Techdirt

A Detailed Explanation Of How The BSA Misleads With Piracy Stats

Michael Masnick — Fri, 18 Jul 2008 19:44:00 PST

A couple months ago, when the Business Software Alliance (BSA) released its latest stats on "piracy," it's VP of anti-piracy, Neil MacBride, gave me a call to discuss my earlier complaints about the organizations methodology. Needless to say, we did not see eye-to-eye, and the phone call did little to resolve our differences. I'm still hopeful that eventually the BSA will recognize that it's doing more damage to its own position by publishing obviously bogus numbers. So, with the organization releasing another bogus stat today, it's time to explain why it's wrong and misleading.

Today's report is an attempt to get the government involved in protecting BSA member companies' business model, by claiming that the US is losing out on $1.7 billion in tax revenue due to "pirated" software. And, of course, it comes with a lovely quote from Mr. MacBride: "The most tragic aspect is that the lost revenues to tech companies and local governments could be supporting thousands of good jobs and much-needed social services in our communities." And the BSA is even so kind as to quantify what that (not really) lost tax revenue could do: "For example, the lost tax revenues to state and local governments -- an estimated $1.7 billion -- would have been enough to build 100 middle schools or 10,831 affordable housing units; hire 24,395 experienced police officers; or purchase 6,335 propane-powered transit buses to reduce greenhouse gas emissions."

Except that this is almost entirely incorrect and it's relatively easy to show why:

The report counts every unauthorized piece of software as a lost sale. You have to dig through separate PDFs to find this info, but when you finally get to the methodology it states:
The software losses are based on the piracy rate and equal the value of software installed not paid for.
That's a huge, and obviously incorrect assumption. Many of the folks using the software likely would not have paid for it otherwise, or would have used cheaper or open source options instead.
The report makes no effort to count the positive impact of unauthorized use of software in leading to future software sales. This is something that even Microsoft has admitted has helped the company grow over time. But according to the BSA's report, this doesn't matter.
The report also proudly notes: "Software piracy also has ripple effects in local communities." However, "ripple effects" are easily disproved as double or triple counting the same dollar. Using ripple effects like that inflates the final number by two or three times. In the link here, Tim Lee explains this (in reference to an MPAA study done by IPI, but it applies here to the BSA study done by IDC as well):
If a foreigner gives me $1, and I turn around and buy an apple from you for a dollar, and then you turn around and buy an orange from another friend for a dollar, we haven't thereby increased our national wealth by $3. At the beginning of the sequence, we have an apple and an orange. At the end, we have an apple, an orange, and a dollar. Difference: one dollar. No matter how many times that dollar changes hands, there's still only one dollar that wasn't there before.

Yet in IPI-land, when a movie studio makes $10 selling a DVD to a Canadian, and then gives $7 to the company that manufactured the DVD and $2 to the guy who shipped it to Canada, society has benefited by $10+$7+$2=$19. Yet some simple math shows that this is nonsense: the studio is $1 richer, the trucker is $2, and the manufacturer is $7. Shockingly enough, that adds up to $10. What each participant cares about is his profits, not his revenues.
This is a huge fallacy that the BSA an IDC refuse to acknowledge. When I discussed it with them in May, they insisted that they only wanted to talk about piracy rates, not the loss number. I wonder why...
Next, if they're going to count ripple effects in one direction, it's only fair to also count them in the other direction. That is, they complain that:
Lost revenue to technology companies also puts a strain on their ability to invest in new jobs and new technologies. For example, the $11.4 billion in piracy losses to software vendors and service providers in the eight states would have been enough to fund more than 54,000 tech industry jobs.
But what they don't acknowledge is the ripple effects in the other direction. That is, if (going by their assumption, remember) every company that uses an unauthorized copy of software had to pay for it, that would represent $11.4 billion in money that all of those other companies could not use to fund jobs at those companies. What about all of those jobs?
The BSA/IDC stat on lost tax revenue also miscounts on the point above, since it includes the lost income tax revenue from those 54,000 lost jobs, but does not count the equivalent income tax revenue from those other jobs. In fact, in the fine print, the report notes:
"Employment losses are calculated from revenue losses, and only apply to employment in the IT industry, not IT professionals in end-user organizations. Tax revenue losses are calculated from revenue losses (VAT and corporate income tax) and employment losses (income and social taxes)."
In other words, the income tax losses only count one side of the equation and totally ignore the lost income tax revenue from the lost jobs on the other side of the equation. Oops.
It seems likely that the eventual tax benefits of the unauthorized use of software is most likely to greatly outweigh the lost tax revenue elsewhere. That's because the use of software within industries is a productivity tool that increases overall productivity and output, which would increase taxes beyond just the income taxes of the employees. The study, of course, ignores this point.
Worst of all, the report seems to assume that direct software sales are the only business model for the software industry, ignoring plenty of evidence from companies that have adopted business models that embrace free software -- generating billions of dollars for the economy (and in taxes). And that's what this really comes down to. It's a business model issue. If others started adopting these business models as well, there wouldn't be any "losses" at all.

