Category: Copyright

Yes, Making a Tort a Criminal Matter is Stupid

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I can think of no better example how how our relentless criminalization of our IP laws creating an environment where prosecutors and IP holders run roughshod over our rights and the presumption of innocence than the current clusterf%$# that is the Kim Dotcom persecution:

Officials in New Zealand’s government apparently believed the law gave them the right to spy on MegaUpload founder Kim DotCom because he was a foreign national.

They were wrong.

In New Zealand today, Prime Minister John Key apologized to DotCom for the spying conducted against him by the Government Communications Security Bureau (GCSB).

The United States has accused DotCom of criminal copyright violations. In January, New Zealand police raided his home and arrested him. Just ahead of the raid, the GCSB began collecting intelligence against DotCom to see if he posed any danger to the police who would later swoop in by helicopter to arrest him.

[It] Turns out that the GCSB isn’t allowed to conduct such surveillance on New Zealand citizens, and the agency was under the false impression that DotCom, who was born in Germany, was not yet a citizen.

This meant that the spying was unlawful.

If you don’t think that they were breaking the law knowingly at the explicit request of the FBI, I have a bridge in Brooklyn to sell you.

Sanity Breaks Out In IP

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A federal judge just ruled that there is no legal obligation to secure your WiFi signal in order to prevent file sharing:

It looks like it might be hard for rights holders in various entertainment industries to sue individuals who have open Wi-Fi networks for copyright infringement done by guests, if the following court case is any indication. A California man whose open network was allegedly used to download a copyrighted video cannot be sued, according to a ruling by a federal judge.

The complaint filed in April of this year alleged that Hatfield was negligent because he didn’t secure his network, and therefore liable.

AF Holdings, who admitted in its case that it does not know the identity of the user who downloaded its video using BitTorrent, targeted Josh Hatfield with a lawsuit in federal court because it was downloaded via his unsecured home Internet connection. Hatfield moved for a dismissal on the grounds that the plaintiff failed “to state a claim” and that the claim “is barred by Section 301 of the Copyright Act and by immunity under the Communications Decency Act.”

U.S. District Judge Phyllis Hamilton dismissed the claim last week. The Electronic Frontier Foundation planned on submitting an amicus brief on behalf of Hatfield if the case had gone forward.

I’m not surprised by the ruling, but I am surprised that it happened this early in the process.

I think that people are beginning to recognize just how f%$#ed up the current IP regime is, and they are no longer willing to treat potential offenders like they’ve robbed a gas station.

Another Bit of Copyright Insanity

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This time, the automated copyright cubicle gestapo took down the Democratic Convention live stream, despite the fact that everything was appropriately licensed:

Here we go again. Less than 24 hours ago, content-protection bots killed a livestream of the Hugo Awards, thanks to the brief appearance of fully approved clips from an episode of Dr. Who. The whole situation was completely absurd to anyone harboring the tiniest vestige of common sense, but IP-protection software isn’t built on common sense: it’s built on algorithms.

This time, content protection via crawling bots have taken down another approved, perfectly legal stream. The victim this time? The Democratic National Convention’s official stream, hosted at YouTube. ………

Un-dirtyword-believable.

We really need some sanity here.

This Does Not Promote the Progress of Science and Useful Arts

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This business will get out of control. It will get out of control and we’ll be lucky to live through it.

Or how the capture of our IP regulatory process by rent seekers has f%$#ed us all:

Last night, robots shut down the live broadcast of one of science fiction’s most prestigious award ceremonies. No, you’re not reading a science fiction story. In the middle of the annual Hugo Awards event at Worldcon, which thousands of people tuned into via video streaming service Ustream, the feed cut off — just as Neil Gaiman was giving an acceptance speech for his Doctor Who script, “The Doctor’s Wife.” Where Gaiman’s face had been were the words, “Worldcon banned due to copyright infringement.” What the hell?

Jumping onto Twitter, people who had been watching the livestream began asking what was going on. How could an award ceremony have anything to do with copyright infringement?

………

And then it began to dawn on people what happened. Gaiman had just gotten an award for his Doctor Who script. Before he took the stage, the Hugo Awards showed clips from his winning episode, along with clips from some other Doctor Who episodes that had been nominated, as well as a Community episode.

