IP ADR Blog

(right:  my attorney)

Yesterday I suggested that by reading Professor Marc Randazza's post Copyright vs. Free Speech (etc.) you could learn how to "respond to legal bullying without hiring a lawyer."  

When Paul Levy of the Public Citizen Litigation Group asked me what part of the Legal Satyricon's advice I was referring to, I pointed him to Randazza's citation of the Streisand Effect, the story of which reads as follows:

A few years ago, Kenneth Adelman posted aerial photos of Barbara Streisand’s home on the intertubes. Streisand got all Barbara on him and sued him for $50 Million. Before the suit, almost nobody had seen Adelman’s website. The lawsuit generated so much attention that millions of people hit his site and the photo was picked up by the AP as newsworthy. Barbara’s tantrum caused the exact opposite effect that she had hoped for.

Defending yourself from even a completely baseless defamation suit can be expensive. Accordingly, often the only defense that a citizen can afford is to rely upon the Streisand Effect, and hope that it turns into a Bickle Rain. (So named after Travis Bickle from Taxi Driver “Someday a real rain will come and wash all this scum off the streets”). Usually, when the victim of the overreaching lawyer brings the dispute to light, and the victim is in the right, the negative publicity can generate a “real rain” that will wash the scum off the streets — or at least convince the bully to be a bit more reasonable. 

Maybe it's because I'm nursing a low-level winter flu, but it didn't occur to me until early this evening that Mr. Levy might have been troubled by my suggestion that a blogger respond to a cease and desist letter without seeking legal advice.  

What I meant to suggest was that people who can't afford to retain legal counsel remain at liberty to resort to Streisand Effect Self-Help.  If there is any way for you to obtain legal advice, however, you should make every reasonable effort to do so if you are served with a cease and desist letter.  

For those who are wondering whether they should seek legal counsel, a great place to start is the  Public Citizen's Litigation site, which has a very informative Internet Free Speech webpage  and Levy's excellent outline on the Legal Perils and Legal Rights of Internet Speakers.

Although I've added bullets to an excerpt of Levy's list for clarity, it is only an outline meant to point its readers to available legal resources as well as to stress the serious nature of any legal tangle involving alleged copyright infringement.  When seeking legal advice from friends and relatives, please understand that even Uncle Joe's niece's husband who just graduated from Harvard Law School and is working for a fancy New York law firm, is not likely to know the answers to these questions.  This is a specialized area of law and only attorneys (or public interest groups) who specialize in copyright, free speech and the like are qualified to advise you.

Below, the excerpt from Levy's outline.  Download it in its entirety and print it out so you can read it in small bits from time to time.  For a non-lawyer, it's not easy to read and comprehend the entire outline.  If you take it a few paragraphs at a time, however, you shouldn't have any trouble getting the general idea.   At least you'll know what you don't know, which is the beginning of understanding.  Also see Levy's Post from the Consumer Law and Policy Blog on the issue here.

Demand letters

• Normally you get a demand letter first (but no guarantees)
• Don’t panic
  • most threats never lead to litigation
  • sometimes they are sent to make the client feel better, or to be able to say that suits was threatened
  • don’t give up your right to criticize just because you are threatened
  • But take threats seriously
  • Sometimes suit can be avoided without giving up your rights
  • Need to think through chances of success or loss and consider cost of defense worth paying for that sort of advice (without hiring lawyer for case)
  • think carefully about the demand letter though
  • if it does not make sense to defend case, consider giving in now, while it’s cheap
• Need to respond
  • Failure to respond in domain name case may be factor allowing plaintiff to file . . . [a law]suit in [a state] . . . located (far from defendant’s home)
  • [a] response can accomplish several things
    • Response is the first stage of litigation; must be drafted with litigation in mind anything you say can be used against you
    • judge and jury will see your response
    • Hence, legal advice is a good idea at this stage
    • Response might persuade the challenger that you are within your rights
    • If the challenger knows you will not just roll over, it may be more
      amenable to compromise
    • Response is also aimed at wider public
    • often, a good response can head off litigation by reminding the plaintiff how much the lawsuit will cost, not just in legal fees, but in bad publicity
    • do a press release; communicate with the Internet community
    • Good collection of documents on the Chilling Effects web site
      