Oh, and just for good measure, the report also falsely claims that: "What many don't realize or don't think about is that when you purchase software, you are actually purchasing a license to use it, not the actual software." That's not exactly true and goes directly against a recent court ruling that said the opposite and goes through a detailed explanation for why a piece of sold software is a sale with restrictions, rather than a license, using previous court precedents.

Most of these points have been made to the BSA and IDC in the past, and both organizations chose not to address them. The fact that they're continuing to use these obviously false numbers and methodology to now push for the government to prop up an obsolete business model should be seen as troubling not just for the dishonesty of it, but for the negative impact it will have on the software industry and our economy as a whole.

Permalink | Comments | Email This Story

No, The Internet Is Not Bad For Science; Bad Research Is Bad For Science

Michael Masnick — Fri, 18 Jul 2008 18:35:23 PST

Wired has an article discussing the assertion published in the journal Science (not online at the moment) claiming that the internet is bad for science, because researchers just do some searches online and get the most popular hits or the most recent hits, and fail to dig deeper or look at older research. Of course, that's placing the blame on the wrong party. The problem isn't the internet: it's people who do bad research on the internet. If you use the internet as one tool of many in doing your research, and make sure to follow up on reading the actual research and following through on the citations, then the internet can be quite useful. I know I've found that in doing some recent economics research. Being able to search online, in addition to through some print journals, resulted in finding some additional useful research I wouldn't have come across otherwise. Of course, perhaps we shouldn't be surprised that a journal whose history is paper-based would push out an article trashing the internet for research.

Permalink | Comments | Email This Story

Should Organizations Get To Ignore Copyright For The Sake Of Preservation?

Michael Masnick — Fri, 18 Jul 2008 17:21:00 PST

Copyright was clearly designed for a different age: when not everyone was a "publisher." And while we've spent years pointing out many of the different problems that has caused, here's another one: how is a library or some other institution charged with "archiving" written works for posterity supposed to deal with copyright laws that can often make such archival activities against the law? Well, the Library of Congress and a bunch of other organizations have a suggestion: let them all ignore copyright law for the sake of archiving. Basically, the report recommends that certain organizations be designated as "preservation institutions," which are then more or less allowed to ignore copyright law and copy-at-will for the sake of preservation. Of course, this is clearly going to lead to many questions, including just who would get designated as such. Many people can probably agree on public libraries and such -- but what about Google? After all, Google is already one of the largest players in "preserving" what's online and also, with its book scanning project, what's in books. Yet it's a private, for-profit company. Should it qualify? I would argue that it makes sense to allow it, given how beneficial the archival activities of Google have already been. Even if it is for profit, the public benefit has been tremendous as well. But then what's to stop any other company from arguing that it to deserves an exemption for preservation purposes? Wouldn't a better solution be to start rethinking copyright law altogether, since what has become clear from this is that copyright doesn't quite fit today's world any more?

Permalink | Comments | Email This Story

GPS Data Used To Disprove Radar Gun In Speeding Trial

Kevin Donovan — Fri, 18 Jul 2008 16:11:00 PST

Over the past couple months, we've pointed to the misuses of technology to enforce traffic laws, particularly red light cameras which often end up causing more accidents or allow municipalities to decrease the yellow light time and increase ticket revenue. Last fall we noted the case of a teenager who was challenging another technological traffic enforcement: radar guns -- and he was using a different technology to do so: his GPS system. Now, the 18-year old driver has successfully contested that speeding ticket which he was issued for allegedly traveling 62 mph in a 45 mph zone.