………

This was, of course, absurd. First of all, the clips had been provided by the studios to be shown during the award ceremony. The Hugo Awards had explicit permission to broadcast them. But even if they hadn’t, it is absolutely fair use to broadcast clips of copyrighted material during an award ceremony. Unfortunately, the digital restriction management (DRM) robots on Ustream had not been programmed with these basic contours of copyright law.

I would also note that the use of clips in an award show used to be clearly fair use, but they had the rights anyway, but the zero tolerance of the RIAA, the MPAA, and the BBC (who do you think produces Dr. Who).

Rent seeking is always a source of inefficiency in the economy, and it should be allowed, as in the case of patent and copyright, only to the degree to which we as a society see a benefit.

The current IP regime is an impediment, not an aid to innovation and other productive work.

An Interesting Insight into the Role of IP in Developing Societies

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http://www.spiegel.de/international/zeitgeist/no-copyright-law-the-real-reason-for-germany-s-industrial-expansion-a-710976.html:

Indeed, only 1,000 new works appeared annually in England at that time — 10 times fewer than in Germany — and this was not without consequences. Höffner believes it was the chronically weak book market that caused England, the colonial power, to fritter away its head start within the span of a century, while the underdeveloped agrarian state of Germany caught up rapidly, becoming an equally developed industrial nation by 1900.

Even more startling is the factor Höffner believes caused this development — in his view, it was none other than copyright law, which was established early in Great Britain, in 1710, that crippled the world of knowledge in the United Kingdom.

Germany, on the other hand, didn’t bother with the concept of copyright for a long time. Prussia, then by far Germany’s biggest state, introduced a copyright law in 1837, but Germany’s continued division into small states meant that it was hardly possible to enforce the law throughout the empire.

Höffner’s diligent research is the first academic work to examine the effects of the copyright over a comparatively long period of time and based on a direct comparison between two countries, and his findings have caused a stir among academics. Until now, copyright was seen as a great achievement and a guarantee for a flourishing book market. Authors are only motivated to write, runs the conventional belief, if they know their rights will be protected.

Yet a historical comparison, at least, reaches a different conclusion. Publishers in England exploited their monopoly shamelessly. New discoveries were generally published in limited editions of at most 750 copies and sold at a price that often exceeded the weekly salary of an educated worker.

London’s most prominent publishers made very good money with this system, some driving around the city in gilt carriages. Their customers were the wealthy and the nobility, and their books regarded as pure luxury goods. In the few libraries that did exist, the valuable volumes were chained to the shelves to protect them from potential thieves.

In Germany during the same period, publishers had plagiarizers — who could reprint each new publication and sell it cheaply without fear of punishment — breathing down their necks. Successful publishers were the ones who took a sophisticated approach in reaction to these copycats and devised a form of publication still common today, issuing fancy editions for their wealthy customers and low-priced paperbacks for the masses.

This is an intriguing though.

I think that the current IP regime, both copyright and patent has become excessive, and serves to hinder innovation and creativity, rather than enhancing it.

But, I am still surprised that even the relatively modest protections in the 18th and 19th century,* appeared to be a major impediment to development.

I guess that those economist say about rent seeking behavior is truer than I thought.

*You had to explicitly file for copyright, and the term was only 14 years, and copyright infractions were a private tort, not a criminal infraction with the threat of years in jail.

Happy Independence Day!

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The European Parliament has resoundingly rejected ACTA, the draconian Anti-Counterfeiting Trade Agreement, 39 to 478:

Six months ago, the situation looked very dark. It was all but certain that ACTA would pass unnoticed in silence. The forces fighting for citizens’ rights tried to have it referred to the European Court of Justice, in order to test its legality and to buy some time. Then, something happened.

A monster by the name of SOPA appeared in the United States. Thousands of websites went dark on January 18, and millions of voices cried out, leaving Congress shellshocked over the fact that citizens can get that level of pissed off at corporate special interests. SOPA was killed.

In the wake of this, as citizens had realized that they didn’t need to take that kind of corporate abuse lying down and asking for more, the community floodlights centered on ACTA. The activism carried over beautifully to defeat this monster. Early February, there were rallies all over Europe, leaving the European Parliament equally shellshocked.