• Getting Legal Help
  • Tempting to try to represent yourself, but it’s risky
  • easy to make devastating procedural mistakes, miss good legal arguments
  • in theory, courts should treat pro se defendants and their procedural mistakes more leniently. Haines v. Kerner, 404 U.S. 519 (1972) but they often do not
  • some courts are much better than others in helping pro se defendants cope
  • Second Circuit [federal court on the east coast] is particularly careful 
  • Hard to find a lawyer at an affordable price
  • unlike plaintiffs, hard to finance these cases through contingent fees or attorney fee awards
  • cases are time consuming and expensive; and you have to pay your lawyer even if you win
  • some states have SLAPP statutes [California does!] that provide for attorney fee awards when a suit against free speech is dismissed [so long as you meet all the criteria]
  • there are a handful of public interest groups [see linked .pdf] but they have very limited resources
  • if they can help, though, they will often represent clients all over the nation
    there are a few law school clinics interested in this area
  • some clinics help only in courts that are close enough for students to appear [see linked .pdf for list]

Thanks for dropping me an email Paul!  Much appreciated. 

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Thanks to Les Weinstein for hipping us to Mark Lacter's Daily Dragon -- this item on Jay Leno's federal copyright infringement action. 

It's always been a pretty gray area, but don't tell that to Jay Leno and Rita Rudner who have settled a federal copyright lawsuit against author Judy Brown and several book publishers. The comedians sued Brown in 2006, claiming that she reproduced their jokes, many of which were told on "The Tonight Show," without permission. Brown has collected and repackaged thousands of jokes by various comedians. The settlement also includes monetary compensation, which Leno, Rudner and NBC Studios will donate to charity.

For remainder of post, click here.

We've covered this issue before in Disputing Humor:  Comedy, Folkways and the Internet here.

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Reading the news in the blogosphere is sort of like reading your opponent's brief for the first time -- you're pretty certain you know that's not the law, but if you don't read the cases cited, it looks pretty nauseatingly right.  Nauseating because it makes your arguments about your client's legal rights . . . well . . . wrong. 

I rely on Plagiarism Today's Week-End Link Roll  as my IP News aggregator (thanks PT!  much appreciated!)  Yesterday, I was surprised to see PT reference a Techdirt post reporting not only Court Says You Can Copyright a Cease and Desist Letter but that you could be liable for infringement by posting on your blog a cease and desist letter sent  to you.   

This seemed wrong on so many levels (copyright, fair use, common decency, that little Constitutional Amendment we call no. 1) that it continued to bug me as I prepared for a dinner party last night and later over the kitchen sink.  I even woke up this morning thinking about it.  But I knew that someone in the blogosphere would have figured it out while I was sleeping.

How did we live without legal blogs in our lives? 

Gratitude aplenty to everyone this morning, most especially Ron Coleman over at Likelihood of Confusion who posted the answer to the question -- did the Court really say that?

Now that you're interested, just trot on over to Ron's blog to read Copyright in cease and desist letter?  Not quite.  

Thanks Ron! 

Everything is nice and orderly in my legal brain centers again.

If you want the holy writ on the Dozier Law firm's antics, read The Legal Satyricon's lengthy history and searing commentary in the post Copyright vs. Free Speech in Cease and Desist Letters.  And no, the word "chucklehead" isn't used nearly enough Marc!

I didn't mention the ADR angle -- how you can respond to legal bullying without hiring a lawyer -- a topic Professor Randazza covers better than I ever could in his post.  A must read for anyone interested in the intersection between Web 2.0 and the law and culture of intellectual property rights.

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Mr. Thrifty and I have been known to walk to the IMPROV (Jerry Seinfeld, Sarah Silverman, and before Mr. T., even Rosanne Barr before she was Rosanne).  The club is right around the corner from our little neighborhood -- the one that's recently been renamed "Beverly Grove" in honor of the two shopping centers that anchor it firmly in L.A.'s march of progress to complete gentrification.   

The presence of the IMPROV in my own personal geography is strong -- I took my comedy-driving- school-class there from the now pretty famous Kathy Griffin back in the day when I used to power my cherry red RX-7 up and down PCH at speeds local law enforcement couldn't ignore.       

But I digress before I lede, a perilous practice when reporting not quite so exciting arbitration clause interpretation cases. 