Luckily for the teen, his car had an advanced GPS system which not only provided directions but measured velocity to "within 1 mph." After receiving a trial and bringing a GPS expert to testify to the accuracy of the device, the $190 ticket has been dismissed. What is not clear is why the police officer's radar gun output was more than 1/3 inflated (though this is hardly an isolated incident). Also, as a number of people have pointed out, similar GPS data, if widespread, could also come to serve as critical evidence in convicting traffic law violators instead of providing a check on state authority.

Kevin Donovan is an expert at the Techdirt Insight Community. To get insight and analysis from Kevin Donovan and other experts on challenges your company faces, click here.

Permalink | Comments | Email This Story

Dutch Court Allows Research On Smart Card Vulnerabilities To Be Published

Michael Masnick — Fri, 18 Jul 2008 15:06:18 PST

We recently wrote about how NXP Semiconductor (formerly Philips Semiconductor) was suing to try to stop the publication of some research that showed some vulnerabilities in its chips used in smart cards around the world. The vulnerability itself was already widely known (though NXP denied it for a while). The good news is that a judge has denied the request, and the research will be published as originally planned. The bad news is that NXP wasted quite a lot of time denying there was a problem instead of fixing the problem -- and with this latest misguided legal stunt, made sure a lot more people knew about it.

Permalink | Comments | Email This Story

Ubisoft Uses Internet Crack To Get Around Its Own DRM

Michael Masnick — Fri, 18 Jul 2008 13:52:00 PST

Ubisoft, one of the larger video gaming companies out there, has a somewhat troubled history of overburdening its games with awful DRM. And, as with most DRM systems, the people it tends to hurt most are the legitimate purchasers who somehow run afoul of whatever DRM rules are in place. In this case, the Ubisoft game Rainbow Six: Vegas2 (R6V2) had some DRM that would check to see if the physical media (CD-ROM) was in the drive before it would let you play. Unfortunately, Ubisoft also offered the game as a download via IGN's Direct2Drive store. They had set it up so this would work even without the actual CD, but a recent patch didn't take that into account, and broke the game for anyone who had purchased it via D2D.

So, what does Ubisoft do? It releases a patch that isn't actually a "patch" but a well known crack that it downloaded off the internet. As TorrentFreak points out at the link, according to the way companies like Ubisoft look at things, it "stole" someone else's code and passed it off as its own. And, of course, there's the somewhat delicious irony that it didn't just "steal" any code for its own use, but the very code that companies like Ubisoft insist is evil, immoral and illegal. Except, of course, when Ubisoft is in desperate need of it, apparently.

Permalink | Comments | Email This Story

Connected Nation: National Broadband Policy Or Big Telco Front?

Michael Masnick — Fri, 18 Jul 2008 12:38:57 PST

For years, we've pointed out that, unlike most every other nation these days, the US lacks any sort of comprehensive broadband policy. Whether or not you think that's a good thing may depend on your perspective -- even among free market supporters. If you believe that broadband is a national infrastructure question involving a natural monopoly (a la the highway system) then it's a shame that there's no national broadband system that allows competition at the service level. If, instead, you think that broadband is not a natural monopoly then perhaps competition at the infrastructure level makes sense, even if it decreases competition at the service level. However, there's definitely been a lot of clamoring from folks that the US needs a national broadband policy. For years, the big telcos have resisted this push, often with incredibly misleading statements about how the government needs to keep its "hands off" their network. That's misleading because they leave out how much of that infrastructure was subsidized by the government -- whether through direct subsidies, grants of rights of way or tax breaks.

Either way, it appears that the telcos have recognized that they need to get behind a "national broadband policy" before one is handed to them -- so they've created their own, called Connected Nation. We discussed this back in February, when there was some question about whether Connected Nation really was a reasonable policy or just a front for the telcos. One of the biggest problems? The more you look at Connected Nation, the more difficult it is to figure out what it actually does. Broadband Reports is taking a look at the problems with Connected Nation, noting that the big telcos are all claiming that it represents a good national broadband policy, but that's hardly supported by the details.

For example, Connected Nation's broadband plan doesn't seem to involve anything resembling consumer advocates, or any objective look at ways to get broadband to those not served by it. But what does Connected Nation actually do? Basically tells the rest of the government that everything is groovy and not to do anything. Officially it takes taxpayer money to create its own questionable maps about broadband penetration, most of which come back showing that there's plenty of broadband penetration (nothing to see here, move along now). Then it sends out marketing material to local leaders about the importance of broadband -- effectively advertising incumbent telco broadband offerings with taxpayer money. Whether or not you support a national broadband policy, this seems pretty questionable all around. It seems to just divert taxpayer money to broadband advertising, without doing much to actually improve broadband.

