearly a quarter of Internet users have downloaded a movie illegally. In fact, the survey suggests that 17% of those who have done so are spending less on going to the movies or making legitimate DVD purchases.

The survey took place in eight countries: the United States, the United Kingdom, Germany, Italy, France, Australia and Japan. Of all the countries surveyed, South Korea was the worst offender, with some 58% of the online population visiting and using the peer-to-peer sites that trade movies.

Half of all downloaders are new to these sites, a trend suggesting that the intensive educational initiatives launched by the MPAA and it music industry counterpart, the Recording Industry Association of America (RIAA), have not been as effective as the organizations had hoped.

Indeed, it appears as though downloaders have formulated their own code of conduct as to what is ethical in terms of P2P sharing. For instance, the survey found that just 38% of downloaders say it is acceptable to download a movie before it reaches the movie theaters. But a huge majority ' 72% ' say it is okay to download a movie after it has been released on DVD and made the rounds in the movie theaters.

How the MPAA will respond to these findings is unclear; however, it is obvious the association will step up its fight against movie piracy as part of its general mission. It has watched with dismay as the music industry lost revenue due to P2P sites; now, as broadband continues to proliferate, it is inevitable that the same will happen to the movie houses.

Already the industry has implemented vigorous measures to combat the problem. Policing the aisles of first viewings of movies with night-vision goggles, for example, is now commonplace.

The key question is will the MPAA resort to the legal tactics employed the RIAA in pursuing individual infringers?

A federal judge in San Francisco recently denied motions to dismiss lawsuits claiming past Napster investors like Bertelsmann AG and venture capital firm Hummer Winblad kept the song-swap site going, costing the music industry $17 billion in lost sales.

In her ruling, U.S. District Judge Marilyn Patel, who issued an injunction against the original Napster in 2000, permitted the case to proceed through its discovery phase, saying the plaintiffs, including music publishers, songwriters and record labels, had the right to try to prove their allegations.

Napster went bankrupt in 2002 and was bought by software firm Roxio Inc., which re-launched it as a pay-for-use service last year. Roxio was not named in these latest cases.

But Napster's renegade past is the focus of the suits that claim that German media company Bertelsmann's $90 million investment in Napster in 2000 kept it operating 8 months longer than it would have otherwise.

In addition to the Bertelsmann case, Vivendi Universal's Universal Music and EMI Group Plc also sued Hummer Winblad, claiming the venture capital firm's $15 million investment and installation of a chief executive at Napster in 2000 also promoted piracy.

“Plaintiffs' allegations that defendants exercised full operational control over Napster during periods in which Napster remained a conduit for infringing activity may be wholly unfounded…. Regardless, such questions must be left for resolution upon motions for summary judgment or at trial,” Patel wrote in her 14-page ruling.

The United Nations is veering off-track in its discussions on whether government officials should set Internet policy, a founding father of the network said recently.

Instead, governments should join together to fight electronic crime globally and develop best practices to encourage the growth of Internet commerce, says Vinton Cerf, who helped invent the Internet's early architecture.

“We need the U.N. to foster global standards, global frameworks,” says Cerf, who is chairman of ICANN, the U.S.-based body governing Internet domain names.

“We don't need redundant coordinating bodies, but what we do need and don't have are parts of the U.N. to look at issues such as electronic commerce, the question of digital signatures, tax, fraud and enforcement.”

The U.N. formed a task force in December 2003 to determine the role of governments in setting policy for the Internet.

Cerf cites education as the best weapon against abuse of the Internet.

“We can try technical methods to stop abuses like spam, but there is a limit to technical means. We can use enforcement to try to detect and punish [the offenders]. But if we can't detect them all, then all we can do is try to teach people what is morally right, and what isn't,” Cerf says.

Canada Rejects Music Royalty Plan for Internet

Canada's Supreme Court recently struck a blow to the music industry in ruling that Internet Service Providers (ISPs) do not have to pay royalties for pirated music.

The High Court rejected the music industry's argument that ISPs, such as BCE Inc. and Time Warner Inc.'s AOL, should have to pay royalties to musicians and their publishers to cover music their customers download.

“The capacity of the Internet to disseminate works of the arts and intellect is one of the great innovations of the information age,” Justice Ian Binnie wrote, however acknowledging that “[the Internet's] use should be facilitated rather than discouraged, but this should not be done unfairly at the expense of the creator of the works.”

“It is clear that Parliament did not want copyright disputes between creators and users to be visited on the heads of the Internet intermediaries, whose continued expansion and development is considered vital to national economic growth,” he wrote.

In a related case, the Federal Court of Canada turned down a request that ISPs identify music copyright infringers so that music companies can prosecute them. The Court concluded that ISPs are mere conduits of vast volumes of information, for which monitoring would seem impracticable.

New York authorities recently settled a lawsuit filed against a Colorado-based e-mail marketer for allegedly sending unsolicited and deceptive “spam” in violation of the Can Spam Act of 2003.

New York Attorney General Eliot Spitzer said the marketer, Scott Richter, and his company, OptInRealBig.com, paid $40,000 in penalties and $10,000 in investigative costs under the agreement, which was signed before state Supreme Court Justice Eileen Bransten in Manhattan. The company also agreed to provide Spitzer's office with customer information and all advertisements it sends as well as promising to use proper identifying information when registering domain names.