So here it is:  Comedy Club, Inc. v. IMPROV West Associates, etc., the Ninth Circuit construing trademark licensing arbitration and non-compete clauses between an IMPROV licensee, the Comedy Club, and the IMPROV as follows:   

1. the arbitrator properly arbitrated the equitable claims where the "scope of arbitration" clause could reasonably be interpreted to embrace such claims;
2. the arbitrator’s award enforcing an exclusivity clause containing a restrictive covenant by terminating the Comedy Club's right to open other clubs could not be set aside as "completely irrational" since that's what the contract provided for;
3. the arbitrator exceeded the scope of his authority by enjoining non-party "affiliate" family members; and,
4. because enforcement of the agreement's covenant not to compete barred the Comedy Club from operating in a substantial portion of its market, that portion of the award violated California Business and Professions Code § 16600, was therefore entered in manifest disregard of the law and had to be vacated.   

The Ninth Circuit therefore,

vacat[ed] the district court’s order confirming the arbitration award and remand[ed the case back] to the district court  with instructions to vacate the Partial Final Arbitration Award in so far as it enjoin[ed the Comedy Store's] Affiliates, unless they [were] agents or otherwise acting for [it] and to the extent it prevent[ed the Comedy Store] from opening or operating non-Improv clubs in counties in which [the Comedy Store] does not now operate or own an Improv club.  

So who said arbitration awards can't be appealed?

With all due respect to those of us here at the IP ADR Blog who arbitrate IP disputes, these lengthly and complex proceedings make me want to mediate the darn thing.

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I don't purport to be an expert in the field of internet monitoring for the prevention of copyright infringement -- though the word "prevention" does suggest prior restraints on free speech.   Because we are here at the commencement of the development of the law in regard to internet freedom, all lawyers, not just IP lawyers, should take an interest and let themselves be heard.

That said, I am providing our readers with links to the conversation taking place at the Concurring Opinions Blog and New York Times "Bits" Blog on internet neutrality.

Concurring Opinions alerted us to this Bits debate between Rick Cotton, the general counsel of NBC Universal, and Tim Wu, a professor at Columbia Law School. Full debate here and highlights here.  Further insight on this issue from Concurring Opinions here.

The issue in more detail as described by Bits' January 8 post, AT&T and Other I.S.P.’s May Be Getting Ready to Filter below.

For the last 15 years, Internet service providers have acted - to use an old cliche - as wide-open information super-highways, letting data flow uninterrupted and unimpeded between users and the Internet.

But I.S.P.’s may be about to embrace a new metaphor: traffic cop.

At a small panel discussion about digital piracy at NBC’s booth on the Consumer

Electronics Show floor, representatives from NBC, Microsoft, several digital filtering companies and the telecom giant AT&T said discussed whether the time was right to start filtering for copyrighted content at the network level.

Such filtering for pirated material already occurs on sites like YouTube and Microsoft’s Soapbox, and on some university networks.

Network-level filtering means your Internet service provider – Comcast, AT&T, EarthLink, or whoever you send that monthly check to – could soon start sniffing your digital packets, looking for material that infringes on someone’s copyright.

“What we are already doing to address piracy hasn’t been working. There’s no secret there,” said James Cicconi, senior vice president, external & legal affairs for AT&T.

Mr. Cicconi said that AT&T has been talking to technology companies, and members of the M.P.A.A. and R.I.A.A., for the last six months about carrying out digital fingerprinting techniques on the network level.

“We are very interested in a technology based solution and we think a network-based solution is the optimal way to approach this,” he said. “We recognize we are not there yet but there are a lot of promising technologies. But we are having an open discussion with a number of content companies, including NBC Universal, to try to explore various technologies that are out there.”

Internet civil rights organizations oppose network-level filtering, arguing that it amounts to Big Brother monitoring of free speech, and that such filtering could block the use of material that may fall under fair-use legal provisions — uses like parody, which enrich our culture.

For full article click here.

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I'm posting a photo of a 1956 Chevy instead of the 1956 Ford I remember being my family's first new car because Ford apparently doesn't want anyone to promote their vehicles.  Image from Military.com's "Ride of the Week."

Read on below:

Thanks again to Plagiarism Today's Weekend Linkroll for continuing to follow companies in self-destruct mode down their own garden paths. 

This item via PT from Boing Boing:  Ford Calls its Fans Pirates for Distributing Pictures of their Own Cars.