Permalink | Comments | Email This Story

Now A German Court Says Open WiFi Owner Is Responsible For What Others Do On WiFi

Michael Masnick — Fri, 18 Jul 2008 11:20:57 PST

Remember just over a week ago the good news coming out of Germany concerning an appeals court ruling that noted (properly) that the owner of an open WiFi access point was not liable for actions done by others on that WiFi? Well, apparently there's a bit of a "split" in the German courts. An anonymous reader sends us notice of a news report out of Germany with a lower level court apparently ruling in the exact opposite way (link in German, translations welcome; here's Google's translation). From what the submitter and the translation suggest, the court claims that it's the responsibility of the access point owner to secure the WiFi, and if they do not, they have to take on some liability for what happens on that system. There's no question, apparently, that the owners of the WiFi system did not actually share the file in question. They showed they were not at home at the time of the alleged infringement, and they had no file sharing software on their computer. While the case isn't yet over, the owners of the WiFi access point have to pay court costs, lawyers fees and the amount they were sued for... and they may face criminal prosecution as well.

Permalink | Comments | Email This Story

Why ISP's 'Stand' Against Child Porn Is Actually Not A Stand Against Child Porn

Michael Masnick — Fri, 18 Jul 2008 09:56:30 PST

Following NY Attorney General Andrew Cuomo's success in getting ISPs to turn off Usenet access and pretend it was a victory against child porn, a bunch of cable providers under the umbrella of the NCTA have announced an agreement with 45 attorneys general, claiming that they, too, are taking a "stand against child porn." This "stand" is the same as what Cuomo pressured ISPs to do: officially it's to block any newsgroup or website that is "known to host child pornography." Taking a stand against child pornography would be a good thing -- but this is not actually a stand against child pornography. This is trying to sweep a problem under the rug so that some politicians and some companies can get some good headlines.

Taking a stand against child porn wouldn't be overly aggressively blocking access to internet destinations that may or may not have porn (and there's no review over the list to make sure that they're actually objectionable). Taking a stand against child porn would be hunting down those responsible for the child porn and making sure that they're dealt with appropriately. Blocking access to some websites doesn't solve the problem. Those who still produce and make use of child porn will still get it from other sources -- but it will be more underground, making it more difficult for authorities to track down. Also, this sets an awful precedent in that the ISPs can point out that it's ok for them to block "objectionable" content where they get to define what's objectionable without any review. For those folks who support network neutrality, this is highly questionable, because it's clearly going against the basic principles of network neutrality -- but in a way no one will protest because they don't want to be seen as siding with child pornographers. But the truth is this "stand" against child pornography won't do anything to stop child pornographers other than making them harder to track down -- and it sends these ISPs down the slippery slope of getting to decide what they think is objectionable content that should be blocked.

Permalink | Comments | Email This Story

Wealthy UK Artists Want Their Families To Get Paid Multiple Times For Their Artwork

Michael Masnick — Fri, 18 Jul 2008 08:11:00 PST

A few years ago, we wrote about the rather silly plan in the UK to create an "artist resale right." This says that even if an artist has sold his or her work, if that work is resold, the artist still gets a 4% cut. The non-economic thinking on this is that an artist is forced to sell his or her work when it's not valued as high, and thus deserves a cut when the value is much higher. However, that's not at all what is happening. Instead, evidence has shown that this is more often used to depress the local art market by making it more expensive to sell art (and decreasing the incentives of anyone to resell any art they've bought). It profits big name artists, but tends to hurt the lesser known artists (you know, the one's it's supposed to help).

So, of course, it should come as no surprise that the wealthy artists who benefit the most from this resale right in the UK are looking to expand it (found via Against Monopoly). Currently, it only applies to living artists. However, they're now pushing to extend the right to 70 years after death, where the family of the artist will be compensated -- claiming that families deserve to be compensated for artwork a family member may have sold off a century earlier because: "Our loved ones often sacrifice a lot to support an artist in the family." Of course, there are lots of sacrifices that families make for people in other professions as well, but they don't get paid a century later for their efforts. This clearly has nothing to do with encouraging more art, since it seems to discourage that. It is, like so many "intellectual property" grants, a way for established creators to get more money out of what they already created, while hurting the market for new upstarts.