………

In theory, ACTA could still come into force between the United States and a number of smaller states. Ten states have been negotiating it, and six of those need to ratify it to have it come into force. In theory, this could become a treaty between the United States, Morocco, Mexico, New Zealand, Australia, and Switzerland. (But wait, the Mexican Senate has already rejected ACTA. As has Australia and Switzerland in practice. Oh well… a treaty between the United States and Morocco, then, in the unlikely event that the United States will actually and formally ratify it. You can see where this is going.)

As described before on TorrentFreak, without the support of the European Union, ACTA is dead. Doesn’t exist.

Note however that this is not an end, but merely one battle:

Many of the bad things in ACTA will return under other names. For the lobbyists, this is a nine-to-five job of jabbing against the legislation until it gives way. Just another day at work. We need to remain vigilant against special interests who will return again, again, and again, until we make sure that the legislative road for them is completely blocked. We must remain watchful.


This is Not Star Trek. In Startrek, the Evil Spock has a goatee. In our world the evil James O’Keefe is clean shaven.

People who understand IP and the net have been raging against the overreach against since the passage of the Sonny Bono Copyright Term Extension Act (AKA the Mickey Mouse Protection Act), and it appears that it’s finally beginning to find some sort of currency.

H/t Jamie O’Keefe (the good one)

Google Did Not Infringe Java Patents

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The jury has ruled that Oracle’s patents were not infringed by Android:

Google on Wednesday was cleared of charges that it had infringed Oracle’s Java patents, ending the second major phase of the trial.

“Today’s jury verdict that Android does not infringe Oracle’s patents was a victory not just for Google but the entire Android ecosystem,” a Google spokesperson said in an emailed statement.

Oracle, however, did not concede defeat. “Oracle presented overwhelming evidence at trial that Google knew it would fragment and damage Java,” an Oracle spokesperson said via email. “We plan to continue to defend and uphold Java’s core write once run anywhere principle and ensure it is protected for the nine million Java developers and the community that depend on Java compatibility.”

Oracle filed its lawsuit against Google last August and the trial began in mid-April. Oracle initially talked about $6 billion in damages. At the moment, it appears Oracle is unlikely to win enough to cover its legal costs.

All that’s left is the whether or not Java’s API, basically the standards for interoperability, are copyrightable.

The jury didn’t rule on this, they could not come to a conclusion on fair use, and they were instructed by the judge to assume that the API is copyrightable. The judge will decide these matters of law, the jury was to rule on matters of fact.)

It appears from the Slashdot discussions that the judge actually made an effort to understand the technical issues, so his ruling should be interesting.

Jeebus, They Are Claiming that API’s are Copyrightable?

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That appears to be the jury ruling in the Oracle-Google lawsuit:

In what could be a major blow to Android, Google’s mobile operating system, a San Francisco jury issued a verdict today that the company broke copyright laws when it used Java APIs to design the system. The ruling is a partial victory for Oracle, which accused Google of violating copyright law.

But the jury couldn’t reach agreement on a second issue—whether Google had a valid “fair use” defense when it used the APIs. Google has asked for a mistrial based on the incomplete verdict, and that issue will be briefed later this week.

The results aren’t clear going forward. Both sides are going to write briefs arguing how to proceed from here, with Google likely arguing the verdict needs to be thrown out, while Oracle somehow tries to hang on to its win on question 1A, the fundamental question about whether Google infringed copyright.

No one knows the jury’s internal deliberations, so it’s speculative to guess at what led to the partial verdict. But one reason could be the unusual construction of this trial. Judge William Alsup, who is overseeing the case, ruled that the case would be decided by a jury of 12, which is large for a civil case and increases the possibility of having one or more “holdout” jurors. Alsup also ruled that the jury must decide unanimously, a requirement for criminal cases that’s not always imposed on civil juries.

Now let’s be clear here: The judge apparently instructed the jury to assume that APIs are copyrightable, in order for them to make decisions about the facts, but that decision will actually be rendered by the judge later. (Yeah, the law is a bitch)

Speaking as a non-lawyer and non-computer programmer, if this stands, it stands a very good chance to shut down much of the software industry in the United States, because any supplier of a platform, at any time, on the machine that you owe, could ban, or demand usurious licensing fees, for any 3rd party software.