Why do we post this in an ADR Blog?  Because the first alternative to litigation is common business sense and we are waiting patiently for companies like Ford to awake from the same type of somnabulence that allowed Japanese car companies to run them off the road in the 1970's.

Excerpt from the Boing Boing post below:  

Josh sez, "The folks at BMC (Black Mustang Club) automotive forum wanted to put together a calendar featuring members' cars, and print it through CafePress. Photos were submitted, the layout was set, and... CafePress notifies the site admin that pictures of Ford cars cannot be printed. Not just Ford logos, not just Mustang logos, the car -as a whole- is a Ford trademark and its image can't be reproduced without permission. So even though Ford has a lineup of enthusiasts who want to show off their Ford cars, the company is bent on alienating them. 'Them' being some of the most loyal owners and future buyers that they have. Or rather, that they had, because many have decided that they will not be doing business with Ford again if this matter isn't resolved."

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Recently, I've noticed Yahoo telling me the number of seconds I've been waiting to get my hands on my email when it doesn't appear instantaneously.  I'm  a little abashed when I realize I'm already getting annoyed by the time Yahoo  informs me I've been waiting for only 22.546 seconds.  

Now Be Specific debunks the myth of a google generation of computer scholars who search the  technological Library of Alexandria with grace and ease.  (pictured here:  the new Alexandrian library)

Not only are our children impatient with the internet's search and navigation functions, so are those who used to spend their time in dusty archives after laboriously flipping through the tattered index cards of the Dewey Decimal System -- University Professors.

We are all, says a recent report from the Brits, not only lacking the "critical and analytical skills [necessary] to assess the information that [we] find on the web" but so impatient that we demonstrate "zero tolerance for any delay in satisfying [our] information needs.  Click here for the full short report (wait time:  3.5 seconds).

This is not good news for IP negotiators.  Our impatience to "get on with it" is probably the primary reason for the breakdown of negotiations for the settlement of IP litigation. 

This is not surprising because no one likes to sit for long in the uncomfortable (but creatively generative) process of exploring the business interests of our bargaining partners when we are pretty certain of the righteousness of our cause and the demonic nature of our opposition.

In survey after survey, lawyers report that the best mediators are patient and persistent.  This is reason alone to bring your IP opponents over to your favorite mediator for whom patience is a central daily practice. 

Thanks to Les Weinstein for passing Be Specific along to us.  We'll be adding it to our Favorite Blogs Link this weekend.

Off to work!

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Here's a law school ranking list for that small but elite group of aspirants to the legal trade -- engineers who want to be lawyers (my brain burns at the cognitive dissonance)  -- Dennis Crouch's Top Thirty [Law School] Patent Programs (Ranked by Patently-O Hits!)

Here are the top ten -- George Washington; University of Texas at Austin; DePaul; Columbia; U. of  Virginia; Boalt; Harvard University; U. of Tennessee; Cornell; and, Boston.  

The cognitive dissonance. 

Two reasons.  Reason One

I tutored 1-L's in Torts when I was a 2-L.  I was good at torts because I was good at story and fairness -- which is what torts is all about.  Students trained in engineering -- which is all about precision and accuracy -- were totally confounded by this subject.  

Having nearly failed high school geometry, its central frustrations remained particularly vivid at the time. 

"Work it like a geometry proof," I recall saying to my tormented first-year engineering law students.  "Just pick an answer and then rationalize it backwards."  That, at any rate, is how I recall being asked to work a proof.  And it seemed to help my most drastically perplexed first-years.

Reason Two

In practice, I litigated the right of oil and chemical companies to obtain insurance coverage for the environmental damage caused by the production, storage and transport of petroleum products and toxic chemicals.  Because the central question in this type of litigation is "what did the policyholders know about the damage they were causing and when did they know it" I took the depositions of dozens of engineers.

Engineers!  The most honest, forthright and helpful deponents alive; nearly incapable of the cautious "coached" deposition answer; congenitally adverse to saying "I don't know" or "I don't remember;" and, deeply committed to telling the absolute and entire truth.

Why?

Because their entire training and practice focuses on precision and accuracy.  They are zero tolerance men and women.  Listen, you get the lunar explorer to the moon or you don't.  There is no middle ground.

So, engineer-lawyers, particularly engineer-litigators and trial attorneys have always amazed me.  To be capable of radical precision and creative truth-telling at the same time requires the kind of intelligence that F. Scott Fitzgerald called "first rate." 