Permalink | Comments | Email This Story

Fewer Amenities When You Fly... But Instead You'll Get A Lot More Ads!

Michael Masnick — Fri, 18 Jul 2008 06:22:00 PST

Have you flown lately? It's becoming less and less enjoyable by the day, it seems. Many airlines are dumping features, adding fees and making sure customer service is about as frustrating as possible. On top of all that, it appears that airlines are so focused on cost cutting that they're looking to do whatever possible to shave the slightest bit of weight from each flight (fewer passengers would be one suggestion) including one airline that discovered removing seatback magazines saved thousands of dollars by making the airplane lighter (yes, seriously).

So, what do you have to look forward to on flights these days? Well, advertisements! There's a new startup that is promising to put contextual ads everywhere from your boarding pass to the check-in terminals and (we're sure) to the seatbacks in front of you on the plane. Now, of course, this idea isn't entirely new. Over in Europe discount airlines have been offering up cheap fares while making it up with all sorts of other fees and services. But, then again, no one's talking about cheap fares in the US either. In the meantime, if they're looking for ideas, I still think the flying casino may be the best idea yet. Get people to simply gamble away their money while flying across the country. However, until that comes to pass, expect worse service, fewer amenities, more fees... and tons of advertising.

Permalink | Comments | Email This Story

Would Wikipedia Be The Same With Edits Needing Approval?

Michael Masnick — Fri, 18 Jul 2008 03:10:00 PST

Wikipedia has apparently been testing a system by which new edits from most users don't show up for most visitors until they get approved by someone with "authority." The plan sounds similar to one that was suggested a year ago -- but in that case, the new edits would simply be shaded in a different color to warn people that they hadn't been reviewed. That seems much more effective than completely waiting to approve any edit -- especially since the "approvals" are really just to weed out vandalism, not to review the actual trustworthiness of the content. But with color coded "unreviewed" content, it will remind users to make sure they're even more cautious than they should be with regular Wikipedia content. Either way, requiring approval before edits go live seems like it would take away much of the spirit that made Wikipedia what it is today.

Permalink | Comments | Email This Story

Locksmiths Pissed Off At Geeks For Letting Out The Secret: Lockpicking Is Easy

Michael Masnick — Thu, 17 Jul 2008 23:07:28 PST

As I've mentioned before, back in high school, I had an art teacher who taught me both how to pick locks and how to make lockpicks (it was a fun class). Since then I've always been fascinated by the whole process of picking locks, though I haven't kept up with the field or even picked a lock in years. However, there is a huge community of folks online -- many coming from the tech/hacker community -- who spend a lot of time exploring lockpicking, and talking about it in great detail online. And, as Gizmodo notes, this is pissing off some locksmiths. What's not stated overtly is the obvious reason, and it's the same for any professional system that requires "certification." It's rarely about making sure people are good enough, but has everything to do with limiting the competition to keep fees high. The locksmiths aren't really so worried about criminals learning how to pick locks online (even though some claim that). They're worried that people won't need to call locksmiths anymore when they get locked out of their homes. On top of that, the lock companies hate to admit that their locks are pickable (they are), and so they hit back at those who prove it, just as software companies hate to admit that their software has vulnerabilities. Over time, perhaps locksmiths and lock companies will recognize that an enthusiastic hobby community that helps make sure locks are more secure can only be a good thing.

Permalink | Comments | Email This Story

Putting Metadata In Video For Search Purposes? Patented! Microsoft Sued

Michael Masnick — Thu, 17 Jul 2008 20:14:00 PST

The last time we wrote about a small company called Gotuit Media, it was in 2003, when the company was suing TiVo for an excessively broad patent about recording TV while playing back TV concurrently. Apparently, the company is still in the business of suing other companies that are putting obvious ideas into practice. For example, it's now suing Microsoft over its implementation of Silverlight-based videos for the Olympics on NBC's website. Microsoft's crime? Apparently the videos are going to include some metadata that will make them searchable, allowing users to search and find specific content. And, that, according to Gotuit, is patent infringement.

Of course, that's ridiculous. If you were to tackle the problem of how to create a search engine for video, one of the first things just about any competent programmer would think of is adding text metadata to the video that would then be used for search. But, thanks to the patent system, apparently you can only do that if you've agreed to pay Gotuit a licensing fee.