So Microsoft could demand fees from (for example) Open Office in order to run on Windows.

In any case, the substantive ruling is the judge’s and that is clearly subject to appeal, you appeal on the law, not the adjudicated facts, so the final decision will likely be either the court of appeal of SCOTUS.

Yet another example of just how %$#ed up our IP system is.

And Now They Are Claiming that Hyperlinking is Infringement

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This is not about making money, This is about seizing control of how we discuss any form of media:

The Motion Picture Association of America is squaring off against a coalition of Internet giants and public interest groups over the key question of whether it’s possible to directly infringe copyright by embedding an image or video hosted by a third party.

A federal judge took that position last July, prompting a chorus of criticism. Two briefs—one by Google and Facebook, the other by the Electronic Frontier Foundation and Public Knowledge—attacked the decision as contrary to past precedents and potentially disruptive to the Internet economy. They asked the Seventh Circuit Court of Appeals to overturn it.

Last week, the MPAA joined the fray with a brief in support of Illinois federal judge John F. Grady’s ruling. It urged the Seventh Circuit not to draw a legal distinction between hosting content and embedding it. In the MPAA’s view, both actions should carry the risk of liability for direct copyright infringement.

The case arose from a dispute over Internet pornography. MyVidster is a video bookmarking site that allows users to save links to their favorite videos and share them with others. The site supports embedding, so bookmarked videos can be viewed on a myVidster page surrounded by myVidster ads.

This is technical, but there is primary and secondary infringement, and the burden of proof is lower, and the penalties are higher, for the former.

If you extend primary infringement to embedding, which is practically indistinguishable from hyperlinks, then expect a full assault on hyperlinks, and if they win on this, the internet becomes another corporate walled garden.

Yes, These Are Members of the Polish Parliament

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And they are protesting Poland’s signing onto the Anti-Counterfeiting Trade Agreement (ACTA):

Poland on Thursday signed an international copyright agreement, sparking more demonstrations by Internet users who have protested for days over fear it will lead to online censorship.

After the signing, protesters rallied in the Polish cities of Poznan and Lublin to express their anger over the treaty. Lawmakers for the left-wing Palikot’s Movement wore masks in parliament to show their dissatisfaction, while the largest opposition party — the right-wing Law and Justice party — called for a referendum on the matter.

Controversy in Poland has been deepening over the Anti-Counterfeiting Trade Agreement, or ACTA. Though many other industrialized countries have signed it, popular outrage appears to be greater in Poland than anywhere else.

This is actually significant.

It’s been growing slowly, but the almost universal consensus about the ability of IP holders to rent seek is now showing cracks, as more and more people start to see it as a drain upon society, rather than a benefit.

We are seeing this in the media, where we are seeing increasing coverage of patent trolls like Nathan Myhrvold.  (Here’s hoping that his f%$#ing cookbook is followed by people protesting his ass)

With a little bit of luck, we may eventually see the worm turn on all of this, and see the protections on IP seen through the lens of public benefit, and not the interest of the rentiers.

Quote of the Day

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Courtesy of the The Rude Pundit:

You got that? The whore who fronts for an industry owned by multinational megacorporations like NewsCorp, Sony, and Viacom is actually attacking BoingBoing.net owners Happy Mutants LLC for using the internet for some evil agenda to steal Chipmunk movies just because they went on a one-day strike. That’s a bit like Ted Bundy accusing a student nurse of having a messy dorm room just before bludgeoning her to death.

He is, of course, describing former Senator Chris Dodd’s pimping for big media in has capacity as chief lobbyist for the MPAA.

And as SOPA/PIPA Goes Down, the Supreme Court Decides to F%$# the Concept of Public Domain

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The Supreme Court just ruled that the public domain can be taken away whenever Congress wants to:

We’ve been talking about the Golan case, and its possible impact on culture, for years. If you’re unfamiliar with it, it’s the third in a line of cases, starting with the Eldred case, to challenge aspects of copyright law as violating the First Amendment. The key point in the case was questioning whether or not the US could take works out of the public domain and put them under copyright. The US had argued it needed to do this under a trade agreement to make other countries respect our copyrights. Of course, for those who were making use of those public domain works, it sure seemed like a way to unfairly lock up works that belonged to the public. It was difficult to see how retroactively taking works out of the public domain could fit into the traditional contours of copyright law… but today, on the day of the big SOPA/PIPA protests… that’s exactly what happened (pdf).