The test of a first-rate intelligence is the ability to hold two opposed ideas in mind at the same time and still retain the ability to function. 

There you have it.   An entire post that is nothing but a digression.  It had to happen at some point. 

I'm greatly looking forward to Dennis' next promised list -- the ten (or more) top law firm procrastinators measured by their Patently-O hits. 

We call this productive procrastination here at the IP ADR Blog Dennis.  Thanks for the enabling lists!

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The Wall Street Journal Law Blog reports Domain-Name Disputes at an All-Time High. 

What interests me is not the number of complaints filed by trademark owners against cybersquatters under the “Uniform Domain Name Dispute Resolution Policy” (UDRP) -- 1 in 1999 and 2,156 in 2007 -- but WIPO's report that "[a]bout 85% of trademark owners prevail when they bring these complaints."

When someone who asks me for a mediation "evaluation" is being over-confident of their chances of success, I always tell them that I would never tell a client that he had a better than 70% chance of prevailing even when I thought every single fact and legal principle lined up in my "victory" column.

I have to tell you that when I say this, lawyers generally blanch and turn to their clients saying something along the lines of "you know I never promised you victory." 

Now the WSJ Law Blog gives me a figure I would never use -- 85% victory. 

It makes me wonder what's behind that figure -- limited resources of cyber-squatters?  Trademark owner bias? 

Anyone have any ideas other than suggesting that trademark owners are almost always right?

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Ontario-based mediator Colm Brannigan * has passed along a valuable article on the mediation of Information Technology disputes from a June '07 Ontario Bar Journal publication.  The article, Resolving I.T. Disputes through ADR -- Part I Mediation was written by Colm with his co-author Michael Erdle. **

Link above with a tempting excerpt below:

[A] common obstacle to settlement in technology cases is differing interpretations of technical terms in a contract or specification. This may prevent the parties from addressing more substantial issues. One possible solution is to mediate a common standard against which the more substantial issue will be measured. A mediator can work with the parties to bring about agreement on a common technical expert whose opinion will be acceptable to everyone.

Another common cause of IT disputes is a misunderstanding between the parties of their respective obligations on a large project. This is especially true where there are multiple parties. The work inevitably takes longer and costs more and each of the parties, often all in good faith, blames the others for the problem. This is a situation that is very difficult to resolve through a series of one-on-one negotiations and can almost always benefit from mediation.

The mediator can facilitate a session that brings all of the parties together, to explain their own understanding of their roles and responsibilities. This assists all parties to understand the gaps that have arisen and helps them to find ways to bridge those gaps in ways that can benefit everyone. These kinds of results are simply impossible to achieve through arbitration or litigation.

In many situations, the parties will have devoted resources to developing a technology or an application upon which they become mutually dependent. Often, other parties, who are not directly involved in the conflict, also rely on these technologies. In a traditional litigation approach, an injunction is often viewed as the remedy of choice.

But the extremely disruptive results of this action on business partners and third parties must be taken into consideration. While the legal rights may support an injunction, the consequences will likely disrupt the business relationships to such a degree that no subsequent effort to restore them would be successful.

Most business people agree that a major part of a company’s cost in delivering services is the expense incurred to develop and maintain customer relationships. The investment in this area is put at risk by traditional litigation methods. By using mediation the parties can meet and with the assistance of the mediator develop creative ways to preserve their investment and/or rights while they work to resolve the substantive issues in their dispute. This can avoid disruptions to a third party that could have the unintended result of additional legal proceedings by the third parties against the disputants.

No dispute is completely binary (win-lose) and business people usually do not think in such simplistic terms. Why should their advisors? Mediation tries to achieve a positive sum result – “I win, you win”. While not always possible, mediated results tend to be creative and sustainable, simply because they are mutually-beneficial. In an industry where entrepreneurship, speedy decision-making and action are highly valued, the management “distraction factor” is an even greater litigation cost than in traditional industries. This cost is significantly reduced by the use of mediation as an affirmative business strategy.

For the full article, click here.

_________________

* Colm Brannigan, LL.B., LL.M. (ADR), C. Med. is a full-time mediator and arbitrator. He can be contacted by e-mail at colm@mediate.ca or (905) 840-9882.

** Michael Erdle is Managing Partner of Deeth Williams Wall LLP. He is a mediator and arbitrator and has advised technology clients in alternative dispute resolution. He can be reached at merdle@dww.com or (416) 941-9201.

