Lose Money On Each Transaction; Make It Up In Volume

Ars Technica reports on a company following in Righthaven's footsteps, although not yet bankrupt:

Question: Can copyright trolling be profitable without suing over porn?
Answer: Probably not.
At least that's what the example of Rightscorp seems to be teaching. The company is the most recent effort to build a business being an online copyright cop, but financial data made public yesterday shows that Rightscorp, which has never been profitable, is losing money faster than ever.
The RIAA's giant lawsuit campaign lost loads of cash, and Righthaven (remember them?) dried up and blew away after legal setbacks interrupted its collections of four- and five-figure settlements from mom-and-pop bloggers.

Further Reading

“You could be liable for $150k in penalties—settle instead for $20 per song”

Growing copyright cop Rightscorp hopes to be a profitable alternative to "six strikes."

The latest incarnation of the business model comes in the form of Rightscorp, which tries to compel Internet users to pay up to $20 per song when its clients' copyrighted works are downloaded over BitTorrent networks. The publicly traded company reported its quarterly financial results yesterday, and they're an unmitigated disaster—although company executives somehow managed to put a happy face on.

Out of Control Department of Homeland Security

This makes absolutely no sense.  From the January 14, 2012 Belfast Telegraph:

A British student can be extradited to the United States to face charges of copyright infringement over a website he ran offering links to pirated films online, a court ruled yesterday.

Richard O'Dwyer, whose site TV Shack made more than £150,000 in advertising revenues, according to US prosecutors, is thought to be the first person extradited to America on such charges. If convicted in New York, he faces jail.

Speaking after the hearing at City of Westminster Magistrates' Court, the 23-year-old said he felt like a "guinea pig" for the US justice system. His lawyer argued that his site hosted no illegal content, but merely directed users to where it was held online, and said that his client would fight the ruling.

Read more: http://www.belfasttelegraph.co.uk/news/local-national/uk/tv-shack-website-creator-faces-extradition-to-us-for-movie-links-16103530.html#ixzz1jTCOK49I

 According to other sources, TV Shack provided only links to other sites, some of which apparently carried videos that may have infringed on copyrights.  It carried no videos of its own.  It was only a search engine (in a sense), or directory providing links to other websites.  I do not see how this can be a criminal offense.  I know that YouTube often has videos that violate copyright, and get taken down after demands from the copyright holder.  If I can find those videos using Google, does that mean Google is engaged in copyright infringement?  No.

It appears that the Department of Homeland Security has the terrorism problem so well solved that they now have resources to devote to stuff that isn't even a crime.  I think I see one place where the government could solve its deficit problem, at least a little: tell Hollyweird to pursue these matters in the criminal justice systems of the countries where the alleged crimes take place--and stop focusing on people who are not even infringing their copyrights.

Stop SOPA

As Ars Technica points out:

Views on copyright law have never broken down cleanly along ideological or partisan lines, but many of the key supporters for the Stop Online Piracy Act have come from the political right. The legislation is sponsored by Rep. Lamar Smith (R-TX) and it enjoys support from right-leaning, corporate-funded organizations like the Chamber of Commerce and Americans for Tax Reform.

But a growing number of right-leaning individuals and organizations have come out against SOPA. Last Wednesday, the Heritage Foundation, one of the nation's largest and most influential conservative think tanks,published an article by senior research fellow James Gattuso warning about the "unintended consequences" of SOPA. And on Thursday, he was joined in opposing SOPA by Erick Erickson, editor of the popular conservative blog RedState.

 And that includes me as well.  I agree with Gattuso's careful statement of the problem with SOPA:

SOPA would undercut other policy goals as well. The requirement that search engines omit links to rogue sites undercuts the role of search firms as trusted intermediaries in conveying information to users. There are, of course, other circumstances where search engines already omit information and links—for instance, Google routinely screens out child pornography from its search results. But there has never been a government mandate that information be withheld from search results. Imposing such a mandate would represent the first step down a classic slippery slope of government interference that has no clear stopping point.

Arguably, the limits placed on search engines as well as other third parties under SOPA would also violate constitutional protections of freedom of speech.[5] But even if not barred legally, any such restrictions should be imposed only after the most careful consideration, only when absolutely necessary, and even then, to the smallest degree possible.

 As Gattuso points out, some of the most dangerous aspects of SOPA, which would allow scum like Righthaven to shut down websites without even going before a judge, have been scrapped.  But what remains in the law remains overreaching.

Yet Another Reason Copyright Law Needs Fixing

The RIAA (the record industry) is considering backing Righthaven.  Now, if only Republicans would stop passing bills to help the industry that almost perfectly defines "anti-family values."

Someone Has Been Watching Righthaven...

But not learning.  The July 15, 2011 San Francisco Chronicle reports on a law firm out of Chicago that is filing lawsuits alleging that defendants are violating copyright law by downloading porn over BitTorrent. It does not appear that there is any allegation that the defendants are republishing it, selling it--not downloading it.  Since it is impossible to play a video without downloading it to your website, it is pretty difficult to figure out how this would survive in court.  By comparison to this, Righthaven at least had half plausible claims, depending on the definition of fair use.

Nor is it clear that the defendants are actually the right parties to sue:

Jane is in her 70s, a retired widow who spends her days doing volunteer work in the East Bay and fussing over her grandchildren. She also downloads porn illegally over BitTorrent....

This particular Jane (who didn't want her real name used for that very reason) said she's never downloaded porn and doesn't know what a BitTorrent is. She can't afford an attorney to make her case, but she's not about to settle either.

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/07/14/BUG51KA26R.DTL#ixzz1SW5mq7ID

The article goes on to explain that Jane has no idea whether her wireless router is password protected or not.  There are a number of young men living next door, however.

So, why file these suits demanding $150,000 if there is effectively no chance of winning?  Ah, because the demand letters these attorneys send out (to 10,000 defendants so far) are

strongly suggesting that these "digital pirates" settle out of court for several thousand dollars. Letters to defendants helpfully remind them the amount is below what they'd probably pay in attorney's fees and that settling would avoid publicly linking their names to pornography.

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/07/14/BUG51KA26R.DTL#ixzz1SW6BlHZG

But the letters ask you to give the lawyers your credit card information, and they will settle out of court for $3400. Maybe Jane did not know that someone was using her wireless connection to download porn.  As a commenter on the article points out, is Starbucks (with its wireless connections) next on the defendants' list?  My guess is no, because Starbucks has the resources to fight this.

I am inclined to think it is time for a serious revision of copyright law.  At the top of my list would be limits on demands (perhaps $5 on newspapers, $100 on books) unless there was evidence that a defendant was commercially reselling the copyrighted material.  Any video where more than 20% of the frames had exposed genitals or female breasts would not be protected at all.

John Fogerty of Credence Clearwater Revival & Copyright Law

Yup.  An article from The Marquette Lawyer discusses Fogerty v. Fantasy, Inc. (1994), in which the Supreme Court upheld the authority of the courts to require Fantasy Records to pay Fogerty's attorneys' fees for a copyright suit in which Fantasy sued Fogerty, and lost.  Thanks to Blog Law Blog for the pointer--they pointedly encourage Righthaven defendants to look at it.