The ruling is ridiculously depressing. The Justices basically just keep repeating the mantra they first set forth in Eldred, that as long as Congress says it’s okay — and that the “fair use” and the “idea/expression” dichotomy remain — all is just dandy. They also claim that since the very first copyright law took works from the public domain and gave them copyright protection, clearly there’s nothing wrong with removing works from the public domain. This decision reinforces why the Eldred decision was a complete disaster, and just keeps getting worse. The Eldred ruling basically ignored the fact that copyright had changed entirely in a way that went against the First Amendment… by retroactively granting copyright extension. Now that ruling is being used to take works out of the public domain as well.

First, as with Eldred (and the second case in the trilogy, the Kahle case), I believe that the Court is greatly mistaken in its analysis of copyright law. First it claims that there’s little fight between copyright and the First Amendment because the two things were put in place at about the same time. That’s a specious argument for a variety of reasons. First, the original copyright law was significantly limited in a way that it was unlikely to really come into conflict with the First Amendment. It was limited to just a few specific areas, and for a very short period of time. It’s only now that (1) copyright law has been totally flipped to make just about everything you create covered by copyright, (2) the law has been massively expanded in time and (3) changes in technology make us all create tons of “copyrighted” material all the time — things have changed an entirely. It’s hard to see how the Court can reasonably argue that the traditional contours of copyright law have not changed… but that’s exactly what it does. Stunningly, the majority decision here, written by Justice Ginsburg, seems to suggest that there’s no First Amendment issue here, because if people want to make use of the works that were previously, but are no longer, in the public domain, they can just buy those rights:

This ruling sucks wet farts from dead pigeons.

IP increasingly resembles the Enclosure Acts in England, with a similar outcome. The ordinary people get f%$#ed, and the nobility makes out like raped apes.

Needless to say, this does not serve, “To promote the Progress of Science and useful Arts,” as the constitution states.

It’s Been the SOPA/PIPA Protest Day Today

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Click for full size


Wikipedia Went Dark

Well, it looks like the rent seekers who normally win this stuff (the “Mickey Mouse” Sonny Bono Copyright Act anyone?) are getting at least a temporary brush-back over their attempt to turn the internet into a gated community:

When the powerful world of Old Media mobilized to win passage of an online antipiracy bill, it marshaled the reliable giants of K Street — the United States Chamber of Commerce, the Recording Industry Association of America, and of course, the motion picture lobby, with its new chairman, former Senator Christopher J. Dodd, the Connecticut Democrat and an insider’s insider.

Yet on Wednesday this formidable Old Guard was forced to make way for the new as Web powerhouses backed by Internet activists rallied opposition to the legislation through Internet blackouts and cascading criticism, sending an unmistakable message to lawmakers grappling with new media issues: Don’t mess with the Internet.

As a result, the legislative battle over two once-obscure bills to combat the looting of American movies, music, books and writing on the World Wide Web may prove to be a turning point for the way business is done in Washington. It represented a moment when the new economy rose up against the old.

“I think it is an important moment in the Capitol,” said Representative Zoe Lofgren, Democrat of California and an important opponent of the antipiracy legislation. “Too often, legislation is about competing business interests. This is way beyond that. This is individual citizens rising up.”

Legislation that just weeks ago had overwhelming bipartisan support and had provoked little scrutiny generated a grass-roots coalition on the left and the right. Wikipedia made its English-language content unavailable, replaced with a warning: “Right now, the U.S. Congress is considering legislation that could fatally damage the free and open Internet.” Visitors to Reddit found the site offline in protest. Google’s home page was scarred by a menacing black swatch that blotted out the search engine’s label.

Phone calls and e-mails poured in to Congressional offices against the Stop Online Piracy Act in the House and the Protect I.P. Act in the Senate. One by one, prominent backers of the bills dropped off.

It should be noted that the Republicans are walking away from this faster than the Democrats.

Even Orrin Hatch, the MPAA and RIAA’s bitch,* has withdrawn his support of the bill.