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Thanks to Colm Brannigan for posing this question to the LinkedIn Legal Community:  What Qualities Do Counsel Look for in a Mediator? 

We've already posted -- here -- the answer of L.A. Sheppard Mullin attorney Jim Burgess.

Below, we give you the thorough and insightful answer of Vermont attorney, mediator and arbitrator Richard Cassidy of Hoff Curtis. 

From Richard's response you can tell that he understands mediation theory and practice from every angle you want a mediator to know. 

So if you practice in Vermont and are looking to settle a commercial case (he also does labor and personal injury) you probably couldn't do much better than to give Richard a call. 

So herewith and all that, we give you Ricahrd Cassidy's thoughts on what qualities lawyers are looking for in mediators:

From my perspective, it’s important to analyze what you want from the mediation and attune your selection to your needs and goals.

Choice of Mediator -- "Someone Who Will Have Credibility with my Opponents"

In selecting a mediator, I am often most in need of someone who will have credibility with my opponents. I do my best to understand the strengths and weaknesses of my case before I get to mediation. Hopefully, there is little a third party can teach me about my own case. Of course, it is human to be imperfect and so sometimes there is more to learn at mediation than I would prefer. So good judgment is important.

Case Assessment

But assuming that enough work has been done to properly assess the case before mediation, I am often hoping to use the mediator’s knowledge and credibility to help persuade my opponents to see things more my way. In such cases, I am happy to agree on whomever my opponent wants, so long as they have the basic skills.

A Mediator My Client Will Respect:  "Seeing a Neutral Learn About the Case and Then Point Out Important Weaknesses Can Be Very Powerful"

Sometimes, however, client control is a real issue. You wonder why some clients hire you and ignore your advice, but it happens. Seeing a neutral learn about the case and then point out important weaknesses can be very powerful for clients who do easily accept a realistic evaluation of their prospects. So, on such occasions I am looking for a mediator my client will respect.

The Basics:  Interpersonal Skill, Patience, Persistence, Stamina and Optimism

Of course, there are basics that one almost always wants. Good interpersonal skills are essential. An understanding of the mediation process and technique is critical. I look for lots of patience, persistence, stamina and optimism. (I have seen many a mediator throw away a real chance of settlement by trying to move too fast or quitting too early. As a mediator, I do not quit until at least one party insists that I do so). Timing is often important. In most of my cases, knowledge of the litigation process is very important because it gives the mediator the ability to point out the problems of the “best” alternative to a negotiated settlement.

Substantive Knowledge

Knowledge of the substance and dynamics of the particular subject area is very important. For example, I do lots of work as an advocate and as a mediator in employment litigation. Many plaintiffs and many plaintiffs’ lawyers don’t understand up front how hard the process is going to be for them, and how bad the statistics are for the employee. A mediator who can genuinely show empathy for the plaintiff’s plight and deliver the bad news when it’s called for is what is needed.

Co-Mediating with Experts

Sometimes, in more esoteric subject areas, substantive knowledge can be hard to find. As a mediator I have successfully occasionally co-mediated with experts (not necessarily mediators) in fields that are outside of my usual range, such as in patent cases.

Evaluator or Facilitator?

On the facilitative/evaluative question, I usually want a mix. It is almost always a mistake for the mediator to try to impose his or her view of the right the resolution on the parties. But for cases in litigation or headed there, I find that a mediator who is unwilling to express any view of the case is usually not very helpful. I understand that, particularly in domestic relations matters, many mediators are unwilling to do any evaluation at all. I understand that if the real goal of the process is not to resolve the specific issues then holding the parties attention but to transform their communication so that they can resolve things themselves in the future, evaluation can be a road block. Ordinarily, however, in my cases (civil litigation, mostly employment, commercial, construction, or personal injury disputes) someone usually needs the kind of reality check that a few well timed evaluative comments can provide.

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Plagiarism Today continues to provide us with the best aggregation of IP news every week in its  Saturday Linkroll.  Today we're linked to Corante's post "Even Fools Don't Invest in the Music Business," noting the Motley Fool's warning (We're All Thieves to the RIAA) that

a good sign of a dying industry that investors might want to avoid is when it would rather litigate than innovate, signaling a potential destroyer of value. If it starts to pursue paying customers -- which doesn't seem that outlandish at this point -- then I guess we'll all know the extent of the desperation. Investor, beware.