Permalink | Comments | Email This Story

Not All Newspaper Chains Are Facing Doom And Gloom Scenarios

Michael Masnick — Thu, 17 Jul 2008 17:54:00 PST

The common refrain on the newspaper industry is that it's dying out, being replaced by online news sources. Of course, that leaves out some important facts: such as the fact that there are newspaper chains that are actually doing quite well, even when they mostly focus on the old dinosaur of actual newspapers. Romenesko points us to a story about David Black, a Canadian newspaper publisher who owns a ton of local newspapers around Canada and the US that are actually doing quite well. But, that's because they're not competing with the big dailys, but focus on having a lean staff that writes almost exclusively about local news. His papers are all local papers, that don't try to provide all that other news that you can already get online, but the news that is only going to be interesting to a small group of folks. But, as Black has learned over many years, those small groups of folks are a lucrative audience. While other newspapers have trouble competing, Black's are full of ads -- many from local businesses which find those papers an effective (and cost effective) way to cut through the clutter.

Permalink | Comments | Email This Story

RNC To Sue CafePress For Helping People Promote Republican Candidates

Michael Masnick — Thu, 17 Jul 2008 16:06:00 PST

Apparently, a few years back, the Republican National Committee trademarked its elephant logo, along with "GOP", "Grand Old Party", and "Republican National Committee." And, here we are in an election year, and they're out trying to enforce those trademarks... against people who are trying to support the GOP and its candidates. Paul Alan Levy, from Public Citizen, who is representing CafePress in this case, writes in to let us know that the RNC has threatened to sue CafePress because some users of CafePress have created shirts that include the RNC elephant and the term GOP. You could almost (almost) understand this, if the shirts were negative. But, no, most of them were actually created by people who are Republicans or support Republican candidates. There's also the question of why its threatening CafePress, rather than the individuals who actually used the logo and the term. But, still, in an election year when the candidates seem to be shoving each other aside to try to embrace the online community and its ethic of "user generated content" perhaps someone should let the RNC know that suing the folks enabling your supporters to promote your candidates might not be the smartest move.

Permalink | Comments | Email This Story

Technopanic In The UK! Think Of The Children! They're Talking About SEX Online!

Michael Masnick — Thu, 17 Jul 2008 14:32:00 PST

Just a week after we were talking about a new research report on media-induced "technopanics" we've got another one. This time, it's coming from the UK. The headline announces: One in ten children have sexually explicit conversations on the internet, study finds. Oh no! And then, each paragraph adds another scare factor: these kids also lie to their parents! Oh no! Sometimes they chat with strangers! Oh no! Some of them go to websites with adult content! Oh no! Some even pretend to do homework while actually (gasp!) chatting with others! It's just awful!

Of course, if you actually look at the details, they don't sound bad at all. In fact, I'm pretty surprised the numbers are as low as they are. The study itself involved a survey of kids from ages 11 to 18 in the UK. That's a huge range. Kids in the 16, 17 and 18 year old range are quite different from your everyday 11 and 12 year old. And the idea that a 17 or 18 year-old might have had a sexually explicit conversation online doesn't seem too surprising. Note that it never says anything about with whom the sexually explicit conversation occurred. Assuming that many of these 17 and 18 year olds have boyfriends or girlfriends, and they probably all use instant messaging, social networking or text messaging -- you have to imagine that many of them will have had somewhat sexually explicit conversations with that boyfriend or girlfriend. That's really not that out of the ordinary. The fact that it's only 11% of kids surveyed sounds incredibly low.

As for lying to parents about what they're doing online, is that a surprise? The fact that a kid would tell his mom he's doing homework while he's really chatting with his girlfriend or his friends? That's to be expected. Note that the study doesn't appear to have said just that people lied about having sexually explicit chats, either. Just that they lied about what they were doing online. As for chatting with strangers... while the article mentions that in passing, it doesn't indicate that the survey actually asked any questions about that at all. And, finally, visiting websites with adult content, I will again point out that we're talking about boys who are going through puberty. The fact that some of them eventually visit an adult website should hardly be news.

But when the press packages it all together in this nice format, it makes it seem like we've got a bunch of deviant kids running around the internet with no supervision from their luddite parents, who need to start standing over the shoulders of their kids as they surf. Either that, or perhaps we can calm down, realize that the stats don't say anything all that surprising, and move on to something that might actually matter.