BTW, this debacle is largely the fault of the entertainment industry, because until now they have refused to meet with the tech companies to work out differences, though they are begging for that now.

Here’s a suggestion to the tech companies:  keep your boot on the MPAA’s.

You’ll be doing them a favor.  You might remember then MPAA chair Jack Valenti claiming that the VCR would destroy the studios, when the video rental revenues actually saved their bacon.

Here’s a thought to the unproductive leeches who are entertainment executives, whose business, after all is to rip off the artists who actually produce this stuff:  Do less cocaine, fire your worthless brothers-in-law, and invest in treating the actual creative people, and in producing better content.

*For which he has been richly paid through record contracts from the labels.

You Know It’s an Election Year, Because ………

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The Obama administration has come out against the most draconian measures in the rent seeking anti-piracy bills in the House and Senate:

The Obama administration won’t back legislation to combat online piracy if it encourages censorship, undermines cybersecurity or disrupts the structure of the Internet, three White House technology officials said.

Their statement, posted yesterday on the White House website, was a response to online petitions on legislative proposals to combat online piracy. The movie and music industries support such measures as a means of cracking down on theft.

“While we believe that online piracy by foreign websites is a serious problem that requires a serious legislative response, we will not support legislation that reduces freedom of expression, increases cybersecurity risk or undermines the dynamic, innovative global Internet,” Aneesh Chopra, Victoria Espinel and Howard Schmidt wrote in a blog post.

The statement marks the administration’s most significant foray into a fight between content creators and Internet companies that has been playing out in Congress. The Senate is scheduled to hold a procedural vote Jan. 24 on starting debate on an anti-piracy bill.

The first thing to note is that this is a very tepid condemnation.

They didn’t make a Friday night release of this blog post, it was around noon on a Saturday when it was competing with the NFL playoffs, and Obama himself has not made a comment here.

That being said, I think that this is the first time that the Obama administration has come out against rent seekers as versus the general public.

I think that the Obama administration has made a tactical decision that they will get plenty of money for the campaign, and so they it isn’t necessary at this time to sh%$ on a motivated and tech savvy part of the electorate.

Senators Want To Put People In Jail For Embedding YouTube Videos

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No, seriously, Senators Amy Klobuchar, John Cornyn and Christopher Coons are proposing to make posting the wrong sort of Youtube videos a felony:

Okay, this is just getting ridiculous. A few weeks back, we noted that Senators Amy Klobuchar, John Cornyn and Christopher Coons had proposed a new bill that was designed to make “streaming” infringing material a felony. At the time, the actual text of the bill wasn’t available, but we assumed, naturally, that it would just extend “public performance” rights to section 506a of the Copyright Act.

Supporters of this bill claim that all it’s really doing is harmonizing US copyright law’s civil and criminal sections. After all, the rights afforded under copyright law in civil cases cover a list of rights: reproduce, distribute, prepare derivative works or perform the work. The rules for criminal infringement only cover reproducing and distributing — but not performing. So, supporters claim, all this does is “harmonize” copyright law and bring the criminal side into line with the civil side by adding “performance rights” to the list of things.

If only it were that simple. But, of course, it’s not. First of all, despite claims to the contrary, there’s a damn good reason why Congress did not include performance rights as a criminal/felony issue: because who would have thought that it would be a criminal act to perform a work without permission? It could be infringing, but that can be covered by a fine. When we suddenly criminalize a performance, that raises all sorts of questionable issues.

The problem here is that people do not understand what IP is.

People seem to think that it’s property.  It’s no more property than a liquor license is.

It’s a limited time limited exclusive license created to, “To promote the Progress of Science and useful Arts.”

It’s not about creating progressively punitive and extortive provisions, largely because the holders of these licenses have lots of money to wave around, and want ways to extort more money.

Pirate Party Founded in Massachusetts

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And I know the guy who did it, James “Jamie” O’Keefe:

The Massachusetts Election Division has approved the Massachusetts Pirate Party as a political designation, allowing voters in the state to register as a “Pirate.”

The party strives to increase government transparency, promote personal privacy, reinforce the spread of knowledge through copyright reform, and abolish patents.