While you're at it, take a look at the Los Angeles Times article, CD Sales Fall Again; DVDs See First Drop,

The [falling] figures underscore the industry's failure to combat music piracy with a campaign of lawsuits and threats. 

We like the music industry.  We really do.  Some of our best friends are musicians and composers and they're suffering some pretty hard times here.  

We just think -- as the RIAA's conduct is proving -- that BigMusic, like the American automobile industry in the 1970s, needs to start listening to at least one of the weathermen who knows which way the wind is blowing.   

Get the picture?  Yes we see . . . . (check out those hair-dos!)

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Direct from NPR to Engadget to our readers:

Speaking to NPR, RIAA president Cary Sherman . . . said . . . that the RIAA hasn't ever prosecuted anyone for ripping or copying for personal use, and that the only issue in the Jeffrey Howell case was -- as always -- sharing files on Kazaa. Perhaps most interestingly, Sherman directly addressed the "ripping is just a nice way of saying 'steals one copy'" comment made by Sony BMG's anti-piracy counsel in the Jammie Thomas case, saying that the attorney "misspoke," and that neither Sony BMG or the RIAA agreed with that position.

Why do we continue to follow this multi-strand narrative on an IP ADR blog? 

Because this is why IP is worth doing.  The law hasn't caught up with today's technology, let alone that lurking around tomorrow's corner.  We're at the very beginning.  Dawn.  And we're excited to begin the year as part of the conversation about the law the culture is in the process of creating to give artists their due; cut the producers and distributors in for their fair share; promote artistic collaboration and the solo effort; and, maybe rearrange a little bit of society, history and politics at the same time.

We're all in!

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Take a look at this excellent article -- Pirates Stealing Content from Rival Website -- by Florida Gunster Yoakley lawyers David Bates and Meenu  Sasser.

This one-page article is well-worth reading if you or your clients possess anything of value on the internet that can be "scraped" by pirates.

The good news?

According to Bates, "[a]bout 95% of the cases are resolved by a cease-and-desist letter."

With that kind of track record, Gunster ought to be thinking about value rather than hourly billing.  Maybe they already have.

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 (left, the victorious Karen R. Thorland of Loeb & Loeb)

Just as we're waxing philosophic about litigation's questionable ability to effectively and efficiently resolve a dispute requiring factual findings, along comes a ruling that not only resolves a mixed question of law and fact, but does so at the pleading stage without giving Plaintiff a chance to amend the Complaint.

Hearty congratulations to Karen R. Thorland of Loeb & Loeb LLP who pulled this rabbit out of the hat for BMG Music.  The new year just doesn't ever start better than that!

The Opinion in Brief 

In Leadsinger, Inc. v. BMG Music Publishing, the Ninth Circuit held today that there was no set of facts which would permit the manufacturer and distributor of karaoke machines to make and sell its devices in the absence of reprint and synchronization licenses.  In concluding that the District Court properly granted defendant's motion to dismiss without leave to amend, the Ninth Circuit explained:

No amendment would change the conclusion that Leadsinger’s karaoke device falls within the definition of an audiovisual work and outside the scope of § 115’s compulsory licensing scheme. Indeed, the conclusion that Leadsinger’s device displays a series of related images that are intrinsically intended to be shown by a machine together with accompanying sounds is justified by Leadsinger’s own description of how its all-in-one microphone allows a consumer to sing lyrics “in real time” with recorded music.

Any amendment relating to Leadsinger’s purported fair use also would have been futile. Leadsinger’s allegations support that its use of copyrighted song lyrics is commercial, that song lyrics fall within the core of copyright protection, and we have drawn the reasonable inference that Leadsinger uses song lyrics in their entirety. Thus, the only possible amendment relating to fair use would address the harm to the potential market for or value of the copyrighted work. That amendments relating to the fourth § 107 factor are a possibility is not enough to find that the district court abused its discretion given that the first three factors under § 107 unequivocally militate against a finding of fair use, and we are not to consider these factors in isolation. See Campbell, 510 U.S. at 591 n.21.

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Duane Morris reports today on the Third Circuit Decision Clarif[ying] Proper Use of Lapp Factors in Trade Dress Infringement Actions.