Permalink | Comments | Email This Story

Creating A List From A Database? Prepare For A Patent Infringement Suit

Michael Masnick — Thu, 17 Jul 2008 12:55:14 PST

Thanks to the whole slew of folks who sent this in: TechCrunch has the details on Channel Intelligence, a company that owns a ridiculously broad and obvious patent on creating a list from a database and is now suing a whole bunch of small websites that offer things like wishlists. Read through the claims of the patent and see if you can explain how a single one is possibly new or non-obvious to those in the space. As TechCrunch notes, the lawsuits are all targeted against smaller websites, rather than the big players like eBay or Amazon. There are a variety of reasons why this might be. Channel Intelligence may have approached those companies and actually received a token payout (cheaper than a lawsuit for those companies). Or, perhaps more likely, it's using these smaller lawsuits to bring in some additional cash and to establish the myth that this patent is valid. That was common a few years back, before people started suing everyone at once for patent infringement. Patent holders would mostly target a few small companies, who wouldn't be able to launch a strong legal defense -- use those "victories" to build up a warchest while also claiming that it showed how the patents are "valid."

Permalink | Comments | Email This Story

SCO Gets Wrist Slapped Over Novell Unix Copyrights

Michael Masnick — Thu, 17 Jul 2008 11:27:41 PST

More than five years after SCO went on its quixotic quest to try to sue Linux out of existence, it's finally had to pay at least some of the price. As you probably know, soon after SCO sued IBM, Novell pointed out that it was pretty sure SCO was wrong in claiming to hold copyrights over Unix code. In fact, Novell was pretty sure that it still owned those copyrights. SCO then took Novell to court over the issue -- making that the main arena for SCO's claims. It took plenty of time, but the judge ruled that, indeed, Novell owned the copyrights, basically derailing SCO's entire basis for its lawsuits. At first it appeared as if SCO was just going to give up. It declared bankruptcy and many hoped it would just go away. Unfortunately, it received a lifeline in the form of a $100 million line of credit, allowing it to keep on suing.

As for the Novell case, a judge has finally come down with the final ruling on a fine, and it's basically a slap on the wrist to SCO. Rather than buying Novell's argument that 95% of SCO's licensing revenue actually belongs to Novell, the judge took a much more limited approach saying SCO only owes $2.5 million. It's not peanuts, but it's a lot less than many had hoped. It certainly will allow SCO to keep going (and potentially appeal this ruling) which is why many are labeling this as a mixed bag sort of ruling. Still, as has been pointed out, SCO is the one that kicked this off, suing IBM and then Novell... and the end result is that SCO is paying out $2.5 million. That's probably not what the company's execs expected when they started down this path.

Permalink | Comments | Email This Story

And You Thought The Next Generation Video Standards Battle Was Over?

Michael Masnick — Thu, 17 Jul 2008 09:55:51 PST

If you thought the questions about what technology standard we'd be using to watch movies was settled when Blu-ray won the next generation DVD standards battle, then you're in for a bit of a surprise. In taking nearly half a decade to decide which standard would make it, the DVD camps left open plenty of opportunity for online competitors to start making their moves. The technology for delivering movies online has been rapidly improving. But, of course, what we didn't count on was that it would just create a huge new mess.

Earlier this week, there was all sorts of talk about Netflix streaming movies to the Xbox as part of Netflix's effort to get consumer electronics companies to build in support for Netflix streaming. As we warned when that announcement was made, it's a bad idea for Netflix to focus on a proprietary streaming solution, as it's only going to set up another standards battle. And, indeed, Blockbuster is working on its own such solution. Then, of course, everyone knows that Apple's in the market with the AppleTV. And don't forget Sony, which is selling a special (extra expensive) TV for downloading movies. And, of course, there are countless startups in the market as well.

Oh, and how could we forget Amazon? The company is now announcing its own proprietary online store for streaming movies and TV. This one piggybacks a bit on Sony's awful plan (meaning if you buy that super expensive internet-connected TV, you'll also be able to stream movies from Amazon).

But the end result is a total mess for the entire market, and that doesn't help anyone. All of the players should take a look at how badly the multi-year DVD standards battle hurt the industry. It makes people unwilling to buy certain hardware, as they don't want to be stuck with the "loser" a year from now. What's wrong with coming up with a single standard for streaming movies from any particular service to various TV-connected devices and computers? Then let the different providers compete on actual services provided? That would increase adoption, and let these companies do what they do best, rather than fighting a can't-win battle against too many other competitors.

Permalink | Comments | Email This Story