“We live in a country founded on the ideals of life, liberty, and the pursuit of happiness,” the Massachusetts Pirate Party said in a statement. “For many people, those ideals are not real. The Supreme Court and Congress have expanded the power of corporations and made them more powerful than people. Increasingly government officials ignore open meeting laws, make deals favorable to corporations behind closed doors and sell off our public information to private interests.”

I went to UMass with him.

Note, as the article does, that Jamie is not the criminal asshole who cooks up fraudulent videos.

Note that my inclinations on IP are very similar, though perhaps a bit more moderate, than those of the Pirate Party.

Sergey Aleynikov Guilty

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He is the computer programmer who was charged with stealing Goldman Sach’s high frequency trading software.

Here are the New York Times and Wall Street Journal stories.

The Times version has a video (unfortunately not embeddable) of Fordham University law professor Joel Reidenbert, who basically says that what would ordinarily be a civil matter, a potential breach of confidentiality agreements, was made into a criminal case to make an example of the “US Attorney doing the heavy lifting for Goldman.”

He doesn’t come out and say it, but I infer from his that this was a hit by the US Department of Justice, with the active and aggressive collusion of federal judge Denise Cote, to do the Vampire Squid’s* bidding, as the article notes, “During the two-week trial, Judge Denise L. Cote closed the courtroom to the public several times to protect Goldman’s proprietary source code,” and “Before dismissing the panel, Judge Cote warned them that if they were going to speak about the case, they must not discuss anything related to Goldman’s code.”

It stinks to high heaven.

*Alas, I cannot claim credit for the bon mot describing Goldman Sachs as a, “great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.” This was coined by the great Matt Taibbi, in his article on the massive criminal conspiracy investment firm, The Great American Bubble Machine.

Well, This is a Surprise

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In the latest twist to the legal travails of Sergey Aleynikov, who is accused of theft of Goldman-Sach’s illegal market front-running high frequency trading software is now arguing that the code in question was open source, so there was no theft:

Sergey Aleynikov, who is accused of stealing Goldman Sachs’ source code used in high-frequency trading, argued that he was standing up to the investment bank’s proprietary claims on open-source code, not trying to steal private codes to use at a competing trading firm.

Mr Aleynikov, a former computer programmer at the bank, is accused of downloading proprietary code related to high-speed trading systems in June 2009 for use at a new job at a competing firm.

While this statement may actually be true, it does strike me as a rather low percentage defense.

Unfortunately, it also implies that we will not be getting any details on how the Vampire Squid and its Wall Street co-conspirators might actually be gaming the system with their co-located high speed trading systems during the trial.

Federal Courts Rule that Software Publishers Own You

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The 9th Circuit Court of Appeals reversed a lower court, and ruled that it’s not a sale, it’s a license, and so they can do whatever they want:

The US Court of Appeals for the Ninth Circuit today ruled (PDF) on a long-standing case involving used software on eBay, and it came to an important decision: if a company says you don’t have the right to resell a program, you don’t have that right. Could this mean the end of the resale market for all digital content? Yup. But the court says it had no choice.

The case is Vernor v. Autodesk, in which Timothy Vernor made his living from selling items (including software) on eBay. Vernor had picked up some old copies of AutoCAD from an architect’s office sale, complete with their serial numbers, and he put them up on eBay noting that they were not currently installed on any computer. Sounds legal, right?

But there’s a catch. Autodesk, the software’s developer, forced all users to accept an agreement before using AutoCAD. This agreement made clear that AutoCAD was merely licensed, never sold, and that one’s license was non-transferable. Further, a licensee could not rent, lease, or sell the software to anyone else; you couldn’t even physically transfer the discs out of the Western Hemisphere (!). Finally, if you upgraded to a new version, the old version had to be destroyed.

That sound that you hear is the stock price of Gamestop falling like the 54th floor of the World Trade Center on September 11, 2001.

Almost every single video game out there bans resale in the license, or as Aris Technica notes, “So, to recap: EULAs are binding, they can control just about everything you might dream up, and only Congress can change the situation.”

This means that a publisher can deactivate your software wherever, and whenever they want, so long as they have it in the license, or they have a section of the license that allows them to change their license whenever they want, like credit card companies do.

Call your congresscritter, and look hard at open source software.