“This settlement holds Richter and his company to a new standard of accountability in their delivery of e-mails,” Spitzer says. “If he does not fulfill these standards, he will find himself back in court, facing greater penalties.”

When Spitzer filed the civil suit against Richter, OptInRealBig.com and some of the company's clients and other individuals in December 2003, the attorney general said he was seeking $20 million in penalties.

Steve Richter, father and lawyer of Scott Richter, says that the settlement basically involved a “no harm, no foul” situation from Richter's standpoint. The fact the attorney general settled for $50,000, while initially asking for $20 million in damages, “speaks for itself,” Steve Richter says.

OptInRealBig.com said in a statement that as part of the settlement with Spitzer, it agreed to abide by the terms of the 2003 federal Can Spam Act. The Westminster, CO-based company said it has been in compliance with the Act.

When announcing his suit, Spitzer said special Hotmail e-mail accounts set up by his investigators revealed thousands of e-mails in May and June 2003 that carried bogus “from” and “subject” lines, often indicating that the messages were part of ongoing conversations instead of being unsolicited commercial lures.

The Motion Picture Association of America (MPAA) recently published new piracy figures that show the problem of illegal downloads from the Internet has not abated.

According to the findings of the new survey, nearly a quarter of Internet users have downloaded a movie illegally. In fact, the survey suggests that 17% of those who have done so are spending less on going to the movies or making legitimate DVD purchases.

The survey took place in eight countries: the United States, the United Kingdom, Germany, Italy, France, Australia and Japan. Of all the countries surveyed, South Korea was the worst offender, with some 58% of the online population visiting and using the peer-to-peer sites that trade movies.

Half of all downloaders are new to these sites, a trend suggesting that the intensive educational initiatives launched by the MPAA and it music industry counterpart, the Recording Industry Association of America (RIAA), have not been as effective as the organizations had hoped.

Indeed, it appears as though downloaders have formulated their own code of conduct as to what is ethical in terms of P2P sharing. For instance, the survey found that just 38% of downloaders say it is acceptable to download a movie before it reaches the movie theaters. But a huge majority ' 72% ' say it is okay to download a movie after it has been released on DVD and made the rounds in the movie theaters.

How the MPAA will respond to these findings is unclear; however, it is obvious the association will step up its fight against movie piracy as part of its general mission. It has watched with dismay as the music industry lost revenue due to P2P sites; now, as broadband continues to proliferate, it is inevitable that the same will happen to the movie houses.

Already the industry has implemented vigorous measures to combat the problem. Policing the aisles of first viewings of movies with night-vision goggles, for example, is now commonplace.

The key question is will the MPAA resort to the legal tactics employed the RIAA in pursuing individual infringers?

A federal judge in San Francisco recently denied motions to dismiss lawsuits claiming past Napster investors like Bertelsmann AG and venture capital firm Hummer Winblad kept the song-swap site going, costing the music industry $17 billion in lost sales.

In her ruling, U.S. District Judge Marilyn Patel, who issued an injunction against the original Napster in 2000, permitted the case to proceed through its discovery phase, saying the plaintiffs, including music publishers, songwriters and record labels, had the right to try to prove their allegations.

Napster went bankrupt in 2002 and was bought by software firm Roxio Inc., which re-launched it as a pay-for-use service last year. Roxio was not named in these latest cases.

But Napster's renegade past is the focus of the suits that claim that German media company Bertelsmann's $90 million investment in Napster in 2000 kept it operating 8 months longer than it would have otherwise.

In addition to the Bertelsmann case, Vivendi Universal's Universal Music and EMI Group Plc also sued Hummer Winblad, claiming the venture capital firm's $15 million investment and installation of a chief executive at Napster in 2000 also promoted piracy.

“Plaintiffs' allegations that defendants exercised full operational control over Napster during periods in which Napster remained a conduit for infringing activity may be wholly unfounded…. Regardless, such questions must be left for resolution upon motions for summary judgment or at trial,” Patel wrote in her 14-page ruling.

The United Nations is veering off-track in its discussions on whether government officials should set Internet policy, a founding father of the network said recently.

Instead, governments should join together to fight electronic crime globally and develop best practices to encourage the growth of Internet commerce, says Vinton Cerf, who helped invent the Internet's early architecture.

“We need the U.N. to foster global standards, global frameworks,” says Cerf, who is chairman of ICANN, the U.S.-based body governing Internet domain names.

“We don't need redundant coordinating bodies, but what we do need and don't have are parts of the U.N. to look at issues such as electronic commerce, the question of digital signatures, tax, fraud and enforcement.”

The U.N. formed a task force in December 2003 to determine the role of governments in setting policy for the Internet.

Cerf cites education as the best weapon against abuse of the Internet.

“We can try technical methods to stop abuses like spam, but there is a limit to technical means. We can use enforcement to try to detect and punish [the offenders]. But if we can't detect them all, then all we can do is try to teach people what is morally right, and what isn't,” Cerf says.