I leave the strictly legal analysis to my fellow IP legal bloggers.  See e.g. the 43(B)log's treatment of the denial of the preliminary injunction by the District Court here.  

My comment pertains to the last paragraph's modest conclusion that the new decision "provides brand owners with important guidance" in ordering their affairs.

That guidance?

1. store brands can 'get away' with a little more similarity than other defendants' products when they prominently display a well-known store-specific signature on their packages
2. but store-brands may not merely affix a tiny differentiating label to a copied national brand
3. "health-related" products such as the artificial sweeteners at issue can err on the side of similarity because customers "are assumed to exercise more care in their purchasing decisions than they otherwise might for low-priced products"
4. evidence of actual confusion from a "surgical strike" shopper was not representative of the typical shopper in light of of their brand indifference and the fast pace of their shopping.

Is This Guidance Sufficiently Certain to Recommend Litigation?

From a practical standpoint -- is there any other? -- any legal issue that requires fact-finding will likely be settled later (and far more expensively) than those that don't. 

Why? 

Because litigation makes sense only if:

1. you have far more resources than your opponent; or,
2. the matter is actually resolved at the preliminary injunction stage because the resulting commercial losses are too great to bear until trial; or,
3. the matter can truly be resolved by way of summary judgment motion, i.e., there are genuinely no  material facts nor any immaterial facts that pull at equity's heart-strings.  

Judges have hearts? 

Yes, indeedy.  In fact, if you look back over your long or short litigation career, you'll get the gestalt -- the cases you should have won on summary judgment but which you (unjustly) lost invariably contained some set of facts that:

1. made the requested judgment feel inequitable even though it would have been legally appropriate
2. made the trial court worry about reversal -- usually because the law or the facts were just too darn complicated
   • ever so brief aside:  at the close of one summary judgment argument in a nine-figure case, I asked the Judge denying my motion to provide the parties with his ruling on our evidentiary objections.  His response?  The wave of a hand at the wire cart containing several red welds of pleading files coupled with this remark -- "you can't expect me to rule on those objections."  Beat.  "There are just too many of them."  Voila -- justice! 
3. required more work to understand than the particular Judge before whom it was pending was prepared to do (cf. "too darn complicated")

But They Infringed My Trade Dress!!!!

Let's stick with artificial sweeteners here. 

The reason the "store brands" cost so much less than the national brands is, of course, promotion.  Advertising.  Print.  Television.  Internet.  Billboards.  Slogans. Jingles.  The whole Adman Magilla (plug here for Madmen from Nancy Franklin's ecstatic New Yorker review -- "it hits a deep place in you, like a straight-up Martini made of memory and desire.")

So really!  No one should feel sorry for a store brand trying to hitch a free ride on the back of the national brand's gazillion dollar ad campaign.  Shoot!  That's the kind of advantage taking that makes everyone's mouth go a little sour, right?

Trouble is, as far as jurors and judges go, there is no innocent and, more importantly, no flesh and blood person who's done any equity-sweating or competitor abusing.  Just the cold record; some high-paid expert witnesses; and, the usual line-up of corporate representatives.

There's simply no way to predict what a Court or jury or appellate tribunal is apt to do.  It's all so loosey goosey really.  This is not only not science -- it's not even social science.  It's a game of chance no matter how skilled and sophisticated the players.

Isn't this Just Another Commercial for Your Mediation Services, Ms. Pynchon?

Well, not entirely.  My friend and mentor Ken Cloke likes to say that mediation is a profession in search of its own suicide because we're always trying to teach people to just do this resolution thing -- strategic planning and negotiation -- by themselves.

Have I, for instance, said read 3-D Negotiation yet this year?  No?  Here's the amazon.com link.  Buy it today.  You don't even have to read the whole thing.  You can skim it.  Really!  It will be the best investment of your legal career since you first subscribed to Lexis or Westlaw.  

The recommendation below, for instance is a little harder than it sounds, but it's a whole lot easier and less risky than high-stakes IP litigation.  What is that recommendation?  

Learn the "art of letting them have your way."

At its best, letting them have your way means finding an agreement that meets your counterpart's real interests, as a way of meeting yours.  It means shaping how the other side sees the basic choice -- between yes and no -- so that the "yes" they choose for their reasons yields the deal you want for yours.

3-D Negotiation at 37.

Try it.  You'll like it!

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Happy New Year by Anthony (Space Potato)

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